Epsilon Theory Professional
In The Flow
Our most impactful structural attribute of narrative is Attention – the level of “drum-beating” for a certain narrative relative to all of the OTHER narratives taking place.
So it matters that the Inflation narrative is close to all-time lows in its Attention score coming into September, while both the Central Bank narrative AND the Trade & Tariff narrative are at all-time highs in their Attention scores coming into September.
I’ve never seen a US-oriented macro query that yielded more non-US narrative clusters.
Also, the past few days in markets have felt like 2008-2009, where the only thing that mattered for markets was risk-on/risk-off, and that “factor” swamped whatever else you were doing in your investment process. This isn’t as all-pervasive as risk-on/risk-off, but whatever it is (rates-on/rates-off?), it’s as impactful in the value/growth context.
First, I think I think that the “cover story” for the Fed – that they act to help the real economy – has evaporated.
Second, I think I think Trump has lost the financial media over the Trade War in the same way that LBJ lost Walter Cronkite over the Vietnam War.
Narrative Monitors
All monitors are updated as of August 31, 2019. Please note the inclusion of a new monitor for US Recession narratives.
ET Pro Inflation Monitor
We track the prevalence and attention of inflation topics in financial and broadly circulated news sources, including their attachment to narratives around financial markets.
Updated through August 31, 2019. Updated monthly.
ET Central Bank Omnipotence Monitor
We track the prevalence and attention of credibility attached by a wide variety of news sources to central banks and their influence on participants in financial markets.
Updated through August 31, 2019. Updated monthly.
ET Trade and Tariffs Monitor
We track the attention paid to and sentiment of a various trade and tariff-related topics in a range of news sources, especially with respect to their attachment to financial market narratives.
Updated through August 31, 2019. Updated monthly.
ET US Fiscal Policy Monitor
We track the strength and consistency of narratives about US fiscal policy, including budgets, tax policy and debt.
Updated through August 31, 2019. Updated monthly.
ET Credit Cycle Monitor
We track the strength of narratives about the credit cycle in general, plus lending, liquidity and other trends in credit markets.
Updated through May 31, 2019 - Please note that we are presently reworking this monitor's queries to ensure that it accurately reflects narratives concerning credit markets. In our opinion, intersection with consumer credit topical discussions has made it too insensitive to changes in institutional credit markets narratives - we will resume updating and publishing once we identify workable queries for going-forward analysis.
ET US Recession Monitor
We track the strength and consistency of narratives about potential US recessionary pressures.
Updated through August 31, 2019. Updated monthly.
In Focus
ET In Focus reports are single-issue topical analyses. They cover investment and portfolio construction topics, issues relating to the businesses of investment management and wealth management, and narrow analyses of the narrative structure and trends on specific issues, companies, sectors, countries or financial markets.
Our updated positioning views for the month of September 2019.
At the request of some ET Pro subscribers, we explore current Big Tech Monopoly narratives. We find an increasingly cohesive, negative narrative that has almost no market attention.
The updated views for August from our ETNA framework for the analysis of narrative structure on US Equity sectors.