March 29, 2019

AlphaSense’s Top 9 Trends Of 2018

Amy Onorato

What were the biggest trends of 2018?

A lot has happened this year. Tensions mounted as a trade war heated up between the United States and China. The roll out of GDPR in the European Union challenged companies to rethink the way they process personal information. Cannabis grew as an emerging market, and new tech gadgets grew the Internet of Things.

When we look at these trends from a corporate perspective, we find the issues highlighted in traditional media are also reflected in company documents like filings, presentations, earnings calls and press releases issued by companies large and small.

AlphaSense’s smart search engine uses Machine Learning and Natural Language Processing to search across content, discern search intent, and distinguish major trends. As we wind down 2018, we decided to take a closer look at some of the hottest topics of the year, based off the number of times a word or phase was found among thousands of company earnings transcripts.

Here’s what we found:

AlphaSense’s Top Trends Of 2018

Tariffs

The U.S-China trade war was a front-and-center topic this year, with mentions picking up in March 2018, shortly after President Donald Trump announced tariffs on solar panels, washing machines, steel, and aluminum on China. Escalating tariff proposals followed from both sides, prompting conversations across industries on the future of international trade, and the potential impact it could have on earnings. At the G20 Summit in late November, China and the U.S. agreed on a 90-day truce, halting Trump’s proposal to hike tariff rates from 10 percent to 25 percent on around $200 billion in goods. China also agreed to buy agricultural products from the United States as part of the deal.

Trade

The term “trade” seemed to go hand-in-hand with “tariffs” this year, due to the swirl of headlines and international politics surrounding the issue. Though the outcome is uncertain, conversations surrounding trade are sure to continue into 2019, as long-term effects from 2018 continue to impact industries, and potential new regulations are introduced.

freight earnings

Freight

As trade and tariff talks loomed, so did mentions of freight, and the potential impact on cost. Concerns over adequate staffing, labor, and fleet size were also frequently mentioned during freight discussions.

GDPR

The General Data Protection Regulation, or GDPR, took effect in the European Union on May 25, 2018. The regulation awards specific data protection and privacy rights to citizens of the EU, and restricts the way companies and organizations handle personal data. Any company, regardless of where they’re located, that deals with the personal data of EU citizens must be GDPR compliant. The fine for negligence could be up to to $20 million euro, or 4 percent of global annual revenue. The law was initially adopted in 2016, giving companies two years to get up to speed before it was fully enforced.

606

When we say 606, we’re referring to ASC 606 — short for Revenue from Contracts with Customers (Topic 606). The Financial Accounting Standards Board rule, initially introduced in 2014, changes the way companies report revenue from contracts with customers. All companies that report financial statements under the U.S. GAAP (U.S. Generally Accepted Accounting Principles) must now be compliant.

Turkey

When you take a closer look at earnings call mentions of “Turkey” this 2018, much of the conversation focuses on the health of the lira. The value of the lira to the U.S. dollar experienced a significant drop throughout 2018, causing concerns over a potential economic crisis. According to the Financial Times, the lira was still down overall in December 2018.

Cannabis

It was a big year for the emerging cannabis industry. In October 2018, Canada became the second country in the world (Uruguay was first) to legalize recreational marijuana (you can see the spike). In the U.S., Michigan, Oklahoma, Vermont, Utah and Missouri all voted to further legalization initiatives, joining a handful of states that have already implemented either medical or recreational cannabis regulations. New regulations means new opportunities for new business, with some speculation of potential IPOs in 2019.

Flu

The 2017-2018 flu season was nothing to sneeze at. The CDC dubbed it a “high severity season,” with new highs for influenza-related hospitalizations. When it comes to earnings season chatter, many conversations reflected on the impact of a severe season (peaking in May). Speculation on this year’s flu season, which typically lasts from December through February, was also top-of-mind.

Internet of Things (IoT)

The continued growth in popularity of connected devices, like wearables, voice assistants, and “smart” tech did a lot to fuel the IoT trend this year. According to Motley Fool, 1.9 billion connected devices will be shipped by companies by 2019, leading to around $490 million in revenue. Consumer adoption is also expected to grow as “smart” devices become more mainstream. Amazon AWS, IBM, Oracle, Salesforce, and Microsoft are among some of the major players leading the transformation.

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