Market Overview

Following the Social Media Chatter Surrounding JPMorgan


SMA's focus pick this week is JP Morgan Chase & Co (NYSE: JPM), the largest U.S. bank. It is a good use case demonstration of the value of our SMA intra-day sentiment measurements.

On Thursday May 10th 4:30 p.m. EST, according to widely published reports, the bank issued an unusual notice saying that it would hold a conference call at 5:00 p.m. but included no details concerning the content of the call. A person familiar with the matter said the call would include CEO Jamie Dimon and discuss the bank's quarterly filing. During the call, JPM disclosed a surprise $2 billion loss in its trading activity due to lax risk oversight.

For the past month, SMA's S-Score for JPM was hovering in the neutral state with little S-Volume activity. S-Volume refers to SMA indicative tweets and measures the level of social media activity for the stock.

On May 10th the intraday S-Score at 4:40 p.m. EST was 0.795 (Neutral). Within the subsequent few minutes, JPM's S-Score exhibited a drastic downward change from Neutral to High Negative, coupled with a significant increase in S-Volume. By 4:55 p.m. EST, in less than 15mn and 5mn prior to the conference call, the S-Score reached a value of -2.102 (High Negative), and the equivalent S-Volume tripled in value. After the announcement the downward trend in S-Score and increase in S-Volume gained momentum to reach even higher values.

The stock fell nearly 7 percent to $38.05 in after-hours trading. On Friday May 11th, in the pre-market, JPM's S-Score entered the extreme negative territory with a value of -4.239, and maintained its sentiment value throughout the day. JPM's S-Volume was exceptional, surpassing historically dominant stocks such as AAPL, and reached high ground with a recorded pre-market S-Volume of 1578 compared to AAPL's 481. Since then, the S-Score has reverted to the neutral state with a concurrent decrease in S-Volume, indicating that the market has integrated the effect of the news.

Social Media data are noisy and complex. A single metric is insufficient to understand sentiment behavior over time. Our S-Factors are a family of metrics, including volatility, trend and volume measures, designed to provide a complete view of the social media signature for each security tracked in SMA's database. SMA's processing engine continuously updates our S-Factors, capturing overnight and pre-market sentiment activities. Clients receive sentiment reports prior to the U.S. market open and intra-day sentiment estimates for tracked stocks, on-demand.

We invite the reader to visit our website; investigate our market sentiment metrics for JPM, other stocks, industry sectors, and market indices; participate in our FAQ forum; and sign up for our Flash Report and Newsletter.

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