deep learning - Complexity Everywhere

2020 Outlook

Entering year 4 of a 15-year private sector confidence cycle, expect a mixed bag for risk-on asset classes in a world weighed down by the continued miscalculations of public sector actors. Major Themes: A Mixed Bag for Risk-on Assets in 2020: The S&P 500 rises modestly; so does

deep learning

Stocks and Bonds are Now Both Right - No Recession in Sight

Expect Stocks to Make New Highs as the Economy Firms Up Recession fears are everywhere. The US-China trade war, Middle East violence, impeachment in DC, protests in Hong Kong, and Brexit have all weighed on the economy. These fears are likely overblown. Consumer economic data remains robust and the Fed

deep learning

Odds Increase That the Fed Doesn't Cut Rates This Week

Another FOMC decision is upon us. Expectations are for a 25 bps cut. Equity markets are near all-time highs and US economic data continues to be resilient. A communications embargo has limited public FOMC communications. NLP analysis of available FOMC communications suggests a much lower likelihood of a rate cut

china

Congress Supports the Trade War, Even if You Don't

Conventional wisdom is that Congress doesn’t support the trade war. Sentiment analysis of every member’s Twitter feeds paints a different picture. TL;DR: Congress is about as negative on China as the President is. And their followers are rewarding negative China tweets with more likes and

deep learning

Optimism is on the Menu; A Recession is Not

The yield curve has inverted, the trade war seems to be in early innings, and economic data is being revised downward. Forecasters are warning of a recession and even financial panic. CNBC has been replete with talk of markets in turmoil. A good part of the country is apoplectic about

deep learning

Believe Me When I Say To You, I Hope You Love a Trade War Too!

NLP Analysis of the President’s Tweets on Trade (With Some Inspiration From Russians by Sting) In Europe and America, There’s a growing feeling of hysteria. Markets are catching up to the staying power of the trade war. As I wrote on May 23rd here: Investors continue to

artificial intelligence

A Data-Driven Fed Wouldn't Cut Rates

TL;DR on Fed Rate Cuts The Federal Reserve Open Market Committee (FOMC) announces its rate decision on Wednesday. A robust review of economic data does not support a rate cut; I built both a neural network and random forest model trained on 72 economic indicators (monthly data going back

artificial intelligence

Can Neural Networks Learn to FedSpeak?

Deciphering FedSpeak1, the words and intentions of the Federal Reserve, has become a full-time job in financial markets and media. And markets have placed their bets leading up to the July 31 Federal Open Market Committee (FOMC) decision. As of today, the widely watched CME FedWatch Tool (which calculates probabilities

artificial intelligence

My Neural Network Bracket Loved Auburn All The Way to the Final Four

Digging Deep [Learning] to Win March Madness I built a neural network to make my NCAA men’s tournament picks this year for my office pool. As of this writing, an Auburn win and Michigan State loss in the Final Four, and I win bragging rights for a year! I