Pessimism and uncertainty of the news and investor’s behavior in Brazil

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Fernando Caio Galdi
Arthur Martins Gonçalves


How investors impound qualitative information released by the media into prices, especially in a less efficient market such as Brazil, helps understand the types of news most sensitive to investors. This study investigates the relationship between the content of the daily editions of specialized financial media in Brazil, captured by a metric of textual tone, and returns and volatility of market indices. Our database contains 1,237 daily editions of the newspaper “Valor Econômico,” between 01/02/2012 and 12/30/2016. The results indicate that the market put more weight on the words “uncertainty” and “negative” in the news. “Uncertainty" has negative relation to current market-returns and weak evidence that news with “negative” terms have positive associations with current market-volatility. The evidences obtained point to the existence of informative content in the news published by the specialized media in Brazil, especially with the words “negative” and “uncertainty.”


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How to Cite
GALDI, F. C.; GONÇALVES, A. M. Pessimism and uncertainty of the news and investor’s behavior in Brazil. RAE - Revista de Administracao de Empresas , [S. l.], v. 58, n. 2, p. 130–148, 2018. DOI: 10.1590/S0034-759020180203. Disponível em: Acesso em: 4 dec. 2023.


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