This year’s fourth quarter is as unique as any you could find in the last couple of decades. It comes shortly after Brexit while the US Presidential election is set to take place just before a highly anticipated interest rate hike.
Add this to the usual fourth quarter occasions such as the holiday season, new Apple (NASDAQ:AAPL) iPhone among other smart devices and technologies launched by various companies. For instance, after Apple’s fall event, Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) or Google came next with its Pixel event, where it unveiled a series of new hardware technologies alongside its new smartphone Pixel.
Pixel is the first phone designed and built by Google. Investors will be watching out for preliminary sales/orders data on Google’s first ever phone and be comparing it with Apple’s iPhone 7 amongst other high-end smartphones launched this year.
This means that there is so much information to incorporate in your trading ideas than it’s ever been before, yet we have been living in the information age for decades now. In fact, businesses are now slowly integrating their operations to capture the impact of Internet of Things (IOT) on Big Data and business analytics, which makes things even more interesting.
As such, investing in the stock market or the currency market, among others, is no longer a straightforward matrix of trying to predict future outcomes based on historical data. The stock market has adopted the kind of dynamism that requires constant monitoring of company and macro events that could affect the movement of the stock price.
For instance, a company could be down and out based on poor performance but when a bigger player in the same industry finds a way it could incorporate the struggling smaller counterpart into its business model via an acquisition, an announcement of a bid could change the picture of the small player for the better.
That’s how dynamic the market has become over the last few decades, and with new technologies such as big data and IOT enabling businesses to analyze their operations from multiple angles, including the customer perspective—receiving timely and up to date information could be the key to playing the markets.
While this information can be accessed via several platforms such as Bloomberg.com, Investing.com, Reuters.com, CNN Money, Wall Street Journal, and many others, investors would still need to quantify it in order to incorporate in their trading models.
However, over the last few years, developers have tried to use big data and IOT to come up with platforms that quantify this information alongside data received from other platforms to help investors to weave it in their trading algorithms.
A simple example is an economic calendar, which platforms such as investing.com have been able to use to convert market sentiment into actionable data. While this information does not amount to investment recommendation by such platforms, investors are able to understand it better than when bombarded with a series of news and market events that try to estimate the expected GDP data or Jobs Data numbers.
Other platforms such as TradeFinder also try to provide similar information but from diverse sources. For instance, TradeFinder gives an opportunity to backtest and simulate your portfolio, based on information from news and press releases, earning reports, mergers and acquisitions, to identify trading opportunities.
In a nutshell, this outlines nearly all the information sources a trader would consider when investing in the stock market. For instance, Google just released a series of hardware devices that could potentially define the future of Alphabet. These devices are yet to be available in the market, which means that in the next few months, investors would be looking to see how Google Home, Google Daydream, as well as, the Pixel phone fair out in the market.
With the TradeFinder.net platform, this information is acquired from news and press releases. It’s then quantified to meaningful trading data before it’s integrated into the system, which then, generates potential trading opportunities for the Alphabet stock.
One major advantage with such systems is that they can also use this information to identify other trading opportunities linked to Google products. For instance, consumer demand data could imply that the manufacturers of the various technologies used in Google Pixel phone would benefit based on the number of products shipped by Alphabet. A good example is the Snapdragon 821 mobile processor (the chipset used in Google Pixel phone) manufacturer Qualcomm (NASDAQ:QCOM), which could gain based on the success of the Pixel phone.
Such information could also be used to confirm—or rule out—trading opportunities generated using technical data, such as historical pricing. This is why solely relying on technical analysis and indicators, is now deemed to be inconclusive for investors. With events such as the Google Pixel event, investors have a lot more to look forward to rather than just whether or not the stock is overprice based on recent price levels.
Another thing that investors will monitor closely is the oncoming US presidential election, which typically will be historical regardless of whoever wins the vote. Republican candidate Donald Trump is viewed as the country’s most controversial candidate ever to vie for the office of the POTUS whereas Hillary Clinton will be the first woman to be president if elected. The market will react differently depending on the winner.
Right after the election, the Federal Reserve is expected to raise interest rates and given the experience of the last interest rate hike, the market could swing significantly to either direction. It all depends on whether or not the market deems the next interest rate hike as a positive move.
All this information will be available on the web and across media houses as soon as it is released, but platforms like TradeFinder, Google Finance, and MarketWatch alongside several others try to make it simpler for those looking to utilize it in their trading models.
Conclusion
Generally, fundamental and technical data can be used to determine whether or not a stock is overvalued based on the stock price and earnings.
However, with new information such as the one released by Alphabet at the Google Pixel event, it gives investors reasons to pay even a higher premium on the stock than they would have been willing to without the new products.
Investors can also make investing decisions from a wider perspective by analyzing the potential impact of the presidential election alongside the highly anticipated interest rate hike.