The Bear Market Begins? Recession Fears?

US:

The bear market begins. The U.S key benchmark indexes sharply dropped over 5% to 7% as a weekly loss. For the second week in a row, the Federal Reserve’s most aggressive rate hike (+75bp) since 1994 fuelled recession worries and sent equities down. The S&P 500 Index fell for the first time since March 2020, entering a bear market and closing about 24 % below its January peak.

As inflation rose, retail sales in the United States fell 0.3 % in May, the first drop in five months. According to a second survey, industrial production expanded at a slower rate last month, while factory output declined for the first time in four months.

U.S Retail Sales:

RTAIL SALE-06-2-2022-The Bear Market Begins

Source: U.S SENSUS BUREAU.

Inflation and rate concerns boosted the yield on the benchmark 10-year Treasury note to 3.24 %, marking a weekly increase.

The rising cost of living is putting a strain on consumers who are forced to pay more for necessities like gasoline, food, and other items. Some industries have reported being relatively immune to the weakening economy’s effects, including airlines, movie theatres, and specialised shops. Other businesses, such as McDonald’s, are also showing symptoms of waning consumer demand.

Europe:

Shares in Europe sank dramatically on fears that economic growth will slow after numerous central banks raised interest rates. The top European benchmark indexes fell over -4% as a weekly loss.

APAC:

Most APAC benchmark indices plunged over -3% to -7% as a weekly loss. Japan’s Nikkie-225 index underperformed. However, China’s Shanghai composite index closed higher for the week amid the expectations that a surge in fixed asset investments would help revive the country’s flagging economy.

Underlying market movement:

Underlying-Weekly-6-20-2022-The Bear Market Begins

Oil prices swung in the early hours of Monday as investors refocused on restricted supply. Despite this, confidence was low after a -6 % drop the previous day on worries about weakening global economic growth and fuel consumption.

Sentiment Analysis

The bear market begins. The week’s mood has become largely apathetic. The U.S. technology index has begun to trend negatively. The Dow-30 industrials, on the other hand, have moved into the black. All other details are unrelated.

The general trend for most European benchmark indices has shifted to a neutral outlook. However, the Dax-30 German stock index has continued its weekly decline.

Across the Asia-Pacific region, the majority of indexes showed a negative mood trend. The Hang Seng and ASX 200 indexes showed initially gloomy signals. The rest of it is quite consistent. The mood, though, is turning pessimistic.

News Sentiment Trend:

Sentiment Trend Chart-6-20-2022-The Bear Market Begins

The following important economic indicators and earnings reports, which can alter current sentiment, may determine the market this week, including the Markit PMI services composite and the Michigan consumer sentiment survey.(https://www.fxstreet.com/economic-calendar)

Sentiment Score:

Sentiment Values-6-20-2022-The Bear Market Begins

Note: The news sentiment data is the most useful additional overlay for your existing models to improve the performance further.

Buy & Sell Signals

The buy/sell signals generated by InfoTrie’s proprietary Investment/Trading models are shown in the table below. These models were built utilising technical, foundational, and quantitative methodologies, with the news-based sentiment score serving as a secondary overlay.

I tallied the random signals from different Trading/Investment models at InfoTrie.

Buy Sell-6-20-2022-The Bear Market Begins

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, don’t hesitate to contact us with the information provided below.       

contact@infotrie.com

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InfoTrie Financial Solutions Pte Ltd, Singapore

Sureshkumar Ramani +65 93376035

Frederic GEORJON +33 (0)6 1304 0600


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