My full review of stock market news sentiment, gathered by scraping 4,668 finance articles across 100+ publishers (Yahoo Finance, Motley Fool, Benzinga, SeekingAlpha, etc.) over the past week. The original version can be found here
TLDR: stock market news sentiment remains significantly bullish for yet another week in a row, driven by optimistic monthly reports released for the month of August and continued upward trends from the SP500 and global cryptocurrency market.
1. This Week’s News Sentiment 📰
As we commence our first week of Autumn 2021, stock market news remains just as bullish as it was to end the summer. News coverage this week was relatively unchanged in terms of sentiment compared to last week. Overall, the average finance article written this week scored a 0.35 in terms of sentiment (meaning that just over 1-in-3 sentences written about the markets this week leaned optimistically) and a 0.63 in terms of time-sense expressed (meaning that almost 2-in-3 sentences published this week were written in future tense). Here’s a look at the major news events driving the continued all-time high bullish sentiment this past week:
📈 Stocks: The major U.S. stock indexes traded in a narrow range all week, but the S&P 500 managed to post a modest gain for the second week in a row.1 The NASDAQ outperformed its peers for the second consecutive week while the Dow fell slightly. Despite sustaining a mid-month decline, the S&P 500 recovered to record its seventh positive month in a row, posting a return of about 3% in August. The index reached 12 record closing highs in the month versus 7 in July.
₿ Cryptos: Much of this week’s news optimism can be attributed to the continued meteoric rise in cryptocurrency prices. Global cryptocurrency market capitalization grew 11.5% this week to $2.4T dollars to cap off the largest month in history in terms of cryptocurrency trading volume. The majority of crypto-related headlines this week came on the back of Ethereum ($ETH) which rose more than 20% to $3,935.17 per coin this week at the time of this writing; other big crypto movers this week include Solana ($SOL) and Bitcoin ($BTC) as it eyes its first “golden cross” since May 2020.
🦅 Economy: While news optimism remains relatively high overall, time-sense fell slightly this week as a slew of monthly economic reports were released for the month of August. A private report showed that the U.S. economy recorded its 15th consecutive monthly gain in manufacturing activity in August. The Institute for Supply Management’s manufacturing index rose 0.4% to 59.9. Any reading above 50 indicates growth in manufacturing activity. We also saw August’s monthly job report this week. The economy generated 235,000 new jobs last month, far short of economists’ expectations and trailing gains of nearly 1.1 million in July and 962,000 in June. The unemployment rate fell to 5.2% from 5.4% in July.
2. Most Mentioned Tickers 📊
Each week we analyze the number of headlines written about each stock and cryptocurrency. The most mentioned tickers in this week’s news and the tickers with the biggest volume increase compared to last week are shown here: most mentioned tickers 8/30-9/3
🍎 Apple ($AAPL): For the second consecutive week, $AAPL was mentioned more in news coverage than any other ticker in finance articles scraped this week. A mainstay of our weekly most-mentioned list, Apple Inc. churns news headlines, whether or not there’s actually significant news to report about the company or its stock. Following the 10-year anniversary of Tim Cook’s tenure as Apple CEO last week — as part of which he received $750M in $AAPL share value under the terms of his contract — headlines this week centered around an open letter written to Cook by Apple employees presenting a litany of grievances including concerns about privacy and diversity within the company. Apple also saw headlines from outside the workplace this week, as regulators from around the world mount pressure on the company’s current App Store policy, accusing Apple of exerting too much control (ex. a 30% commission on in-app purchases) on developers who use it to sell products.
“What is Apple Thinking?” | The New York Times
👨🔧 Automatic Data Processing Inc. ($ADP): The ticker with the biggest increase in news headlines this week compared to last week was $ADP. The stock fell a slight -0.86% last week and has now dropped nearly 3% over the past month to $207.38 per share as the company plans to go ex-dividend on September 9th. This means investors who purchase and settle shares of $ADP before this upcoming Thursday will be eligible to receive the company’s $0.93 dividend payment per share, which will be paid out on October 1st. Automatic Data Processing’s previous dividend payment consumed approximately 61% of the company’s free cash flow last year, and while this is in the normal range for most dividend-paying organizations, analysts seem to agree that the decision bodes well for the company’s long-term strategy by freeing up some space on their margins during a relatively lean period in its history as a business. Overall news sentiment for $ADP scored a +41.05% on a scale from -100% to +100%, signaling relatively bullish sentiment to boot over the past week.
