Tweets are the New Tea Leaves for Investors on Black Friday

Nov 29, 2016 4:55 AM ET

by Adela Quinones, News Product Manager, Bloomberg

As the U.S. heads into the holiday weekend, investors with an interest in the retail sector have their eyes fixed on sales performance metrics for retailers and consumer brands offering the season’s best deals on Black Friday and Cyber Monday.

The National Retail Federation (NRF) forecasts sales in November and December alone to increase 3.6 percent to $655.8 billion. Nearly 6 in 10 Americans — an estimated 137.4 million people — plan to or are considering shopping during Thanksgiving weekend, according to NRF’s annual survey.

Traders, portfolio managers, corporate communications professionals and many others will be looking at advertised bargains, sales projections, isolated headlines and early performance estimates this Friday to gauge how investments in the retail sector could be affected by our holiday shopping sprees. The real question remains, however, are there other signals that could give investors a better sense of a retailer’s or a consumer brand’s performance?

The answer is yes, and they can be found in a single Tweet – or several thousand of them. Every year millions of shoppers across the U.S. skip the turkey and pumpkin pie to wait in door-buster lines. And after the excitement of waiting on a line the length of a football field wears off, it’s more than likely that at some point they’ll take to social media to share holiday wish lists, great finds and insights about their shopping experiences – reaching the Twitter community as well as reporters on the ground covering the day’s events.

The good news in all of this is that machine learning and natural language processing technologies have made it possible to leverage the 24-hour news cycle en masse. Investors and other stakeholders can now look at both the sentiment and volume of news headlines or tweets for a more educated sense of what’s on this year’s holiday-gift hit list. By piecing together unstructured bits of information (C-suite executive names, company products, etc.), machine learning algorithms can provide a helping hand for investors trading the market, much in line with the spirit of giving season.

Bringing these emerging technologies to a host of professionals, Bloomberg recently launched a suite of news and social media analytics tools that subscribers are diving into for various benefits. An expansive landscape of formless data can now be shaped to generate new investment ideas, monitor brand strength, and develop a richer understanding of market share. Using these new functions, including GN <GO> for charting traditional news analysis and GT <GO> for visualizing Twitter data, investors can measure the volume and sentiment of media data surrounding public companies, charting swings in these metrics against stock performances over a set period of time. This information allows them to compare businesses against each other, not only for forecasting longer-term trends, but also identifying market movements and potential winners based on major events like Black Friday.

With only two days to go until the door-busters begin, there is an increasing appetite to see what chatter matters most. Bloomberg has identified the publicly-traded retailers who are currently leading (in volume and sentiment) in the news headlines and social media world this holiday season over the last week:

Companies with the highest volume of news and social coverage:

  1. Inc
  2. Alibaba Group Holding Ltd
  3. Wal-Mart Stores Inc
  4. Inc
  5. Netflix Inc

Companies with the greatest uptick in volume of news and social coverage in the week leading up to Black Friday:

  1. Gap Inc/The
  2. Best Buy Co Inc
  3. Abercrombie & Fitch Co
  4. Staples Inc
  5. Urban Outfitters Inc

Companies with the most positive sentiment:

  1. Advance Auto Parts Inc
  2. Best Buy Co Inc
  3. Murphy USA Inc
  4. TJX Cos Inc/The
  5. Chico’s FAS Inc

To learn more about GT<GO>, GN <GO> and other tools for investors including Bloomberg’s News Readership Ranking (NRR <GO>), News Readership Sentiment (NRS <GO>), and News Readership Volume (NRP <GO>) please visit these functions on the Bloomberg Terminal.

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