stocks should make up a material portion of equity portfolios. economic expectations could be tough to beat for the remainder of 2021, we still believe U.S. Global real GDP contracted 3.3% in 2020, and it is expected to rise to +6.0% in 2021, according to Bloomberg’s consensus estimate, before ticking down to +3.4% in 2022. However, the overall global growth trajectory is expected to continue to be robust through 2021. and abroad, may fade as we move through the year. As a result “economic surprises,” both in the U.S. Looking ahead, we expect now elevated economic expectations, particularly in the U.S., may prove a tougher target. The repair of global trade activity, as supply lines are reconnected, has been notably key in non-U.S. This reflects economic data coming in better than expected in several geographic regions. As shown in the LPL Chart of the day, economically, global conditions remain rather strong, as evidenced by these indices, which remain above the zero line. The index rises when economic data exceeds Bloomberg consensus estimates and falls when data is below forecasts. The Citigroup Economic Surprise Index, or CESI, tracks how the economic data fare compared with expectations. A sea-change in that thinking could be approaching as value-heavy European indices have gotten some attention with the improvement from value, but a firm, constructive view of European equities may still be some ways off. We believe the improving COVID-19 trends in Europe could be particularly sticky as vaccine distribution becomes more widespread.įor several years now, being underweight European equities, relative to the U.S., has been a winning trade. equity markets, and has caused us to improve our outlook for developed non-U.S.

This improvement has helped to steady the foundation in many non-U.S. Driven by some improving COVID-19 trends, the economic backdrop has improved overseas, while high economic expectations have proved to be a more formidable hurdle here in the U.S. In terms of whether economic data is either beating or missing economists’ forecasts, it appears conditions may now be a bit better overseas.

Citi economic surprise index global