Ferrer, Elena, Salaber, Julie and Zalewska, Ania 2016. Consumer confidence indices and stock markets’ meltdowns. European Journal of Finance. 22 (3), pp. 195-220. https://doi.org/10.1080/1351847X.2014.963634
| Title | Consumer confidence indices and stock markets’ meltdowns |
|---|---|
| Type | Journal article |
| Authors | Ferrer, Elena, Salaber, Julie and Zalewska, Ania |
| Abstract | Consumer confidence indices (CCIs) are a closely monitored barometer of countries’ economic health and an informative forecasting tool. Using European and US data, we provide a case study of the two recent stock market meltdowns (the post-dotcom bubble correction of 2000–2002 and the 2007–2009 decline at the beginning of the financial crisis) to contribute to the discussion on their appropriateness as proxies for stock markets’ investor sentiment. Investor sentiment should positively covary with stock market movements (DeLong, Shleifer, Summers, and Waldmann 1990); however, we find that the CCI–stock market relationship is not universally positive.We also do not find support for the information effect documented in the previous literature, but identify a more subtle relationship between consumer expectations about future household finances and stock market fluctuations. |
| Keywords | consumer confidence; investor sentiment; dotcom bubble; financial crisis; behavioural finance |
| Journal | European Journal of Finance |
| Journal citation | 22 (3), pp. 195-220 |
| ISSN | 1351-847X |
| Year | 2016 |
| Publisher | Taylor & Francis |
| Accepted author manuscript | |
| Digital Object Identifier (DOI) | https://doi.org/10.1080/1351847X.2014.963634 |
| Publication dates | |
| Published in print | 2016 |
| Published online | 09 Oct 2014 |