CU study: Politics now driving economic opinions rather than reverse

BOULDER — Are Republican traders more likely to feel optimistic about the economy and the stock market than their more liberal counterparts? It appears so, according to a new study from University of Colorado Leeds School of Business researchers. 

The study, led by CU professor Tony Cookson, found that in 2020 — unlike normal election years when economics tend to drive political opinions — a person’s political persuasion is having an outsized impact on how they view the economy. 

“Using keywords like #MAGA or #Trump2020, the researchers dug through more than 5 million posts on StockTwits, a social media website geared toward stock traders, for clear markers of conservatism. They found users who made frequent references to President Donald Trump or some of his favorite talking points tended to be more optimistic about a quick stock market rebound,” according to CU. “The research also shows StockTwits posts correspond with actual trades in the market, indicating Republican optimism on the platform likely translates to more bullish trading.”

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The study also found that since the start of the COVID-19 pandemic traders identified as Republicans tend to feel more pessimistic about Chinese firms.

“The world in the face of COVID-19 forces us to ask different questions about how investors form their opinions,” Cookson said in a prepared statement. “It can be overwhelming to make these choices. It’s interesting that we saw politics mattering as much as it does.”

Cook said the study is not meant to be a political statement on behalf of the researchers. 

“We aren’t litigating who we think is right; we’re observing that they’re coming to different conclusions,” he said.