“Automatic Data Processing, Inc. Is About To Go Ex-Dividend, And It Pays A 1.8% Yield” | Yahoo Finance
3. Sentiment Winners and Losers 👍👎
Each week we summarize the most extreme sentiment scores in the news for each ticker to help you decide where to focus your attention. Here’s a look at which tickers scored the highest (and lowest) in terms of optimism, pessimism, speculation, and reaction expressed in this past week’s news: most optimistic and pessimistic tickers 8/30-9/3
Sentiment: Most Optimistic😀 and Pessimistic😒 Tickers
📶 Motorola Solutions Inc. ($MSI): This week’s most optimistic stock in news coverage was Motorola Solutions Inc. (optimism score: 58.9%). $MSI stock rose a mere 0.76% on the week to build on 46.7% growth so far in 2021. Motorola Solutions — which succeeded Motorola, Inc., following the spinoff of the mobile phone division into Motorola Mobility in 2011 — has been spoken of with relatively good cheer compared to industry competitors like Qualcomm ($QCOM) and Verizon ($VZ). Much of the optimism has come as a revelation following the company’s Q2 earnings released nearly a month ago on August 5th, in which the company revealed stratospheric annual earnings per share growth of 41% compound. While some may call it an old-fashioned investment in today’s age of “tech-stock blue sky investing”, it’s hard to argue with bonafide profitability like this if you’re investing for the long-term. This week’s most optimistic $MSI article:
“Here's Why I Think Motorola Solutions Is An Interesting Stock” | Simply Wall St.
🐕 Shiba Inu Coin ($SHIB): This week’s most pessimistic (and reactive) ticker in news coverage was Shiba Inu Coin (pessimism score: 29.3%). Even though we saw relatively low amounts of pessimism in this week’s news coverage across the board, $SHIB saw more pessimism expressed in articles this week than any other ticker, as the fringe cryptocurrency reached its lowest price of the past month on Tuesday (a whopping $0.000006735 per coin — yes, that’s five zeroes after the decimal) as its developers announced that they’d be removing a portion of the existing $SHIB supply from circulation. Though $SHIB price rose considerably heading into the weekend and continues to trend upwards at the time of this writing, it’s still down 11% in value over the past month. Keep in mind that the coin — which was created in April as a blatant meme and borderline Ponzi scheme in response to the meteoric rise in the price of Dogecoin early this year — has grown 45x in value since its inception four months ago. In other words: a $1,000 investment in Shiba Inu Coin back in April is now worth somewhere around $42,000. This week’s most pessimistic $SHIB article:
“How the Shiba Inu Coin Burn is Attempting to Rekindle a Meme’s Magic” | Fast Company
Time-Sense: Most Speculative🤔⏩ and Reactive😮⏮️ Tickers:
image: most speculative and reactive tickers 8/30-9/3
🔋 FirstEnergy Corp. ($FE): The stock with the most speculative (ie. future-tense) sentiment measured in the news coverage this week was FirstEnergy (speculation score: 95.4%). $FE stock 2.86% this week to $39.59 to cap a 34.16% run in share price year-to-date as the energy utility company has benefited from improving electricity demand in recent months. Per the U.S. Energy Information Administration (EIA), U.S. retail electricity sales are likely to inch up 2.7% in 2021 after sliding 3.9% in 2020. Given the growth in demand, coupled with FirstEnergy’s 96.5% earnings growth this year and given that its stock is still trading 52.8% below its estimated fair value (according to Simply Wall St.), analysts speculate that its stock is set to remain a handsome mid- to long-term investment. Analysts also cite $FE’s 14% return on equity (ROE) as a reassuring sign that the company is growing in value and effectively managing investors’ money. This week’s most speculative $FE article:
“Should You Be Excited About FirstEnergy Corp.'s 14% Return On Equity?” | Simply Wall St.
