The Trader's Guide to Key Economic Indicators E-Book

Richard Yamarone

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Bloomberg Professional
• Sprache: Englisch

Seitenzahl: 419

Veröffentlichungsjahr: 2010

Beschreibung

New economic data are reported by the media virtually every trading day. Investors--big or small--have to understand how these reports influence their investments, portfolios, and future sources of income. The new edition of The Trader's Guide to Key Economic Indicators homes in on the most important economic statistics used on Wall Street today and in a clear and concise voice tells you exactly what these important reports measure and what they really mean. With two new chapters on commodities and fixed-income indicators, this fully updated edition will be an easy-to-use desk reference for new readers, but will also be favored by fans of the first book. From GDP and employment to consumer confidence and spending, you'll learn what to look for and how to react. This handy reference, illustrated with scores of instructive graphs and charts, will put you ahead of the market curves.

Leseprobe

Table of Contents

Praise

Title Page

Copyright Page

Dedication

Acknowledgements

Introduction

THE BUSINESS CYCLE

INDICATORS AND THE MARKETS

HOW TO USE THIS BOOK

WHO CAN BENEFIT FROM THIS BOOK?

Chapter 1 - Gross Domestic Product

EVOLUTION OF AN INDICATOR

DIGGING FOR THE DATA

WHAT DOES IT ALL MEAN?

HOW TO USE WHAT YOU SEE

Chapter 2 - Indexes of Leading, Lagging, and Coincident Indicators

EVOLUTION OF AN INDICATOR

DIGGING FOR THE DATA

WHAT DOES IT ALL MEAN?

HOW TO USE WHAT YOU SEE

Chapter 3 - The Employment Situation

EVOLUTION OF AN INDICATOR

DIGGING FOR THE DATA

WHAT DOES IT ALL MEAN?

HOW TO USE WHAT YOU SEE

Chapter 4 - Industrial Production and Capacity Utilization

EVOLUTION OF AN INDICATOR

DIGGING FOR THE DATA

WHAT DOES IT ALL MEAN?

HOW TO USE WHAT YOU SEE

Chapter 5 - Institute for Supply Management Indexes

EVOLUTION OF AN INDICATOR

DIGGING FOR THE DATA

WHAT DOES IT ALL MEAN?

HOW TO USE WHAT YOU SEE

Chapter 6 - Manufacturers’ Shipments, Inventories, and Orders

EVOLUTION OF AN INDICATOR

DIGGING FOR THE DATA

WHAT DOES IT ALL MEAN?

HOW TO USE WHAT YOU SEE

Chapter 7 - Manufacturing and Trade Inventories and Sales

EVOLUTION OF AN INDICATOR

DIGGING FOR THE DATA

WHAT DOES IT ALL MEAN?

HOW TO USE WHAT YOU SEE

Chapter 8 - New Residential Construction

EVOLUTION OF AN INDICATOR

DIGGING FOR THE DATA

WHAT DOES IT ALL MEAN?

HOW TO USE WHAT YOU SEE

Chapter 9 - Conference Board Consumer Confidence and University of Michigan ...

EVOLUTION OF AN INDICATOR

DIGGING FOR THE DATA

WHAT DOES IT ALL MEAN?

HOW TO USE WHAT YOU SEE

Chapter 10 - Advance Monthly Sales for Retail and Food Services

EVOLUTION OF AN INDICATOR

DIGGING FOR THE DATA

WHAT DOES IT ALL MEAN?

HOW TO USE WHAT YOU SEE

Chapter 11 - Personal Income and Outlays

EVOLUTION OF AN INDICATOR

DIGGING FOR THE DATA

WHAT DOES IT ALL MEAN?

HOW TO USE WHAT YOU SEE

Chapter 12 - Consumer and Producer Price Indexes

EVOLUTION OF AN INDICATOR

DIGGING FOR THE DATA

WHAT DOES IT ALL MEAN?

HOW TO USE WHAT YOU SEE

Chapter 13 - The Fixed-Income Market

EVOLUTION OF AN INDICATOR

DIGGING FOR THE DATA

WHAT DOES IT ALL MEAN?

HOW TO USE WHAT YOU SEE

Chapter 14 - Commodities

EVOLUTION OF AN INDICATOR

DIGGING FOR THE DATA

WHAT DOES IT ALL MEAN?

