Corporate Earnings Announcements and Stock Market Bubbles

Elie Bouri (), Ufuk Can (), Oguzhan Cepni and Rangan Gupta ()
Additional contact information
Elie Bouri: School of Business, Lebanese American University, Lebanon
Rangan Gupta: Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa

No 202543, Working Papers from University of Pretoria, Department of Economics

Abstract: We examine how corporate earnings (CE) announcement shocks influence stock market bubbles in the US using daily data from January 1990 to June 2025. After identifying positive and negative bubbles over short, medium, and long-term periods, Local Projections (LP) combine information from corporate earnings announcements with the varying intensity of shocks experienced on those specific days. Results show that positive earnings shocks boost positive bubbles, particularly at the medium to long-term, while reducing negative bubbles at the short-term. Therefore, favourable earnings news can fuel prolonged speculative episodes by increasing investor optimism, and lead to deep� crashes but only mild recoveries.

Keywords: Multi-Scale Positive and Negative Bubbles; Stock Markets; Corporate Earnings Shocks; Local Projections Model (search for similar items in EconPapers)
JEL-codes: C22 G10 G12 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2025-11
New Economics Papers: this item is included in nep-fmk
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pre:wpaper:202543

Access Statistics for this paper

More papers in Working Papers from University of Pretoria, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Rangan Gupta ().