Stock Returns After Major Price Shocks: The Impact of Information

This paper focuses on stocks that experience major price changes. Using analyst reports as a proxy, I find that price events accompanied by information are followed by drift, while no-information ones result in reversals. One interpretation of these results is that investors underreact to news about fundamentals and overreact to other shocks that move stock prices. Consistent with this hypothesis, information-based price changes are more strongly correlated with future earnings surprises than no-information ones. Furthermore, drift exists only when the direction of the price move and of the change in analyst recommendations have the same sign. Finally, the ratio of no-information to information-based price shocks is strongly correlated with aggregate implied volatility and also forecasts momentum returns

Do Stock Mergers Create Value for Acquirers?

This paper finds support for the hypothesis that overvalued firms create value for long-term shareholders by using their equity as currency. Any approach centered on abnormal returns is complicated by the fact that the most overvalued firms have the greatest incentive to engage in stock acquisitions. We solve this endogeneity problem by creating a sample of mergers that fail for exogenous reasons. We find that unsuccessful stock bidders significantly underperform successful ones. Failure to consummate is costlier for richly priced firms, and the unrealized acquirer-target combination would have earned higher returns. None of these results hold for cash bids

Marriage and Managers\u27 Attitudes to Risk

Marital status can both reflect and affect individual preferences. We explore the impact of marriage on corporate chief executive officers (CEOs) and find that firms run by single CEOs exhibit higher stock return volatility, pursue more aggressive investment policies, and do not respond to changes in idiosyncratic risk. These effects are weaker for older CEOs. Our findings continue to hold when we use variation in divorce laws across states to instrument for CEO marital status, which supports the hypothesis that marriage itself drives choices rather than it just reflecting innate heterogeneity in preferences. We explore various potential explanations for why single CEOs may be less risk averse. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2014.1926

How Much Do Investors Care About Macroeconomic Risk? Evidence From Scheduled Economic Announcements

Stock market average returns and Sharpe ratios are significantly higher on days when important macroeconomic news about inflation, unemployment, or interest rates is scheduled for announcement. The average announcement-day excess return from 1958 to 2009 is 11.4 basis points (bp) versus 1.1 bp for all the other days, suggesting that over 60% of the cumulative annual equity risk premium is earned on announcement days. The Sharpe ratio is 10 times higher. In contrast, the risk-free rate is detectably lower on announcement days, consistent with a precautionary saving motive. Our results demonstrate a trade-off between macroeconomic risk and asset returns, and provide an estimate of the premium investors demand to bear this risk

One Central Bank to Rule Them All

While global stock markets enjoy high returns on days surrounding FOMC meetings, there is no comparable result for other central banks either internationally or, more surprisingly, domestically. Neither announcement surprises nor currency moves drive these findings, which hold even for stocks with a domestic focus. The difference in announcement premia is not explained by economy size, exposure to multinationals, or policy activism. We conclude that the Fed exerts a unique impact on global equities. Consistent with this hypothesis, uncertainty drops across global markets following FOMC announcements but not those of other central banks. Furthermore, the Fed is generally the leader among central banks in setting monetary policy

Continuous Deployment Transitions at Scale

Predictable, rapid, and data-driven feature rollout; lightning-fast; and automated fix deployment are some of the benefits most large software organizations worldwide are striving for. In the process, they are transitioning toward the use of continuous deployment practices. Continuous deployment enables companies to make hundreds or thousands of software changes to live computing infrastructure every day while maintaining service to millions of customers. Such ultra-fast changes create a new reality in software development. Over the past four years, the Continuous Deployment Summit, hosted at Facebook, Netflix, Google, and Twitter has been held. Representatives from companies like Cisco, Facebook, Google, IBM, Microsoft, Netflix, and Twitter have shared the triumphs and struggles of their transition to continuous deployment practices—each year the companies press on, getting ever faster. In this chapter, the authors share the common strategies and practices used by continuous deployment pioneers and adopted by newcomers as they transition and use continuous deployment practices at scale

The Respiratory Protection Effectiveness Clinical Trial (ResPECT): a cluster-randomized comparison of respirator and medical mask effectiveness against respiratory infections in healthcare personnel.

BACKGROUND: Although N95 filtering facepiece respirators and medical masks are commonly used for protection against respiratory infections in healthcare settings, more clinical evidence is needed to understand the optimal settings and exposure circumstances for healthcare personnel to use these devices. A lack of clinically germane research has led to equivocal, and occasionally conflicting, healthcare respiratory protection recommendations from public health organizations, professional societies, and experts. METHODS: The Respiratory Protection Effectiveness Clinical Trial (ResPECT) is a prospective comparison of respiratory protective equipment to be conducted at multiple U.S. study sites. Healthcare personnel who work in outpatient settings will be cluster-randomized to wear N95 respirators or medical masks for protection against infections during respiratory virus season. Outcome measures will include laboratory-confirmed viral respiratory infections, acute respiratory illness, and influenza-like illness. Participant exposures to patients, coworkers, and others with symptoms and signs of respiratory infection, both within and beyond the workplace, will be recorded in daily diaries. Adherence to study protocols will be monitored by the study team. DISCUSSION: ResPECT is designed to better understand the extent to which N95s and MMs reduce clinical illness among healthcare personnel. A fully successful study would produce clinically relevant results that help clinician-leaders make reasoned decisions about protection of healthcare personnel against occupationally acquired respiratory infections and prevention of spread within healthcare systems. TRIAL REGISTRATION: The trial is registered at clinicaltrials.gov, number NCT01249625 (11/29/2010)

Daptomycin versus standard therapy for bacteremia and endocarditis caused by Staphylococcus aureus.

BACKGROUND: Alternative therapies for Staphylococcus aureus bacteremia and endocarditis are needed. METHODS: We randomly assigned 124 patients with S. aureus bacteremia with or without endocarditis to receive 6 mg of daptomycin intravenously per kilogram of body weight daily and 122 to receive initial low-dose gentamicin plus either an antistaphylococcal penicillin or vancomycin. The primary efficacy end point was treatment success 42 days after the end of therapy. RESULTS: Forty-two days after the end of therapy in the modified intention-to-treat analysis, a successful outcome was documented for 53 of 120 patients who received daptomycin as compared with 48 of 115 patients who received standard therapy (44.2 percent vs. 41.7 percent; absolute difference, 2.4 percent; 95 percent confidence interval, -10.2 to 15.1 percent). Our results met prespecified criteria for the noninferiority of daptomycin. The success rates were similar in subgroups of patients with complicated bacteremia, right-sided endocarditis, and methicillin-resistant S. aureus. Daptomycin therapy was associated with a higher rate of microbiologic failure than was standard therapy (19 vs. 11 patients, P=0.17). In 6 of the 19 patients with microbiologic failure in the daptomycin group, isolates with reduced susceptibility to daptomycin emerged; similarly, a reduced susceptibility to vancomycin was noted in isolates from patients treated with vancomycin. As compared with daptomycin therapy, standard therapy was associated with a nonsignificantly higher rate of adverse events that led to treatment failure due to the discontinuation of therapy (17 vs. 8, P=0.06). Clinically significant renal dysfunction occurred in 11.0 percent of patients who received daptomycin and in 26.3 percent of patients who received standard therapy (P=0.004). CONCLUSIONS: Daptomycin (6 mg per kilogram daily) is not inferior to standard therapy for S. aureus bacteremia and right-sided endocarditis. (ClinicalTrials.gov number, NCT00093067 [ClinicalTrials.gov].)