HOW TO USE WHAT YOU SEE

References

Index

About Bloomberg

About the Author

Continuing Education Exam for CFP Continuing Education Credit

Praise for the first edition ofThe Trader’s Guide to Key Economic IndicatorsBY RICHARD YAMARONE

“Every stock and bond trader should keep this invaluable description of relevant economic indicators within easy reach.”

—DAVID M. JONES, PHD Chairman of the Board, Investors’ Security Trust Company Former Chief Economist, Aubrey G. Lanston

“Wall Street pros rely upon key economic indicators in their analysis and you should, too, if you wish to significantly increase your prospects of successful investing. Richard Yamarone has done a masterful job of describing technical economic concepts in plain English. This book will enable you to emulate the methods and successes of the pros, by instructing you as to which indicators are the most relevant and how to use them to make money in the financial markets.”

—STAN RICHELSON Coauthor, Bonds: The Unbeaten Path to Secure Investment Growth

“This book breaks down the often complex world of economics into an easy-to-understand guidebook for investors. Yamarone goes beyond the numbers, providing insight into what’s important to financial markets and offering ‘tricks from the trenches’ you won’t find anywhere else.”

—RHONDA SCHAFFLER Former Senior Correspondent/Anchor, CNNfn (1995-2005)

Also available from Bloomberg Press

Breakthroughs in Technical Analysis: New Thinking from theWorld’s Top MindsEdited by David Keller

Flying on One Engine: The Bloomberg Book ofMaster Market EconomistsEdited by Thomas R. Keene, CFA

Tom Dorsey’s Trading Tips: A Playbook for Stock Market Successby Thomas J. Dorsey and the DWA Analysts

Investing in Hedge Funds—Revised and Updated Editionby Joseph G. Nicholas

Investing in REITs: Real Estate Investment Trusts ( Third Edition)by Ralph L. Block

The Economist Guide to Economic Indicators:Making Sense of Economics (Sixth Edition)

A complete list of our titles is available at www.bloomberg.com/books

Attention Corporations

This book is available for bulk purchase at special discount. Special editions or chapter reprints can also be customized to specifications. For information, please e-mail Bloomberg Press, [email protected], Attention: Director of Special Markets, or phone [phone].

© 2007 by Richard Yamarone. All rights reserved. Protected under the Berne Convention. No part of this book may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher except in the case of brief quotations embodied in critical articles and reviews. For information, please write: Permissions Department, Bloomberg Press, 731 Lexington Avenue, New York, NY 10022, or send an e-mail to [email protected].

BLOOMBERG, BLOOMBERG ANYWHERE, BLOOMBERG.COM, BLOOMBERG MARKET ESSENTIALS, Bloomberg Markets, BLOOMBERG NEWS, BLOOMBERG PRESS, BLOOMBERG PROFESSIONAL, BLOOMBERG RADIO, BLOOMBERG TELEVISION, and BLOOMBERG TRADEBOOK are trademarks and service marks of Bloomberg Finance L.P. (“BFLP”), a Delaware limited partnership, or its subsidiaries. The BLOOMBERG PROFESSIONAL service (the “BPS”) is owned and distributed locally by BFLP and its subsidiaries in all jurisdictions other than Argentina, Bermuda, China, India, Japan, and Korea (the “BLP Countries”). BFLP is a wholly-owned subsidiary of Bloomberg L.P. (“BLP”). BLP provides BFLP with all global marketing and operational support and service for these products and distributes the BPS either directly or through a non-BFLP subsidiary in the BLP Countries. All rights reserved.

CBOT is a registered trademark of the Chicago Board of Trade.

This publication contains the author’s opinions and is designed to provide accurate and authoritative information. It is sold with the understanding that the author, publisher, and Bloomberg L.P. are not engaged in rendering legal, accounting, investment-planning, or other professional advice. The reader should seek the services of a qualified professional for such advice; the author, publisher, and Bloomberg L.P. cannot be held responsible for any loss incurred as a result of specific investments or planning decisions made by the reader.

Library of Congress Cataloging-in-Publication Data

Yamarone, Richard.

The trader’s guide to key economic indicators / Richard Yamarone. -- Updated and expanded ed. p. cm.

