Home Stock The income season is beginning. Why you might also want to...

The income season is beginning. Why you might also want to see weather.


The earnings season started in earnest on Wednesday with reports from some of the largest banks in the US

Besides looking at earnings per share, revenue, and future guidance, investors may just want to see weather reports.

That’s the conclusion of a research paper, which found that weather conditions near a company’s large institutional investors influence the stock market’s response to that news.

Researchers led by Danling Jiang, a professor at Stony Brook University, said unpleasant weather could trigger physiological and psychological responses in these investors, leading to information processing. delay, resulting in a slower price response to income announcements. They checked weather for two weeks prior to earnings announcement, for a company’s 10 largest institutional investors.

Looking at data from 1990 to 2016, they found that an increase in the standard deviation during pre-publication unpleasant weather resulted in 45 basis points, or 10%, a smaller difference between the above surprises. and under. They also noticed a decrease in trading activity during unpleasant weather.

That is not exaggeration of the impact. When the chart of average cumulative anomalies shows, investors should recognize bad weather and better earnings news than vice versa. Also, it seems that what the weather is like at the company that reports earnings doesn’t matter – it’s just that of the company’s big investors.

Jiang and her co-authors are not the first to study the effects of weather on the stock market. A study from 1993 found market returns on cloudy New York City days were significantly lower than on sunny days. A 2003 study on 26 major stock markets globally showed that sunny weather brings greater optimism and risk taking, while cloudy weather is the opposite.

For what it’s worth – weather across the US is 13% warmer than usual in March, according to the American Gas Association.

Another thing to keep in mind is which day of the week. Previous research has found that investors pay little attention to earnings announcements that occur on Friday.

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Coinbase listing

The Coinbase direct listing is established, with Nasdaq
COMP,
-0.22%

given the reference price of $ 250 which would set the price for the cryptocurrency exchange
COIN,

at $ 65 billion. Bitcoin
BTCUSD,
+ 0.33%
,
up 5% on Tuesday, widening the gains and surpassing $ 64,000.

JPMorgan Chase big bank
JPM,
-1.24%
,
Goldman Sachs
GS,
+ 2.87%

and Wells Fargo
WFC,
+ 4.91%

The start of earnings season, with all three lenders beating estimates at both top and bottom returns.

Software giant SAP
SAP,
+ 1.53%

SAP,
+ 1.11%

has risen in Frankfurt after the lifting of the year cloud revenue guidelines. External shower bed
BBBY,
-11.35%

decline after the retailer reiterated its sales outlook and increased its stock repurchase program.

Discovery TV station
DIAL,
-3.57%

and online Chinese video platform iQiyi
INTELLIGENCE QUOTIENT,
-4.47%

may face pressure after Bloomberg News reported that Credit Suisse sold shares worth $ 2.3 billion, as the bank continues to loosen positions held by Archegos Capital Management.

There were several Federal Reserve officials speaking, including Chairman Jerome Powell, at Eastern noon, and Vice President Richard Clarida, at 3:45 pm, with Clarida possibly more important to the topic, “Federal Reserve New Framework and Transition Guidelines Based on Results. ”

European Central Bank President Christine Lagarde is speaking at a “chat by fire” event at 10am Eastern time. The Fed’s Beige book on economic anecdotes will also be released.

The market in the holding pattern

Even Johnson & Johnson
JNJ,
+ 0.06%

The COVID-19 vaccine delay failed to stop the S&P 500’s record 21 of the year
SPX,
+ 0.07%

on Tuesday. Stock futures contracts
ES00,
+ 0.09%

NQ00,
-0.56%

in the first hours the increase is higher.

10-year Treasury yield
TMUBMUSD10Y,
1,645%

is 1.64%, due to the bond market primarily eliminates stronger consumer price data than expected.

Oil contract
CL.1,
+ 4.92%

increase after The International Energy Association raised its oil demand forecast.

Ranking of states of the United States of America

YouGov
FRIEND,

asked 1,211 American adults to choose better in two states (and the District of Columbia) in a series of head-to-head games. Nothing specific better, remember you, just “better”. Hawaii scored the highest, while Alabama and Washington, DC, behind, seem to have a pretty fair rating.

Random reading

France is offering the opportunity exchange old cars for electric bikes.

Alex Rodriguez, former New York Yankees legend, most recent player in 2016, and former partner of singer Jennifer Lopez, Who is?” to Anthony Edwards, young star of the Minnesota Timberwolves basketball team that Rodriguez is buying.

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