Mark Mobius has a left-field theory on why volatility in global stock markets is so low.
“Social media is having a huge impact,” the executive chairman of Templeton Emerging Markets Group said in an interview during a visit to Tokyo. “It’s creating confusion with a lot of false news,” he said. “You’re getting a situation where a lot of information is discounted immediately because people are afraid that maybe the information they’re getting is not true.”
The VIX Index, the so-called fear gauge for U.S. stocks, fell earlier this week to its lowest close since 1993, as record-low turbulence plays out in markets across the world. Far-right candidate Marine Le Pen’s defeat in French elections was the latest development imbuing calm among investors.
Along with sowing doubt about the veracity of news, social media is shortening people’s attention span, according to the 80-year-old fund manager. That’s softening the impact of events like Tuesday’s firing of FBI Director James Comey, he said.