The following research was contributed to by Christine Short, VP of Research at Wall Street Horizon.
Wall Street Horizon conducted its annual online survey focused on data for trading and risk in June 2024. The majority of respondents were executive level at institutional firms, traders/investors, and portfolio managers. The firms they represented included institutional quantitative and discretionary fund managers, individual investors and trading/research platforms.
Key findings from the survey results include:
- Earnings announcements and earnings announcement changes ranked as the top two corporate event types that survey respondents considered to be most important to follow
- Approximately 24% of respondents experienced a loss due to an earnings date that was missing, incorrect or had changed
- Out of the 24% that suffered a loss, 50% said a poorly timed investment resulted, 17% said the loss impacted a trading strategy, and 17% indicated it affected a risk strategy
- Geopolitical risk was the primary risk concern (55%) followed by macroeconomic risk (25%)
Earnings announcement data has been reported by survey respondents as the top corporate event type to track since the survey’s inception in 2017. As Figure 1 shows, the top 5 event types to track in 2024 included: earnings announcements, earnings announcement changes, M&As, dividends, and investor/analytics events.
The most significant change from last year is the increase in the importance of earnings announcement changes, as reported by survey respondents, as investors appear to be even more savvy by recognizing that earnings announcement dates and their changes can serve as volatility catalysts.
In 2024, 24% of respondents experienced a loss because an earnings date was missing, incorrect or had changed. This is a significant drop from last year’s 47%.
Of the 24% of respondents who reported a loss because of an incorrect or changed earnings date, what was the result? Fifty percent responded that a poorly timed investment resulted, 17% said it impacted a trading strategy and 17% indicated it affected a risk strategy.
Of note related to earnings announcement timing is the Wall Street Horizon Late Earnings Report Index (LERI). The LERI is a proprietary metric that tracks the number of off-trend earnings date confirmations reported later or earlier than their historical average at US publicly traded companies with market capitalizations of $250M and higher. A reading over 100 demonstrates that more companies are delaying earnings reports, which should be watched carefully. The official post-peak season LERI reading for the Q2 reporting season (data collected in Q3) stands at 186, an increase from 157 in Q1 of 2024. View press release: Wall Street Horizon LERI (Late Earnings Report Index) Shows Less US Corporate Confidence.
Risk seems to be of concern for respondents, which may be due to macro factors such as the upcoming US election, unrest in the Middle East and regulatory changes. As shown in Figure 3, survey participants flagged geopolitical risk (55%) as the primary risk concern followed by macroeconomic risk (25%) and misinformation/data and cybercrime risk (10%). By contrast, in the 2023 survey, the top two risk concern results were flipped, with macroeconomic risk as the primary risk concern (41%) followed by geopolitical risk (35%). This isn’t surprising as investors this year may be concerned with the US election, especially given the unexpected democratic candidate shift in July 2024.
With AI attracting the attention of many investors, we asked how concerned survey respondents are about the regulatory risk posed by the use of AI within the investment process. The majority (57%) reported concern with 24% reporting not concerned. Of note, Wall Street Horizon conducted the same poll during our April 2024 Data Minds panel “Triple Threat: Leveraging Data to Manage AI, ESG, and ETF Risks” and interestingly had the same percentage of respondents (57%) reporting concern (plus an extra 13% voted extremely concerned) and only 4% were not concerned. The webinar addressed the ever important question: Given the increased regulatory focus on AI usage, what specific risks will firms face when it comes to data selection and usage? View recording.
Finally, the survey included an open ended question pertaining to the most prominent pain point in the corporate event space. Accuracy and completeness of the data from providers, including addressing gaps between multiple providers, was the most prevalent response. This feedback is not new for the Wall Street Horizon team, therefore we follow a strict methodology of automated and hand curated data collection. Additional notable write-in responses include pricing concerns, the challenge of keeping up with events, and lack of coverage on small cap stocks. Wall Street Horizon has addressed the latter concern with its recent release of expanded small cap coverage in its Global Events Calendar offering, more info here.
Sources:
Wall Street Horizon provides institutional traders and investors with the most accurate and comprehensive forward-looking event data. Covering 9,000 companies worldwide, we offer more than 40 corporate event types via a range of delivery options from machine-readable files to API solutions to streaming feeds. By keeping clients apprised of critical market-moving events and event revisions, our data empowers financial professionals to take advantage of or avoid the ensuing volatility.
Christine Short, VP of Research at Wall Street Horizon, is focused on publishing research on Wall Street Horizon event data covering 9,000 global equities in the marketplace. Over the past 15 years in the financial data industry, her research has been widely featured in financial news outlets including regular appearances on networks such as CNBC and Fox to talk corporate earnings and the economy.
Twitter: @ChristineLShort
The author may hold positions in mentioned securities. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
