Alternative Data Newsletter #63 – 5th June

Key Highlights 

Eagle Alpha will be hosting another virtual data conference on the 8th, 9th, 10th of September. For registration and sponsorship opportunities contact us.

Key Takeaways From Economic Impact: Unemployment Surge

  • The panel was chaired by Brendan Furlong
  • The chair opened with a slide showing how employment has recovered in previous recessions with recessions in 2001 and 2007 taking much longer than previous cycles. The economist from CME group discussed the high levels of unemployment and how a recovery will take place in phases. This phased recovery will take a long time. Actions from the US fed and US government are supporting the economy but will not be inflationary, in his view.
  • A speaker from Appcast Inc. highlighted that not all online job listings are real and there can be a significant level of “bloat” in the listings. This bloat can be worse in certain sectors like the gig economy. This speak also highlighted that online job listings are down significantly since the start of COVID-19 but more importantly candidate clicks on listed jobs is also down significantly. The implication is that people are sitting on current welfare payments that may be higher than re-joining the labour force in low paying jobs.
  • An employment dataset vendor offered views of the US job listings on corporate websites. Data for March and April showed decline for job listing across sectors and states. Some US states being more impacted than others. The dataset also showed job listing data for Europe which is showing similar trends to the US. While the data was down sharply in March and April, on a weekly basis the data was showing improvements in May. South Carolina, Texas and Florida are seeing sharp upticks in job listings, when measured off the bottom in April.
  • The last vendor gave insight on data they gather on form 5500 that companies are required to file in the US. The vendor has benefits and pension data on 650,000 public and private companies. Backtesting of the data shows that company contributions to defined contribution plans, and other benefits, has a direct correlation with company revenue and EBITDA. In the current environment the actions by companies to the economic downturn will be seen in form 5500 data and provide insight on company level fundamentals. The vendor highlighted that companies with historic defined benefit plans are most at risk from an economic downturn

Key Takeaways From Economic Impact: Oil Market Crisis Panel

  • The panel started with a discussion on shale production volumes in the US. February US production was 13 million barrels per day, this has declined to 11 million barrels per day. By the end of the year Rystad expect 10 million barrels per day which means pricing is improving which will reduce default risk.
  • Regarding shipping and storage, production in Saudi has been increasing and has meant that we now see ‘oil on water’ is now at very high historical levels as tankers are being used for storage. VLCC rates (tanker rates) are now at $250k per day for a large portion of April. We have never seen these levels before relative to crude prices.
  • A broader number of countries have been reducing exports and production, this is positive from a supply and pricing perspective. US last year was exporting significantly and became a net exporter. In the last number of weeks this has shown weakness with US exporting less. IHS believe this will stabilize somewhat but big increases in US as a net exporter will not be seen again in the medium term.
  • BP said its important as a practitioner to think about how you combine these datasets to arrive at conclusions from an industry perspective.
  • Carbon emissions is going to be a key issue for the next decade. Scope 3 is a framework that captures the environmental impact of different types of energy sources. Rystad have developed a dashboard to measure this. US Shale actually scores very well on Scope 3 according to them. Scope 3 related data could be really key for differentiating amongst companies going forward and an ‘alpha generator’ as people differentiate between good and bad energy production. Demand for this data should encourage industry to provide more to investor.

The Data on Data – Man Group and Eagle Alpha Paper

Man Group and Eagle Alpha co-authored a new paper entitled “The Data on Data”. In today’s day and age, data is often referred to as the oil that fuels the investment machine. Some go as far as tagging the search for alternative data as the new oil rush. We look at the data on data to find out what really matters in this new boom.

Download the co-authored paper by Eagle Alpha and Man Group The Data on Data.

Active Data Requests

  • UK shopping malls data assessing how quickly and to what level of normalcy, UK malls are returning to
  • LiveNation
  • Credit card transaction and value data
  • US and Canada gas station purchasing transaction, value and gas versus in store
  • TRUPanion transaction and value data and cohorts
  • EU Telco churn, gross add, net add data
  • Tourism in UAE data – arrivals, departures, revpar, occupancy, spend
  • German online pharmacy
  • Small business data in Spain
  • European coverage data for credit card, online traffic and social media
  • Bank account payment level data on direct deposits (i.e. recurring income) vs mainly bill pay out (recurring expenses)
  • Luxottica retail chains in the US in terms of finding out how sales are trending for some of their stores (Lenscrafters, Sunglass Hut, Oakley,etc)

Login to your Eagle Alpha account and update your dataset product information to generate exposure to the buy-side funds. If you do not have an Eagle Alpha account yet you can create one free of charge at the following link and market your product to the top investment funds. 

Industry Intel

  • ‘Nowcasting—predicting the present or the very near-term future—can help investment teams leverage alternative data to understand the state of economic activity in real time, according to Thorsten Neumann, an independent consultant and academic.’ Click here to read the article.
  • ‘Job losses were more moderate at small businesses, many of which received government assistance in the form of the Paycheck Protection Program. Payrolls at companies with fewerthan 50 employees shrank by 435,000. Large businesses shed 1.6 million jobs while medium businesses reduced headcount by 722,000.’ Click here to read the article.

Events You Should Attend

  • Vendor solutions webinar on 25th June at 11.30 – 12.30 ET
  • Virtual data conference on 8th, 9th, 10th of September,2020

Contact to learn more.