Using the Thomson Reuters MarketPsych Indices, a multidimensional data feed derived from global news and social media content, we explore how emotions and themes expressed in media have been predictive of asset prices over the period 1998-2013. Our results show that specific political risks, macroeconomic themes, and sentiments influence collective investor behaviour, as seen in subsequent market price action with notable differences across asset classes. Uncertainty is most impactful to currencies, production volume is most significant for commodities, investor anger is the primary driver of U.S. equities, and global equity indexes are primarily influenced by government instability.
Speaker: Richard Peterson is CEO of MarketPsych Data which produces psychological and macroeconomic data derived from text analytics of news and social media. MarketPsych's data is consumed by the world's largest hedge funds. Dr. Peterson is an award-winning financial writer, an associate editor of the Journal of Behavioral Finance, has published widely in academia, and performed postdoctoral neuroeconomics research at Stanford University.