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Noreen Seebacher
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Surprise!!
Noreen Seebacher   4/10/2012 9:14:25 AM
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Scott mentioned the the Citigroup Economic Surprise Index in a post this week. The proprietary index keeps track of the ratio of upside US economic data surprises to downside surprises.

But here is what is interesting -- or disturbing. The index hit 91.9 on  January 6 --  its highest level since March 2011. It  now stands at 4.6.  That's quite a deceleration!  

Many analysts say it has been fairly reliable in the past as a leading stock-market indicator, meaning the index's recent declines "aren't such a great sign for investors." Analysis from Thomson Reuters shows a consistent relationship between 3-month trailing performance of the S&P 500 Index and the Citigroup Economic Surprise Index.  Based on that analysis, if economic data continues on its current trajectory, markets may suffer.   

Of course, not everyone considers the index a perfect barometer, especially in regard to equity markets. And they think the market may surprise the surprise index. What are your thoughts?





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