U.S. Markets closed

Use New America, Snapshot For Clues On Broad Economy

With The New America, IBD readers get insights into groundbreaking companies. With Industry Snapshot, readers discover groups of companies making major strides.

But these columns can also help readers with the upper level of investment analysis: an understanding of where the economy is headed and why.

An economic feature on the front page, or the "Vital Signs" chart and news briefs in "To The Point" (every day on Page A2) is perhaps the most direct way to know what is going on with the economy. But read New America and Industry Snapshot regularly, and you can sense trends developing in the economy as you learn about companies and industries doing well.

The New America is published every day. It is a longtime staple of IBD, with a reputation for profiling companies with exceptional growth, usually before their shares make big share-price advances.

Industry Snapshot is published once a week, in IBD's Monday editions. It focuses on industry groups leading or climbing the group-performance rankings.

The Industry Themes column is a cousin of the Snapshot, and is published daily.

From a top-down view, professional investors study the economy and make forecasts about how economic trends will affect certain industries and companies. For example, a persistent decline in oil prices will depress the price of jet fuel, the highest-single cost item for airlines.

Readers instead can take a bottoms-up view, spotting the hot stocks and industries, then judging what those say about the economy. With a new story every market day, the economy watcher has plenty to work with.

A flurry of stories about homebuilders, construction materials makers and title insurers will tell you the housing market is rebounding. Increasing coverage of utilities, food makers and pharmaceutical firms may suggest a defensive tone in the economy.

In 2010, the U.S. economy was bouncing back from the financial crisis of two years earlier. Unemployment lines remained long, and consumers were cautious.

Despite that, the restaurant industry was emerging as a market leader at the time.

"The restaurant industry appears to be nibbling its way toward a recovery," the Industry Snapshot noted on Nov. 8, 2010. "After eight straight periods of traffic declines, customer traffic in the June-through-August (2010) period was flat vs. a year earlier. .. .

Among the stocks mentioned in the story was Chipotle Mexican Grill (CMG). In August of the same year, Chipotle was featured in The New America. A story on Panera Bread (PNRA) was published around the same time.

Both stocks soon went on to break out, make strong price gains and hit .

That same year, The New America published an article on Union Pacific (UNP), the large railroad operator that is often viewed as an economic bellwether.

"As a play on broad economic recovery, it is poised to gain from long-term trends that have the rails taking market share from trucks," the June 18 story reported.

Meanwhile, other New America articles on sporting goods chains, department stores and other consumer-related companies reinforced the notion that consumers were slowly regaining confidence in recent years.