Use Cases of Economic Group Pushers
We refer to the real and latest economic data as well as the expectations of monetary policy, and turn the 19 pushers of the economic data group to the colors judged in the following screenshots. (We assume that green indicates an upward trend, red indicates a downward trend, orange indicates a flat trend, and white is the initial color, with no reasoning yet.)
Monetary Policy Interpretation: Loose
Growth of Import and Export Value: Upward
Growth of Fiscal Revenue: Upward
National Tax Revenue: Flat
Growth of New Credit: Upward
Growth of Total Retail Sales of Consumer Goods: Upward
Industrial Added Value: Upward
Consumer Confidence Index: Downward
GDP Growth: Upward
CPI: Flat
PPI: Decreasing
PMI: Decreasing
Year - on - year decline in the money supply M1, but month - on - month increase, and the scissors gap with M2 is narrowing.
Unemployment Rate: Flat
Deposit and Loan Interest Rates: Downward
Oil Price: Bullish
Treasury Bonds: Bullish
Gold: Bullish
RMB Exchange Rate: Bearish
Please refer to the following sand table deduction diagram:
Based on the directional deduction of the economic data group, we can analyze the fundamental logic of the economy from multiple perspectives:
1. Loose Monetary Policy
Impact: A loose monetary policy usually means that the central bank stimulates the economy by lowering interest rates or increasing the money supply. This will help reduce financing costs, promote investment and consumption, and thus drive economic growth.
Logic: A loose monetary policy helps support economic growth, especially when other economic indicators such as GDP and industrial added value show an upward trend.
2. Upward Growth of Import and Export Value
Impact: Growth in imports and exports usually indicates strong external demand or enhanced domestic competitiveness, which helps drive economic growth.
Logic: Growth in imports and exports makes a positive contribution to GDP, especially in the context of global economic recovery or an improvement in the trade environment.
3. Upward Growth of Fiscal Revenue
Impact: Growth in fiscal revenue usually reflects active economic activities, increased corporate profits and residents' incomes, which in turn drives tax growth.
Logic: The growth of fiscal revenue provides the government with more fiscal space, which can be used for infrastructure construction or other measures to stimulate the economy.
4. Flat National Tax Revenue
Impact: Flat tax revenue may mean that the growth of corporate profits and residents' incomes is limited, or there are no significant changes in tax policies.
Logic: Flat tax revenue may place certain restrictions on the further growth of fiscal revenue, but it will not have a significant negative impact on the economy.
5. Upward Growth of New Credit
Impact: Growth in new credit indicates an increase in the financing needs of enterprises and individuals, which is beneficial to the activation of economic activities and is also conducive to improving the scissors gap between M1 and M2.
Logic: Credit growth helps drive investment and consumption, and thus supports economic growth, especially against the backdrop of a loose monetary policy.
6. Upward Growth of Total Retail Sales of Consumer Goods
Impact: Consumption is an important driver of economic growth. Growth in the total retail sales indicates an increase in residents' consumption willingness.
Logic: Consumption growth helps drive GDP growth. Especially when the consumer confidence index is declining, the continuous growth of consumption may be driven by policy support or income growth.
7. Upward Industrial Added Value
Impact: Growth in industrial added value indicates that manufacturing and production activities are active, and the economy is in an expansionary phase.
Logic: The growth of industrial added value directly contributes to GDP, especially in the context of export growth.
8. Consumer Confidence Index: Downward
Impact: A decline in consumer confidence may indicate a reduction in future consumer spending and a possible slowdown in economic growth.
Logic: Although current consumption shows an upward trend, a decline in consumer confidence may have a negative impact on future consumption, especially in the context of inflation or an unstable job market.
9. GDP Growth: Upward
Impact: GDP growth indicates that the economy as a whole is in an expansionary phase, with active economic activities.
Logic: GDP growth is a core indicator of a positive economic trend. Although some indicators such as PMI and PPI are declining, the overall economy is still on a growth track.
10. CPI: Flat
Impact: A flat CPI indicates low inflation pressure, and the cost of living for residents is relatively stable.
Logic: A flat CPI helps maintain residents' purchasing power and supports consumption growth, especially against the backdrop of a loose monetary policy.
11. PPI Decrease
Impact: A decrease in PPI indicates that producers face reduced price pressure, which may reflect weak demand or a decline in raw material costs.
Logic: A decrease in PPI may put some pressure on corporate profits. Especially when the industrial added value is showing an upward trend, a decrease in PPI may reflect weak demand in some industries.
12. PMI Decrease
Impact: A decrease in PMI indicates a slowdown in manufacturing activities and a weakening of the driving force for economic expansion.
Logic: A decrease in PMI may indicate a slowdown in future economic growth. Especially when the industrial added value is showing an upward trend, a decrease in PMI may reflect a short - term adjustment in the manufacturing industry.
