Volatility Surges, News-Based Trading Performs
Markets are up sharply today after opening the session down. Major equity indexes fell sharply last week after the promised imposition of broad steel and aluminum tariffs by US President Trump. They’ve been posting an impressive show of confidence since, recovering from negative territory during Friday’s trading and bursting out of the gate today. The rebound could be driven by the possibility that US economic advisors are finding ways to rein in the President’s proposal, limiting the actual impact of tariffs while saving face politically. Meanwhile, Congressional Republicans are showing potential willingness to take legislative action to limit the President’s executive power to unilaterally alter trade policy.
All of this dramatic price action continues to reinforce the narrative that’s been dominating 2018 so far: the return of volatility. Earnings are still solid but, after years of relative peace in the equity markets, market participants appear to be diverging on their projections for the macroeconomy. The VIX, a volatility metric sometimes known as Wallstreet’s “fear gauge” jumped 17% during last week’s trading.
Either way, heightened volatility only increases profits for news-based traders. Why? Because the less individual stocks move together (due to passive investing behavior – “buy the whole market”), the more news-based trades are differentiated from broader market momentum.
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XL Group’s stock is up sharply this morning on news of an impending sale to AXA, which will acquire 100% of XL in the transaction.
XL Group is a market leader in the “Property & Casualty” insurance/reinsurance market; the new combined entity is expected to be the #1 global player in this space, with a substantial presence in North America, Europe, and Asia-Pacific.
Investors have been buying the stock on heavy volume since the announcement. The stock has been flirting with gains around the 30% mark at the time of this writing.
Keep checking our blog for a small sample of the 1000’s of profitable news-based stock plays generated for our users every single week. As markets become increasingly volatile, news-analytics become a truly invaluable tool for generating profits that can be impossible to achieve with more passive approaches.
Whether you have a bearish or bullish outlook on current market valuations, News Quantified offers you the ability to attack shorts, longs, or a strategic allocation of both. More than a single-trading strategy, News Quantified offers data-backed leverage to help any strategy become far more profitable.