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The Economic Indicator Handbook. Richard Yamarone
Читать онлайн.Название The Economic Indicator Handbook
Год выпуска 0
isbn 9781118233122
Автор произведения Richard Yamarone
Жанр Зарубежная образовательная литература
Издательство John Wiley & Sons Limited
Economist Estimates and Expectations
Once in the calendar on economic releases, right-clicking on any of the indexes reveals the Street expectations, as seen in Exhibit 1.2. Here we see the graphical distribution for nonfarm payroll estimates by 74 economists, as well as the average, median, high, low, and standard deviation. There is also a ranking of the economist for that indicator in the lower-right-hand corner, which is based on two years of contributed estimates.
Exhibit 1.2 Economist Estimates
Source: Bloomberg
Then, clicking again on an individual economist or firm reveals a chart of the forecasting history of that particular forecaster for that economic release (Exhibit 1.3), as well as the median and actual number. You can also select several economists at a time. Now we are capable of seeing just how good some are at the estimating game.
Exhibit 1.3 Economist/Firm Forecast History
Source: Bloomberg
And since we have the Street estimates for dozens of indicators – and history – we can plot to see how far off the experts as a consensus were with respect to the actual number. Exhibit 1.4 shows the Economic Surprise Monitor (ECSU <GO>), which contains a dashboard of the latest top-tier indicators and their associated postings (by date) and the amount that each differed from the survey median as polled by Bloomberg, divided by the survey standard deviation.
Exhibit 1.4 The Economic Surprise Monitor
Source: Bloomberg
The Bloomberg Economic Surprise Index
The Bloomberg Economic Surprise Index (ESI) shows the degree to which Street economists either under- or overestimate those top-tier indicators posted in ECO <GO>.
When the actual number exceeds the Street estimates, it's a sign that the measured performance of a particular economic indicator bettered Street expectations, implying the economy may be performing better than the pros believe. Conversely, lower actual values suggest weaker economic conditions compared to what the forecasters believe. The associated exhibit lists the most recent releases in the Bloomberg ECO U.S. Surprise Index and whether they missed to the up side (green) or to the down side (red).
Formal releases of economic data aren't the only incidents that move the market or may change the outlook of the economy. The daily events calendar is an extremely important tool used in the analysis of the economic environment. While there are rarely specific data or indexes revealed in the countless events that occur during any given trading session, there are nuggets of information in many of the conference calls or releases – the sharp analyst just has to know where to look.
Most analysts and economists know days in advance about what is on the docket regarding investor meetings, industry or bank-sponsored conferences, earnings calls, corporate updates, annual meetings, and special company announcements like a merger or acquisition. The Bloomberg Events Calendar in Exhibit 1.5 (EVTS <GO>) identifies one page of the thousands that exist on the terminal.
Exhibit 1.5 Events Calendar
Source: Bloomberg
The Events Calendar
The company is identified, as well as a description of the event type. Where applicable, the dial-in number is listed along with the necessary PIN code in the event that the listener would like to call in directly and ask questions.
The last five columns are functions that permit the user to read the associated press release (P), download a PDF file of the transcript of the entire conference call (T), read a transcript summary (S), listen to an audio file of the entire conference call (A), or sync the event to your calendar (C). These, of course, are all archived and available on an historical basis.
To be sure, not every call will generate insight to the goings on of the economy. But the wise desk economist should listen to (or read the transcripts of) the most economically sensitive companies that may be complaining of a high-interest-rate environment, stagnant spending by the consumer, or high input prices. Just about anything that can disrupt a company's performance will be mentioned in these calls. Many times, the comments made by executives on these calls forewarn changes in the economic data.
In Exhibit 1.5, it would be wise to listen to what Home Depot, Wal-Mart, and TJX Companies might have to say. The information contained in those calls might identify the underlying tone of the consumer. And since the consumer is responsible for a large portion of economic activity, the anecdotes can be invaluable to the forecasting process.
Having a treasury of economic data is essential for every economist or analyst. The Bloomberg Professional terminal provides a trove of economic and financial market data ranging from the common government reports and all the associated detail like GDP, consumption expenditures, the price indexes, and the confidence measures to the more obscure North American rail carloads of forest products. Just think of how valuable the latest data on industrial production of veneer, plywood, and engineered wood products, the retail price of carbonated drinks, or the number of persons employed in museums, historical sites, and parks can be to a housing, beverage, or not-for-profit industry analyst.
The Economic Statistics Table (ECST)
As Exhibit 1.6 highlights, the data are available on tens of thousands of indicators and are easily searchable and downloadable with a mere click on the menu – all in one place.
Exhibit 1.6 Economic Statistics Table
Source: Bloomberg
Having the ability to work with data is also critical in the analysis process. All of the charts in this book were created using data from the Bloomberg terminal, and almost all have been produced in the Economic Workbench (ECWB <GO>). This function permits you to “play” with data. That is, insert different indicators or indexes and look at relationships, ideally identifying the temperature of the economic climate or other key indicators to better appreciate the tone of an industry, the possible direction of a stock or bond, or changes in the business cycle.
The Powerful Economic Workbench
Exhibit 1.7 displays the Bloomberg Economic Workbench. Basically, this is a charting tool. Any of the historical data on the terminal may be loaded into a field and then altered to identify a particular pattern or association. Sometimes economists want to compare data that are reported in different bases, like a quarterly GDP and weekly initial jobless claims, or daily commodity prices and monthly producer price indexes.
Exhibit 1.7 Economic Workbench
Source: Bloomberg
In Exhibit 1.7, we chart the U.S. Treasury cash balance of federal tax deposits withheld from employment income and tax receipts against the monthly nonfarm payrolls. The economic explanation behind this is that the more people employed, the greater will be the amount of tax withholdings by the federal government.
There are several other applications that analysts