Fox Business host Stuart Varney explained on “Fox & Friends” Wednesday why the stock market dropped nearly 800 points Tuesday, saying 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. (RELATED: Stuart Varney Says Liberals Who Want To Raise Climate Change Taxes Should Look At What’s Happening In France)
“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.”
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Varney claimed the computer algorithm’s interpretation of President Donald 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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