A recent IMF research paper on media sentiment found:

-News sentiment “robustly predicts daily returns”

-Global news sentiment has a bigger impact on equity returns than changes in country-specific sentiment.

-News sentiment impacts foreign investors more than locals

-Positive macro sentiment generates LT foreign equity flows

Those findings re-enforce what we see at Bloomberg: that investors are looking for alternative measures to gauge market sentiment and that news offers a new opportunity.

We’ve focused initially on calculating sentiment for companies. The chart for Boeing shows how news sentiment deteriorated after the crash of the 737 Max.