13. Year - on - year decline in the money supply M1, but month - on - month increase, and the scissors gap with M2 is narrowing
Impact: A year - on - year decline in M1 indicates a tightening of short - term liquidity, but a month - on - month increase may indicate an improvement in liquidity. The narrowing of the scissors gap between M2 and M1 indicates a more balanced structure of the money supply.
Logic: Changes in the money supply reflect the transmission effect of monetary policy. A month - on - month increase in M1 may indicate an improvement in liquidity, which helps support economic growth.
14. Unemployment Rate: Flat
Impact: A flat unemployment rate indicates a stable labor market, and the employment situation has not deteriorated significantly.
Logic: A flat unemployment rate helps maintain the stability of residents' incomes and supports consumption growth, especially when the consumer confidence index is declining.
15. Deposit and Loan Interest Rates: Downward
Impact: A decrease in deposit and loan interest rates helps reduce financing costs and stimulate investment and consumption.
Logic: A decrease in deposit and loan interest rates is consistent with a loose monetary policy and helps support economic growth, especially when new credit shows an upward trend.
16. Oil Price: Bullish
Impact: An increase in the oil price may increase the production costs of enterprises and the transportation costs of residents, putting upward pressure on inflation.
Logic: An increase in the oil price may put some upward pressure on PPI and CPI. Especially when the CPI is flat, an increase in the oil price may have a certain impact on inflation.
17. Treasury Bonds: Bullish
Impact: An increase in the price of treasury bonds usually indicates an increase in market risk - aversion sentiment or concerns about the economic outlook.
Logic: A bullish trend in treasury bonds may reflect market concerns about future economic growth, especially when PMI and PPI are declining.
18. Gold: Bullish
Impact: An increase in the price of gold usually indicates an increase in market risk - aversion sentiment or concerns about inflation.
Logic: A bullish trend in gold may reflect market concerns about economic uncertainty or inflation risks, especially when the consumer confidence index is declining.
19. Exchange Rate: Bearish
Impact: A decline in the exchange rate may help enhance export competitiveness, but it may increase import costs and put upward pressure on inflation.
Logic: A decline in the exchange rate helps support export growth, especially when the import and export value shows an upward trend, but it may put some pressure on import - dependent industries.
Summary:
Economic Growth: Indicators such as GDP, industrial added value, imports and exports, and consumption are bullish, indicating that the economy as a whole is in an expansionary phase. Although the decline in PMI and PPI may indicate weak demand in some industries.
Inflation Pressure: A flat CPI and a decrease in PPI indicate low inflation pressure, but an increase in the oil price may put some upward pressure on inflation.
Monetary Policy: A loose monetary policy, a decrease in deposit and loan interest rates, and an upward trend in credit growth indicate that the policy environment is conducive to economic growth.
Market Sentiment: A decline in consumer confidence, and a bullish trend in treasury bonds and gold reflect market concerns about the economic outlook, which may put some pressure on future economic growth.
External Environment: A decline in the RMB exchange rate helps exports, but an increase in the oil price may increase cost pressure.
Overall, the economic fundamentals are generally positive, but the decline in some indicators such as PMI, PPI, and consumer confidence indicates that the economy still faces certain downward risks, especially in an uncertain external environment.
The core value of the deduction and analysis of the economic data group in the sand table lies in helping investors understand the general trend of the economic fundamentals and make investment decisions through multi - dimensional economic indicators and logical reasoning. The following are some specific application scenarios and examples to demonstrate the effectiveness and applicability of this set of data analysis:
1. Macroeconomic Analysis and Asset Allocation
Scenario: Institutional investors (such as funds, insurance companies, family offices) need to adjust their asset allocation according to macro - economic trends.
Example: Data Group Analysis: GDP growth is upward, industrial added value is upward, CPI is flat, PPI is decreasing, and PMI is decreasing.
Reasoning: The economy as a whole is in an expansionary phase (growth in GDP and industrial added value), but a slowdown in manufacturing activities (decrease in PMI) and a decline in producer prices (decrease in PPI) may indicate weak demand in some industries.
Decision - making Suggestions:
- Increase the allocation to growth - oriented industries such as essential consumption and technology (benefiting from GDP growth and consumption growth).
- Reduce the allocation to traditional manufacturing industries (affected by the decline in PMI and PPI).
- Increase the allocation of defensive assets (such as treasury bonds and gold) to cope with potential economic slowdown risks.
2. Monetary Policy and Bond Investment
Scenario: Bond investors need to assess the impact of monetary policy on the bond market.
Example: Economic Data Group Analysis: The monetary policy is loose, deposit and loan interest rates are downward, the month - on - month of M1 in the money supply begins to pick up, and treasury bonds are bullish.
