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What we have seen since the start of the coronavirus crisis is considerable daily volatility in share prices and in credit spreads: this high-frequency high volatility is incompatible with a market of fundamentalists, per Natixis.

Key quotes

“It is normal that prices may fall due to new information (the arrival of the epidemic in Europe and the United States); high daily volatility is not.” 

“The disappearance of fundamentalists gives rise to high price volatility, as participants react to daily news without any relationship with the long-term fundamental value of assets.” 

“The models show that at some point, the proportion of fundamentalists rises again, as participants with short-term horizons end up making too many losses and gradually disappear.”