👜 PVH Corp. ($PVH): The stock with the most reactive (ie. past-tense) sentiment measured in the news coverage this week was PVH Corp. (reaction score: 53.6%). $PVH stock price stair-stepped up 5.12% to $118.84 per share on Wednesday following the release of its Q2 earnings report, which beat consensus analyst earnings and laid out an upbeat outlook for the remainder of the year. The company (formerly known as Phillips-Van Heusen Corporation) is one of the world’s largest clothing conglomerates and owner/licenser of brands such as Tommy Hilfiger, Calvin Klein, Kenneth Cole New York, and Michael Kors. PVH Corp announced quarterly earnings per share of $2.72 — crushing analyst estimates $1.52 — and posted revenue growth of 46% YoY to $2.31 billion as consumers begin to return to their pre-pandemic apparel shopping habits. Following the beat-and-raise report, analysts at JPMorgan and Credit Suisse both announced increased price targets for $PVH. The most reactive $PVH article this week:
“PVH, IBD Stock Of Day, Breaks Out As Calvin Klein Owner's Earnings Beat” | Investor’s Business Daily
Biggest Mood Swings and Changes 🎭🔀
Each week we compare the sentiment of each ticker to its sentiment from the previous week. Presented below are the tickers that saw the biggest change in each of our four sentiment metrics this week compared to last: image
💽 Advanced Micro Devices ($AMD) saw the largest increase in optimism expressed this week compared to last week after $AMD stock broke resistance above $109 per share early in the week; analysts at Benzinga say the stock has now settled into its second bullish pattern of the past month. On Wednesday, it was reported the U.S. Department of Energy was nearing a deal worth $500 million to purchase a supercomputer made with AMD and NVIDIA Corp.
💰 Coinbase Inc. ($COIN) recorded the largest increase in pessimism expressed this week despite the stock rallying 8.62% to $278.44 per share. This increase in pessimism can be widely attributed to a handful of contrarian, negative articles published by the likes of the Motley Fool and SeekingAlpha arguing that the underlying volatility of digital assets makes Coinbase an inherently risky stock to invest in.
💻 Hewlett Packard Enterprises Co. ($HPE) posted the biggest increase in speculative language expressed this week compared to last as the stock remained relatively flat over the trading period, rising just 0.06% to $15.67 per share. Much of the speculation surrounding the company’s lackluster earnings report released early in the week, in which the company’s continued supply chain issues showed through. Analysts wonder if HP’s component supply concerns will continue.
💉 Moderna Inc. ($MRNA) received the biggest increase in reactive language expressed after increasing in stock price by more than 13% to $416.70 per share on strong trading volume and new research released this week suggesting that the company’s COVID-19 shot may offer longer-lasting protection that Pfizer’s amid growing conversation about the importance (or lack thereof) of booster shots.
4. Market Mood Outlook 🌡️🔭
This past week brought a close to the month of August and commenced the unofficial start of Fall 2021. In terms of market action, August was the 7th consecutive month of stock market growth, and the largest month in history in terms of cryptocurrency trade volume. This past week was no exception to the tremendous momentum in both realms, and news sentiment reflected this: stock market news articles published this week saw more optimism expressed on average than any other week this year except for one (the first week of August, the height of Q2 earnings).
Looking ahead into September and October, the extreme optimism is showing no signs of slowing down as Wall Street expectations for the next stock market earnings season continue to rise. Over July and August, forecasts for third-quarter earnings of companies in the S&P 500 rose 3.8%, according to FactSet. That’s the fourth-largest such increase during the first two months of a quarter since 2009.
While market bulls are currently reveling in the continued outperforms of stocks, market bears may be quick to point out that we are growing more and more due for some sort of correction. The S&P 500 hasn’t suffered a 5% pullback since October 2020. The last time the index experienced such a long period without a big drop was from June 2016 to early February 2018. With that in mind, we will continue to watch the progression of international economic factors like the COVID-19 Delta variant and the transition to Taliban rule in Afghanistan for any inkling of adverse impact on the U.S. stock market. That’s all for today’s report; good luck this week everyone, and thanks for reading. 🙏
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