Summary: “This book presents the twelve most important economic indicators, plus several others from fixed-income and commodity markets that have been added in this revised and expanded edition. These key indicators are among the most valuable of any analyst’s or economist’s tools for understanding and predicting what will happen in the markets”--Provided by publisher.

Includes bibliographical references and index.

ISBN 978-1-57660-301-7 (alk. paper)

1. Economic indicators--United States. 2. Investments--United States. I. Title.

HC106.83.Y35 2007

330.01’5195--dc22 2007036398

To Suzie,Milton, Oskar, and Nash—felinus economicus

Acknowledgments

THIS PROJECT COULD never have been completed without the support and assistance of my wife, Suzie. She has helped in countless and immeasurable ways. Families play an integral role in dreams, aspirations, and accomplishments. My family has paved a clear path for any and every ambition that I could possibly have. They are indubitably responsible for all of my successes. My mother and father instilled in me the importance of education, hard work, freethinking, and discipline. For that I could never thank them enough. A special thanks goes to my brother, Robert, and to my in-laws, Richard and Nancy McCabe.

Educators can have a profound influence on one’s life. My life, as well as this project, was no exception in the way of encouragement and wisdom disseminated by those in academia. Professors and mentors have helped, not only in the understanding of some of the roles that economic indicators and statistics assume, but as counselors to a not-so-quick-to-learn student. They include, but are not limited to, David W. Ring, William O’Dea, Robert Carson, and Thomas Gergel of the State University of New York at Oneonta. Professor Ring taught me to work hard, Professor Carson to look at each situation from alternative perspectives, and Professor Gergel to have a passion about whatever task I might take on. I practice these three lessons every day of my life.

The list of professional associates who have helped me with this project could easily take up the entire book, but some individual recognition is essential. In my eighteen-plus years of work experience on Wall Street, I have never been associated with a more professional outfit than Bloomberg News. To the scores of friends and acquaintances at the Bloomberg offices all around the world, thanks for all your help and input into this project. You are unaware of how helpful you have been. I especially wish to thank Vinny DelGiudice, Vince Golle, Yvette Fernandez, Monee Fields-White, Jackie Jozefek, and Al Yoon.

Undoubtedly the greatest gratitude with respect to the creation of this work has to go to my editors at Bloomberg Press, namely Kathleen Peterson, Chris Miles, Tracy Tait, and mostly, Betsy Ungar. Betsy’s extraordinary talents transformed my muddled manuscript into a more readable and effective publication. I must extend my sincere gratitude to Sophia Efthimiatou and Dru-Ann Chuchran for ironing out the many wrinkles that I had penned in the later chapters, as well as several previously unnoticed errors in the first edition.

Many thanks to the analysts at Argus Research who help me each day with insight into their respective industries, particularly, Wendy Abramowitz, Robert Becker, Kevin Calabrese, Gary F. Hovis, Jim Kelleher, David Ritter, and Kevin Tynan—the best auto analyst on Wall Street. I must tip my hat in appreciation to John Eade, Argus Research’s CEO and director of research, as well as the Dorsey family for the opportunity to work at the most prestigious research institution on Wall Street.

I would like to thank the new analysts at Argus Research that have come aboard for the writing of this updated and expanded edition: Bridget Adams, David Anthony, Suzanne Betts, Joseph Bonner, Ruth Chung, David E. Coleman, Rashid Dahodwala, Martha Freitag, Chris Graja, Paul Kleinschmidt, Maggie Liu, David Rewcastle, Bill Selesky, Erin Ashley Smith, John Staszak, Jackson Turner, Wendy Walker, and Phil Weiss.

And a very special thanks goes to Lakshman Achuthan and Anirvan Banerji from the Economic Cycle Research Institute (ECRI) in New York. They oversee some of the best economic indicators on the Street today.

Acknowledgment wouldn’t be complete without special thanks to Charles Gilbert and Michele Johnson (Federal Reserve Board); Lynn Franco (the Conference Board); Richard Deitz (Federal Reserve Bank of New York); Guhan Venkatu (Federal Reserve Bank of Cleveland); Scott Scheleur (U.S. Census Bureau, Service Sector Statistics Division); Kristen Kioa (Institute for Supply Management); Jeannine Aversa and Marty Crutsinger (Associated Press); Garrett Bekker (Merrill Lynch); Steve Berman (U.S. Census Bureau); Barbara Hagenbaugh, Sue Kirchhoff (USA Today); Jason Hecht (Ramapo College); David Jozefek (UBS); Thomas Feeney (Shippensburg University); Jeffrey J. Junior (Aries Appraisal Group Inc.); and Joe Pregiato (Arbor & Ivy Photography).

