2.1 Inflation and Bonds

Fixed-income investors aka Bond traders REALLY WATCH Inflation

GDP price deflator from BEA to check inflation

CPI In the US, food only makes up 15% CPI, and Housing makes 40% CPI

2.2 Unemployment

non-farm payrolls (this disregards seasonal farm workers) and is the most useful measure of unemployment https://fred.stlouisfed.org/series/PAYEMS It correlates with GDP (recessions)

2.3 Big Corp Confidence = PMI

PMI IS THE BEST ECONOMIC INDICATOR SINCE IT PREDICTS GDP

• Market moves depending on Actual vs Expected

Institute of supply management PMI trading economics

50 is neutral, gt 50 is optimism vis-a-vis https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/services/november/ institute of supply management

Typically we can find an actual and expected PMI. Like earnings if expected > actual, it’s a good surprise.

2.4 Housing

Remember housing makes up 40% CPI

3.0.1 CEF - Closed Ended funds

• NAV of CEF are sensitive to good/bad investment decisions by the owner
  
• CEF have cheap interest rate on debt
• Federal requirements mandate a limit on debt relative to NAV
  • Market downturn –> NAV decrease –> Forced sell-off to stay below debt limit

Terms
:NAV = similar to book value [what the fund really has] :Positive Discount = Premium to NAV [fund is doing well] :Negative DIscount = Discount to NAV [fund is doing badly] :Distribution rate = Dividend yield [calculated annually ]