Technical Review

Data Has Delivered Negative Surprises

Wall Street is convinced that the economy will strengthen in the second half of 2024 and enable earnings to grow by more than 10% in 2024. The increase in confidence is doubling interesting since recent data has consistently been weaker than forecast.

The Citi Economic Surprise Index (ESI) is constructed by comparing estimates for economic data and the actual data. Understanding how estimates are influenced by the recent trend is the key to how the ESI becomes a Contrary Opinion indicator. If recent data has been weak and the outlook is for more slowing, estimates for future...

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