Reasoning: A loose monetary policy and a decrease in interest rates will drive up bond prices (treasury bonds are bullish), and the month - on - month increase in M1 indicates an improvement in liquidity, further supporting the bond market.
Decision - making Suggestions:
- Increase the allocation of medium - and long - term treasury bonds to benefit from the decline in interest rates and the increase in bond prices.
- Pay attention to high - rated corporate bonds, which benefit from the improvement in liquidity and the reduction in financing costs.
3. Exchange Rate and Cross - border Investment
Scenario: Cross - border investors need to assess the impact of the RMB exchange rate on their investment portfolios.
Example: Economic Data Group Analysis: The currency exchange rate is bearish, the growth of import and export value is upward, and the oil price is bullish.
Reasoning: Currency depreciation helps enhance export competitiveness (the growth of import and export value is upward), but an increase in the oil price may increase import costs and put pressure on some industries (such as aviation and petrochemical).
Decision - making Suggestions:
- Increase the allocation to export - oriented industries (such as electronics and textiles), which benefit from RMB depreciation and export growth.
- Reduce the allocation to import - dependent industries (such as aviation and petrochemical), which are negatively affected by the increase in the oil price and RMB depreciation.
4. Consumer Industry Investment
Scenario: Investors in the consumer industry need to assess the trends in the consumer market.
Example: Economic Data Group Analysis: The total retail sales of consumer goods show an upward growth, the consumer confidence index is downward, and the CPI is flat.
Reasoning: Although consumer confidence is declining, the upward growth of consumption may be driven by policy support or income growth. A flat CPI indicates low inflation pressure, which helps maintain consumption capacity.
Decision - making Suggestions:
- Increase the allocation to essential consumer goods (such as food and daily necessities), which are less affected by economic fluctuations.
- Be cautious about optional consumer goods (such as luxury goods and cars), which are more affected by the decline in consumer confidence.
5. Commodity Investment
Scenario: Commodity investors need to assess the trends of oil prices and gold.
Example: Economic Data Group Analysis: The oil price is bullish, gold is bullish, PPI is decreasing, and CPI is flat.
Reasoning: An increase in the oil price may push up production costs (PPI is decreasing), but has a limited impact on CPI (CPI is flat). A bullish trend in gold may reflect market concerns about economic uncertainty.
Decision - making Suggestions:
- Increase the allocation to energy - related commodities (such as crude oil) to benefit from the increase in the oil price.
- Increase the allocation of gold as a hedging asset to cope with economic uncertainty.
6. Stock Market Industry Rotation
Scenario: Stock investors need to adjust their industry allocation according to the economic cycle.
Example: Economic Data Group Analysis: GDP growth is upward, industrial added value is upward, PMI is decreasing, PPI is decreasing, and the consumer confidence index is downward.
Reasoning: The economy as a whole is expanding (growth in GDP and industrial added value), but a slowdown in manufacturing activities (decrease in PMI) and a decline in consumer confidence may indicate weak demand in some industries.
Decision - making Suggestions:
- Increase the allocation to growth - oriented industries (such as technology and healthcare) to benefit from economic expansion.
- Reduce the allocation to cyclical industries (such as raw materials and traditional industries), which are more affected by the decline in PMI and PPI.
7. Risk Management and Hedging Strategies
Scenario: Investors need to adjust their risk exposure when economic uncertainty increases.
Example: Economic Data Group Analysis: The consumer confidence index is downward, PMI is decreasing, treasury bonds are bullish, and gold is bullish.
Reasoning: A decline in consumer confidence and a decrease in PMI indicate an increase in economic uncertainty. A bullish trend in treasury bonds and gold reflects an increase in market risk - aversion sentiment.
Decision - making Suggestions:
- Increase the allocation of hedging assets (such as treasury bonds and gold).
- Reduce the exposure to high - risk assets (such as stocks and high - yield bonds).
Summary
This set of data analysis has the best effect in the following scenarios:
1. Asset Allocation: Helps investors adjust their asset portfolios according to macro - economic trends.
2. Industry Rotation: Identifies industries that benefit and those at risk in the economic cycle.
3. Risk Management: Copes with economic uncertainty by adjusting hedging assets and risk exposure.
4. Policy - making: Provides a basis for strategic planning for enterprises and the government.
Now, you can flip the pusher labeled “Foundation of the Trend” in the General Trend set to light red. But flip the pusher named “Market Trend Raceway” to light green, as you already know that the technology sector will perform well during this time.
Next, you'll use 29 theoretical thinking tools to deduce the general trend index and the index of the technology sector. However, this process is too lengthy to explain in detail here. We will create some free explanatory videos available online. After purchasing this sand table, you will also have the following resources: You'll get an invitation code for the communication community for free, enabling you to exchange deduction diagrams and logics with others.
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