Abstract
Geomagnetic activity with global influence is an essential object of space weather research and is a significant link in the section of the solar wind-magnetospheric coupling process. Research so far provides strong evidence that geomagnetic activity affects stock investment decisions by influencing human health, mood, and human behaviours. Therefore, this research investigates the empirical association between geomagnetic activity and stock market return. Overall, we find that geomagnetic activity exerts a negative influence on the return of the US stock market. Further, market liquidity effectively magnifies the effect of geomagnetic activity. Inconsistent with previous literature, this effect is not mainly caused by the semiannual variation of geomagnetic activity. Our research contributes to the introduction of geomagnetic indices to financial economics studies on the impact of geomagnetic activity influence on stock market return.
Highlights
The geomagnetic field is formed by the superposition of different magnetic fields from various sources
We introduce a geomagnetic relationship to the financial economics literature
Using monthly-based geomagnetic indices and US stock market indices for the recent 20 years, we find compelling evidence supporting a causal relation between geomagnetic activity and stock return
Summary
The geomagnetic field is formed by the superposition of different magnetic fields from various sources. When the corresponding disturbance of the geomagnetic field occurs, the geomagnetic activities form. These disturbances vary in length and intensity and significantly affect human activities in terms of economics. Since the 1960s, people have been aware of the critical influence of cosmic activity, especially geomagnetic activities, on human behaviour. Friedman et al (1963) initially explored the relationship between human health and geomagnetic activity parameters [1]. We summarize the research progress on the correlation between geomagnetic activity and the stock market into three ways: geomagnetic activity and human behaviours; human behaviours and the stock market; geomagnetic activity and the stock market
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
