ch13 EconomyMarket Analysis外文电子书籍.pptVIP

Economy/Market Analysis Chapter 13 Charles P. Jones, Investments: Analysis and Management, Ninth Edition, John Wiley Sons Prepared by G.D. Koppenhaver, Iowa State University Top-down Approach Analyze economy-stock market T industries T individual companies Need to understand economic factors that affect stock prices initially Use valuation models applied to the overall market and consider how to forecast market changes Stock market’s likely direction is of extreme importance to investors Should also take a global perspective because of linkages Taking a Global Perspective U. S. investors can choose equities from some 50 countries The current trend is to open economies and deregulate industries Another reason investors need to consider foreign securities is currency changes. Economy and the Stock Market Direct relationship between the two Economic business cycle Recurring pattern of aggregate economic expansion and contraction Cycles have a common framework trough T peak T trough Can only be neatly categorized by length and turning points in hindsight Business Cycle National Bureau Economic Research Monitors economic indicators Dates business cycle when possible Composite indexes of general economic activity Series of leading, coincident, and lagging indicators of economic activity to assess the status of the business cycle Stock Market and Business Cycle Stock prices lead the economy Historically, the most sensitive indicator Stock prices consistently turn before the economy How reliable is the relationship? -The market has given false signals about future economic activity The ability of the market to predict recoveries is much better than its ability to predict recessions The Stock Market and the Bond Market Stock investors pay attention to the bond market because of the importance of interest rates The bond market can provide daily signals about what investors are thinking Bond traders react to news daily Macroeconomic Forecasts of the Ec