What I noticed in the past year in reports on the economic news was the following. In my experience updates of inventories of crude oil in the United States had been the one time stronger than expected and a decline in oil production the next time, I noticed for the faster than expected increases in oil stocks.
Over time this experience repeated itself and in my curiosity - or was it suspicion - decided to straighten things out(without pretending to be exhaustive):
Date Announcement Declined Increased Terms used in coverage
06-10-10 3.100.000 last week has increased faster than expected
29-09-10 -500.000 declined more than expected
10-09-10 -2.500.000 decreased as expected
2-08-10 -1.800.000 crude oil stocks fell suddenly
28-07-10 7.300.000 crude oil stocks rose
22-05-10 2.500.000 last week has increased faster than expected
5-05-10 2.800.000 last week rose more than expected
4-03-10 -758.000 unexpectedly fell last week
The numbers are barrels of crude oil
What was it that triggered me so?
1. On the one hand there are significant differences between -1.800 and 7.300.000 barrels but it's not like stocks decline and increase every week and another week;
2. I think in particular the terms "harder than expected", "suddenly fell" and "unexpected" made me more alert.
Nice to look back to see if your experience matches reality.
The xls file with more information, visit:
https://spreadsheets.google.com/ccc?key=0Ar2CjvVL2hq_dG5lb3pDNWlGeUhXdmlMMUhSakpwR3c&hl=en
Ofcourse this raises a few questions:
1 How does one produce these estimates and is the margin of error that is accepted?
2 What are the implications of these messages for different idices?
Feel free to make a contribution in solving this mystery to me!
Blogs on: Healthcare, innovation, social media, economics and other topics that strike me.
Market news reporting is backfitted to market data vs. market action.
ReplyDeleteWhen supply #s comes out and the market goes down, then supply is said to be more then expected; and if the market happens to go up, then supply is said to be less then expected.
Blame laziness on the part of news organizations which in turn manufacture a market narrative that can evolve into a self-fulfilling prophecy.
Xcuse for the late response Michael I am planning to take this blog elsewhere...
ReplyDeleteSo you mean that there is no correlation the markets and those press releases? Not first the release and then the drop or rise in stock prices?
I've been trading some time (stopped for a year now ;)And when I saw the Dow opening up and saw en read those releases I thought there was a connection. In fact I see the same with unexpected drops or increases in house sales, unemployment figures. My key point is that these figures come around each month and the results are often unexpected (weather up or down).
1. Why are they so unexpected? (Hughes differences between oil production)
2. If they are so unexpected but come every month or so then why let them have so much influence? (I know that sounds pretty ignorant.. but it puzzles me).