Music sentiment and stock returns

Fernández-Pérez, Adrián; Garel, Alexandre; Indriawan, Ivan

doi:10.1016/j.econlet.2020.109260

Cited by 13 publications

(19 citation statements)

References 33 publications

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“…Several researchers have documented various exogenous factors to capture the mood and are correlated with the stock returns. Saunders (1993) and Hirshleifer and Shumway (2003) examined using the weather, Kamstra et al (2003) analyzed using the daylight, Yuan et al (2006) investigated using the lunar phases, Edmans et al (2007) studied using international soccer results, Drakos (2010) investigated the terrorism activity and Fernandez-Perez et al (2020) used music to name a few. In this study, we examine how a retail investor' s mood on the COVID-19 pandemic affects the stock market.…”

Section: Introductionmentioning

confidence: 99%

COVID-19 fear index: does it matter for stock market returns?

Subramaniam

Chakraborty

2021

RBF

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PurposeThe purpose of this paper is to capture the investors' mood related to the COVID-19 pandemic and analyze its impact on the stock market returns.Design/methodology/approachTo capture the investor mood related to the COVID-19 pandemic, the authors construct a unique COVID-19 fear index based on the Search Volume Index (SVI) from Google Trends (http://www.Google.com/trends/) of the search terms related to COVID-19 words and phrases as revealed by Google and Internet dictionaries. The COVID-19 fear index was used to investigate its impact on the stock market returns.FindingsThe study finds a strong negative association between COVID-19 fear and stock returns. Unlike other studies, the relationship is persistent for a significant period. This relationship is not found to reverse in the following days. The results also highlight that COVID-19 fear strongly impacts the stock market. The sentiment persists for a significant period and is not reversed soon, unlike the regular times in earlier studies.Originality/valueThe study is among the very few studies that constructed COVID-19 fear index using several Google search terms and captured its impact on the stock market returns.

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Section: Introductionmentioning

confidence: 99%

COVID-19 fear index: does it matter for stock market returns?

Subramaniam

Chakraborty

2021

RBF

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“…Our analysis suggests that seasonal variations of A-shares stock prices in China are, if not all, partly explained by mood beta. Recent studies related to sentiment uses innovative approach such as music and photo sentiments in the US and other international markets (Chiah et al, 2021; Edmans et al, 2021; Fernandez-Perez et al, 2020; Obaid & Pukthuanthong, 2021). The connection between these mood indicators and stock mispricing in the Chinese stock market is uncertain.…”

Section: Discussionmentioning

confidence: 99%

Mood Beta, Sentiment and Stock Returns in China

2022

SAGE Open

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We examine the cross-sectional seasonality of stock excess returns in China. We find that stocks’ historical excess returns are positively related to their future excess returns under a congruent-mood period and negatively associated with their future excess returns under a noncongruent-mood period. Besides, stocks with larger mood beta tend to outperform during mood periods, and this impact is still significant after differentiating companies. Moreover, consistent with our hypotheses, mood beta has stronger explanatory power after China’s unique Split-Share Structure Reform and RMB Exchange Rate Reform. Finally, mood beta has stronger explanatory power compared to sentiment beta during ascending and descending mood months.

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“…Frijters et al ( 2015 ) show that stock market increases lead to modest improvements in life satisfaction and mental health, because of the direct exposure (for young and middle-aged males) or as a leading indicator of employment prospects (for young cohorts). Fernandez-Perez et al ( 2020 ) study music sentiment and stock returns and reveal an inverse relationship between stock exchange prices and valence, which is associated with a mispricing correction.…”

Section: Methodology and Data Descriptionmentioning

confidence: 99%

Music preferences as an instrument of emotional self-regulation along the business cycle

Fernández

Palomeque

2022

J Cult Econ

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This paper studies the influence of macroeconomic conditions on subjective well-being and music preferences. The macroeconomic cycle exerts an effect on happiness and well-being that consumers counterbalance by modifying music consumption. We use machine learning techniques to make a weekly classification of the top 100 songs of Billboard Hot 100 into positive and negative lyrics over the period 1958–2019. When unemployment is high, society generally prefers more positive songs. Other macroeconomic indicators such as high inflation, high interest rates or low stock market prices also affect musical preferences. These results provide initial evidence regarding the use of cultural consumption to offset business cycle oscillations.

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Music sentiment and stock returns

Cited by 13 publications

References 33 publications

COVID-19 fear index: does it matter for stock market returns?

COVID-19 fear index: does it matter for stock market returns?

Mood Beta, Sentiment and Stock Returns in China

Music preferences as an instrument of emotional self-regulation along the business cycle

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