My presentation at Traders Carnival. It was about Macro data and how it impacts markets.

1. Deepak Shenoy capitalmind.in
MACRO AND MARKETS

2. Markets and Macro
 We’ll talk about
 What the “Macro” picture means
 Impact on markets
 Specifics that apply to India
 Questions: Raise your hand

3. Quiz
 Why was the Nifty locked in Upper
Circuit, and closed over 20% up, on May
18, 2009?

4. Quiz #2
 Why did the Nifty open at lower circuit and
then recover intraday on Oct 17, 2007?

5. Quiz #3
 Why did the market crash to lower circuit in
May 2004?

6. 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?

7. What?
 Elections
 War
 RBI regulations
News about macroeconomics, geopolitical
issues, market infrastructure impact
markets, sometimes dramatically.

8. Macro: Not Directly Related
 News that isn’t related to a stock or sector
 Political
 Economic
 Global
 Natural Disasters

9. Market Impact
No Left
Perception Party in govt
Good thing
No P-
Fear Notes, FIIs Bad thing
will run away
War raises oil Bad thing
Prediction prices (Good for oil)
Euro will
Stupidity dissolve Bad thing
today

10. Indian Markets
 GDP Growth
 Data Released every quarter
 IMF Makes “estimates” now and then
 Data Revised Like Crazy
 Inflation
 WPI and CPI
 Every Month

11. Various Macro Elements
PMI IIP Deficits
Bank Credit Money
Liquidity
Growth Supply

12. Market Macro
Market Wide
Index VIX Liquidity
Indicators
Exports And
FII Flows
Imports

13. 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

14. Variable Impact
 Macro impacts different markets differently
RBI raises Dollar
Banks Auto/IRS Exporters
rates Rate
Greece Exits Exporters Global Liquidity Broad
Euro to Europe Markets Issue Market

15. 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

16. Global Markets

17. Inflation

18. VIX

19. Trend Days

20. T-Bill Yields

21. Stocks Above DMAs

22. Steel Production

23. Nifty Including Dividends

24. Nifty P/E

25. Known Issues
 Bad Data
 Revisions
 Interference by Governments
 Bailouts
 QE
 Black Swans Very Likely
 Luck is underattributed

26. Questions
 Read: capitalmind.in
 Mail me: deepakshenoy@gmail.com
 Twitter: @deepakshenoy