macro and markets
DESCRIPTION
My presentation at Traders Carnival. It was about Macro data and how it impacts markets.TRANSCRIPT
MACRO AND MARKETS
Deepak Shenoycapitalmind.in
Capitalmind.in
Markets and Macro
We’ll talk about What the “Macro” picture means Impact on markets Specifics that apply to India Questions: Raise your hand
Capitalmind.in
Quiz
Why was the Nifty locked in Upper Circuit, and closed over 20% up, on May 18, 2009?
Capitalmind.in
Quiz #2
Why did the Nifty open at lower circuit and then recover intraday on Oct 17, 2007?
Capitalmind.in
Quiz #3
Why did the market crash to lower circuit in May 2004?
Capitalmind.in
Quiz #4
21 years ago, Within 2 minutes of hearing the word “Regrettably”, US stock markets fell, Bond yields rose, and oil went up $3 per barrel.
Why?
Capitalmind.in
What?
Elections War RBI regulations
News about macroeconomics, geopolitical issues, market infrastructure impact markets, sometimes dramatically.
Capitalmind.in
Macro: Not Directly Related
News that isn’t related to a stock or sector Political Economic Global Natural Disasters
Capitalmind.in
Market Impact
Perception
No Left Party in
govt
Good thing
FearNo P-
Notes, FIIs will
run away
Bad thing
Prediction
War raises oil prices
Bad thing (Good for
oil)
StupidityEuro will dissolve today
Bad thing
Capitalmind.in
Indian Markets
GDP Growth Data Released every quarter IMF Makes “estimates” now and then Data Revised Like Crazy
Inflation WPI and CPI Every Month
Capitalmind.in
Various Macro Elements
PMI IIP Deficits
LiquidityBank Credit Growth
Money Supply
Capitalmind.in
Market Macro
Index VIXMarket Wide
IndicatorsLiquidity
Exports And
ImportsFII Flows
Capitalmind.in
Delays
Macro Data usually has a huge lag Data appears months after it actually
happens Reactions to news is usually
immediate Despite potential future revisions
One time events like an Election result are exceptions
Capitalmind.in
Variable Impact
Macro impacts different markets differentlyRBI raises
rates Banks Auto/IRS
Dollar Rate
Exporters
Greece Exits Euro
Exporters to
Europe
Global Markets
Liquidity Issue
Broad Market
Capitalmind.in
Can Be Painful
Michael Burry Traded against Subprime Mortgages from 2005 Lost money for over two years! Made a packet since that
Soros Held a massive trade against the British Pound Could have been wiped out by the leverage
Niederhoffer was Long Term Capital was Amaranth was
Capitalmind.in
Global Markets
Capitalmind.in
Inflation
Capitalmind.in
VIX
Capitalmind.in
Trend Days
Capitalmind.in
T-Bill Yields
Capitalmind.in
Stocks Above DMAs
Capitalmind.in
Steel Production
Capitalmind.in
Nifty Including Dividends
Capitalmind.in
Nifty P/E
Capitalmind.in
Known Issues
Bad Data Revisions Interference by Governments
Bailouts QE
Black Swans Very Likely Luck is underattributed
