scholarly journals The Influence of Investor Emotion on the Stock Market: Evidence from an Infectious Disease Model

2021 ◽  
Vol 2021 ◽  
pp. 1-12
Author(s):  
Yutao Chen ◽  
Shuzhen Zhu ◽  
Haoyuan He
Keyword(s):  
Infectious Disease ◽  
Stock Market ◽  
Disease Model ◽  
Investor Sentiment ◽  
Circuit Breakers ◽  
Infectious Disease Model ◽  
Sirs Model ◽  
The Us ◽  
Other Information ◽  
The Impact

In March 2020, four consecutive circuit breakers in the US stock market underscored the impact of investor sentiment on the stock market. With the development of technology, public opinion and other information now spread easily through social media and other channels, indirectly affecting investor sentiment. This makes it important to understand the underlying dynamics of such situations to help manage the market impact of such events going forward. To that end, we analyze investor sentiment, investor structures, and the capital market fuse mechanism using infectious disease dynamics. We use an extension of the SIR (susceptible, infectious, and recovered) model, called the dynamic SIRS model (where individuals return to a susceptible state), to simulate the impact of investor sentiment on the stock market. Accordingly, we study the circuit breakers in the US stock market and the simulation results of the model to analyze the fuse mechanism process in China that triggers a pause in the market based on volatile trading. The results of our study show that when the influence rate of investor mutual communication increases or when the emotional calm rate decreases, investor emotions will start to diffuse, leading to an increase in the probability of either a serious stampede or zealous overbuying in the stock market. At the same time, the trading frequency of investors and the ratio of investors in both buying and selling directions will have a certain formal impact on the direction of the stock market, with the final impact determined by the ratio of normal investors to emotional investors. When emotional investors dominate the market, their emotions are diffused throughout. Our study provides the reference for relevant agencies to monitor and improve the stock market fuse mechanism in the future.

The Impact of Monetary and Fiscal Policies on the Stock Market in the United States (U.S); Evidence from Linear ARDL Framework

2020 ◽  
Vol 11 (1) ◽  
pp. 132-132
Author(s):  
Aref Emamian
Keyword(s):  
United States ◽  
Stock Market ◽  
The United States ◽  
Real Effective Exchange Rate ◽  
Annual Data ◽  
Fiscal Policies ◽  
Long Run ◽  
The Us ◽  
Short Run ◽  
The Impact

This study examines the impact of monetary and fiscal policies on the stock market in the United States (US), were used. By employing the method of Autoregressive Distributed Lags (ARDL) developed by Pesaran et al. (2001). Annual data from the Federal Reserve, World Bank, and International Monetary Fund, from 1986 to 2017 pertaining to the American economy, the results show that both policies play a significant role in the stock market. We find a significant positive effect of real Gross Domestic Product and the interest rate on the US stock market in the long run and significant negative relationship effect of Consumer Price Index (CPI) and broad money on the US stock market both in the short run and long run. On the other hand, this study only could support the significant positive impact of tax revenue and significant negative impact of real effective exchange rate on the US stock market in the short run while in the long run are insignificant. Keywords: ARDL, monetary policy, fiscal policy, stock market, United States

scholarly journals Light a lamp and look at the stock market

2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Radeef Chundakkadan
Keyword(s):  
Stock Market ◽  
Financial Distress ◽  
Investor Sentiment ◽  
Downside Risk ◽  
Bond Yields ◽  
Risky Assets ◽  
Market Participants ◽  
Market Return ◽  
The Impact

AbstractIn this study, we investigate the impact of the light-a-lamp event that occurred in India during the COVID-19 lockdown. This event happened across the country, and millions of people participated in it. We link this event to the stock market through investor sentiment and misattribution bias. We find a 9% hike in the market return on the post-event day. The effect is heterogeneous in terms of beta, downside risk, volatility, and financial distress. We also find an increase (decrease) in long-term bond yields (price), which together suggests that market participants demanded risky assets in the post-event day.

scholarly journals Loss aversion, overconfidence of investors and their impact on market performance evidence from the US stock markets

2020 ◽  
Vol 25 (50) ◽  
pp. 451-478
Author(s):  
Ahmed Bouteska ◽  
Boutheina Regaieg
Keyword(s):  
Stock Market ◽  
Economic Performance ◽  
Loss Aversion ◽  
Market Performance ◽  
Ordinary Least Squares ◽  
Company Performance ◽  
Service Firms ◽  
Content Type ◽  
The Us ◽  
The Impact

