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.

Do stress and overstatement in the news affect the stock market? Evidence from COVID-19 news in The Wall Street Journal / Carlini, Federico Carlo Eugenio; Farina, V.; Gufler, Ivan; Previtali, Daniele. - In: INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS. - ISSN 1057-5219. - 93:(2024), pp. 1-14. [10.1016/j.irfa.2024.103178]

Do stress and overstatement in the news affect the stock market? Evidence from COVID-19 news in The Wall Street Journal

Carlini F.;Gufler I.;Previtali D.
2024

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.
2024
COVID-19, Media sentiment, Stock markets
Do stress and overstatement in the news affect the stock market? Evidence from COVID-19 news in The Wall Street Journal / Carlini, Federico Carlo Eugenio; Farina, V.; Gufler, Ivan; Previtali, Daniele. - In: INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS. - ISSN 1057-5219. - 93:(2024), pp. 1-14. [10.1016/j.irfa.2024.103178]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11385/237699
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