(Bloomberg) — To navigate these unprecedented times, market participants are getting creative with how they monitor economic activity.
As some countries relax their lockdowns, investors and strategists are poring over mobility data from Apple Inc. and Alphabet Inc.’s Google to track the pace of economic recovery and estimate consumer spending across different regions. Such information can provide early clues on which countries will exit the worst recession in decades faster than others, and which will fall behind.
“Covid-19 is like no other shock and so most investors are discounting the traditional indicators,” John Roe, head of multi-asset funds at Legal & General Investment Management, said by email, referring to data such as unemployment and retail sales that are reported with a lengthy lag. “Instead it’s all about the shape of the recovery and so we’re tracking a number of innovative data sources that we believe will be more real time.”
LGIM’s asset allocation team takes Apple users’ requests for travel directions and adjusts them for weekly seasonality before projecting the data onto estimates for gross domestic product. So far, their analysis shows that the U.S. economy is holding up better than other regions and is gradually reopening, while there are signs of improvement in southern Europe as countries like Italy relax their movement restrictions.
Depressed Activity
Apple and Google both launched online tools last month based on people’s mobility. Apple’s uses anonymous data from the company’s Maps app, showing the volume of people driving, walking or taking public transit in their communities and covers major cities and 63 countries or regions. The Google reports are also anonymous and broken down by location and display the change in visits to places like grocery stores and parks. Both tools lack data from mainland China.
In addition to LGIM, Societe Generale SA and Deutsche Bank AG are among those tracking mobility data. SocGen quant strategists led by Andrew Lapthorne said in a note on Monday that the data has helped them see that despite the easing of lockdowns in major economies, activity continues to be weak.
“Regional differences are apparent and the extent of the lockdown remains clear and though there are very tentative signs that the G7 at least is starting to drive a little more, activity remains depressed,” the strategists wrote. “We’ll be watching how this activity develops over the coming weeks.”
Google Data
Over at Deutsche Bank, strategists are using Google data to monitor any pick-up in activity in various New York communities. New York state will begin to reopen in some regions on Friday although the city’s lockdown is likely to continue into June.
Torsten Slok, chief economist at Deutsche Bank Securities, said the analysts are beginning to see early signs of a turnaround in daily and weekly indicators of New York City subway usage, but those improvements are more modest than the pick-up in activity at parks, grocery stores and pharmacies.
According to LGIM’s Roe, asset managers and analysts are having to use mobility data because the current tense market situation requires the most up-to-date information possible.
“We are trying to tread a path between vastly different scenarios,” he said. “Early indicators like this are crucial for reassessing their relative likelihoods.”
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For more articles like this, please visit us at bloomberg.com” data-reactid=”32″>For more articles like this, please visit us at bloomberg.com
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Subscribe now to stay ahead with the most trusted business news source.” data-reactid=”33″>Subscribe now to stay ahead with the most trusted business news source.
©2020 Bloomberg L.P.
Add Comment