Spring clock change can impact investors response to company earnings

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Researchers say their findings are consistent with sleep-deprived investors mispricing and revisiting relevant information.

The spring clock change significantly affects how investors respond to companies that reveal unexpected levels of earnings, new research shows.

Researchers say their findings are consistent with sleep-deprived investors mispricing and subsequently revisiting relevant information. The research team hopes the study – published in The European Journal of Finance – will deepen understanding of the effects of sleep deprivation on financial markets.

The team studied a large sample of earnings announcements, made between 1993 and 2018, in the wake of the spring clocks reset.Unexpected increases in earnings within the target group were then compared with a control group of similar companies that had announced financial results exactly one week earlier.

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Spring clock change can impact investors response to company earningsResearchers say their findings are consistent with sleep-deprived investors mispricing and revisiting relevant information.
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