Corporate Communications Go Under the Microscope
Analytics vendors Nasdaq and Wall Street Horizon each have launched new tools that aid institutional traders and investors in unlocking possible trading signals hiddened within corporate communications, company officials announced today, October 17.
Nasdaq has added Prattle’s Equities Analytics to its portfolio of feeds available from the exchange operator’s Analytics Hub. It also is the second feed from Prattle that Nasdaq has included in its offering.
The feed leverages the same natural language processing technology that Prattle incorporated in its Central Bank Analytics that parses announcements from the ten largest central banks and assigns a sentiment value to each statement made by one of the central banks.
“Prattle looks at individual companies and individual speakers at those companies,” Oliver Albers, head of sales, global information services at Nasdaq, told Markets Media. “It has a lexicon specific to those companies and individuals, knowing that everyone’s communication style is different. What sounds bullish coming from one person is actually bearish coming from another.”
The feed vendor sources its data on 3,000 publicly traded US companies from each company’s earnings calls and various public statements and assigns a sentiment value that describes the short-term performance of the stock following an earnings call or public disclosure.
“This is quantifying something that previously was not quantifiable,” said Albers. “So, it bodes well for people who are utilizing the information for algorithms and automated trading. It also provides visual signals for certain intricate things Prattle can pick up, but analysts might have missed listening to the earnings call or reading through the transcript.”
The feed provides a minimum of five years worth of history for each company, but some companies have data stretching back to 2001, according to Prattle officials.
Wall Street Horizon, on the other hand, has delved into what company CEO Barry Star refers to as the unspoken “corporate body language,” with its launch of EventBreaks.
The new offering builds upon the vendor’s Enchilada platform, which provides users earnings and event data, and flags any changes covered companies make in earnings dates, the location their shareholder meetings, and public speaking engagements of their executives.
“There’s academic research that shows when a company moves its shareholder meeting more than 50 miles away from its headquarters that it is not a positive sign,” explained Star.
Wall Street Horizon has been developing EventBreaks for the past two years. Unlike Enchilada, which uses a “pull” delivery model, EventBreaks pushes its data to end users.
“We actually had to rebuild our whole backend to support it,” said Star.
The new backend enables EventBreak to track and record any changes made companies make regarding their meetings, calls, and presentations, which firms can use as an audit trail, he added. “Not only will EventBreaks tell you a shareholder meeting moved but that it moved yesterday at 2:22 p.m. EST from ‘X’ to ‘Y.'”
Wall Street Horizon has initially released EventBreaks as a low-latency feed for APIs.
“So when an earnings day changes or if the company changes the location of its shareholder meeting, users will know in milliseconds,” said Star. “They will get the information so they can trade on it. Or if the viewer is a market maker, they can adjust their spread.”
He expects support for desktop GUI is only a couple weeks away.
Regarding coverage, EventBreaks follows the same 6,000 public companies that Enchilada follows, according to Star. “There are 5,000 US companies and 1,000 companies outside of the US that are the constituents of every major global index,” he said.
Wall Street Horizon also plans to release near-term volatility reports, which will show users where to expect volatility over the next few days, also in the coming weeks.
The hard part is not creating a new view or report, according to Star. “The hard part is collecting all of the data and doing it in an accurate, timely, and comprehensive way.”
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