Surprises in scheduled releases: why do they move the bond market?

It is well known that information arrival has an impact on prices volatility, and trading volume in financial markets (see e.g., Goodhart and O?Hara 1997). Scheduled macroeconomic announcements, such as monthly employment figures, consumer prices, or building permits, stand out from the steady flow of information.1 Several studies (e.g. Fleming and Remolona 1997) show that these releases have a very distinct impact on prices. While most of these studies try to find out which releases are significant, considerably less effort has been devoted to the question what makes some releases so important in contrast to others that seem to attract no attention. Papers addressing this question emphasize the content of releases. For example, Edison (1996) discriminates between news related to unexpected inflation and those related to unexpected changes in economic activity. Investigating intraday T-bond futures price responses to surprises in scheduled macroeconomic releases, this paper presents evidence that the type of information is relevant. More specifically, the results suggest that the sequence of releases within a given content category helps to explain their relative importance. In other words, if market participants have already observed some figures on which they can base their assessment of a particular aspect of the economy, then the additional information of another related report should be small, and thus, its impact on prices. --Macroeconomic news,scheduled announcements,public information,price formation,Treasury bonds,futures market

A mean variance king? Creation and resolution of uncertainty under the employment report's reign

This paper delineates the simultaneous impact of non-anticipated information on first and second moments of the intraday price process by including appropriate variables accounting for the news flow into both the mean and the variance function. This allows us to differentiate between the consistent price reaction to surprising news and traders? uncertainty about the precise price impact of this information. Analyzing the US employment report, we find that headline information is almost instantaneously incorporated into T-bond futures prices. Nevertheless, large surprises create considerable uncertainty, in particular ?bad? news. In contrast, if surprises in related headlines cross-validate each other, less room for differences of opinion is left, and hence volatility is decreased. --Information processing,trading process,volatility,macroeconomic announcements,Treasury bond futures,high-frequency data

Accounting for stock-based compensation: an extended clean surplus relation

Residual income valuation is based on the assumption that the clean surplus relation holds. As pointed out by Ohlson (2000), among others, the standard clean surplus relation is frequently violated. Moreover, standard residual income valuation models rest on the implicit assumption that future stated earnings belong to current shareholders only. This is clearly invalid for companies granting employee options. In order to overcome these deficiencies, this paper establishes an extension of the clean surplus relation and derives simple analytical solutions for the value of outstanding stocks in terms of already known accounting information. --Residual income valuation,clean surplus accounting,US-GAAP,employee stock option programs

New economy accounting : why are broad-based stock option plans so attractive?

Several studies indicate that stock option plans are becoming more and more a substantial part of compensation schemes in U.S. companies. This paper shows the tax implications and accounting rules for stock option plans. By comparison of the tax and accounting rules for different compensation schemes we show that the popularity of stock options may be mainly due to the U.S. Generally Accepted Accounting Principles (US-GAAP) which require no charge to earnings for speciffically designed stock option plans if a company opts for footnote disclosure. Thus, for these companies the stated earnings are higher than their economical situations justify. Based on a case study of 20 companies out of the S&P 500 which rely heavily on employee stock options we arrive at the conclusion that the amount of hidden compensation cost can reach economically signifficant amounts. Since this topic seems to be widely neglected it is questionable whether stock prices reflect these hidden cost. --Accounting,US-GAAP,stock option programs

The impact of macroeconomic news on quote adjustments, noise, and informational volatility

We study the impact of the arrival of macroeconomic news on the informational and noise-driven components in high-frequency quote processes and their conditional variances. Bid and ask returns are decomposed into a common ('efficient return') factor and two market-side-specific components capturing market microstructure effects. The corresponding variance components reflect information-driven and noise-induced volatilities.We find that all volatility components reveal distinct dynamics and are positively influenced by news. The proportion of noise-induced variances is highest before announcements and significantly declines thereafter. Moreover, news-affected responses in all volatility components are influenced by order flow imbalances. --effcient return,macroeconomic announcements,microstructure noise,informational volatility

Magnetohydrodynamic Effects in Propagating Relativistic Jets: Reverse Shock and Magnetic Acceleration

We solve the Riemann problem for the deceleration of an arbitrarily magnetized relativistic flow injected into a static unmagnetized medium in one dimension. We find that for the same initial Lorentz factor, the reverse shock becomes progressively weaker with increasing magnetization \sigma (the Poynting-to kinetic energy flux ratio), and the shock becomes a rarefaction wave when \sigma exceeds a critical value, \sigma_c, defined by the balance between the magnetic pressure in the flow and the thermal pressure in the forward shock. In the rarefaction wave regime, we find that the rarefied region is accelerated to a Lorentz factor that is significantly larger than the initial value. This acceleration mechanism is due to the strong magnetic pressure in the flow. We discuss the implications of these results for models of gamma-ray bursts and active galactic nuclei.Comment: 13 pages, 3 figures, Accepted to publication in ApJ Letter

Plant cell culture technology in the cosmetics and food industries : current state and future trends

The production of drugs, cosmetics, and food which are derived from plant cell and tissue cultures has a long tradition. The emerging trend of manufacturing cosmetics and food products in a natural and sustainable manner has brought a new wave in plant cell culture technology over the past 10 years. More than 50 products based on extracts from plant cell cultures have made their way into the cosmetics industry during this time, whereby the majority is produced with plant cell suspension cultures. In addition, the first plant cell culture-based food supplement ingredients, such as Echigena Plus and Teoside 10, are now produced at production scale. In this mini review, we discuss the reasons for and the characteristics as well as the challenges of plant cell culture-based productions for the cosmetics and food industries. It focuses on the current state of the art in this field. In addition, two examples of the latest developments in plant cell culture-based food production are presented, that is, superfood which boosts health and food that can be produced in the lab or at home