Any errors or oversights that may exist in this book were not intentional and are not the fault of any of those individuals named above.

Introduction

INVESTING WITHOUT UNDERSTANDING the economy is like taking a trip without knowing anything about the climate of your destination or what season you’ll be in when you get there. Just as inclement weather can wreak havoc with a vacation, putting hard-earned money into the stock or bond market when economic conditions are unfavorable or selling investments for the wrong reasons can destroy financial plans for a comfortable retirement, a new house, or a child’s college education. This is as true today as it was when the first edition of this book was being written in late 2003.

No one understands this better than Wall Street investment banks, brokers, and research institutions. All have adopted a top-down approach to securities analysis that begins with a forecast of the general economic climate, including interest-rate projections, currency forecasts, and estimates of domestic and foreign economic growth. In this, they are following one of the precepts laid down by Benjamin Graham and David Dodd in their 1934 investors’ bible, Security Analysis: “Economic forecasts provide essential underpinning for stock and bond market, industry, and company projections.”

You don’t need to manage millions or billions of dollars, however, to study economic conditions and plan your investment strategy accordingly. You can get much of the same information that Wall Street professionals use in their analyses from the business sections of the nation’s newspapers, magazines, evening news programs, the Internet, and cable business channels.

Furthermore, you don’t need a degree in economics or mathematics to interpret this information. In fact, many graduates of such programs at the nation’s top universities find themselves entirely unprepared for the real world of finance.

This book attempts to bridge the wide gap between the sometimes mind-numbing theories of textbook economics—the principles that are taught on college campuses—and the everyday world of Wall Street. It does so by focusing on a dozen economic indicators, plus several others from fixed-income and commodity markets that have been added in this revised and expanded edition. These key indicators are among the most valuable of any analyst’s or economist’s tools.

Over the past century, thousands of economic indicators have emerged, predicting everything from the demand for gasoline to the size of harvests. Some are more fun than functional, such as those claiming links between stock performance for the year and which football conference, the NFC or the AFC, wins the Super Bowl, or whether women’s hemlines rise to midthigh or fall to mid-calf. Others indicators are more serious, solidly based in economic observations. These range from the arcane—such as the indicator connecting the production level of titanium dioxide, a constituent of pigments used in paints and plastics, with the demand for building materials—to the commonsensical. The price of copper, used in wiring and many other construction elements, for instance, has a clear relationship with the pace of housing activity. The same could be said of economic growth and railroad car loadings, shipping container production, wooden pallet shipments, and the manufacture of corrugated boxboard and packaging, all of which are connected with transporting freight or manufactured goods. Over time, economists have weeded out the least successful indicators, based on the most dubious relationships, to arrive at a core of about fifty consistently reliable ones that are must-haves in any analytical toolbox. The indicators covered in the first edition—and revisited in this new one—are among the most accurate at depicting economic relationships that can engender big swings in the financial markets.

After the first edition came out, I received close to a hundred inquiries about the omission of certain significant indicators. Many of my clients and other investors questioned the exclusion of the import price index, for example, or the absence of the consumer credit report. There are indeed thousands of indicators currently in use, some with exceptional track records of projecting economic conditions such as employment, inflation, manufacturing activity, and consumer spending. But including those would have taken us further from the primary goal of the book, which was to limit the list to a manageable number of key economic indicators that are most relevant to the Street.

Nonetheless, across the many inquiries one reoccurring and noteworthy theme presented itself: I had not included any market-determined indicators, which many investors felt were important components of their indicator tool sets. Most of the indicators presented in the first edition are constructed by U.S. government agencies such as the U.S. Department of Commerce’s Census Bureau, the U.S. Department of Labor, and the Board of Governors of the Federal Reserve System, or are products of private organizations such as the Institute for Supply Management, the Conference Board, and the University of Michigan. Some reflect principally the current state of the economy. Others have excellent predictive powers, highlighting, for example, industries that might outperform, thus helping identify the likely path of economic activity. But many influential money managers, hedge fund participants, and proprietary traders rightfully raved about the usefulness of indicators that are determined by the markets themselves.

