November 2013 - Growing Economic Uncertainty and Civil Unrest

One of the many benefits of looking at collective mood is that one can get a heads up on prosperous times, and times of more uncertainty and social angst.  The information is perhaps more general than one would desire, but it is still helpful in planning for near future storms or celebrations.

Coming into the month of November is a hopeful United States, and to some extent the world.  Perhaps the worst is behind us?  Perhaps we conquered the problems of the Great Recession after all?  Maybe things are going to really start to get better?

Yet, that is not the picture for November.  Globally, the primary concern is associated with economic issues.  While, as usual, the people of the United States will try to assume that this doesn't apply to them, the U.S. is not exempt from the November turmoil.

The top issues associated with the mood configurations for November: economic uncertainty, bonds and interest rates, new and unexpected problems, denial, fighting, arguing, and protests.  Overall, this is a month of transition.  In the long run, what will matter is how we resolve this transition in December and January.  Do we enter a new global era of prosperity and stability or does cooperation become so elusive that it all starts to unravel?

Likely stock market direction for the month: mixed to down.

Disaster or Terrorist Activity?- Something Big is Near: Outlook 30 Oct. '13

after market update: actual S&P -8.7 (-0.5%); Markets did turn down today, accelerating after the FOMC meeting as bonds sold off and interest rates climbed.  The "disaster or terrorist activity" may be later this week.

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Overview: Social mood appears to be deteriorating, and reflects both aggressiveness and instability.  The themes in the news are associated with the perception of destruction, deterioration, or disaster.  Mood is turning sharply down, markets are likely to follow.  Whether it happens today, or in a few days, something abrupt and tragic is near.

Today's Market Outlook is turning down to sharply down (-0.1% to -1.1%);  While the news signal is near unchanged at the time of this posting, the social mood signal is sharply down.

 

Near term mood outlook: The social mood pattern corresponds with violence and instability.  The mood themes found in the news are associated with destruction, deterioration, or disaster.  The combined pattern of news and social mood, at times, accompanies global themes of violence, protests, and terrorist activity.  An abrupt change and something of a tragic nature is indicated as a highly likely occurrence.

 

Near term market outlook: The social mood signal is turning down from the resistance area (see this post for more info).  Markets should either pause or turn down sharply from here.

 

Longer term outlook: The overall social mood trend has been in what appears to be a topping process all year.  There are no clear signals that this process will be over anytime soon.  Yet, a sharp drop of more than 10%, just around the corner, is indicated by long term mood and market charts.

 

Today’s social mood signal is -18.3 S&P points as of the time of this posting.  Markets tend to follow social mood more often than not. 

 

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Today’s news signal is -0.9 S&P points.  News tends to follow the general trend of the market, but on a daily basis, can either lead or lag the movement of the market.    

 

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Note: data for U.S. social mood are scores in eight MoodCompass categories of Google Hot Trends, data for news are scores of top Google U.S. news stories.  Scores are converted to 4 inputs to the Market Mood Model.  The output is a conversion of mood data to estimated S&P point change. 

At the Edge of a Cliff: Outlook 20 Sept '13

after market update: actual S&P -12.6 (-0.7%); Markets opened nearly unchanged, up about 0.2%.  Following this, they slowly declined the rest of the day.  The House passed a stopgap funding bill, tied to defunding Obamacare.  Does this give us the title for the next "chapter"-- the U.S. funding/debt crisis?  Does today mark the first step off the cliff?


news ties markets and this next chapter together: Dow down nearly 200 points as uncertainty returns
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Overview:  The mood portrays a perception of an "ending of a chapter."  This together with the sharp drop in social mood showing up over the last few days, indicates that the new reality showing up next week may be quite surprising and disturbing.

Today's Market Outlook is Nearly Unchanged (-0.1% to +0.3%).  A sharp stock market drop is likely to begin within a few days.  Social mood is sharply down over the past several days, and the markets should be joining the trend by early next week.  At the time of this posting, the social mood signal is slightly positive, and the news signal is barely negative.

 

Near term outlook: The social mood pattern corresponds with perceptions that a national or global "chapter" is ending, and a new one very near beginning.  Common news themes associated with the current news mood pattern are uncertainty, confusion, and over-indulgence.  The combined pattern, at times, accompanies global themes of violence, instability, terrorist activity, and geopolitical escalation.  Diplomatic endeavors or negotiations are not likely to succeed at this time, as a mood of genuine cooperation is almost non-existent.

 

Longer term outlook: The social mood trend has turned sharply down; the bounce over the last month appears to be complete. 

 

Today’s social mood signal is +4.9 S&P points.  Markets tend to follow social mood more often than not.

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Today’s news signal is -0.5 S&P points.  News tends to follow the general trend of the market, but on a daily basis, can either lead or lag the movement of the market.    
 

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