Mo­bius links low volatil­ity to so­cial me­dia

New Straits Times - - Business -

TOKYO: Mark Mo­bius has a left­field the­ory on why volatil­ity in global stock mar­kets is so low.

“So­cial me­dia is hav­ing a huge im­pact,” said the ex­ec­u­tive chair­man of Tem­ple­ton Emerg­ing Mar­kets Group, here.

“It’s cre­at­ing con­fu­sion with a lot of false news. You’re get­ting a sit­u­a­tion where a lot of in­for­ma­tion is dis­counted im­me­di­ately be­cause peo­ple are afraid that maybe the in­for­ma­tion they’re get­ting is not true.”

The VIX In­dex, the so-called fear gauge for United States stocks, fell ear­lier this week to its low­est close since 1993, as record-low tur­bu­lence plays out in global mar­kets.

Ma­rine Le Pen’s de­feat in French elec­tions was the lat­est de­vel­op­ment im­bu­ing calm among in­vestors.

Along with sow­ing doubt about the ve­rac­ity of news, so­cial me­dia was short­en­ing peo­ple’s at­ten­tion span, ac­cord­ing to the 80year-old fund man­ager.

That was soft­en­ing the im­pact of events like Tues­day’s fir­ing of FBI di­rec­tor James Comey, he said.

Mo­bius said US Pres­i­dent Don­ald Trump’s ac­tion amid the agency’s in­ves­ti­ga­tion of Rus­sian in­ter­fer­ence in last year’s elec­tion would meet a sim­i­lar fate: peo­ple will brush it off.

That was true in trad­ing on Wed­nes­day, with MSCI’s global shares in­dex up 0.1 per cent as of 7.02pm in New York.

“There’s so much con­tro­versy on Trump in many di­rec­tions that this is one more page in this whole his­tory of changes,” he said.

“I think it’s in the back­ground, be­cause it doesn’t have any eco­nomic im­pact.” Bloomberg

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