Excess Returns · Thursday, August 6, 2026
Chan Yang defines leading indicators as data points that shift ahead of major economic events, such as building permits anticipating construction activity. He contrasts these with coincident indicators like GDP or inflation, which are only apparent after the fact.
“You know, as investors, we look a lot like, you know, GDP, right? Or inflation, or, you know, fiscal, what fiscal, what policy announcement. These are all what we would say is like real-time coincidence things that happen.”
“And in a way, when we say leading indicators, it's almost like instead of trying to get a crystal ball and forecast something, you just standing back and observing if the data is shifting.”
“So if we take that building permit example I gave, through to its conclusion is that, okay, let's say we've building permits start to surge, right? This month, next month, you have a few months in a row, building permits going up. Then you know there's going to be a lot of construction activity, right?”