Global Stocks Rally Halted. Virus Second Wave Concerns?
Rising fears of a virus second wave led to concerns. The global rally halted and stocks logged their worst weekly decline since March. US and Europe equities closed lower on last Thursday after a sharp single-day decline due to rising probability over a resurgence in corona virus infection, this triggered some profit-taking.
Oil swings between gains after a larger decline due to the uncertainty in economic recovery. Gold retraced its previous losses and ended more than 3% as a weekly gain.
The Major Indexes from APAC regions ended a week negated but not as much as the US and European markets. The major liquid indices from the APAC region ended negatively around 2 to 3%, whereas the US and European liquid Indices ended negatively around 6-8% as a weekly loss.
Amazon may face EU antitrust charges over inappropriate use of third-party merchant data. The US unemployment down moderately from a week earlier claims 1.54 million by June 1st Week.
The market remains volatile in the coming days considering the second-wave virus concerns, Upcoming election uncertainties, sluggishness in the economic restart and Policy concerns.
News sentiment data can be approached several ways to make better use of it. I have used 7 days average daily sentiment data for this analysis which is scaled between the range of +5 to -5.
The below figure illustrates the news sentiment trend for major global Indexes. The US Indices S&P 500, Nasdaq 100, and Russel 2000 show consistency in the Neutral in sentiment trend followed by the negative trend sentiment last week. This indicates the US markets remain volatile and sideways in the coming days.
However, the trend may change based on the important economic data being released include retail sales on Tuesday, housing starts and building permits on Wednesday, and the leading index on Thursday.
The European Indices showing the mixed mode in sentiment trend. CAC 40 and FTSE MIB showing the moderate downtrend sentiment. Whereas FTSE trending upwards. Dax Index remains Neutral.
The Nikkei 225, Nifty 5o and ASX 200 Indexes are showing the strong downturn in sentiment. On the other hand, Hang Seng, Shanghai, and Kospi Indexes remain neutral. I have consolidated the sentiment trend with the table below.
Note: The sentiment indicator can be used as an additional overlay for your existing models to improve the performance further.
Buy & Sell Signals
The below table showing the buy/sell signals generated based on InfoTrie’s proprietary Investment/ Trading models. These models are developed with the combination of technical, fundamental, quantitative techniques and primarily the news-based sentiment score as an additional overlay.
I have tabulated the random signals from several InfoTrie’s Trading/Investment models.
The news sentiment score provides significant improvement, significant “Alpha” compared to the traditional investment/trading models.
For more details on the analysis, accessing complete tear sheets or white paper for the models, subscription details for News Sentiment data and other consulting works please contact us with the information provided below.