AroniSmartInvest™ and AroniSmartIntelligence™ in Action: Analysis of Volatility of Stock Market Indices, Treasury Yield, Gold, Silver, and Oil as Q1 2023 Ends

AroniSmartIntelligence Stock Market Indices Time Series Support Vector Machine, Neural Network and NLP Sentiment Analysis

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Q2 2023 is pushing forward. The quarter has followed the period with complex dynamics.  Year 2022, during which the stock market experienced major dynamics, mostly with historical randomness and a downtrend rollercoaster, saw the  major upbeat sentiments and performance observed in 2021 almost washed out. Q1 2023 started with an upbeat sentiment, before experiencing the trends, volatility and seesaw movements observed in 2022. However, in the last weeks of the quarter, some positivity started to show up.  By the end of the quarter, most of the key market indices had recovered and went above the levels of early January 2023.  Now, more than a month within the quarter, the market dynamics continue to be challenging. As promised at the beginning of the quarter, , AroniSmart™ team, leveraging the NLP, Text and Sentiment Analysis, Machine Learning  Econometrics and Time Series capabilities and Dominance Analysis of AroniSmartInvest ™ and AroniSmartIntelligence™, has been analyzing the stock market news and trends.  The results and insights on the trends and the projected dynamics  will be progressively shared in upcoming articles.

Since 2022 and throughout  Q1 2023 the performance over has, overall, significantly been impacted by the Federal Reserve's monetary policy regarding inflation, the continued uncertainty on the Chinese economic policies, worries of recession, and Ukraine war.  The impact of the COVID-19 pandemic new variants that impacted 2022 was almost inexistent in Q1 2023 and has now been declared inconsequential going forrward. As expected by  economists and most major banks,  the Federal Reserve has  continued to agressively raise interest  rates and a new important factor has worsened the fears. The collapse of the Silicon Valley Bank (SIV) and Signature Bank (SBNY)  in the US was followed by the  failure of Credit Suisse in Europe, has seen a new failure: First Republic Bank, which had assets of $212 billions as of the end of Dec 2022. The events have rattled the stock market, and most worries have shifted to making sure the money is at an FDIC-insured bank and within insurance limits. However, like in Q1 2023, the stock market continues to be resiliant, with key major indices still in positive territories. 

So far, the interest rate has been raised nine times, from 0.25% to 5.00%, with the aggressive 75point raise in June, July, September and November 2022 and 50point raise in December 2022.  The latest raises were 25point in Feb and March.  The interest raises have pushed borrowing costs to highs since 2008.  The Federal Reserve has kept the option to  continue to raise the target range for the federal funds over the year, as the inflation persists, but by smaller steps and not as regularly.

These changes have negatively impacted all the market indices, as the Treasury Yield 10 Years (^TNX) continued to increase until early march, before declining towards the end of Q1 2023.

AroniSmart™ team, leveraging the Machine Learning Time Series capabilities, including Support Vector Machine, and Neural Network Analysis of AroniSmartIntelligence™ ,  has analyzed the trends of key stock market indices (DJI, NASDAQ,  S&P 500, Russell 2000, Oil, Gold)  between  mid Nov 2021 and  mid Nov 2022 and came up with insights and  projections on the dynamics.  

At the start of Q1 2023, on Tuesday January 31, 2023, AroniSmart™ team, leveraging the NLP, Text and Sentiment Analysis, Machine Learning  Econometrics and Time Series capabilities and Dominance Analysis of AroniSmartInvest ™ and AroniSmartIntelligence™, looked at the stock markets news and trends.  From the analysis, the team came up with insights and highlights on key stocks and market sentiments.  The analysis identified  the key stocks  expected to weight heavily in investment decisions in Q1 2023 and the associated sentiment analysis results ( see here: AroniSmartIntelligence™ and AroniSmartInvest™ Stock Market and Investment Sentiment and NLP Analysis: Market Sentiment and Highlighted Stocks on January 31, 2023 and Q1 2023).

The insights followed other analyses covering the dynamics in the previous periods (for disclaimer and terms, check AroniSoft website). For related analyses of Stock Markets using Time Series, Dominance Analysis, and Neural Network capabilities see here : 1) AroniSmartInvest™ and AroniSmartIntelligence™ in Action: Analysis of Volatility of Stock Market Indices, Treasury Yield, Gold, Silver, and Oil as Year 2022 Ends ; 2)  AroniSmartInvest™ and AroniSmartIntelligence™ in Action: Analysis of Volatility of Stock Market Indices, Gold and Oil in Mid-November 2022 ;  and 3) AroniSmartInvest and AroniSmartIntelligence Stock Market Analysis: Update on Market Sentiment and Highlighted Stocks at the End of Oct 2022).

