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    Security Analysis: "Economy /market Analysis"

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    Almira Muthia Islami
    The document discusses the relationship between the economy, business cycles, and the stock market. It states that the stock market and economy are closely related, with the stock market generally leading changes in the economy. When the economy is doing well, most companies and the stock market also tend to do well. The document also examines how macroeconomic forecasts can be useful for investors, and how fiscal policy, monetary policy, and the corporate tax rate can impact stock prices.

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    Security Analysis: "Economy /market Analysis"

    Uploaded by

    Almira Muthia Islami
    22 views14 pages
    The document discusses the relationship between the economy, business cycles, and the stock market. It states that the stock market and economy are closely related, with the stock market generally leading changes in the economy. When the economy is doing well, most companies and the stock market also tend to do well. The document also examines how macroeconomic forecasts can be useful for investors, and how fiscal policy, monetary policy, and the corporate tax rate can impact stock prices.

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    analisis security

    Original Title

    Security Analysis

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    The document discusses the relationship between the economy, business cycles, and the stock market. It states that the stock market and economy are closely related, with the stock market generally leading changes in the economy. When the economy is doing well, most companies and the stock market also tend to do well. The document also examines how macroeconomic forecasts can be useful for investors, and how fiscal policy, monetary policy, and the corporate tax rate can impact stock prices.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    22 views14 pages

    Security Analysis: "Economy /market Analysis"

    Uploaded by

    Almira Muthia Islami
    The document discusses the relationship between the economy, business cycles, and the stock market. It states that the stock market and economy are closely related, with the stock market generally leading changes in the economy. When the economy is doing well, most companies and the stock market also tend to do well. The document also examines how macroeconomic forecasts can be useful for investors, and how fiscal policy, monetary policy, and the corporate tax rate can impact stock prices.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 14

    Security Analysis :

    Economy /Market
    Analysis
    By,
    Laela Susdiani, SE, M.Com(App.Fin)

    Security Analysis
    Fundamental Analysis

    - Economy/Market analysis
    - Industries analysis
    - Company analysis
    Technical Analysis

    The Economy and The Stock Market


    If the economy is doing badly, most
    companies will also be performing poorly, as
    will the stock market. Conversely, if the
    economy is prospering, most companies will
    also be doing well, and the stock market will
    reflect this economic strenght

    Economy as Business
    Cycle
    Business cycle is the recurring patterns of
    expansion, boom, contraction, and recession
    in the economy

    The Stock Market and


    The Business Cycles
    Stock prices generally lead the economy. The
    market and the economy are closely related,
    but stock prices tend to almost always turn
    before the economy

    How Reliable is the relationship


    between the stock market and the
    business cycle
    The ability of the market to predict recoveries
    is much better than is ability with recession

    The Relationship Between The Bond


    Market and The Stock Market
    Bond investors react to daily information
    about the economy, and the stock market, in
    turn, is affected

    Macroeconomic
    Forecasts of The Economy
    Good economic forecasts are of obvious
    significant value to investors. Since the
    economic and market are closely related,
    good forecast of macroeconomic variables
    would be very useful.

    Uses of Market Measures


    Market measures tell investors how all stocks
    in general are doing at any time or give them
    a feel for the market. Many investors are
    encouraged to invest if stocks are moving
    upward, whereas downward trends may
    encourage some to liquidate their holdings
    and invest in money market assets or funds

    The Determinants of Stock Prices


    Fiscal Policy
    Monetary Policy
    The corporate tax rate

    Potential Output Of The


    Economy Affect Three Changes
    In The Economy
    Total spending
    Price level
    Real money

    These three changes ultimately affect


    Corporate earnings
    Interest rate

    Corporate Earnings,
    Interest Rate and Stock Prices
    If the economy is prospering, investors will

    expect corporate earnings and dividends to


    rise and other things being equal, stock prices
    to rise.
    If the interest rate fall, stock prices rise and if
    the interest rate rise, stock prices fall

    Valuing The Market


    Using a multiplier or P/E Ratio
    Po = D 1 / k g
    Po = (Po/E1 ) x E1
    Where
    Po = Stock prices
    E1 = Expected earnings
    D1 = Expected divedends
    k = Discount rate or required rate of return
    g = Expected growth rate in divedend or earnings

    Forecasting Changes In The Market


    Using The business cycle
    Using Key Variables To make market forecasts
    Using Valuation Models

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