Chap017Macroeconomic and Industry Analysis(金融工程-南开大学,王小麓))精选.pptVIP

Chapter 17 Macroeconomic and Industry Analysis Framework of Analysis Fundamental Analysis Approach to Fundamental Analysis: Domestic and global economic analysis Industry analysis Company analysis Why use the top-down approach? Global Economic Considerations Performance in countries and regions is highly variable. Political risk Exchange rate risk Sales Profits Stock returns Key Economic Variables Gross domestic product Unemployment rates Interest rates inflation International measures Consumer sentiment Federal Government Policy Fiscal Policy - government spending and taxing actions. Direct policy Slowly implemented Federal Government Policy (cont’d) Monetary Policy - manipulation of the money supply to influence economic activity. Initial feedback effects Tools of monetary policy Open market operations Discount rate Reserve requirements Demand Shocks Demand shock - an event that affects demand for goods and services in the economy. Tax rate cut Increases in government spending Supply Shocks Supply shock - an event that influences production capacity or production costs. Commodity price changes Educational level of economic participants Business Cycles Business Cycle Peak Trough Industry relationship to business cycles Cyclical Defensive NBER Cyclical Indicators: Leading Leading Indicators - tend to rise and fall in advance of the economy. Examples: Avg. weekly hours of production workers Stock Prices NBER Cyclical Indicators: Coincident Coincident Indicators - indicators that tend to change directly with the economy. Examples: Industrial production Manufacturing and trade sales NBER Cyclical Indicators: Lagging Lagging Indicators - indicators that tend to follow the lag economic performance. Examples: Ratio of trade inventories to sales Ratio of consumer installment credit outstanding to personal income Industry Analysis Sensitivity to business cycles Factors affecting sensitivity of earnings to business cycles: Sensitivity of sales of the firm’s product