International Economic Indicators and their Impacts on Financial Markets

Day One

09.00 - 09.15 Welcome and Introduction

09.15 - 12.00 Review of Modern Macroeconomics

• Overview of Important Macroeconomic Variables
• Alternative Measures for Output and Income
• Economic Fluctuations, Unemployment and Inflation
• Government Deficits and Interest Rates
• Balance of Payments and Exchange Rates
• Fiscal and Monetary Policies and their Impacts on the Financial Markets
• Small Exercises

Introduction to Economic Indicators

• What Is an Economic Indicator? Why Are they Important?
• Types of Economic Indicators
  • Leading, Lagging, Coincident
  • Procyclical, Countercyclical, Acyclical
  • Composite and Diffusion Indexes
• Overview of Domestic and International Indicator Indexes
• Linkages between Economic Indicators
• Overview of the Practical Uses of Economic Indicators

12.00 - 13.00 Lunch

13.00 - 16.30 Leading Indicators and their Importance to Financial Markets

• Important Indexes of Leading Indicators
  • The Conference Board (US)
  • OECD's Composite Leading Indicator for the G7 Economies
  • The ECRI Index
• Closer look at the Individual Leading Indicators
  • Stock Prices and Stock Market Returns
  • Average Weekly Hours
  • New Orders
  • Money Supply
  • Housing Permits
  • Consumer Spending and Confidence
  • Interest Rate Spreads (Yield Curve)
• Other Leading Indicators
• Forecasting Recessions Using Leading Economic Indicators
• Interpreting Declines in the Leading Index: The Three D’s
• Investment Implications
  • How the Release of New Economic Data Can Impact the Value of Financial Instruments and Investment Projects
  • Estimating the Effect on Stock Prices and Interest Rates
• Cautions and Conclusions about Leading Indicators
• Small Exercises

Day Two

09.00 - 09.15 Brief Recap

09.15 - 12.00 Coincident Indicators and their Importance to Financial Markets

• Industrial Production
  • Real and Nominal GDP, Volume of Sales of the Manufacturing and Wholesale-Retail Sectors, Durable Goods Orders, Factory Orders
  • Practical Investment Implications of Industrial Production Indicators
  • Examples of Investment Strategies of (Changing) Industrial Production Indicators
• Employment
  • Employment Situation, Weekly Claims for Unemployment Insurance, Help-Wanted Advertising Index, Corporate Layoff Announcements, Mass Layoff Statistics (MLS)
  • Practical Investment Implications of Employment Indicators
  • Examples of Investment Strategies to Exploit (Changing) Employment Indicators
• Other Coincident Indicators
  • Personal Income and Spending
  • New and Existing Home Sales
  • Practical Investment Implications and Examples of Investment Strategies
• Small Exercises

12.00 - 13.00 Lunch

13.00 - 16.00 Lagging Indicators and their Importance to Financial Markets

• Unemployment
• Cost of Doing Business
  • Inventory-Sales Ratios
  • Prices, Productivity, Wages, Employment Cost Index
• Consumer and Social Costs
  • Ratio of Instalment Credit Outstanding to Personal Income
  • Percentage Change in CPI
  • Average Duration of Unemployment
• Other Lagging Indicators
• Practical Investment Implications of Changing Lagging Indicators
  • Understanding the Behaviour of the Economy
  • Examples of Investment Strategies that Are Based Upon the Analysis of Lagging Indicators
• Small Exercises

Outlook: Economic Integration and Global Financial Markets

• Where is the Global Economy Heading?
• What will be the Impact on Global and Local Financial Markets?
• Taking the Pulse of the Global Economy by Looking at Economic Indicators

Summary, Evaluation and Termination of the Seminar