Weaker than expected data from Europe and the U.S. has driven the Citigroup G10 economic surprise index even lower. As this chart shows economic sentiment has been a big driver of the relative performance of equities and bonds since the financial crisis.
The pattern of economic data weakening as we head into the summer seems to mirror last year. So does the (slightly delayed) reaction of oil prices which have taken notice of the weaker data and fallen sharply.
Greg Harrison points out 82% of S&P 500 companies have beaten their Q1 earnings estimates so far. It is early days but it it continues that would be the highest for at least five years.
Is this a sign that the strength in corporate earnings in continuing? The chart below suggests as least part may be due to falling expectations coming into earnings season.