GDP Decline? AbleMarkets Has You Covered Well in Advance

Post date: 2024-05-30 14:16:30 GMT

AbleMarkets tracks institutional activity so you know what informed players know

Have you heard of the latest GDP news? Yes, the ones from this morning, informing all about the Q1 GDP downward revision? The news has brought tremors to the markets and triggered a sell-off, but was it really that new?

A brief examination into the trends detected by AbleMarkets shows that the institutional investors had been aware of the impending news for at least a few days, if not the whole week. AbleMarkets even ran an article about this yesterday morning. Figure 1 summarizes daily net institutional flows in the S&P 500 ETF (SPY) over the past month, as estimated by AbleMarkets. As the Figure shows, the institutions have been net selling the S&P 500 since at least May 16, and, possibly, May 10, 2024, a good two weeks prior to the news finally reaching the public.

How do the institutions know the news before it is released? As we discuss in our book “Real-Time Risk: What Investors Should Know About Fintech, High-Frequency Trading and Flash Crashes” (with Steve Krawciw, Wiley, 2017), the news of GDP caliber is not created and announced in one day. In particular, a quarterly revision is compiled over many days and gradually seeps to the informed market participants. In many cases, institutions nourish information channels by building strong relationships that give them a “heads up” in the macro space, such as this GDP news.

How can “other” institutional and non-institutional market participants learn about what is going on? Observing informed institutions’ activity is a good start. AbleMarkets offers reliable estimates for net flows for institutional activity that timely informs our subscribers of big changes. Subscribe to AbleMarkets today to be in the know and benefit.