The returns of firms’ corporate bonds predict their future stock returns, especially for firms with low credit ratings and distressed fundamentals. Predictability is amplified when bond volume is high relative to stock volume, and when bond traders are larger, and is stronger for firms with lottery-like stock characteristics that attract retail traders. These findings suggest that informed bond trading transmits valuable information that equity markets incorporate with a delay due to noise. Stronger predictability around earnings announcements supports the view that bond markets reflect firm-specific cash flow information rather than changes in risk premia.Connect with James Cook University, Singapore: Like us on Facebook: https://www.facebook.com/jcu.singapore.fanpage/ Follow us on Twitter: https://twitter.com/jcu_singapore Follow us on Instagram: https://www.instagram.com/jcusingapore Follow us on TikTok: https://www.tiktok.com/@jcusingapore And for more news and information, visit https://www.jcu.edu.sg/

Aquaculture – More Than Just Fish. Let James Cook University’s Distinguished Professor Dean Jerry reel you into this growing industry. Listen to the full episode: https://www.jcu.edu.sg/jcu-conversations/podcasts/jcu-conversations-43-dean-jerry/