Head fakes and headline risk: A guide to the new era in stock trading

Plus, EU backs off climate disclosure rules as tariffs take priority

In today’s edition:

— Head fakes and headline risk: A guide to the new era in stock trading

— EU steps back on climate disclosure as tariffs take priority

— Where the LA fires ranks in the history of U.S city blazes

— U.S. military backs off climate change aid under Trump

— Thar she blows! How whaling journals from the 1800s are helping climate scientists understand weather patterns

It was probably almost 20 years ago now when I was at Dow Jones with MarketWatch that editors in New York there created the first algorithmic headlines. Automated headlines that large investors could program to trigger massive buy and sell orders were supposed to help clients rapidly respond to economic data releases.

These days algorithmic bots are used regularly by hedge funds and large banks for almost any type of trade. Monday’s $6 trillion turnaround in stock prices in just a few minutes on a false tweet about a delay in tariffs was a prime example, with bots loaded for any sort of headline that indicated the harmful tariffs were off.

It’s an important guide for investors in these uncertain times that market directions can change in minutes, just like our administration’s trade policies. Look for that first trade deal with a major country, probably this week, to be another important signpost.

In the first Trump administration, the president would routinely move company stocks by attacking them or their CEOs in a tweet. Now he’s moving entire markets.

That obviously is not healthy, but it’s a result of the big-trade, low liquidity world we’ve created on global stock exchanges. Climate investors — and all investors — need not panic. Or even try to pivot. Sometimes it’s better to just watch the show and wait for bargains.

Don’t forget to contact me directly if you have suggestions or ideas dcallaway@callawayclimateinsights.com.

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Tuesday’s subscriber insights

Fearing the economic worst, EU steps back on climate disclosure