Every key event in a CausifyMarket report has two distinct parts. The summary states the facts: what was announced, by whom, with which figures. The causal read is an argument about why that event produced the market impact we observed. Keeping them separate lets you accept the facts while judging the argument on its own merits.
A causal read has three components.
1. The mechanism
The mechanism is the proposed chain from the event to the price move. It has to be anchored to something specific in the data. A mechanism is only accepted if it contains at least one of:
- explicit guidance — a number, a percentage or a company statement;
- a quantitative comparison with a similar past event;
- second-level data beyond price, such as options volume.
Generic phrasing such as "the news reflected growing optimism" is rejected automatically. In that case the mechanism is left empty and the confidence is set to undetermined.
2. The confounders considered
A confounder is anything else that could explain the same move without the event being the cause: a rally across the whole sector, macro data released at the same time, earnings season, a shift in interest-rate expectations. Every causal read lists at least one.
Read this list as the report arguing against itself. If a confounder looks more convincing to you than the mechanism, you have good reason to be sceptical.
3. The confidence level
The confidence label tells you how strongly the data supports the mechanism:
- High — the mechanism is directly evidenced by the source, for example an explicit guidance change or causal language used by the company itself.
- Medium — the mechanism is plausible and anchored to data, but inferred rather than stated.
- Low — the explanation is speculative; some data points in its direction, but not much.
- Undetermined — the event's effect cannot be separated from the confounders with the data available. No mechanism is given.
Summary — Orbital Freight said fuel costs rose 18% quarter-on-quarter and cut its operating margin outlook by 1.5 percentage points.
Mechanism — Management quantified an 18% rise in fuel costs and a 1.5-point margin cut; after a comparable fuel warning two years earlier the shares fell 6% over two sessions, consistent with the size of today's decline.
Confounders — Oil prices rising for reasons unrelated to the company; sector-wide transport weakness after soft freight data.
Confidence — Medium: the figures are explicit, but the link to today's move is inferred, and a sector-wide decline could explain part of it.
How the causal read feeds the rest of the report
The causal read is not a side note. The sector analysis is derived from the causal reads of that sector's events rather than written independently. Risk factors are linked to the events that raise them. And recommendations must reference an event: any suggestion to add or reduce exposure has to include a measurable future trigger, or it is downgraded to "monitor".
So when a sector is labelled bullish, you can trace that label back to specific events, their mechanisms and their confidence levels — and decide for yourself whether the chain holds.
Three habits when reading
- Read the confidence before the mechanism. It tells you how much weight the explanation deserves.
- Challenge the mechanism with the confounders. Ask which story fits the timing and the size of the move better.
- Open the sources. Related news items are linked to each event, so you can check the figures the mechanism relies on.
For the terms used here, see the glossary. For the full pipeline behind the reports, see our methodology.