The Stock Market's Reaction to Unemployment News: Why Bad News Is Usually Good for Stocks  

Oleh:

Boyd, John H. ; Jagannathan, Ravi ; Hu Jian

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 60 no. 2 (Apr. 2005), page 649-672.
Topik: stock market; studies; unemployment; interest rates; financial performance; rates of return; equity; stocks
Fulltext: p 649.pdf (134.48KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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We find that on average, an announcement of rising unemployment is good news for stocks during economic expansions and bad news during economic contractions. Unemployment news bundles three types of primitive information relevant for valuing stocks : information about future interest rates, the equity risk premium, and corporate earnings and dividends. The nature of the information bundle, and hence the relative importance of the three effects, changes over time depending on the state of the economy. For stocks as a group, information about interest rates dominates during expansions and information about future corporate dividends dominates during contractions.

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