Market-Leading Industries
June 7, 2006 - Economic Indicators
Do certain industries tend to lead or lag stock market cycles? In the November 2004 update of their paper entitled “Do Industries Lead the Stock Market?”, Harrison Hong, Walter Torous and Rossen Valkanov investigate whether returns from some industries predict future returns for the overall stock market. The authors hypothesize that the overall market only gradually recognizes valuable information contained in the returns of specific industries. Using U.S. data for 1946-2002 and international data for 1973-2002, they conclude that: Keep Reading