How alternative data spread through finance
Everyone is hungry for data to help navigate the coronavirus crisis, but thorny questions remain about consent and privacy.
At the start of April, Exabel, an artificial intelligence and machine-learning platform for active asset managers, partnered with 1010data, an alternative data provider to the retail, consumer packaged goods and financial services industries, to develop their Covid-19 impact dashboard.
The dashboard derives information from multiple sets of live credit and debit card transaction data, as well as some geolocation data that shows declining visits to stores.
Taken together, these give investors a close to real-time insight into how the pandemic and lockdowns have impacted consumer spending in the US at companies across 11 subsectors of the travel, general merchandise and grocery, and retail industries.
While sell-side analysts struggle to update projections based on slow-to-arrive and already-out-of-date-when-they-do official and audited numbers, such as GDP and quarterly corporate earnings, the dashboard offers searing, immediate insights.
Consumer behaviour started to change around February 25, even before the first coronavirus death in the US. By March 28 the dashboard was showing an astonishing year-on-year aggregate decline in spending of 46.3%. By the end of the quarter that had improved – if one can use that word – to a year-on-year decline of 36.9%.