For Global Economy and Emerging Markets, How Much Better News Sentiment on US Helps
Over last ten days, there have been interesting takeaways if we do the sentiment analysis for news flow around some very important and immensely popular key words, which matter for USA.
First the key positive from this analysis…we find a little bit of improvement in the overall news sentiment on words such as Donald Trump, Dow Jones Index, Fed Rate, Nasdaq Composite, Chinese Economy and US Economy.
The key findings as seen in the chart as well;
- Though there has been a dip in last couple of days in sentiment for Chinese economy, overall, there has been a massive improvement in last week
- Some improvement in sentiment for US economy too and that is a good thing which is driven by the hopes that lock down will start getting lifted on a case-by-case basis
- Improvement in sentiment for Dow Jones Index and Nasdaq composite both which is not a surprise looking at the US markets
- However, the biggest worry is that the sentiment remains poor on Donald Trump and Fed Rate which might have long term repercussions
- On a cumulative basis, the news sentiment for key words which matter for USA has improved in last few days but only a little.
Overall, the improvement in news sentiment over US economy is reflecting in the US markets as well. But what is needed now is more confidence in Trump and Fed on their ability to pull this off. Watch out for this space as we keep track of how this evolves.
EM Alpha LLC
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EMAlpha, a data analytics and investment management firm focused on making Emerging Markets (EMs) accessible to global investors and unlocking EM investing using machines. EMAlpha’s focus is on Unstructured Data as the EMs are particularly susceptible to swings in news flow driven investor sentiment. We use thoroughly researched machine learning tools to track evolving sentiment specifically towards EMs and EMAlpha pays special attention to the timely measurement of news sentiment for investors as these markets can be finicky and sentiment can be capricious.Our team members have deep expertise in research and trading in multiple Emerging Markets and EMAlpha’s collaborative approach to combining machine learning tools with a fundamental approach help us understand these markets better.
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