For this reason I felt that, in revising this book, it was important to include some of the more popular market-determined measures. They conveniently fit into two categories, fixed income and commodities, which we will examine in Chapters 13 and 14 respectively.

All the indicators brought up to date in this new edition still have one thing in common, however: In one way or another, they all relate to the business cycle. Understanding how they work will make the study of economics more palatable and can make the pursuit of investment gains more profitable.

THE BUSINESS CYCLE

The business cycle is one of the central concepts in modern economics. It was defined by celebrated economists Arthur Burns and Wesley Mitchell in their pioneering 1946 study, Measuring Business Cycles, written for the National Bureau of Economic Research (NBER), which today is the official arbiter of the U.S. business cycle. According to Burns and Mitchell, the business cycle is “a type of fluctuation found in the aggregate economic activity of nations that organize their work mainly in business enterprises: a cycle consists of expansions occurring at about the same time in many economic activities, followed by similarly general recessions, contractions, and revivals, which merge into the expansion phase of the next cycle.”

Figure I.1 U.S. Business Cycle Durations

Source: NBER

Figure I.2 GDP and Highlighted Recessions

Sources: U.S. Department of Commerce, Bureau or Economic Analysis; NBER

No two business cycles are the same. As illustrated in FIGURE I.1, during the relatively short time that people have been measuring the U.S. economy, the length of expansions, from economic trough to peak, and of contractions, from peak to trough, have varied widely—although the former, especially recently, have generally been longer and steadier than the latter. Expansions have ranged from 120 months (April 1991 to March 2001) to 10 months (March 1919 to January 1920), and downturns from 43 months (September 1929 to March 1933) to 6 months (February 1980 to July 1980). The amplitude of the peaks and troughs has also differed significantly from cycle to cycle.

One way to think of the business cycle is as a graphical representation of the total economic activity of a country. Because the accepted benchmark for economic activity in the United States is currently gross domestic product (GDP), economists generally identify the business cycle with the alternating increases and declines in GDP. Rising GDP marks economic expansion; falling GDP, a contraction (see FIGURE I.2). That said, the business cycle, as defined by Burns and Mitchell, can’t be fully captured by one indicator, not even the GDP. Rather, a compendium of indicators reflects various aspects of the economy.

Economic indicators are classified according to how they relate to the business cycle. Those that reflect the current state of the economy are coincident; those that predict future conditions are leading; and those that confirm that a turning occurred are lagging.

INDICATORS AND THE MARKETS

The organization responsible for an indicator generally distributes its report about an hour before the official release time to financial news outlets such as Bloomberg News, Dow Jones Newswires, Reuters, and CNBC. The reporters, who are literally locked in a room and not permitted to have contact with anyone outside, ask questions of agency officials and prepare headlines and analyses of the report contents. These stories are embargoed until the official release, at which time they are transmitted by the newswires to be dissected by the Wall Street community. Most Wall Street firms employ economists to provide live broadcasts of the numbers as they run across the newswires, together with interpretation and commentary regarding the likely market reaction. This task, known as the “hoot-and-holler” or tape reading, is among the most stressful performed by an economist. One slipup can cost a trader or an entire trading floor millions of dollars.

The more an indicator deviates from the Street’s expectations, the greater its effect on the financial markets. A 0.1 percent decline in retail sales, for example, might not move the markets much if economists were looking for a flat reading or a 0.1 percent rise. But if the consensus were for an increase of 0.7 percent, and instead the 0.1 percent decline hit the tape, the markets might well be rocked. That said, it is always prudent for traders and other market participants to keep apprised of what the Street’s expectations are for key economic indicators such as those covered here.

HOW TO USE THIS BOOK

You’ve no doubt read in a paper or heard on television or the radio forecasts of economic expansion or recession. You also probably realize that one is desirable and the other is not. But you may not know how the economists quoted came up with their predictions. Without this knowledge, how can you judge how well considered or rash they are—and whether to trust them in creating your investment strategy? This book seeks to help you form your own opinions about the possible direction of the economy and the markets and to decide how to act based on those opinions.

