Stocks Edged Higher But Sentiment Remains Negative

The most global stocks edged higher on President Donald Trump’s signing of a USD 900 billion coronavirus relief bill on Sunday night, unemployment benefits and Covid-19 vaccination rollout. However, the Sentiment remains negative for the week considering the increased number of new daily cases and the new restrictions in the U.K. and a few other European countries.  

S&P set a fresh record high. Technology stocks closed out a year of substantial gains. Apple, Amazon, and Microsoft shares generated 53% of the S&P 500′s total return in 2020. Health care shares outperformed within the S&P 500 Index.

The U.S major benchmark Indexes attain a significant weekly increase of about 0.65% to 1.43%. However, it ended the week mixed, with small-caps recording losses. ACY, BRPAU, ABML, Bitcoin Invest, and FUSE shares were the top five weekly trendings in the U.S market.

Shares in Europe rose, lifted by the UK-European Union (E.U.) trade deal and a U.S. fiscal stimulus package’s approval. The critical European benchmark indexes closed higher about 0.46% to 0.97% as a weekly gain. However, The U.K.’s FTSE 100 Index recorded modest losses, partly due to the stronger British pound, which reached USD 1.3675, its highest level in a year.

The most APAC benchmark Indexes outperformed and booked a substantial weekly gain of about 1.96% to 3.2%. However, The Australian Index ASX-200 booked a weekly loss of about -1.17% and ended with the yearly loss of about -2.17%. Over the final three months of the year, the ASX 200 put on a record December quarter gain of 13.3%.

Weekly market movement

Underlying_2021-01-04-Stocks Edged Higher But Sentiment Remains Negative

Gold ended with the another Flat for the week, and the Sentiment turned positive for precious metals in 2020 after the global pandemic. Fear and uncertainty will remain for the next several years.

Oil closed higher for the week, about 1%. Bitcoin accelerated its fourth-quarter surge as around 16% for the week and hit the record high of $29,000 on Thursday.

Sentiment Analysis

The below figures illustrates the news and social media sentiment trend for the week. Despite the solid momentum on the underlying shares, the Global market Sentiment remains negative for the week.

However, we expect the positive long-term outlook for the year 2021 considering the key factors that the U.S. economy boosts from the shift to a post-vaccine phase, the continuous decline of the unemployment rate, and the Fed keeps its policy rate near zero even as the economy improves. But geopolitical uncertainties remain a source of volatility.

The European Key Indexes, CAC-40 AND FTSE-100 were showing the strong negative sentiment trends for the week. U.K’s stock Index sentiment tend to fall when the pound rises because many companies that are part of the index are multinationals with overseas revenues on the new variants Covid spreads. In contrasts, FTSE-MIB showing the solid uptrend in sentiment direction.  

The most APAC benchmark indexes weekly sentiments trend turns in to negative mode. Nifty-50, China’s SSE-50, HIS-50 and Japan’s Nikkei-225 Indexes are showing the strong downtrend view. However, Korean Index Kospi-100 showing the strong uptrend in sentiment direction for the week.

Sentiment Trend Chart

Sentiment Chart_2021-01-04-Stocks Edged Higher But Sentiment Remains Negative

The following critical economic data refer to https://www.fxstreet.com/economic-calendar  PMI composite, Unemployment Rate, and Factory Orders data released

Sentiment Values

Sentiment Table_2021-01-04-Stocks Edged Higher But Sentiment Remains Negative

Note: The sentiment scores applied as an additional overlay to your existing models to further improve performance.

Buy & Sell Signals

The below table shows the buy/sell signals generated based on InfoTrie’s proprietary Investment/ Trading models. These models developed using technical, fundamental, quantitative techniques and the news-based sentiment score as an additional overlay.

I have tabulated the random signals from several InfoTrie’s Trading/Investment models.

Buy_Sell_2021-01-04-Stocks Edged Higher But Sentiment Remains Negative

The news sentiment score provides a 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 below.

InfoTrie Financial Solutions Pte. Ltd.
Alternative Data, Sentiment Analysis, Financial I.T. and A.I. Consulting

Read our previous blog posts. Want to access our data? Try our API or access our FinSentS platform

contact@infotrie.com
Suresh Kumar Ramani +65 9337 6035
Frederic GEORJON +33 (0)6 1304 0600


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