Purpose – The purpose of this study is to test the validity of super-fast development of social media and its wide range of use by even professional investors as the new financial contagion which is carried with “Black Noise” tweets. Newly established robotic modern finance environment and various news channels provide the necessary infrastructure to utilize a focused and directed market noise. Measuring the impact of this noise in the financial market volatility is a crucial and important issue.
Methodology - In this study, we investigate the news impact of trade wars and monetary policy news on steel industry of US and its reflection on Turkish markets utilizing 30 minutes high frequency return data. The novelty is this study is the interaction terms that we generated and embedded in the E-GARCH models to test the reactions of steel major listed US steel industry companies such as US Steel, AK Steel, Nucor and the pioneer Turkish company Ereğli in this sector.
Findings- Findings of this study highlights that specific news about trade war and monetary policy have a significant impact on steel company returns. For further research papers testing the speculation strength of such tweet can be a beneficial topic for the other researchers.
Conclusion- As a result of this study, being one the major market makers, Trump’s direct messages to the market via Twitter and such, about sanctions, interest rates and monetary policy creates “Black Noise” in financial markets. Even in a durable production industry like steel sector this leads to speculation.
|Finance, Business Administration
|March 30, 2020
|Published in Issue
|Year 2020 Volume: 9 Issue: 1
Journal of Business, Economics and Finance (JBEF) is a scientific, academic, double blind peer-reviewed, quarterly and open-access journal. The publication language is English. The journal publishes four issues a year. The issuing months are March, June, September and December. The journal aims to provide a research source for all practitioners, policy makers and researchers working in the areas of business, economics and finance. The Editor of JBEF invites all manuscripts that that cover theoretical and/or applied researches on topics related to the interest areas of the Journal. JBEF charges no submission or publication fee.
Policy - JBEF applies the standards of
Committee on Publication Ethics (COPE). JBEF is committed to the academic
community ensuring ethics and quality of manuscripts in publications.
Plagiarism is strictly forbidden and the manuscripts found to be plagiarized
will not be accepted or if published will be removed from the publication. Authors
must certify that their manuscripts are their original work. Plagiarism,
duplicate, data fabrication and redundant publications are forbidden. The
manuscripts are subject to plagiarism check by iThenticate or similar. All manuscript submissions must provide a similarity report (up to 15% excluding quotes, bibliography, abstract, method).
Open Access - All research articles published in PressAcademia Journals are fully open access; immediately freely available to read, download and share. Articles are published under the terms of a Creative Commons license which permits use, distribution and reproduction in any medium, provided the original work is properly cited. Open access is a property of individual works, not necessarily journals or publishers. Community standards, rather than copyright law, will continue to provide the mechanism for enforcement of proper attribution and responsible use of the published work, as they do now.