The weather effect describes an observed anomaly of capital market on the stock market, which was mentioned for the first time 1993 in an empirical investigation of Saunders. According to the weather effect a negative connection between the cloudy appearance density and the net yield insists on stock markets.

Compatibility with the market efficiency hypothesis

The market efficiency hypothesis means, which the prices on a capital market all at this time available information illustrate. Net yields follow thus no sample and are not not predictable. Anomalies like e.g. the weather effect would contradict this theory.

Explanation by the psychology

One simply explanation for this relationship supplies the psychology. The human behavior is affected strongly by the weather. Humans react with sunlight more optimistically than on rainy days. The positive tendency lets the yields on shares rise.

Further anomalies of capital market

• January effect
• Politics effect
• Winner loose effect

Articles in category "Weather effect"

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