Millions of people in the UK and northern Europe will be witnessing today the first eclipse in years.
Now, while experts are warning people not to look directly at the sun and scientists are conducting experiments in order to improve their understanding of weather and climate change models, we ask ourselves whether such event will impact the financial markets…
Electricity Grid Operators… Wachtout!
“This solar eclipse will thus be an unprecedented test for Europe’s electricity system” (ft.com)
“Other nations, such as Germany, have almost eight times as much solar power, and Europe’s electricity system operators have given warning about the prospect of disrupted supplies during the eclipse.” (ft.com)
nb: 10.5% of Europe’s renewable energy produced by solar power
Do Eclipses increase market volatility?
“Near the date of the eclipse, before and after, there is a marked increase in volatility. Eclipses have coincided with market reversals in either direction.” (astrologicalinvesting.com)
exploit Financial Astrology to increase your results?
“As an-astro trader, I look for correlations between planetary cycles and the movements of the markets […] I study the markets as well as the stars.”
“A look at the price history of the S&P 500 shown in [the] Figure immediately reveals how strongly solar eclipses can coincide with important market tops or bottoms” (traderplanet.com)
=> for broader material concerning the influence of Weather Events on Markets:
• Book – Extreme Weather and The Financial Markets: Opportunities in Commodities and Futures (L. J. Oxley, 2012)
“As devastating as climate change has shown itself to be, its potential for new investing opportunities must not be underestimated.”
• Academic Paper – Good Day Sunshine: Stock Returns and the Weather (Hirshleifer & Shumway, 2003)
-> key takeaway: evidence of a “sunshine effect” (where sunnier days are associated with higher stock market returns); however such small arbitrage may only be exploited in the short term and by traders with relatively low transaction costs.
Do not hesitate to share your comments & thoughts (see comment section below).
Subscribe with your email address (see dedicated section on the right) to be automatically notified when a new article is published. Also, don’t forget to follow us (here and on our other social media pages, which include Facebook, Twitter & Instagram).
Stay tuned dear Storm-Troopers !
(Yes, this is indeed the term we coined for our loyal readers… Oh and yes, we are Star Wars fans).