Each chapter corresponds to an indicator, beginning with the most comprehensive—the GDP and indexes of leading, lagging, and coincident indicators—and continuing with those tied to particular aspects or segments of the overall economy, such as consumer prices, manufacturing, housing, and retail sales. Every chapter contains four principal sections: an introduction sketching out the major attributes of the indicator and its effect on the markets; a discussion of its origins and development; a description of how the relevant data are obtained, analyzed, and presented; and an explanation of how to incorporate these data into your investment process. The last section also contains at least one “trick”—involving either a little-known subcomponent of the indicator or a combination of subcomponents—that Wall Street economists use to get a clearer or more timely picture of business activity. At the end of the book is a listing of additional reading and resources, organized by chapter, pointing those interested to references that discuss the relevant indicator in greater detail.

In putting what you learn from this book into practice, you might take some pointers from Wall Street. Just about every investment firm has a pre-market-opening meeting in which the day’s events and potential trading strategies are presented. This always includes a discussion of the economic indicators scheduled for release that day. No trader wants to be caught off guard by an unexpected market-moving release. For the same reason, many traders have on their desks calendars showing which economic release is scheduled for a particular day and indicating both the value or percentage change of the previous report and the Street’s estimates—highest, lowest, and consensus—for the upcoming report. That way, when the actual figure is released, they will know how it compares with expectations and can react accordingly.

Of course, no single economic indicator will tell you all you need to know about the current or future economic climate. Each has drawbacks and may send false signals because of unforeseen shocks, faulty measurements, or suspect collection processes. Piecing together the information from all the indicators discussed in this book like tiles in a mosaic will give you a dynamic representation of the economy. But if you are truly serious about understanding the macroeconomic climate and individual industry conditions, you should also take advantage of the Securities and Exchange Commission’s fair-disclosure regulation, Regulation FD, which was adopted in 2000 and mandates that individual investors have the same access to companies’ quarterly earnings conference calls that professional analysts have.

These calls provide a great deal of insight into corporate spending plans, manufacturing and production activity, international conditions, pricing, and the general business climate. Especially informative are the announcements of industrial behemoths such as Alcoa Inc., the Boeing Company, Caterpillar Inc., Cummins Inc., Emerson Electric Company, Ford Motor Company, General Electric Company, Illinois Tool Works Inc., Johnson Controls Inc., and United Technologies Corporation. Many companies also offer slide presentations, handouts, and supplemental data with these quarterly presentations, which often provide even greater detail on their buying intentions, prospective employment changes, and any threats to performance that they foresee. There’s no cheaper and easier way to gather anecdotal evidence about business conditions. If you can’t listen in, the presentations are almost always archived on company websites, from which they may be readily retrieved twenty-four hours a day.

WHO CAN BENEFIT FROM THIS BOOK?

This book was written primarily for those traders and investors lacking a formal introduction to the most popular economic indicators on Wall Street. Just because an individual is entrusted with investing millions of dollars does not guarantee a practical command of economic indicators and their meaning for investment. When newly minted MBAs arrive on the trading floors of financial firms, for example, few are equipped with a complete appreciation of these indicators—no matter from which institution that degree has come. My years of experience on a few of the largest trading floors in the world has suggested the need to fill what can be viewed as a surprisingly expansive void regarding indicators, statistics, the economic meaning of the associated figures, and the market’s likely reaction.

Those new to the field of investing and economics, including students of the subject, also should benefit from the fundamental, application-oriented nature of this book. As most academics know, if students cannot see the results or directly test theories with practical data, the knowledge they hold tends to remain more theoretical than real-world and they may eventually lose interest in the field. It is here that many future economists are lost. As exercises within an imperfect “science,” experiments conducted in the social discipline of economics are predominantly theorized or hypothesized and seldom tested with tangible data. In this sense, economists are not as fortunate as physicists or natural scientists, who conduct experiments in a controlled environment such as a laboratory, riverbed, or ocean. The economic indicators contained in these chapters serve as concrete guideposts within the discipline of economics, and as such make experimentation, testing, and study for investments not only possible but also understandable.

1

Gross Domestic Product

ECONOMICS HAS RECEIVED A BAD RAP. In the mid-nineteenth century, the great Scottish historian Thomas Carlyle dubbed this discipline “the dismal science,” and jokes about economists being more boring than accountants abound on Wall Street. But truth be told, there is nothing more exciting than watching the newswire on a trading floor of a money-center bank minutes ahead of the release of a major market-moving economic report. One of the top excitement generators is the report on gross domestic product (GDP)—an indicator that is a combination of economics and accounting.