Group of people laughing

Laughter: the best of medicine

The major indexes stayed on an upward trajectory on signs of growth in the U.S. economy. The Dow gained 107 points, with 22 of its 30 components advancing; the S&P 500 Index rose 12 points; and the Nasdaq added 37. Advancers led decliners by ten to nine on the NYSE and nine to seven on the Nasdaq. The prices of Treasuries weakened. Gold futures increased $7.70 to close at $1,233.10 an ounce, and the price of crude oil slid 9 cents to settle at $53.11 a barrel.

In earnings news:

  • PepsiCo Inc. reported fourth-quarter earnings that slipped to 97 cents a share from $1.17 a share in the same period a year ago, while adjusted earnings per share came to $1.20, beating the consensus. A 5% revenue increase also beat the consensus. The company said that the strong U.S. dollar hurt results abroad. Shares of Pepsi (PEP) fell 0.2%.
  • Danone S.A. said its 2016 net profit rose 34% to EUR1.72 billion, while full-year sales fell to EUR21.94 billion, which it attributed to problems in Europe, including the relaunch there of its Activia yogurt product and weak sales in Spain. The company attributed the profit increase during a time of declining sales to cost controls, and announced a further EUR1 billion cost-cutting plan. The world’s largest yogurt maker said the turnaround of its fresh dairy unit is taking longer than expected and new regulation in China weighed on baby food sales there. The company’s shares (BN) lost 0.2% in trading.
  • Bunge Ltd. reported a profit of $271 million, up from $203 million a year earlier. The agribusiness’s profit fell 12% to $237 million, pressured by soy-processing operations, but its overall earnings rose above expectations as gains in its smaller segments offset weakness in its core business. Revenue increased 8.6%. Bunge shares (BG) gained 10.0% for the day.

In other business news:

  • The Labor Department said the Consumer Price Index (CPI) jumped 0.6% in January, the largest increase in since February 2013. January retail sales increased 0.4%. In the 12 months through January, the CPI increased 2.5%, while the year-on-year core CPI increased to 2.3%, both above the Federal Reserve’s 2% inflation target. Treasury yields rose to two-and-a-half week highs on the news, bolstering expectations that the Federal Reserve is closer to raising interest rates.
  • Stocks in Asia gained on Wednesday as investors were encouraged by upbeat testimony from U.S. Federal Reserve Chairwoman Janet Yellen. Japan’s Nikkei Stock Average closed up 1%. Elsewhere, the Hang Seng Index in Hong Kong gained 1.2%, and Australia’s S&P/ASX 200 Index rose 0.9%. Stock gains for South Korea were more muted, and another index in China, the Shanghai Composite, closed 0.2% lower.
  • Integra LifeSciences Holdings Corp. will pay $1.05 billion in cash to buy Johnson & Johnson’s Codman Neurosurgery business. Codman’s devices are focused on hydrocephalus, neurocritical care, and operative neurosurgery. Integra expects the deal to add 22 cents to adjusted earnings per share in the first year after closing. Shares of Integra (IART) added 2.3% while Johnson & Johnson’s shares (JNJ) rose 0.7%.


Laughter, the old saying goes, is the best of medicine. If that is true, why are so many millions of dollars spent on pharmaceutical research, experiments, and testing, and so little spent on researching laughter?

Sophie Scott, a British neuroscientist and stand-up comedian, believes laughter is worthy of serious research. As deputy director of the Institute of Cognitive Neuroscience at University College London, she maintains that laughter is clearly recognizable across cultures, has an interactive component, and is a highly contagious social behavior. “At its heart, laughter is an invitation to play,” Ms. Scott said during a recent lecture titled “Don’t make me laugh.”

Laughter makes a difference in the health of businesses and the lives of the people who make the businesses successful, research shows. People who laugh at themselves make fewer mistakes and recover from them more quickly. Furthermore, in lighthearted business settings, customers tend to be happier, and happier customers tend to spend more money.

Of course, marketing messages that successfully elicit laughter are as legendary as those ads that fail miserably in the attempt. Advertisers use humor at their peril, according to a recently published study in the Journal of Marketing Behavior, which found that different ads can be equally humorous to consumers, but have different effects on brand attitudes depending on the type of humor used.

The research explores the idea that people find humor in “benign violations”—that is, material that somehow threatens their sense of well-being, personal identity, or beliefs, albeit in a harmless way. But even benign violations can cross a line, according to the research, which explored the effects of mild versus severe benign violations on brand attitudes.

The research found that even though people may find a severe violation funny, they may like the brand or the retailer sponsoring the message less. People’s attitudes about brands are, of course, important because they ultimately influence purchasing decisions.

“You can usually predict the response based on the type of violation used in the ad and whether it’s going to trigger negative feelings in addition to humor,” the study concludes. The study suggests that advertisers ask themselves questions about the humor used in their ads. Among those questions are: Is it funny? Is it threatening or at the expense of someone else? And perhaps the most germane question is, Will the ad create humor in a way that also motivates avoidance? After all, a key goal of advertising is to bring a customer and a product closer together.

With that thought in mind, I am reminded of the comment of philosopher and pianist Victor Borge who said, “Laughter is the closest distance between two people,” and, perhaps, between buyers and brands.


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