1、INVESTMENTS | BODIE, KANE, MARCUSCopyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinCHAPTER 17Macroeconomic and Industry AnalysisINVESTMENTS | BODIE, KANE, MARCUS17-2 A firms value comes from its earnings prospects, which are determined by:The global economic envi
2、ronmentEconomic factors affecting the firms industry The position of the firm within its industryFundamental AnalysisINVESTMENTS | BODIE, KANE, MARCUS17-3 Stock markets around the world responded in unison to the financial crisis of 2008. Performance in countries and regions can be highly variable.
3、It is harder for businesses to succeed in a contracting economy than in an expanding one.The Global EconomyINVESTMENTS | BODIE, KANE, MARCUS17-4 Political risk:The global environment may present much greater risks than normally found in U.S.-based investments. Exchange rate risk:Changes the prices o
4、f imports and exports.The Global EconomyINVESTMENTS | BODIE, KANE, MARCUS17-5Table 17.1 Economic PerformanceINVESTMENTS | BODIE, KANE, MARCUS17-6The Domestic Macroeconomy Stock prices rise with earnings. P/E ratios are normally in the range of 12-25. The first step in forecasting the performance of
5、the broad market is to assess the status of the economy as a whole.INVESTMENTS | BODIE, KANE, MARCUS17-7Figure 17.2 S&P 500 Index versus Earnings Per Share INVESTMENTS | BODIE, KANE, MARCUS17-8 Gross domestic product Unemployment rates Inflation Interest rates Budget deficit Consumer sentimentThe Do
6、mestic Macroeconomy:Key VariablesINVESTMENTS | BODIE, KANE, MARCUS17-9Demand and Supply Shocks Demand shock - an event that affects demand for goods and services in the economy Supply shock - an event that influences production capacity or production costsINVESTMENTS | BODIE, KANE, MARCUS17-10Demand
7、-side Policy Fiscal policy the governments spending and taxing actions Monetary policy manipulation of the money supplyINVESTMENTS | BODIE, KANE, MARCUS17-11Fiscal Policy Most direct way to stimulate or slow the economy Formulation of fiscal policy is often a slow, cumbersome political processINVEST
8、MENTS | BODIE, KANE, MARCUS17-12Fiscal Policy To summarize the net effect of fiscal policy, look at the budget surplus or deficit. Deficit stimulates the economy because: it increases the demand for goods (via spending) by more than it reduces the demand for goods (via taxes)INVESTMENTS | BODIE, KAN
9、E, MARCUS17-13Monetary Policy Manipulation of the money supply to influence economic activity. Increasing the money supply lowers interest rates and stimulates the economy. Less immediate effect than fiscal policy Tools of monetary policy include open market operations, discount rate, reserve requir
10、ements.INVESTMENTS | BODIE, KANE, MARCUS17-14Supply-Side Policies Goal: To create an environment in which workers and owners of capital have the maximum incentive and ability to produce and develop goods. Supply-siders focus on how tax policy can be used to improve incentives to work and invest.INVE
11、STMENTS | BODIE, KANE, MARCUS17-15Business Cycles The transition points across cycles are called peaks and troughs.A peak is the transition from the end of an expansion to the start of a contraction. A trough occurs at the bottom of a recession just as the economy enters a recovery.INVESTMENTS | BOD
12、IE, KANE, MARCUS17-16The Business CycleCyclical Industries Above-average sensitivity to the state of the economy. Examples include producers of consumer durables (e.g. autos) and capital goods (i.e. goods used by other firms to produce their own products.) High betasDefensive Industries Little sensi
13、tivity to the business cycle Examples include food producers and processors, pharmaceutical firms, and public utilities Low betasINVESTMENTS | BODIE, KANE, MARCUS17-17 Leading indicators tend to rise and fall in advance of the economy. Coincident indicators move with the market. Lagging indicators c
