LIVE MARKETS-When stock buzz sends shoppers buying

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com.

WHEN STOCK BUZZ SENDS SHOPPERS BUYING

Stock splits and earnings may feel like dry market news, but research suggests they can also work like free advertising.

Finn Oystein Bergh, chief economist at Pareto Asset Management in Oslo, points to studies showing that customers - not just investors - react to stock market news.

"Would you want to buy a car from a company whose stock price indicates a real risk of bankruptcy?," he writes in his latest "The Optimal Pareto" blog post.

Using GPS data, one paper finds "upticks in foot-traffic" to stores immediately after earnings releases. Another estimates that the impact on brand visibility is roughly one-sixth of a Super Bowl ad, without its heavy price tag.

The effect appears strongest for high-value or network goods, and when consumers have limited knowledge of the brand. In contrast, dividend news leaves shoppers cold.

Even stock splits – "technically irrelevant" events – may lift sales. A recent draft study suggests smaller companies see the biggest boost, helped along by the visibility splits receive on trading platforms and social media.

To conclude, Bergh says: "In a truly efficient market, they are non-events. In practice, they're not. Much like rational investors and market efficiency".

(Danilo Masoni)

EARLIER LIVE MARKETS POSTS:

DID US EXORBITANT PRIVILEGE IMPROVE IN 2025? CLICK HERE

WHO'S AFRAID OF JAPAN'S BIG, BAD MOF? CLICK HERE

GREENLAND TARIFFS? MS SAYS EUROPE'S HIT IS MODEST CLICK HERE

TARIFF TRADES CLICK HERE

EUROPE BEFORE THE BELL: BRACE FOR BIG FALLS CLICK HERE

MORNING BID EUROPE: US PICKS A FIGHT WITH ITS BIGGEST CREDITOR CLICK HERE