Our Market Optics chartbook contains data-driven insights that power our portfolio management teams’ views, ideas, and decisions. Each week, we’ll take a look a closer look at one of the charts.

This week’s topic: Global economy: Growth and inflation comparison.

  • The coronavirus crisis was bad for every country. The economic hit is being fully displayed in the year-over-year growth rates of gross domestic product (GDP). The recovery, as indicated by the Bloomberg consensus, is hardly one of a rapid rebound. While the economic data has been surprising to the upside since June, the recovery has been a “V” with a long downstroke and a short upstroke. But for the markets, all that matters is the direction of travel.
  • This week is a big week as we’re past earnings season and past the Federal Reserve strategy framework announcement. Now the focus is on the new cycle of economic indicators, starting with Tuesday’s Institute for Supply Management (ISM) Manufacturing Index and ending with Friday’s employment situation report. The data are for August, but it should show how firm of a footing we are on for the economic expansion. Another surprise to the upside with the ISM or employment report could force bears to rethink their life decisions. A surprise to the downside could dent the confidence of the bulls.

Get more charts and insights like this by downloading our Q2 Market Optics chartbook today.

Disclosure:

Index definitions

All investing involves risks, including the possible loss of principal. There can be no assurance that any investment strategy will be successful. Investments fluctuate with changes in market and economic conditions and in different environments due to numerous factors, some of which may be unpredictable. Each asset class has its own risk and return characteristics.

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