Macroeconomic and Industry Analysis — Flashcards

A set of fill-in-the-blank flashcards covering key topics from macroeconomic and industry analysis, including top-down analysis, global and domestic macroeconomy indicators, monetary and fiscal policy, business cycles, and industry performance.

The key variables usually used to summarize the state of the domestic U.S. economy include the U.S. government macroeconomic policy, determinants of __, and business cycles.

interest rates

In the global economy, stock markets in local currency vs US$ reflect inflation rate differentials; a negative number indicates a __.

depreciating dollar

The unemployment rate is the ratio of the number of unemployed to the total __.

labor force

Inflation is the rate at which the general level of prices for goods and services is __.

rising

High interest rates reduce present value of future cash flows, and reduce the value of __.

stock

Budget Deficit: Government spending in excess of government __.

revenues

Open Market Operations involve the Fed buying or selling __ to influence the money supply.

securities

If the reserve requirement is 10% and $100 is deposited, $__ must be held against that deposit.

10

Discount Rate: the interest rate at which the Fed charges banks for borrowing money, allowing them to __ the money supply.

increase

Federal Funds Rate: banks with excess reserves lend to other banks; the rate is determined by the interaction of the supply and demand of funds available in the __ market.

federal funds

The Fed can affect the __ of funds and thereby affect the federal funds rate.

supply

QE (Quantitative Easing) increases money supply by purchasing back government __.

bonds

Leading indicators are economic series that tend to rise or fall in advance of the rest of the economy; an example is __.

Average weekly hours of production workers

Coincident indicators tend to rise or fall in tandem with the rest of the economy; an example is __.

Employees on nonagricultural payrolls

Lagging indicators tend to rise or fall behind the rest of the economy; an example is __.

Average duration of unemployment

Economic goals include stable prices (inflation), full employment (job creation), and __ (GDP growth).

economic growth (GDP growth)

The yield curve is the spread between the 10-year T-bond yield and the rate.

federal funds

Holders of the public debt (as of Dec 2016) include Foreign entities; the largest category held around trillion.

6.004

Business cycles: a Peak marks the transition from end of expansion to start of __.

contraction

Business cycles: a Trough marks the transition between recession and .

recovery

Cyclical industries have __ betas.

high

Defensive industries have __ betas.

low

In 2016, ROE across major industry groups ranged from % for iron and steel.

0.9%

In 2016, ROE across major industry groups ranged from % for aerospace.

24.6%

ROE for Symantec was as low as %.

-6.6%

ROE for Intuit was as high as %.

61.6%

Airlines had about a % gain in 2016.

40.9%

Oil and gas industry had about an % loss in 2016.

8.4%