Yahoo Finance 5 Charts From the Week in Markets
Did a ‘flash crash’ contribute to a $14 billion plunge in the holdings of the man once considered China’s richest? Also, European markets hang on a central banker’s words, human stock pickers stage a comeback, and how to tell the difference between bad and good home-price increases. Here, in five charts, is a look at this week’s financial-market highlights.
#1: $14 Billion, Gone in a Flash?
Shares of high-flying Chinese solar company Hanergy Thin Film Power Group plummeted 47% in Hong Kong on Wednesday, knocking roughly $14 billion off the net worth of its chairman, who was once China’s richest man. While analysts had been cautioning that the stock could be overvalued, a look at the trading data shows the speed of Wednesday’s drop — with the bulk of it coming within one second — points more toward market dislocation, similar to the May 2010 market meltdown dubbed the ‘flash crash.’
#2: Dinner With a Side of ECB News
European markets had their own dizzying move this week when a European Central Bank official said the institution would step up its bond purchases ahead of a summer lull in markets. European stocks jumped and the euro plunged. The strong reaction, even though the comments by ECB executive board member Benoît Coeuré appeared to signal a smoothing of the ECB’s bond buys rather than a ramping up of stimulus, highlighted the dependence of investors on hints from the world’s central bankers. Adding to the intrigue: Investors at a select dinner in London on Monday were handed a roughly 12-hour head start over the rest of the market when Mr. Coeuré outlined the plan in a speech that wasn’t publicly released until Tuesday morning.
#3: Traders Stockpile Hopes on Oil
Oil prices gained support on an unexpectedly large drop in U.S. supplies. The figures Wednesday showed the third consecutive drop in crude supplies since stockpiles hit a recent peak in April, heartening traders who are watching for signs that a global glut is abating. Expectations of strong demand during the U.S. summer driving season, which kicks off this Memorial Day weekend, also bolstered gasoline prices. But some shale-oil companies are expected to boost production if prices stabilize near current levels, creating an uncertainty that is keeping prices volatile; indeed, this week’s U.S. oil drilling rig count—a proxy for activity in the industry—showed a drop of just one rig, the smallest in a 24-week steak of declines.
#4: Stock Pickers 1, Index Funds 0
Human stock pickers have been making a comeback this year, with actively managed U.S. stock mutual funds up 2.25% through the end of April, compared with 2.2% for funds that track various indexes and a 1.9% gain in the S&P 500. The stock market’s recent slowdown has given old-school stock pickers more chances to shine, adding up to a rare rebound for active fund managers, who have been losing ground to less-expensive index funds.
#5: Buying a Home? Know Your Market
In many parts of the country, this is a good time to sell a home. That could make it a risky time to buy one. Check out this interactive guide to whether price gains in your city are being driven by sustainable factors, such as a solid economy, or mask warning signs, such as low inventory. For more tips, read our buyer’s guide to a seller’s market.
