Fox Business host Stuart Varney explained why the stock market dropped nearly 800 points on “Fox & Friends” Wednesday and said fears of a recession are unfounded.
“In my opinion computers, computer-driven trading — algorithms played a very large part in yesterday’s drop,” Varney said.
“Let me explain it. First thing in the morning we heard that interest rates had come way, way down — A sharp drop in interest rates. Some people think that is a signal of recession. You get that word in headlines, recession — the algorithms read it — sell.”
Varney claimed the computer algorithm’s interpretation of Trump’s hard-line against China is what triggered the loss and called the idea of a recession “nonsense.”
“Then came a flurry of tweets from President Trump in which he used the word ‘Tariff man.’ The computers, the algorithms read that expression — sell. So you’ve got a combination of two factors here — The possibility of a recession which I think is absolute nonsense. There is no sign of a recession on the horizon at all. Then you’ve got the tweets from President Trump,” he continued.
“That was interpreted as a very hard-line on China, therefore we’re not going to get a deal. I think that’s nonsense. It’s a negotiating position. The computers read this stuff and sell. So you’ve got a spiraling down nearly 800 points by the close.”
“Human beings on Wall Street should get a grip,” Varney added. “I’m tired of being whipsawed like this by mathematicians who create an algorithm which tells you to sell when they read the words recession.”
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