Call me crazy, but I think it’s at least possible that the black swan-ish slide in shares of J&J might have caused something to “snap” midway through the U.S. cash session on Friday.
As you’re probably aware, Reuters released a bombshell investigative report today and while you’re certainly encouraged to read it in its entirety if for no other reason than that someone clearly put a lot of effort into writing it, all you really need is the title. To wit:
Ok, so they were knowingly harboring asbestos in the baby powder, a truly unfortunate revelation that makes me want to fling open the doors to the cabinets in the bathroom and make sure there are no J&J products in there (What’s in the baby shampoo you monsters?!)
Investors are obviously selling first and ordering the free Meso book later, because the move in the shares looks entirely anomalous from where I’m sitting – although I’m no J&J analyst.
This, frankly, is quite something to behold:
It looks to me like it’s rippling across other names. I’m reasonably sure I’ll get some irritated e-mail for suggesting this, but you’d be forgiven for asking if “someone” who isn’t human and thereby lacks the cognitive capacity to understand the idiosyncratic nuance of the story, might be selling other things by mistake on the assumption that something more systemic and/or sinister is afoot (although, I’m not sure what’s more “sinister” than knowingly hiding asbestos in baby powder):
But you know what? Really it doesn’t matter if that specific contention is any semblance of true. Because the problem with modern market structure is that when you get a black swan move in a stalwart like J&J that naturally weighs on the rest of market, it definitely does have the potential to trigger systematic selling as key levels/strikes are breached. That, in turn, can start tipping dominos and deepen the selloff.