TheCorporateCounsel.net

There is a good reason everyone hates Mondays. Sometimes, bad stuff happens on Mondays, and yesterday was just one of those days. Yesterday, the S&P 500 index fell 3%, the Dow Jones Industrial Average fell 1,034 points and the Nasdaq dropped 3.4%. Disturbingly, the Nikkei Stock Average in Japan suffered its worst one-day drop since the crash after 1987’s infamous Black Monday. It was as if everyone showed up on Monday and collectively decided that things were not looking as rosy on Monday as they had been on Friday. I was completely oblivious to the market tumult, driving for 12 hours from Southeast Georgia to get out of the path of Hurricane Debby. It was jarring to look at my phone late in the day and see the news of the Wall Street rout that seemingly came out of the blue. At least things were looking more positive as of early this morning. Maybe it was just a Monday thing.

One thing that has always fascinated me about financial markets is the inevitable rhythm of the markets over time. For example, anyone who has practiced in capital markets generally knows that you do not want to price an IPO in the last few weeks of August, because traders and investors tend to go on vacation and market trading thins out. The same concepts apply around holidays like Thanksgiving and Christmas, as the human elements of the markets are revealed to a certain extent. Over the years, I have noted how this conventional wisdom has faded to some extent, as markets have become more global and people tend to work from anywhere. Ultimately, these rhythms may be rendered completely obsolete when the AI robots take over trading and investment banking, and perhaps we will be better off without the all too human element of the markets. Until that time, we are still subject to the risk that all of those humans driving the markets will come into work on any given Monday and decide to sell, sending the indices plummeting. And then, the next day, because it is a Tuesday, deciding that maybe things were not so bad after all.

– Dave Lynn