14、hange subsequent to market movements.Economic IndicatorsINVESTMENTS | BODIE, KANE, MARCUS17-18Figure 17.4 Indexes of Leading, Coincident, and Lagging IndicatorsINVESTMENTS | BODIE, KANE, MARCUS17-19Table 17.4 Useful Economic Indicators INVESTMENTS | BODIE, KANE, MARCUS17-20Economic Calendar Many sou
15、rces, such as The Wall Street Journal and Yahoo! Finance, publish the public announcement dates of various economic statistics. INVESTMENTS | BODIE, KANE, MARCUS17-21Figure 17.5 Economic Calendar at Yahoo!INVESTMENTS | BODIE, KANE, MARCUS17-22Industry Analysis It is unusual for a firm in a troubled
16、industry to perform well. Economic performance can vary widely across industries.INVESTMENTS | BODIE, KANE, MARCUS17-23Figure 17.6 Return on Equity, 2009 INVESTMENTS | BODIE, KANE, MARCUS17-24Figure 17.7 Industry Stock Price Performance, 2009INVESTMENTS | BODIE, KANE, MARCUS17-25Defining an Industry
17、 North American Industry Classification System, or NAICS codes Firms with the same four-digit NAICS codes are commonly taken to be in the same industry.INVESTMENTS | BODIE, KANE, MARCUS17-26Table 17.5 Examples of NAICS Industry Codes INVESTMENTS | BODIE, KANE, MARCUS17-27Sensitivity to the Business
18、Cycle1. Sensitivity of sales:Necessities vs. discretionary goodsItems that are not sensitive to income levels (such as tobacco and movies) vs. items that are, (such as machine tools, steel, autos) Three factors determine how sensitive a firms earnings are to the business cycle.INVESTMENTS | BODIE, K
19、ANE, MARCUS17-28Figure 17.9 Industry Cyclicality INVESTMENTS | BODIE, KANE, MARCUS17-29Sensitivity to the Business CycleFirms with low operating leverage (less fixed assets) are less sensitive to business conditions.Firms with high operating leverage (more fixed assets) are more sensitive to the bus
20、iness cycle.2. Operating leverage : the split between fixed and variable costsINVESTMENTS | BODIE, KANE, MARCUS17-30Table 17.6 Operating Leverage of Firms A and B Throughout the Business Cycle INVESTMENTS | BODIE, KANE, MARCUS17-31Sensitivity to the Business CycleInterest is a fixed cost that increa
21、ses the sensitivity of profits to the business cycle.3. Financial leverage: the use of borrowingINVESTMENTS | BODIE, KANE, MARCUS17-32Figure 17.10 A Stylized Depiction of the Business CycleINVESTMENTS | BODIE, KANE, MARCUS17-33Sector Rotation Portfolio is shifted into industries or sectors that shou
22、ld outperform, according to the stage of the business cycle. Peaks natural resource extraction firms Contraction defensive industries such as pharmaceuticals and foodINVESTMENTS | BODIE, KANE, MARCUS17-34Sector Rotation Trough capital goods industries Expansion cyclical industries such as consumer d
23、urablesINVESTMENTS | BODIE, KANE, MARCUS17-35Figure 17.11 Sector RotationINVESTMENTS | BODIE, KANE, MARCUS17-36Industry Life CyclesStage Start-up Consolidation Maturity Relative DeclineSales Growth Rapid and increasing Stable Slowing Minimal or negativeINVESTMENTS | BODIE, KANE, MARCUS17-37Figure 17
24、.12 The Industry Life CycleINVESTMENTS | BODIE, KANE, MARCUS17-38Which Life Cycle Stage is Most Attractive? Quote from Peter Lynch in One Up on Wall Street: Many people prefer to invest in a high-growth industry, where theres a lot of sound and fury. Not me. I prefer to invest in a low-growth indust
25、ry. . . . INVESTMENTS | BODIE, KANE, MARCUS17-39Which Life Cycle Stage is Most Attractive?In a low-growth industry, especially one thats boring and upsets people such as funeral homes or the oil-drum retrieval business, theres no problem with competition. You dont have to protect your flanks from po
26、tential rivals . . . and this gives you the leeway to continue to grow.”Peter Lynch in One Up on Wall StreetINVESTMENTS | BODIE, KANE, MARCUS17-40Industry Structure and Performance:Five Determinants of Competition1. Threat of entry2. Rivalry between existing competitors3. Pressure from substitute products4. Bargaining power of buyers5. Bargaining power of suppliers
