Economic Indicators and Market Cycles

The market's source of information and reality check

Course objectives

  • Understand nature and methodology of economic indicators
  • Evaluate market impact of indicators based on environment
  • Understand consensus but shape your own opinion

The Fight of a Century for economists

  • The Neoclassical school of thought
  • The Keynes Revolution, the monetarist rebellion and the Austrian Counter Revolution: all but theory…. This is today !

Case Study: the European political debate under this new light

What is the use of economic indicators?

  • Leading Vs lagging indicators
  • Volatility, anticipations, and consensus-making on the markets
  • Would-be economic indicators: political instability, oil and monetary policy

Mastering the main economic indicators and their methodology, and how markets interpret the data

  • Real / nominal GDP and growth
    • Consumer spending corporate investment
    • Impact of government spending
    • Impact of imports and exports
  • Economic cycles and inflation *Supply Vs demand-led inflation

Case Study: historical perspective on inflation cycles in the US

  • How anticipations shape markets
  • Philipps theory over the medium and long term

Case Study: analysis of labor statistics and inflation in the US

- How Non-Farm Payroll data compares to Household survey

- Monetary aggregates and Cebtral Bank balance sheet in the USA and Eurozone: how investors read it

  • Consumer Price Indices
    • Core-CPI index: evolution and significance to the investor
    • CPI in the US and PER for the S&P
  • The voice from the core: indices from ISM (USA), PMI (EuroZone), Tankan(Japan), IFO and ZEW (Germany)
  • Household and consumer confidence surveys

How to measure economic cycles

  • Introduction to economic forecasting tools at global institutions : ARMA and DSGE methodologies

Case Study: market movers

Excel: calculation of a PMI

- How to interpret surprises

- Filtrering signals : empirical and statistical approach

Importance of indicators depending on cycles and environment

  • Importance of corporate earnings post-Nasdaq crash
  • Importance of housing market pre-2008
  • Importance of Central Bank action (QE, LTRO,…)post-2008 Economic calendar and impact by asset class

Case Study: group discussion of the latest ECB press release with analysis of latest economic indicators

Tigrane Kibarian

Tigrane Kibarian

Tigrane, a graduate of ESSEC and Warwick Business School, began his career in auditing at Arthur Andersen before joining General Electric - Energy Division - in corporate finance, working on industrial, regulatory and M&A assignments in France and Italy.
He joined Goldman Sachs in London, first as COO in the Equities division and then as VP on the institutional portfolio restructuring desk, working on ALM and cross-asset allocation issues.
He made a transition to asset management by becoming Global Macro portfolio manager at Odin Capital, before becoming its COO. After this experience, he founded Zentak Capital with a partner to offer institutional clients a volatility arbitrage strategy.
He has been working in training for 10 years, as a trainer and also in charge of CIB-AM clients for Bärchen. Tigrane is Lean Six Sigma and FCA certified.

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