AI-Driven Financial Foresight

We analyzed mentions of "tariffs" in U.S. earnings calls over the past two decades:🔹 In 23 years of data, only the Trump presidencies saw tariffs become a major boardroom topic. 🔹 During Trump I, it took time for tariff talk to ramp up. 🔹 In Trump II, we've surpassed the prior peak — and the bulk of earnings season hasn't even hit. 🔹 Mentions are now far beyond the previous peak.  👀 Market participants are clearly bracing for geopolitical and trade turbulence. 💬 This time the Trade War does not look like a negotiation tactic.

Stocks Associated with Tariffs are Tanking We collected all U.S. earnings call transcripts from March 2025 and grouped companies into three buckets: 1️⃣ No mention of tariffs 2️⃣ Mentions tariffs 3️⃣ Mentions tariffs 30+ times in a single earnings conference call Then we looked at April stock returns… 👀  The results speak for themselves:🔵 Companies that didn’t mention tariffs had better average performance🔵 Those that talked tariffs saw worse returns🔵 And frequent tariff talkers? Down over 16% on average.

📉 Get Ready for Turnaround Tuesday in the Stock Market 📈 On Monday, September 15th, 2008, I was in the green room for a financial news segment, preparing to speak on behavioral finance. A CEO of a large equity investment firm was also there. As he left, he turned to me and said: “Get ready for Turnaround Tuesday!” 📊 That Tuesday turned out to be one of the biggest rallies in S&P 500 history.Curious, I looked into it further — and sure enough, the stock market has a quirky history of rallying on Tuesdays following steep Monday selloffs. It’s a known behavioral phenomenon.

An update on our Feb 25th post - falling sentiment often pulls the stock market lower in a predictable fashion, especially when sentiment is dropping from a high level.  US stock market sentiment is now approaching 2022 lows, but not COVID lows. Uncertainty and fear are also rising significantly. When those two emotions stabilize, prices could rebound in a "relief rally." But we've got a ways to go before that can happen.

In the past 24 hours, the companies most positively and negatively associated with "tariffs" in the media. In the image, the horizontal bars represent the average sentiment of co-mentions of the company with "tariffs" in the past 24 hours of media coverage. At least 5 co-references required to be plotted. 👍 Possible beneficiaries (or less-affected) companies include:1. BJ's Wholesale Club - inventory is largely tariff-resistant2. Philip Morris - consumers want their staples (like tobacco) regardless of price.3. Goodyear - competitors are much more affected, so Goodyear will benefit.4. Ferarri - customers are price insensitive.5. First Solar - like Goodyear, the company will benefit from high tariffs on low-cost Chinese competitors. 👎 Among losers, shipper Maersk is sinking (sorry), Best Buy's almost entirely non-US electronics stock is becoming costlier, and Puma's "cheap" shoes are no longer so.

In the past 3 months of earnings calls we averaged the sentiment of every sentence in which an analyst referenced "tariffs." Exactly 100 companies had more than 3 such tariffs references. On average, only 5% of companies were positive, while 95% were negative.  The level of positivity was anemic for those five positive companies and was exceptionally negative for the remaining ninety-five. Please join our webinar April 2nd (https://lnkd.in/gy3TjFf9) or reach out for more info about the newly launched LSEG MarketPsych Transcript Analytics.

If you're interested in the power of earnings calls over markets, please join our upcoming webinar on April 2nd at 3pm UK Time / 10 am ET: https://lnkd.in/gMqN-kr2

Greatly enjoyed another fantastic quant event hosted by the finance rockstar Alexander Fleiss of Rebellion Research at Columbia University. So lucky to be on a panel moderated by the maestra Christina Qi with Didier Rodrigues Lopes Petros Zerfos Chris White and Yosef Zweibach. We discussed the applications of AI models in modern investment, what AI tech is building viable value-creating products, and much more. Looking forward to the next one!