This study investigated the effect of media coverage on financial markets in response to COVID-19-related news. By collecting data from the United States Centers for Disease Control and Prevention, we study the effect of The Wall Street Journal's coverage and tone on stock markets. In particular, we attempted to measure media overstatements by comparing the number of articles and stress words with the number of COVID-19 cases. We obtained three main findings. First, investors discount macroeconomic news and objective measures of COVID-19. Second, excessive stress in the media tone leads to greater uncertainty and lower returns. Third, these results hold across sectors, although heterogeneity exists. Overall, long periods of high-stress sentiment and uncertainty affect investors more than single-day news.
Carlini, F., Farina, V., Gufler, I., Previtali, D. (2024). Do stress and overstatement in the news affect the stock market? Evidence from COVID-19 news in The Wall Street Journal. INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS.
Do stress and overstatement in the news affect the stock market? Evidence from COVID-19 news in The Wall Street Journal
Vincenzo Farina;Daniele Previtali
2024-01-01
Abstract
This study investigated the effect of media coverage on financial markets in response to COVID-19-related news. By collecting data from the United States Centers for Disease Control and Prevention, we study the effect of The Wall Street Journal's coverage and tone on stock markets. In particular, we attempted to measure media overstatements by comparing the number of articles and stress words with the number of COVID-19 cases. We obtained three main findings. First, investors discount macroeconomic news and objective measures of COVID-19. Second, excessive stress in the media tone leads to greater uncertainty and lower returns. Third, these results hold across sectors, although heterogeneity exists. Overall, long periods of high-stress sentiment and uncertainty affect investors more than single-day news.File | Dimensione | Formato | |
---|---|---|---|
1-s2.0-S1057521924001108-main.pdf
solo utenti autorizzati
Tipologia:
Versione Editoriale (PDF)
Licenza:
Copyright dell'editore
Dimensione
1.17 MB
Formato
Adobe PDF
|
1.17 MB | Adobe PDF | Visualizza/Apri Richiedi una copia |
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.