The analyses produced the different measures of forecasting accuracy, including  directional accuracy of Stock market indices. Directional accuracy is an important statistic when ones tries to look at the prediction of a given stock market indice  vs others and key selected stocks, for example, as in this case, the  NASDAQ , S&P500,  RUSSEL 2000, or DJI Adjusted Closing Price as a function of other stock market indices, Gold,  Silver, and Oil and selected stocks and Treasury Yield.   There was also good insights from Dominance analyses that were performed to see whether there are major connections  among indices, assuming investors are moving from some market indices to others, especially from tech dominated  NASDAQ to DJI, or from stocks to Gold, Oil, and Silver.

What happened to some identified stocks since January 2023?

In general all indices experienced an upward momentum  over 2021 and to January 7, 2022: Dow Jones (.DJI) had grown by 16.84% to 36,231.66; S&P 500  (.INX) by 23.09% to 4,677.03;  Nasdaq Composite (.IXIC) by 14.57% to 14,935.90; Russell 2000 Index (RUT) by 4.25% to 2,179.84, Crude Oil by 50.7% to 78.95 and Gold by -1.93% to 1,794.00

Over 2022, the stock indices had very poor performance and  have been significantly down.  The downward trends appeared to reverse in late Q1 and Q3 2022 but the market went back to high volatility, swinging between the opening and the closing of the market. Since early Q4 2022, the market started to come back ( see: AroniSmartInvest™ and AroniSmartIntelligence™ in Action: Analysis of Volatility of Stock Market Indices, Treasury Yield, Gold, Silver, and Oil as Year 2022 Ends).

Hence,  it was expected that Year 2023 would fuel on the persistent dynamics: worries of recession, softening inflation, pandemic impact, less reliance on China for some investments including semiconductors, Electric Vehicles, and microchips, increased layoffs and unemployment.

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Unusual Dynamics and  Trends  in Q1 2023.

AroniSmart™ team  is analyzing  stock indices performance dynamics, leveraging the  Econometrics and Time Series Support Vector Machine  and  Neural Network Multilayer Perceptron  capabilities  of  AroniSmartIntelligence™ and Machine Learning and Sentiment Analysis of AroniSmartInvest™.  The team is looking at the performance of  Dow Jones (.DJI), S&P 500  (.INX),  Nasdaq Composite (.IXIC), Russell 2000 Index (RUT) Adjusted Close vs  Adjusted Close of the other indices ( Crude Oil,  Silver, and Gold) and key selected stocks  from  in Q1 2023.

The preliminary analyses confirm as before that these indices basically follow similar trends. Also, they are all similarly impacted by the market conditions. Already some of the stocks highlighted in January 2023 analysis have shown significant trends. As example, YTD the following key stocks highlighted in January 2023 analysis  have performed as follows, which appears to mirror the performance of the market indices and consistent with the market sentiment:

Stock Price Index as of Jan 3, 2023 Price Index  as of May 5, 2023 Increase (decrease)
Dow Jones Industrial Average (^DJI) 33,136.37 33,274.15 0.38%
NASDAQ Composite (^IXIC) 10,386.98  1,2221.91  16.77%
S&P 500 (^GSPC):  3,824.14  4,109.31  7.0%
Russell 2000 (^RUT) 1750.73  1802.48 0.37%
Crude Oil May 23 (CL=F)  76.93  75.67  -5.72%
Gold Jun 23 (GC=F)  25.96  29.35 14.65% 
Global X DAX Germany ETF (DAX)  25.96  29.35  14.65%
ASML Holding N.V. (ASML) 574.32 680.71 13.89%
Apple Inc.(AAPL)  125.06   164.90  26.92%
AMC 3.93 5.01  23.1%
AMZN 85.46 103.29 22.96%
Applied Materials Inc (AMAT) 97.63 122.83 26.13%
ASE Technology Holding Co. Ltd. (ASX) 6.32 7.97 27.11%
ASML Holding N.V. (ASML) 549.57 680.71 24.58%
Bank of America Corp (BAC) 33.51  28.60 -13.65%
Bitcoin (BTC-USA) 16,625.08 28,636.48 71.85%
CVS 91.72 74.31  -20.26%
Exxon Mobil 106.51 109.66  -0.5%
Freeport - McMoran Inc. (FCX) 37.95 40.91 7.66%
FTI Consulting (FCN) 161.89 197.35 24.28%
MercadoLibre, Inc. (MELI) 88.25 126.80 37.5%
NetFlix, Inc. (NFLX) 298.06 345.48 17.16%

Skyworks Solutions, Inc. (SWKS)

90.50 117.98 29.46%


The key findings highlight:  Most of the stocks highlighted in January 2023 analysis ended Q1 2023 with an upward momentum. Trendwise, most of the gains happened in Feb 2023 and then towards then end Q1 2023.  March 2023 has started with most stocks and market indices giving up some gains.

AroniSmart team will be publishing detailed analyses in upcoming days.

More detailed analyses can be conducted using AroniSmartIntelligence™ Big Data, Machine Learning, Time Series and Sentiment Analysis capabilities.

For  more on AroniSmartIntelligence and AroniSmartInvest capabilities, visit AroniSoft web site by clicking here. AroniSmartInvest™ and AroniSmartIntelligence ™ are available on Apple's App Store.

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