The CatFood simulation allows you to experience a day of trading in financial markets.

During the simulation, you will receive news about CatFood, a company whose shares are traded on the SimTrade platform. You will be able to buy and sell shares of CatFood.

Your goal is to maximize your trading gain at the end of the simulation.

At the start of the simulation, you own an account consisting of €50,000 in cash and 1,000 CatFood shares. Given yesterday’s closing price of €50.15, the total value of your position is about €100,000.

The duration of the simulation is initially set to 5 minutes which corresponds to a 24-hour trading day.

You must complete the simulation for it to be valid for the experiment.

CatFood is an American firm in the pet food manufacturing industry. CatFood operates more than 100 chains of cat food stores in main cities in the United States. It also operates one of the most visited shopping websites in the world for pet food and treats. It offers organic food with 100% fresh and natural ingredients with recipes that owners might use at home.

The headquarters of CatFood are in Miami, which is well-known to be the best city to live in with cats.

After several decades of rapid growth, CatFood had a successful initial public offering (IPO) in 2005. Since its introduction in the stock market, the stock price of CatFood (code: CAT) has increased from its introductory price of €10 to a recently new high of €55. This positive trend in the stock price has also been accompanied with market volatility.

CAT shares are quoted in European and US exchanges. CatFood is one of the top firms in the Pet Food manufacturing industry.

CAT shares are currently priced at approximately €50.

Today is an important day for CatFood, as the firm will hold its annual General Meeting. The CEO of CatFood will announce the profit for the last year. The expectation from the market consensus is an annual profit of €80 million for CatFood. How much profit is CatFood going to announce?

During the General Meeting, CatFood will also give the details of the launch of a new line of organic food. For a firm, the ability of catching up with the market trend is widely seen as a recognition of its sustainable performance. This information has already been incorporated into the stock market price by participants.

Investors are also aware that today at 8:15 AM the US government releases the statistics about the Gross Domestic Product (GDP) for the last quarter. The GDP has longtime been considered a reliable leading indicator of future economic activity. Thus, a decrease in the GDP would forecast slow economic growth, while an increase in the GDP would forecast fast economic growth. Analyst research has especially shown a positive correlation between the change in the GDP and the change in revenues of pet food companies like CatFood. An increase/decrease in the GDP usually translates into an increase/decrease in CatFood revenues and finally an increase/decrease in CatFood stock price. The market consensus about the GDP is its stability (0-point change). However, some financial analysts debate about two possible scenarios: a 2-point increase or a 2-point decrease. Which will be the GDP figure for today?

Today at 3:30 PM, the US government publishes the Consumer Price Index (CPI). The CPI reflects the inflation in the economy based on the price evolution of a basket of products and services over the last year. Inflation has a big impact on the level of consumption of individuals: the higher the inflation, the lower the consumption. Analyst research has especially shown a negative correlation between the change in the CPI and the change in revenues of pet food companies like CatFood. An increase/decrease in the CPI usually translates into a decrease/increase in CatFood revenues and finally a decrease/increase in CatFood stock price. The market consensus for the CPI is a 5% inflation rate. However, there is a wide heterogeneity in financial analysts’ forecasts. Which will be the CPI figure for today?

There is speculation about takeovers in the Pet Food manufacturing industry.