Part One –
Most asset managers, traders, and investment bankers have a daily market review to strategize trading before the trading day begins Our Market Report class requirement is intended to give you a sense of how the securities marketing is moving and why the movements are occurring.
At the beginning of each lecture (except when exams are scheduled), two students will provide a five-minute oral summary to the class and an email copy of their comments to each student in our class. In your commentary, its more important to explain why/how the markets than listing the changes in the marketplace. I suggest that you send me a draft or a copy of your work before you address the class or your email distribution.
In your market commentary, I suggest that you:1) practice speaking aloud before your address the class; 2) make sure that your audience can hear you clearly; 3) show the audience that you have a good grasp about market; and 4) ask if anyone has a question.
Elements of the Market Report
A. Your presentation
The report should cover the following information:
1. Describe the current economic events in the USA.
2. Address the changes in the key US and international benchmarks (your emphasis on the US indices)
3. Describe the current domestic US market sentiment and reasons that gave rise to the market movements.
4. Describe the changes in the US bond market, including changes in the UST yield curve.
5. In light of your research, what steps should an investor do to improve your investment?
B. Where to get information and what information is important:
Market indices
1. Dow Jones Industrial Average (DJIA) – net change in the stock price of the 30 largest companies in the United States
2. S&P 500 (SP500) – net change in the stock price of the 500 largest US companies
3. Russell 2000 – approximately 2,000 small-cap companies included in the Russell 3000 index which is made up of 3,000 of the biggest U.S. stocks. The Russell 2000 serves as a benchmark for small-cap stocks in the United States
.
Where can this information?
1, The easiest place is the front page of the WSJ online.
2. Another is Yahoo Finance
3. Financial Times
C. Remember that we are interested in how the market indices have changed and what is the cause for the change
Discuss the market sentiment (bullish or bearish). What key things happened and why did they move the market? Identify market trends and when the trend has changed (example, the market was bullish and now a sharp sell-off occurred).
There can be a variety of reasons for indices to change. For example, concern about privacy about tech stocks may cause some stocks to decline while others remain the same. However, the “Street” tends to focus on either overall market influences (such as the change in the exchange rate of the dollar or economic influences) or changes in key components of the indices (Example: Tariff wars between the US and China may cause importers and exporters to lose money or changes in income tax)
We don’t have time to provide an exhaustive analysis of the indices but, fortunately, neither do most professional investors. Most newspapers tend to wrap up the change in domestic indices in a few sentences. Since your report may cover several days of market changes, you may need to read the newspapers each day to prepare a brief synopsis of the net change in index values since our last market report.
I recommend the WSJ Heard on the Street section and the Real-Time Economics section to find useful information about the markets and the economy
D. What should I report about bonds?
In bonds, we are primarily interest in the changes in current rates for US Treasuries and the slope of the UST yield curves (a graph of current interest rates by maturity). The Credit Market News section of the WSJ provides information about movements in the bond market.