| August 07, 2014
Last weekend my wife remarked how torrid the world appeared to be at the moment. Indeed, unless you’ve had your head in the sand, you’ll know global tensions have been on the rise this year.
Using RavenPack’s macroeconomic and geopolitical data set, we can see the elevated the number of geopolitical events taking place and how depressed sentiment has become.
Figure one shows the global daily average RavenPack event sentiment score (red line) and daily event count (blue line), and their 14-day moving averages, for non-corporate events – that is economic, political, social and environmental. Sentiment is a measure between 0 and 100, with 50 being neutral. As you can see,
sentiment is at its lowest for the year and the event count at its highest.
Figure two shows that the situation is not down to economic deterioration – the average sentiment score for global economic events remains above neutral (neutral = 50) and the event count is relatively stable. Hence it must be down to political, social and environmental issues.
So what are the crises driving the higher event count and lower sentiment. I think we can all guess – but here they are in pictures.
Figure three shows the equivalent event & sentiment data for Israel & Palestine. As you can see the number of events detected has
shot up in the last month or so and sentiment has been steadily declining.
Figure four shows the evolution of Russian & Ukrainian sentiment. You can clearly see the peak in events around February/March when President Yanukovych resigned and disappeared and Russia’s parliament approved the use of force in Ukraine. Also note, sentiment didn’t really deteriorate at the time. That’s not true of recent events related to economic sanctions – the count is up and sentiment is down.
And then there are the Arabic countries of the Middle East – Iraq, Iran, Syria and Turkey. It’s clear from figure 5 that the event count has declined in recent weeks and sentiment is off its lows compared to June when ISIS seized Mosul. But one wonders how much of the recent drop in detected events is down to the world’s eyes being on Israel, Palestine, Russia and the Ukraine?
Please use your business email. If you don't have one, please email us at email@example.com.
We will process your personal data with the purpose of managing your personal account on
RavenPack and offering our services. You can exercise your rights of access, rectification,
erasure, restriction of processing, data portability and objection by emailing us at firstname.lastname@example.org. For more information, you can
Your request has been recorded and a team member will be in touch soon.
We consider incorporating sentiment signals from news, earnings call transcripts, and insider transactions to
boost the risk-adjusted returns, and revive factor performance.
We find stronger, more predictable market reactions when the words of company executives agree with their actions.
We have gathered 12 insights from 2021 research that can be leveraged in 2022.