Financial market news is information that impacts trading and risk management decisions. It is used to assess trends, correlations, and potential risks. Financial analysis also provides insight into hedging strategies and capital allocation.
The nature of financial market news varies by medium. It can range from simple text to audio or video. News media organizations typically create a mix of information sources, including unbiased reporting and opinions from expert analysts. These sources should be filtered to remove hype and hyperbole. Using several sources helps avoid building an echo chamber of your own opinions or misinformation from AI-generated content.
While some financial market news may be objective, it is important to distinguish between fact and opinion. A recent study found that only a few percent of participants could discern whether statements were factual or not. It is also important to distinguish between information that is relevant and irrelevant to your investments. For example, a story about the MG scandal does not usually impact investing decisions. A more useful piece of news would be a new narrative on the cause of oil price volatility.
It is also important to consider how frequently a topic appears in the media. A single article is unlikely to change investor sentiment, but the frequency and depth of coverage are more meaningful. DataTrek, for example, uses Google search trending to categorize stories based on how often they are searched. Another useful tool is the Industrial Sentiment Survey from Corbin Advisors, which has a wordcloud of news headlines.