Industrial and Organizational Psychology Commons^™

Mood And The Market: Can Press Reports Of Investors’ Mood Predict Stock Prices?, Yochi Cohen-Charash, Charles A. Scherbaum, John D. Kammeyer-Muller, Barry M. Staw

Publications and Research

We examined whether press reports on the collective mood of investors can predict changes in stock prices. We collected data on the use of emotion words in newspaper reports on traders’ affect, coded these emotion words according to their location on an affective circumplex in terms of pleasantness and activation level, and created indices of collective mood for each trading day. Then, by using time series analyses, we examined whether these mood indices, depicting investors’ emotion on a given trading day, could predict the next day’s opening price of the stock market. The strongest findings showed that activated pleasant mood …