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.