US economic surprises have rebounded as sharply as they plummeted in the aftermath of the initial pandemic shock. The large symmetric nature of the errors in both directions is a testament to the unprecedented nature of this shock as well as the difficulties in learning definitive lessons from a quickly evolving economic and policy landscape still riddled with unknowns.
Economic surprises tend to be coincident with short-term (i.e. three-month) equity returns and, at such lofty levels, the ability of positive news alone to continue to fuel the equity market rally is severely diminished.
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