The Citi Global Surprise index measures the pace at which economic indicators around the world are coming in better than expected compared to economist estimates. As an example of how weak the global economy has been over the last 18 months, the Citi Global Surprise index was in negative territory for a record 361 trading days from April 2018 through last Thursday. But just in time for what will likely be another rate cut from the Fed this week, the Global Surprise index broke its record streak on Friday by closing in positive territory.
As shown below, not even during the Financial Crisis did the surprise index remain negative for so long. Back in 2008 and 2009, however, the Surprise index got much more negative than it did at any point during the streak that just ended. Start a two-week free trial to Bespoke Institutional to access our Biggest Movers tool, Trend Analyzer, Chart Scanner, and much more.
Below is a chart comparing the Citi Global Surprise index to the Bloomberg World equity market index over the last two years. The two don’t track each other very closely. In mid-2018, the Surprise index saw a spike similar to the one we’ve seen over the last couple of months, but that spike was followed by a very weak fourth quarter for the global stock market. The Surprise index didn’t predict the Q1 2019 bounce-back for stocks either.