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.File | Dimensione | Formato | |
---|---|---|---|
1-s2.0-S1057521924001108-main.pdf
Solo gestori archivio
Tipologia:
Versione dell'editore
Licenza:
Tutti i diritti riservati
Dimensione
1.17 MB
Formato
Adobe PDF
|
1.17 MB | Adobe PDF | Visualizza/Apri |
Pubblicazioni consigliate
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.