This time, I want to talk about some macroeconomic indicators, such as M2, CPI, PMI, PPI, GDP and so on. What do they mean, what does it have to do with us, what do those scholars or investors think of these data, and what is the use.
You may think that macroeconomics is far away from us and there is no need to understand it. In fact, many phenomena in life are related to these indicators. For example, if you want to go abroad, you should quickly look at the exchange rate and change more foreign currencies when the exchange rate is low. For example, if you buy a house, you will pay attention to the deposit and loan interest rates and think about the rise and fall of house prices in the short term. You often need to know the current macro-financial events in order to make better decisions. To understand these, we can start with some indicators.
GDP: Gross domestic product (GDP) refers to the value of all final products and services produced by a country or region's economy in a certain period (a quarter or a year). Generally, it is published once every quarter, which is a lagging indicator. Domestic GDP increased by more than 6% year-on-year in previous years, and it was -6.8% year-on-year in the first quarter of this year, which shows the great impact of the epidemic. Every economic downturn of 1% means that countless people find it difficult to find jobs.
CPI and PPI: Consumer price index and producer price index. CPI focuses on the consumption side, while PPI focuses on the production side. PPI includes coal, steel, oil and cement. CPI includes eggs, pork, vegetables, rice and flour, clothes, tobacco and alcohol, etc. Generally speaking, when PPI rises, CPI will eventually rise.
These two indicators are related to inflation. CPI is generally used to measure the inflation rate of a country. If it increases by more than 5% year-on-year, it shows signs of inflation. However, if the CPI of our country generally exceeds 3, monetary policy may be tightened. If the core CPI is below 2, the economy will be too cold and the currency will be loose.
The high PPI indicates that the ex-factory price is high and the market demand is relatively strong; But at the same time, the price of raw materials for production has also gone up, and the cost of enterprises has also gone up, so it is difficult to generalize. So it depends on the breakdown of PPI. Generally speaking, when PPI continues to rise, the economy is relatively prosperous; PPI continues to fall, and the economy is not very prosperous. Roughly 4%-7% year-on-year, the economy is improving and then it will overheat. Below 3%, the market is understood as cold demand.
Money supply: refers to a country's money stock that serves the social and economic operation in a certain period of time. It consists of two parts: deposit currency and cash currency supplied by financial institutions including the central bank. The currency estimation caliber of central banks around the world is not exactly the same, but the basic basis of division is the same, that is, the size of liquidity. M0 (base currency): cash in circulation; M 1:M0+ company demand deposits+government organizations and military deposits+rural deposits+credit card deposits held by individuals; M2 (broad money): M 1+ savings deposits of urban and rural residents+fixed deposits in corporate deposits+foreign currency deposits+trust deposits; M3:M2+ financial bonds+commercial paper+large negotiable certificates of deposit, etc.
People often judge whether monetary policy is loose by the year-on-year growth rate of M2. It is often said that releasing water is also comparing money with water. If there is more money supply and more water is released, asset prices may rise. Some experts pay more attention to M 1, which refers to cash+bank demand deposits, that is, money that can be used at any time. If the economy expands and enterprises invest, they may have more cash. If the year-on-year growth rate of M 1 has been rising for several months, it means that the economy is on the rise.
Purchasing managers index. Questionnaires were sent to enterprise managers to investigate the production and sales situation, and finally the comprehensive PMI index exceeded 50, indicating that more people think that the situation is good this month and the economy may get better. On the contrary, the economy may get worse. This index measures the manufacturing industry from eight aspects: production, new orders, commodity prices, inventory, employees, order delivery, new export orders and imports. It is a very important subsidiary index among the leading economic indicators and has high timeliness.
Compared with GDP, which is a lagging indicator, it is predictive. See the rules are roughly:
1, depending on whether it is above 50 or below 50.
2. Look at its changing trend, whether it is getting bigger or smaller.
This is a one-month indicator, so we should keep checking to see if it keeps a similar trend in a few months.
Total social financing: refers to the balance of funds obtained by the real economy from the financial system in a certain period (end of the month, end of the season or end of the year). It talks about the total amount of loans of the whole society in a certain period, which represents the barometer of economic cold and heat. The ways to borrow money are loans, stocks, bonds and so on. The year-on-year growth reflects everyone's desire for investment and consumption in this period, so social integration has a high correlation with the country's economic growth rate and is highly predictable.
Benchmark deposit and loan interest rate: it is the guiding interest rate for the central bank to issue loans to commercial banks, and it is one of the monetary policies used by the central bank to regulate the operation of social economy and financial system.
Statutory deposit reserve ratio: refers to the ratio of the statutory reserve required by a country's central bank that commercial banks and deposit financial institutions must deposit in the central bank to their total deposits, that is, the deposit ratio of banks in the central bank. Adjusting the statutory deposit reserve ratio is an effective way for the state to adjust its monetary policy.