Purpose The current study aims to investigate the impacts of two behavioral biases, namely, loss aversion and overconfidence on the performance of US companies. First, the impact of loss aversion on the economic performance of companies was assessed. Second, the impact of overconfidence on market performance was discussed. Design/methodology/approach This study used around 6,777 quarterly observations on the population of US-insured industrial and services companies over the 2006-2016 period. Ordinary least squares (OLS) regression in two panel data models were used to test the hypotheses formulated for the study. Findings It was documented that the loss-aversion bias negatively affects the economic performance of companies and this is achieved for both sectors. In contrast, the findings suggest that overconfidence positively affects market performance of industrial firms but negatively affects market performance in service firms. Further robust evidence was found that overconfidence bias seems to be dominant, and hence, investors may tend to be more overconfident rather than more loss-averse. Originality/value This research can be extended by focusing on the following question: What is the impact of the contradictory (positive and negative) effects of an investor's loss aversion and overconfidence on the US company performance in case of realization of a stock market crisis or stock market crash?

scholarly journals The Impact of Investor Sentiment on the German Stock Market

2010 ◽  
Author(s):  
Philipp Finter ◽  
Alexandra Niessen-Ruenzi ◽  
Stefan Ruenzi
Keyword(s):  
Stock Market ◽  
Investor Sentiment ◽  
German Stock ◽  
The Impact ◽  
German Stock Market

scholarly journals Obesity as an "infectious" disease

2021 ◽  
Vol 11 (9) ◽  
pp. 534-537
Author(s):  
Daria Żuraw ◽  
Paulina Oleksa ◽  
Mateusz Sobczyk
Keyword(s):  
Infectious Disease ◽  
Disease Model ◽  
Living Environment ◽  
Social Contagion ◽  
Social Discrimination ◽  
Obese People ◽  
Obesity Epidemic ◽  
Global Epidemic ◽  
Infectious Disease Model ◽  
The One

Introduction: Obesity has been recognized as a global epidemic by the WHO, followed by a wealth of empirical evidence supporting its contagiousness. However, the dynamics of the spread of obesity between individuals are rarely studied.  A distinguishing feature of the obesity epidemic is that it is driven by a process of social contagion that cannot be perfectly described by the infectious disease model. There is also social discrimination in the obesity epidemic. Social discrimination against obese people plays quite different roles in two cases: on the one hand, when obesity cannot be eliminated, social discrimination can reduce the number of obese people; on the other hand, when obesity is eradicable, social discrimination can cause it to explode.(1)   Materiał and methods: A literature analysis on obesity epidemic was carried out within the Pubmed, Google scholar and Research Gate platform. The following keywords were used in serach: obesity, epidemy, children, body max index.    Purpose of the work: The aim of the following analysis is to present an obesity as an infectious disease. The steadily increasing percentage of obese people, including children, shows that there is an obesity epidemic. This is the phenomenon of social contagion, which partially explains the concept of homophily, which involves the grouping of people with similar characteristics. Potential explanations are also provided by sharing a living environment with similar access to certain foods and similar opportunities for physical activity, which defines the occurrence of analogous health habits

scholarly journals Capital Market Response to COVID-19 Pandemic – A Systematic Review on Stock Volatility and Performance

2021 ◽  
pp. 27-49
Author(s):  
Janga Bahadur Hamal ◽  
Rishi Raj Gautam
Keyword(s):  
Stock Market ◽  
Investor Sentiment ◽  
Market Volatility ◽  
Stock Market Volatility ◽  
Stock Volatility ◽  
Government Response ◽  
Stock Market Performance ◽  
Policy Measures ◽  
And Performance ◽  
The Impact

This paper aims to identify the impact of the COVID-19 pandemic on stock market volatility and market return as well as the impact of government response to the COVID-19 pandemic on stock market performance. To analyze the same, the paper has adopted Systematic Literature Review (SLR) approach and conducted a review of 40 journal articles published between between2020 to mid-2021. The paper identified that the short-term impact of the COVID-19 outbreak and government policy measures had a significant and adverse impact on stock market volatility, return and overall performance. In the longer term, the stock markets slowly started to stabilize and revive. This effect on the stock market was also attributed to investor sentiment and thus, in the later stages, targeted government response had a positive effect on boosting investor confidence towards the market.

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