Chapter 1: Economic Analysis and Setting Capital Market Expectations

In this section

• Approaches to Macroeconomic Forecasting
  Discover key methods and practical insights for predicting economic conditions, from econometric models to expert judgment, and learn how these forecasts inform portfolio strategies and capital market expectations.
• Top-Down versus Bottom-Up Analysis
  Explore how both top-down and bottom-up approaches guide investment decision-making, from macro-driven forecasts to granular company-level evaluations.
• Leading Economic Indicators and Data Sources
  Explore key leading economic indicators, their construction, data sources, and how to integrate them into forecasting and investment strategies.
• Scenario Analysis and Sensitivity Analysis in Economic Forecasting
  Explore essential forecasting techniques that help analysts evaluate outcomes under varied economic conditions, including worst-case and best-case scenarios and the impact of changing key variables.
• Integrating Economic Analysis with Investment Strategy
  Learn how to align macroeconomic forecasts with investment decisions, covering strategic and tactical asset allocation, sector rotation, security selection, risk management, and more.
• Cyclical Analysis for Asset Return Forecasting
  Explore how different phases of the economic cycle influence asset returns, discover indicators for turning points, and learn how to adapt investment strategies to align with cyclical shifts.
• Using Big Data and Machine Learning in Economic Forecasting
  Explore the use of big data and machine learning techniques in economic forecasting, including applications like nowcasting, sentiment analysis, and pattern recognition, while addressing practical challenges, ethical considerations, and model integration strategies.
• Model Uncertainty and Forecast Accuracy
  Discover how forecasting models can go awry due to incorrect assumptions or structural breaks, and learn practical ways to improve forecast accuracy and manage uncertainty.