Capital Markets: Observations and Insights Autumn 2019

​ The Good, the Bad, and the Ugly

ECONOMY

The Good – Data Improving

• Economic data points have begun to improve with lower interest rates boosting housing measures like home sales and refinancings while bank lending and money supply have also accelerated

‒ The result is economic data is coming in better relative to expectations

Bloomberg Economic Surprise Index

0.3

Positive Surprises

0.2

0.1

Economic data has begun to surprise to the upside

0.0

-0.1

-0.2

-0.3

Negative Surprises

-0.4

-0.5

Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19

Source: Bloomberg as of September 2019. The Bloomberg Economic Surprise Index shows the degree to which economic analysts under- or over-estimate the trends in the business cycle. The surprise element is defined as the percentage (or percentage point) difference between analyst forecasts and the published value of economic data releases.

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