Sheeple Alert: Wall Street Called A Rally, But No One Came

By Steven Russolillo at the Wall Street Journal

There were crickets on Wall Street last week.

Trading volume on the major U.S. exchanges suffered the slowest August since 2006, according to Credit Suisse CSGN.VX -1.52% Trading Strategy. And it got even slower as the month wound down: The final six trading days last month ranked among the lowest 15 volume days of the past seven years.

“What makes it feel even slower, though, is how much volumes dropped compared to the beginning of the year,” said Ana Avramovic, an analyst at Credit Suisse.

She notes that the first four months of the year saw higher volumes than the equivalent periods in 2012 and 2013. But as the chart below shows, average daily volumes this year started slumping in May and have only fallen further since.

The slowdown in trading over the past several months comes as investors see little reason to make big changes to their portfolios. Major U.S. stock indexes keep climbing to fresh records amid a growing economy and improving corporate profits.

Diminished volatility has played a role in keeping trading down. Volume from high-frequency trading also dropped significantly over the summer, according to Credit Suisse, continuing a years-long downtrend from the 2009 peak.

Overall, year-to-date trading volumes across U.S. exchanges are down 1.6% from a year ago, Credit Suisse says. At the moment, there’s little indication that the trend of low trading activity will change anytime soon.

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