When EU Leaders Speak, the Markets Listen

摘要

We use content analysis software to examine certain characteristics of\udcommunications arising from European Council meetings. These characteristics\udappear to explain a large proportion of variation in stock returns around the\udmeeting dates. More specifically, stock market investors react favorably when the\udconclusions and declarations issued by heads of states convey a positive sentiment\udand demonstrate a stance of moral rectitude. On the other hand, the returns tend to\udbe negative when the communications are obfuscated by an excessive use of\udabstract words and fixated on regional rather than global issues.