How to Analyze Market Recaps

The simplest way to stay informed about daily trends.

Market recaps are important for two reasons. First, they keep you up-to-date on the most important events that occur throughout the trading day. Second, they help you make informed trading decisions for the days that follow.

Market recaps are written by professional asset managers or equity research analysts who follow most aspects of the market and have a broader understanding on what is going on. Usually, the best time to look at these recaps is when the market close at around 5pm EST. This ensure all of the day’s information is added into the reports. That being said, let’s dive into where to find these recaps and how to use them.

Sources to Consider

Since I started trading, I’ve found Charles Schwab’s market updates to be the most informed. Additionally, you could look through Eoption’s market recaps, Value Line, and Edward Jones. Another source where you can get find these recaps is by creating an account with a brokerage. One of my favorites is Interactive Broker since their platform offers daily insights as well as several other data points that are essential for carrying out good trading practices. To be fair, most of the brokerage firms offer market insights to their clients for free, so no matter who your go with, you will be able to get a lot of information that will assist you with your trading strategy.

Market Recap Structure

Let’s break down how market recaps are constructed.

1. The first part of the report talks about the entire trading day and how the major indices performed that day, which is followed by individual company news, especially during the earnings season. If you are interested about what the earnings season is, check out my post talking about it. It is very helpful to read these individual company news because you will be able to find good opportunities or see a trend arising within a specific industry.
2. After the company news and performance, you might find a section that will talk about economic data for the day or will talk about the bond market which is also a very important part of the economy. Even if you are an equity investor, it is crucial to understand how bonds signal trends in the economy.
3. Depending on what source you use for your daily dose of market news, you might find a summary of how the European or Asian markets performed that day. I like to read recaps that talk about the major markets and not just the US market. This is especially true if you have exposure in other countries. As I have investments in multiple continents, I like to read market recaps that summarize the trading activity across Europe and Asia.

I recommend reading these market recaps as they have helped me stay on top of markets tremendously, especially when I was not focusing on investing as a full-time job. If you are a day trader or an equity analyst, it is your full-time job to read market news and have great sources such as the Bloomberg terminal or other comparable platforms. When you are a retail trader whose full-time job is not investing, then these recaps can help you get all the knowledge that you will need to know what your next step will be when you invest.

Originally published at https://www.spawner.ai on July 28, 2020.