Political Speeches and Stock Market Outcomes

61 Pages Posted: 5 Jun 2017 Last revised: 11 Sep 2017

See all articles by Anastasios Maligkris

Anastasios Maligkris

University of Miami Herbert Business School

Date Written: August 8, 2017


Using data on political speeches, I demonstrate that U.S. presidential candidates influence stock market outcomes. Political speeches that contain economic information increase aggregate market returns and trading volume but decrease market volatility. Speeches with a net negative linguistic tone have the opposite effect. The magnitude of the effect becomes stronger during the first months of campaigns and varies based on the prevailing market conditions. In the cross-section of stock returns, I show that industries with high government exposure are more sensitive to government-spending information and that politically sensitive industries do not react more strongly to candidate speeches. Overall, my findings suggest that political speeches affect investor expectations and, in turn, stock market outcomes.

Keywords: Presidential candidate, political speech, political campaign, elections, policy uncertainty, finance and politics

JEL Classification: G12, G14, G18

Suggested Citation

Maligkris, Anastasios, Political Speeches and Stock Market Outcomes (August 8, 2017). 30th Australasian Finance and Banking Conference 2017, Available at SSRN: https://ssrn.com/abstract=2980475 or http://dx.doi.org/10.2139/ssrn.2980475

Anastasios Maligkris (Contact Author)

University of Miami Herbert Business School ( email )

514 Jenkins Building
Department of Finance
Coral Gables, FL 33124
United States

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