Sunday, June 30, 2024

The US economy is slowing down more than expected.

How do we interpret the Citi's economic surprise index (ESI)?

If the ESI is in a negative zone, it means that the real economy is performing worse than expectation (underperforming).  Conversely, when the ESI is in a positive territory, it means that the real economy is performing better than expectation (outperforming).

Currently, the ESI is around -30 and this shows that the US economy is underperforming.  How much higher can the US stock market move further when the real economy is underperforming?

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