In the face of economic ambiguity, data science has been an invaluable tool to illustrate current trends and forecast upcoming financial scenarios. While the future of global markets remains uncertain, tech giants and government institutions continue to rely on data-driven analysis to provide insight into future market behaviour. One important metric to consider when tracking financial outlook is the Impending Doom Index (IDI). Utilised by both traders and investors, the Impending Doom Index provides a comprehensive analysis of the health of the market, enabling users to make informed decisions about their investments. This article will analyse three charts which make up the Impending Doom Index and how they can be used to assess the current economic landscape.
The first chart of the Impending Doom Index is the Global Systemic Risk Index (GSR). This chart plots the current trend of systemic risk levels across the world. Systemic risk is a measure of how likely an event is to trigger a large-scale financial catastrophe. A high GSR score indicates that investors are at an increased risk of volatility and market downturns. This chart provides investors with a glimpse into the near-term financial future.
The second chart of the Impending Doom Index is the Central Bank Activity Index (CBAI). This chart plots the activity of central bank interventions, including quantitative easing and stimulus packages. By assessing the fluctuations in central bank activity, investors can gain insight into the current monetary climate. By tracking the trends towards inflation or deflation, investors can better understand the efficacy of current policies and the ramifications it may have on their investments.
The final chart of the Impending Doom Index is the Market Risk Exposure Index (MREI). This chart plots the current risk exposure of large investments in relation to their potential profitability. By tracking risk exposure levels, investors are able to better determine how their investments may fare in different financial environments. This information can be used to fine-tune portfolio allocations and better manage risk.
Overall, the Impending Doom Index provides investors with a comprehensive suite of data to analyse when assessing market performance. By analysing the Global Systemic Risk Index, Central Bank Activity Index, and Market Risk Exposure Index, investors are better equipped to make informed decisions and mitigate risk.