CHART OF THE DAY: A Solar Storm Is A Bad Omen For Stocks

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Now, this is fascinating.

NASA has been reporting of a spike in solar flare activity on the sun, which has the potential to disrupt earth’s electrical grids and communication networks.

However, it seems that those same flares may actually impact trading activity as well.

Bloomberg’s Alexis Xydias dug up a 2003 paper by the Federal Reserve Bank of Atlanta.  According to the paper’s authors, stocks tend to underperform during the days following a solar storm.

From the Atlanta Fed:

The figure displays the bar graphs of the returns on the NASDAQ, S&P500, AMEX, and NYSE (NY) stock market indices during normal days (left column) and bad days (right column). We define the six calendar days after a storm as bad days and the remaining calendar days as normal days.

chart of the day, returns during normal and bad days, march 2012

Photo: Federal Reserve Bank of Atlanta

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