MACRO AND MARKETS Deepak Shenoy capitalmind.in
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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
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Quiz
Why was the Nifty locked in Upper Circuit, and closed over 20% up, on May 18, 2009?
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Quiz #2
Why did the Nifty open at lower circuit and then recover intraday on Oct 17, 2007?
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Quiz #3
Why did the market crash to lower circuit in May 2004?
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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?
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What?
Elections War RBI regulations
News about macroeconomics, geopolitical issues, market infrastructure impact markets, sometimes dramatically.
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Macro: Not Directly Related
News that isn’t related to a stock or sector Political Economic Global Natural Disasters
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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
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Indian Markets
GDP Growth Data Released every quarter IMF Makes “estimates” now and then Data Revised Like Crazy
Inflation WPI and CPI Every Month
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Various Macro Elements
PMI IIP Deficits
LiquidityBank Credit Growth
Money Supply
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Market Macro
Index VIXMarket Wide
IndicatorsLiquidity
Exports And
ImportsFII Flows
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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
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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
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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
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Global Markets
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Inflation
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VIX
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Trend Days
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T-Bill Yields
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Stocks Above DMAs
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Steel Production
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Nifty Including Dividends
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Nifty P/E
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Known Issues
Bad Data Revisions Interference by Governments
Bailouts QE
Black Swans Very Likely Luck is underattributed
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