TP 15147E 2010 · Transportation and the Economy Table EC1: Economic Indicators, 2010
Economic Indicators 2010-2011
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Transcript of Economic Indicators 2010-2011
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( ")The analyses and conclusions of the Western Investment Club WIC contained in this.presentation are based on publicly available information WIC recognizes that there may be
confidential information in the possession of the companies discussed in the presentation .that could lead these companies to disagree with WIC s conclusions This presentation and
the information contained herein is not a recommendation or solicitation to buy or sell.any securities
,The analyses provided may include certain statements estimates and projections prepared, ,with respect to among other things the historical and anticipated operating performance, .of the companies access to capital markets and the values of assets and liabilities Such
, ,statements estimates and projections reflect various assumptions by WIC concerning, ,anticipated results that are inherently subject to significant economic competitive and
other uncertainties and contingencies and have been included solely for illustrative. , ,purposes No representations express or implied are made as to the accuracy or
,completeness of such statements estimates or projections or with respect to any other.materials herein Actual results may vary materially from the estimates and projected
.results contained herein
Disclaimer
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hat is an economic indicator?
Economic Indicators What are they?
Statistics or data used to analyze current economicactivityUseful for identifying stages in the business cycle ,From an investors point of view economic indicators can
help shape an investment strategy If any indicator suggests that the economy is going to
,do worse or better than previously expected then.decisions may change
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he Business Cycle
Economic Indicators The Business Cycle
The Business CycleGDP
Peak
Trough
Trough
Peak
Peak
ExpansionContraction Recovery
Recovery
Expansion
Contraction
Time
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, ,eading Lagging or Coincident
Economic Indicators Timing
T he timing of economic indicators reflects whether the,overall economic conditions have changed are changing or will change
Leading Indicators which change before the economy
.changes They help predict what the economy will be like
in the future as they re more highly correlated with future ( .GDP rather than past or current Ex Housing
)StartsLagging Indicators that change after the economy
,changes hence are more highly correlated with past .GDP,They reflect how the economy has performed in the past
( . )often a few months or quarters ago Ex Unemployment rate
oincident Indicators that move at the same time as( . ).the economy Ex Retail Sales They are most correlated
with current GDP
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L ag gi ng I nd ic at or
Economic Indicators Timing
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hat are some examples?
Economic Indicators Examples
Leading Indicators Coincident Indicators Lagging Indicators
Housing StartsManufacturers neworders
Spot commodity pricesAvg. Hours worked per week Money Flows
Industrial productionPersonal incomeRetail sales
Business investmentspendingUnemployment
Labour CostsInventory LevelsInflation
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hen do we get this information?
Economic Indicators Frequency of Information
requency How often the information is available : ,Examples GDP is released quarterly unemployment is
, ( . )released monthly and Indices ex Dow Jones is available.immediately and changes quite often
Figures that come out infrequently often have a larger impact on the capital markets compared with those
released often
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ow can this help us?
Economic Indicators
Economic indicators can be used to support an invesment,thesis or to demonstrate potential investment risks
Decisions shouldn t be based on economic
/ indicators economic trends alone they should be used
in conjunction with fundamental analysis
, - As a value investing club we take a bottom up approach
, ,to investing and look for good companies rather than companies that stand to benefit form changing economic
conditions
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hat can we see right now?
-Economic Indicators Some Current Indicators
Indicator Unit Summar y
Vs. Previous
DateRetail Sales(Procyclical/Coincident)
CAD 35,856,000,000
-25,000,000
July.2010
Building Permits Value
Seasonally Adjusted(Procyclical/Leading)
CAD 5,748,00
0,000
-585,800,
000
Aug.
2010Money Supply(Procyclical/Leading)
CAD 218,581,000,000
872,000,000
Aug.2010
Prime Interest Rate(Procyclical/Lagging)
% 2.75 0.25 July2010
Unemployment(Countercyclical/Lagging)
% 8.0 -0.8 Sept.2010
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Cartoon
Economic Indicators
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