Does stock market lead the economy?
Rebecca Stockley
10/3/2019
- Q1.
stock.pricesImport S&P500 since 2009. - Q2. Prepare the imported stock prices for merge.
- Q3
economic.dataImport real U.S. GDP growth since 2010. - Q4. Prepare the imported economic data for merge.
- Q5. Merge the two data sets.
- Q6. Plot the relaionship between stock returns and GDP growth?
- Q7. Describe the relationship between the stock markets and economic growth.
- Q8 Hide the messages, but display the code and its results on the webpage.
- Q9 Display the title and your name correctly at the top of the webpage.
- Q10 Use the correct slug.
stock.prices
## # A tibble: 5,221 x 7
## date open high low close volume adjusted
## <date> <dbl> <dbl> <dbl> <dbl> <dbl> <dbl>
## 1 1999-01-04 2208. 2234. 2193. 2208. 936660000 2208.
## 2 1999-01-05 2208. 2252. 2206. 2251. 948350000 2251.
## 3 1999-01-06 2286. 2321. 2286. 2321. 1252650000 2321.
## 4 1999-01-07 2293. 2334. 2284. 2326. 1200900000 2326.
## 5 1999-01-08 2364. 2370. 2315. 2344. 1286690000 2344.
## 6 1999-01-11 2374. 2385. 2348. 2385. 1140930000 2385.
## 7 1999-01-12 2396. 2396. 2320. 2321. 1107300000 2321.
## 8 1999-01-13 2222. 2353. 2206. 2317. 1195470000 2317.
## 9 1999-01-14 2337. 2338. 2276. 2277. 1012270000 2277.
## 10 1999-01-15 2292. 2349. 2277. 2348. 1001160000 2348.
## # … with 5,211 more rows## # A tibble: 21 x 2
## yearly.returns year
## <dbl> <dbl>
## 1 0.843 2000
## 2 -0.393 2001
## 3 -0.211 2002
## 4 -0.315 2003
## 5 0.500 2004
## 6 0.0859 2005
## 7 0.0137 2006
## 8 0.0952 2007
## 9 0.0981 2008
## 10 -0.405 2009
## # … with 11 more rowseconomic.data
## # A tibble: 19 x 3
## price year GDPgrowth
## <dbl> <dbl> <dbl>
## 1 4.1 2000 0.0410
## 2 1 2001 0.01
## 3 1.7 2002 0.017
## 4 2.9 2003 0.0290
## 5 3.8 2004 0.038
## 6 3.5 2005 0.035
## 7 2.9 2006 0.0290
## 8 1.9 2007 0.019
## 9 -0.1 2008 -0.001
## 10 -2.5 2009 -0.025
## 11 2.6 2010 0.026
## 12 1.6 2011 0.016
## 13 2.2 2012 0.022
## 14 1.8 2013 0.018
## 15 2.5 2014 0.025
## 16 2.9 2015 0.0290
## 17 1.6 2016 0.016
## 18 2.4 2017 0.024
## 19 2.9 2018 0.0290Merge
## # A tibble: 19 x 4
## price year GDPgrowth yearly.returns
## <dbl> <dbl> <dbl> <dbl>
## 1 4.1 2000 0.0410 0.843
## 2 1 2001 0.01 -0.393
## 3 1.7 2002 0.017 -0.211
## 4 2.9 2003 0.0290 -0.315
## 5 3.8 2004 0.038 0.500
## 6 3.5 2005 0.035 0.0859
## 7 2.9 2006 0.0290 0.0137
## 8 1.9 2007 0.019 0.0952
## 9 -0.1 2008 -0.001 0.0981
## 10 -2.5 2009 -0.025 -0.405
## 11 2.6 2010 0.026 0.439
## 12 1.6 2011 0.016 0.169
## 13 2.2 2012 0.022 -0.0180
## 14 1.8 2013 0.018 0.159
## 15 2.5 2014 0.025 0.383
## 16 2.9 2015 0.0290 0.134
## 17 1.6 2016 0.016 0.0573
## 18 2.4 2017 0.024 0.0750
## 19 2.9 2018 0.0290 0.282Plot 
Q1. stock.prices Import S&P500 since 2009.
Hint: Google tidyquant::tq_get() to find example codes.
## # A tibble: 2,706 x 7
## date open high low close volume adjusted
## <date> <dbl> <dbl> <dbl> <dbl> <dbl> <dbl>
## 1 2009-01-02 903. 935. 899. 932. 4048270000 932.
## 2 2009-01-05 929. 937. 920. 927. 5413910000 927.
## 3 2009-01-06 931. 944. 927. 935. 5392620000 935.
## 4 2009-01-07 927. 927. 902. 907. 4704940000 907.
## 5 2009-01-08 906. 910 897. 910. 4991550000 910.
## 6 2009-01-09 910. 912. 888. 890. 4716500000 890.
## 7 2009-01-12 890. 890. 864. 870. 4725050000 870.
## 8 2009-01-13 870. 877. 862. 872. 5567460000 872.
## 9 2009-01-14 867. 867. 837. 843. 5407880000 843.
## 10 2009-01-15 842. 852. 817. 844. 7807350000 844.
## # … with 2,696 more rowsQ2. Prepare the imported stock prices for merge.
Hint: Calculate yearly returns; create a new variable, year; and drop date.
## # A tibble: 11 x 2
## yearly.returns year
## <dbl> <dbl>
## 1 0.197 2010
## 2 0.128 2011
## 3 -0.0000318 2012
## 4 0.134 2013
## 5 0.296 2014
## 6 0.114 2015
## 7 -0.00727 2016
## 8 0.0954 2017
## 9 0.194 2018
## 10 -0.0624 2019
## 11 0.152 2020Q3 economic.data Import real U.S. GDP growth since 2010.
Hint: Find the symbol in FRED. Select in the list of related variables, Percent Change from Preceding Period, Annual, Not Seasonally Adjusted.
Q4. Prepare the imported economic data for merge.
Hint: Create a new variable, year; convert price to decimal number; and drop date.
## # A tibble: 9 x 3
## price year GDPgrowth
## <dbl> <dbl> <dbl>
## 1 2.6 2010 0.026
## 2 1.6 2011 0.016
## 3 2.2 2012 0.022
## 4 1.8 2013 0.018
## 5 2.5 2014 0.025
## 6 2.9 2015 0.0290
## 7 1.6 2016 0.016
## 8 2.4 2017 0.024
## 9 2.9 2018 0.0290Q5. Merge the two data sets.
Hint: Google dplyr::left_join() to find example codes.
## # A tibble: 9 x 4
## price year GDPgrowth yearly.returns
## <dbl> <dbl> <dbl> <dbl>
## 1 2.6 2010 0.026 0.197
## 2 1.6 2011 0.016 0.128
## 3 2.2 2012 0.022 -0.0000318
## 4 1.8 2013 0.018 0.134
## 5 2.5 2014 0.025 0.296
## 6 2.9 2015 0.0290 0.114
## 7 1.6 2016 0.016 -0.00727
## 8 2.4 2017 0.024 0.0954
## 9 2.9 2018 0.0290 0.194Q6. Plot the relaionship between stock returns and GDP growth?
Hint: See the code in 4.2.1 Scatterplot in the textbook.
Q7. Describe the relationship between the stock markets and economic growth.
The realtionship between the stock markets and economic growth is as yearly stock market increases, so does economic growth.
Q8 Hide the messages, but display the code and its results on the webpage.
Hint: Use message, echo and results in the chunk options. Refer to the RMarkdown Reference Guide.