Displaying items by tag: social media
New Data Shows Investors are Really Worried About a Recession
(New York)
If you are a fan of behavioral economics and the way investor psychology impacts the market, then there is some interesting new data to look at. The amount of people searching the internet for “recession” and “bear market” has been spiking. People have been increasingly searching for such terms and their level of searches has hit its highest since 2008. Tweeting activity on such topics has also nearly reached a new peak in records going back to 2010.
FINSUM: This may seem like statistical noise, but when you consider that millions of Americans are calling their advisors in a panic, you can start to see how such concern starts flowing through to indexes.
Algorithms Warn of Big Stock Correction
(New York)
As if there were not enough worrying indicators out there, Market Watch has featured a new worrisome measure. The paper interviewed a famous Wall Street quant who says that algorithms which track broad social media sentiment are showing significant risks of a serious decline in equities. The big worries on the public’s mind revolve around the escalating trade war between China and the US. The indicator also informs sector picks, to which strategist Yin Luo said “With U.S. stocks, we are bullish consumer discretionary, technology, and industrials over the medium horizon, and are negative on consumer staples and telecom services, where fundamentals remain relatively weak and momentum has been negative”.
FINSUM: We are always skeptical of these kinds of views because what people say on social media is not a very good reflection of what they are doing in their investment account. Further, there are likely mountains of people being assessed by the algorithms that have no trading/investment account, so their impact is nearly non existent.