U.S. Earnings Call Sentiment Reaches a 20-year High

Over the past 20 years corporate sentiment on earning scalls has been increasing (blue line) alongside stock prices (Russell 2000, IWV, black line).

Our research on quantile performance indicates that highly positive sentiment calls precedes stock price hashtag#outperformance (a post on that effect coming soon).

But why is higher call sentiment occurring? Could it be that consistently improving corporate fundamentals are reflected in more positive call sentiment? Are analysts becoming more polite (or maybe only the friendliest are selected to ask questions)? Or is it a result of executive communication coaching to avoid gaffes and add more positive polish? Or maybe all of the above…