Sports Mood Index and sell-side analysts

Runze Wu

The Quarterly Review of Economics and Finance, 2023, vol. 92, issue C, 35-48

Abstract: This paper explores how sports-induced bad mood affects the sentiment and behavior of sell-side financial analysts. I construct the Sports Mood Index (SMI) of metropolitan areas in the U.S. based on the performance of Big 4 professional sports teams. In sports-induced bad mood settings, sell-side analysts tend to issue more pessimistic forecasts in both earnings forecast and price target samples. Sports-induced bad mood also leads to inattention, associated with larger forecast errors, and analysts are slower or less likely to respond to earnings announcements. The results are robust to various measurements of pessimism, forecast errors and activity levels.

Keywords: Sports Mood Index (SMI); Sell-side analysts; Pessimism; Inattention; Earnings forecast; Price target (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:92:y:2023:i:c:p:35-48

DOI: 10.1016/j.qref.2023.08.004

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