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Did Congress trade ahead? Considering the reaction of US industries to COVID-19
During the ongoing COVID-19 pandemic in the US, there has been considerable media attention regarding several US legislators who traded stocks in late January through February 2020. The concern is that these legislators traded in anticipation of COVID-19 having a major impact on the financial market...
Autores principales: | , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Elsevier Inc.
2020
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7261360/ https://www.ncbi.nlm.nih.gov/pubmed/32837361 http://dx.doi.org/10.1016/j.frl.2020.101578 |
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author | Goodell, John W. Huynh, Toan Luu Duc |
author_facet | Goodell, John W. Huynh, Toan Luu Duc |
author_sort | Goodell, John W. |
collection | PubMed |
description | During the ongoing COVID-19 pandemic in the US, there has been considerable media attention regarding several US legislators who traded stocks in late January through February 2020. The concern is that these legislators traded in anticipation of COVID-19 having a major impact on the financial markets, while publicly suggesting otherwise. We consider whether these legislator trades were in a time window, and of a nature, that would be consistent with trading ahead of the market. Towards this end, we assess the reactions of US industries to sudden COVID-related news announcements, concomitantly with an analysis of levels of investor attention to COVID. Results suggest that, at an industry-level, for legislator trading to be “ahead of the market” it needed to have been done prior to February 26, and involving the 15 industries we identify as having abnormal returns, especially medical and pharmaceutical products (positive); restaurants, hotels, and motels (negative); as well as services and utilities. These criteria are met by many of the legislator trades. Our results help to both parameterize concerns about this case of legislator trading; as well as provide insight into the reactions and expectations of investors toward COVID-19. |
format | Online Article Text |
id | pubmed-7261360 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2020 |
publisher | Elsevier Inc. |
record_format | MEDLINE/PubMed |
spelling | pubmed-72613602020-06-01 Did Congress trade ahead? Considering the reaction of US industries to COVID-19 Goodell, John W. Huynh, Toan Luu Duc Financ Res Lett Article During the ongoing COVID-19 pandemic in the US, there has been considerable media attention regarding several US legislators who traded stocks in late January through February 2020. The concern is that these legislators traded in anticipation of COVID-19 having a major impact on the financial markets, while publicly suggesting otherwise. We consider whether these legislator trades were in a time window, and of a nature, that would be consistent with trading ahead of the market. Towards this end, we assess the reactions of US industries to sudden COVID-related news announcements, concomitantly with an analysis of levels of investor attention to COVID. Results suggest that, at an industry-level, for legislator trading to be “ahead of the market” it needed to have been done prior to February 26, and involving the 15 industries we identify as having abnormal returns, especially medical and pharmaceutical products (positive); restaurants, hotels, and motels (negative); as well as services and utilities. These criteria are met by many of the legislator trades. Our results help to both parameterize concerns about this case of legislator trading; as well as provide insight into the reactions and expectations of investors toward COVID-19. Elsevier Inc. 2020-10 2020-05-31 /pmc/articles/PMC7261360/ /pubmed/32837361 http://dx.doi.org/10.1016/j.frl.2020.101578 Text en © 2020 Elsevier Inc. All rights reserved. Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active. |
spellingShingle | Article Goodell, John W. Huynh, Toan Luu Duc Did Congress trade ahead? Considering the reaction of US industries to COVID-19 |
title | Did Congress trade ahead? Considering the reaction of US industries to COVID-19 |
title_full | Did Congress trade ahead? Considering the reaction of US industries to COVID-19 |
title_fullStr | Did Congress trade ahead? Considering the reaction of US industries to COVID-19 |
title_full_unstemmed | Did Congress trade ahead? Considering the reaction of US industries to COVID-19 |
title_short | Did Congress trade ahead? Considering the reaction of US industries to COVID-19 |
title_sort | did congress trade ahead? considering the reaction of us industries to covid-19 |
topic | Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7261360/ https://www.ncbi.nlm.nih.gov/pubmed/32837361 http://dx.doi.org/10.1016/j.frl.2020.101578 |
work_keys_str_mv | AT goodelljohnw didcongresstradeaheadconsideringthereactionofusindustriestocovid19 AT huynhtoanluuduc didcongresstradeaheadconsideringthereactionofusindustriestocovid19 |