We often hear about adjusting the above two rates, both of which belong to the category of monetary policy. People often say that lowering the deposit reserve ratio, raising interest rates and lowering interest rates refer to raising or lowering the benchmark deposit and loan interest rates of financial institutions. The deposit reserve system mainly controls the amount of funds and the benchmark interest rate adjusts the price of funds. Interest rate can be regarded as the price of capital. RRR cuts and interest rate cuts can generally expand the credit scale (capital) of the whole society, stimulate the economy, and also increase the prices of assets (real estate, stocks, etc.). ); The standards for raising interest rates and raising interest rates are opposite.
Interbank lending rate: refers to the interbank lending rate of short-term funds of financial institutions, which means that financial institutions are willing to borrow; Loan interest rate, the interest rate indicating the willingness to lend.
By the way, the yield of Yu 'ebao is closely related to monetary policy and market interest rate, which can reflect the tightness of monetary policy. Generally speaking, the loan interest rate between the central bank and financial institutions is regarded as policy interest rate, while the loan interest rate between financial institutions is market interest rate. Monetary policy affects policy interest rate and money supply, and then affects market interest rate. Most of Yu 'ebao's investments are in the interbank money market, sharing the interest rate in the interbank market, so its yield is closely related to the market.
From the yield of Yu 'ebao, we can also see the tightness of monetary policy in the past 20 years. Monetary policy was loose in March and April, and the yield of Yu 'ebao was very low, 1.0%. In the following months, the yield of some money funds broke 2%, indicating that monetary policy has been tightened a lot.
LPR: preferential loan interest rate, LPR)
Related to us, the mortgage interest rate can be converted into LPR five-year interest rate plus points. In the past, the benchmark lending rate of the central bank was adopted. If you are optimistic about the long-term interest rate decline, you can convert it, but now the deadline has passed. For the market, the adoption of LPR, which was published once a month on the 20th, marked the marketization of interest rates, breaking the "dual-track" problem of the coexistence of benchmark loan interest rates and market interest rates.
10-year treasury bond yield: 10-year treasury bond yield is the anchor of asset pricing in financial markets, which is often called "risk-free rate of return". There are generally five kinds of yields for national debt, namely nominal yield (coupon yield), spot yield, yield to maturity, subscription yield (bond issuance rate) and holding period yield. The bond yield we often mention in financial news generally refers to yield to maturity, considering the current bond price, the interest spread returned after maturity and the remaining years from maturity.
The rise in the yield of national debt means the decline in the price of national debt itself. The yield can be simply estimated by the face value of the bond/the current bond price. The higher the yield, the lower the current bond price. By the way, if the central bank lowers interest rates and RRR, it will usually lead to an increase in bond prices. The central bank can raise the bond price by buying bonds in the open market, thus reducing the bond yield (market interest rate). If you hold a bond fund before the interest rate cut, the bond price will rise during the interest rate cut, and your net debt base will also rise.
Speaking of the return of the yield of 10-year treasury bonds, generally speaking, it is the anchor for pricing other assets, so the prices of stocks, bonds, futures and real estate will be affected by its yield. Regardless of inflation:
The yield of 10-year treasury bonds moved down and asset prices rose.
The yield of 10-year treasury bonds rose and asset prices fell. The principle is similar to the previous bond price decline.
By the way, generally speaking, the yield of short-term bonds will be lower than the long-term yield, which reflects the optimism about long-term economic growth. However, if the yield of short-term bonds is higher than the long-term yield, for example, the yield of three-month US bonds is higher than 10 year, it reflects that investors believe that the economy is in a long-term recession, and this upside-down is a bad warning signal, which may lead to the decline of the stock market, commodities and the rise of the bond market.
There are many indicators mentioned above, which can be roughly classified as follows:
Indicators reflecting the current economic situation: GDP, PMI and social integration, in which GDP lags behind, while PMI and social integration are more timely and forward-looking.
Reflecting inflationary pressure: CPI, PPI
Reflect the trend of monetary policy: money supply, the above interest rate changes, deposit reserve, etc.
Reflect fiscal policy: fiscal deficit and total government debt ratio.
The impact of some indicators on various assets is as follows, which can be used as a dimension reference. ("A Picture to Read Economic Indicators" Wall Street Experience)
For us ordinary people, we can understand the macro indicators that often appear in financial news, and know the general meaning and the possible meaning behind it. The purpose of this article has also been achieved. Of course, some people hope to judge the current economic situation through some indicators and help them make investment decisions, such as asset allocation this year and whether to buy a house this year. I think it's too difficult. Macroeconomy is a complex system, and it is impossible to abstract it with a few indicators, which can only reflect it to a certain extent. Professional things should be left to professional people. I prefer to refer to the views of various experts and scholars on macroeconomics and policies, and choose judgments on this basis, which is more reliable. Of course, these experts and scholars refer to those who have stood the test of time and have a high prediction rate.
Next, let's take a look at how experts judge the macro situation and make investment decisions, and try to understand their investment thinking mode.
National Bureau of Statistics of People's Republic of China (PRC)
Statistics of China People's Bank
Dongfang fortune net economic data center
Reference materials:
Xiang Shuai, Peking University finance course, He Fan macroeconomics 30 lectures
Look at pictures and read economic indicators.