Consumer Sentiment and the Stock Market

Otoo, Maria Ward

doi:10.2139/ssrn.205028

Cited by 57 publications

(20 citation statements)

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“…In their study, Brown and Cliff (2004) use monthly data from March 1965 and December 1998 and weekly data from July 24, 1987 through December 18, 1998 for the U.S Stock market. Their results are similar to the results of Otoo (1999) and Jansen and Nahuis (2003) indicating a perfect positive relationship between the market returns and consumer sentiment. Their VAR analysis reveals that market returns predict future sentiment however little evidence suggests that sentiment predicts market returns.…”

Section: Literature Reviewsupporting

confidence: 85%

“…Movements in equity prices can be used as a leading indicator. In their studies Jansen and Nahuis (2003), Brown andCliff (2004), andBremmer (2008) support the findings of Otoo (1999) demonstrating that the current stock prices predict future consumer confidence.…”

Section: Literature Reviewmentioning

confidence: 82%

“…The study of Otoo (1999) is the first examining the relationship between equity prices and consumer confidence by using monthly data of Wilshire 5000 stock index from June 1980 to June 1999. His Granger causality test results indicate that stock price movements affect changes in consumer confidence but the lagged changes in confidence have no explanatory power for stock prices.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Among these studies, Jansen and Nahuis (2003) extend the study of Otoo (1999) by examining eleven European countries for the period from 1986 to 2001. They find positive relationship between the changes in stock prices and consumer confidence for nine countries and argue that stock returns and consumer confidence are correlated in countries where stock ownership is high such as U.K.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Second reason can be explained by the leading indicator channel denoting that the current changes in stock prices will affect future incomes and consumer confidence. This explanation is made by Otoo (1999) following Poterba and Samwick (1995), Morck, Shleifer and Vishny (1990). Here higher stock prices are interpreted as a sign of favorable future economic conditions.…”

Section: Introductionmentioning

confidence: 96%

See 4 more Smart Citations

Effect of Investor Sentiment on Stock Markets

Bolaman¹,

Mandaci²

2014

JFRS

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Motivation of this study is to examine the relationship between investor sentiment and stock market by taking financial crisis period into account. When literature is examined, it is seen that there is a deficiency in this respect. Although there are studies examining same phenomena, none of them has considered the impact of financial crisis. To eliminate this deficiency, we have employed tests with structural breaks rather than conventional ones. At the end of these tests, structural breaks are observed at crisis period as it is expected. By employing data for the period December 2003-December 2012 existence of co-integration, which is an indicator of a long-term relationship between variables, is proved. This is a significant insight showing that consumer confidence index is a critical factor which is in an interaction with stock markets.

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Section: Literature Reviewsupporting

confidence: 85%

Section: Literature Reviewmentioning

confidence: 82%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 96%

See 3 more Smart Citations

Effect of Investor Sentiment on Stock Markets

Bolaman¹,

Mandaci²

2014

JFRS

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Spillovers Between Business Confidence and Stock Returns in Greece, Italy, Portugal, and Spain

2012

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This paper employs Hong's (2001) causality-in-mean and causality-in-variance tests to investigate the spillovers between business confidence and stock returns for the four economically distressed Southern European countries, namely Greece, Italy, Spain, and Portugal. The sample uses monthly data and covers the period from January 1988 to December 2010. Our causalityin-mean results indicate that there is feedback relationship between stock returns and business confidence in Portugal. The direction of causality-in-mean runs from business confidence to stock returns in Italy, but it is in the reverse direction in the case of Spain. Nevertheless, there is still evidence of a contemporaneous interaction between business confidence and stock returns in both Italy and Spain. On the other hand, causality-in-variance indicate the presence of volatility spillovers from business confidence to stock returns in Portugal, while a causal relationship is found in the current month in the case of Italy. Business confidence causes stock returns only in the mean in Greece. These results indicate that the stock market and business confidence relationship has its own idiosyncratic properties and that the stock market reactions to the current macroeconomic environment and expectations about the future developments might evolve differently in each country.

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Macroeconomic Conditions and Australian Financial Risk Attitudes, 2001–2010

West

Worthington

2013

J Fam Econ Iss

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This paper employed panel data from the 2001-10 waves of the Household, Income, and Labor Dynamics in Australia (HILDA) survey to investigate the financial risk attitudes of 10,000 individuals across 6,839 households. Ordered logit models including individual and household random effects tested for changes in risk tolerance while focusing on the impact of transitory macroeconomic conditions and controlling for individual demographic and socioeconomic characteristics. We found Australians generally reduced their tolerance for risk, though higher levels of education, wealth, good health, and being selfemployed indicated the increased likelihood of risk tolerance. We found macroeconomic conditions jointly significant in determining financial risk attitudes. However, the innate demographic and socioeconomic characteristics of individuals were more important at the margin.

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Consumer Sentiment and the Stock Market

Cited by 57 publications

References 0 publications

Effect of Investor Sentiment on Stock Markets

Effect of Investor Sentiment on Stock Markets

Spillovers Between Business Confidence and Stock Returns in Greece, Italy, Portugal, and Spain

Macroeconomic Conditions and Australian Financial Risk Attitudes, 2001–2010

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