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On reflection, markets have decided that last week's US healthcare debacle wasn't such a big deal, with the global economies' bright patch playing a big role in soothing nerves. Unfortunately, the US data actually paints a slightly muddled picture. Optimists point to Cities Global surprise index, a gauge that measures how often data turns out better than expected. And this has been running at a seven year high for most of 2017, thanks to a long and broad string of positive readings.
Bloomberg's equivalent US index is at a five year high. But if you look under the surface, then complications for equity bulls soon become apparent. The so-called hard and soft economic data is splitting so dramatically that an Olympic gymnast would applaud. Morgan Stanley's economists reckon this stunning divergence is the biggest since at least 2000.
Softer data points like confidence surveys are running red hot. Consumer sentiment this month shot up to its highest level since 2000, and small business optimism is near its highest reading in 43 years. But real economic data continues to bumble along at the same uninspiring speed. February's underwhelming 0.1% rise in US retail sales was a case in point.
How this is reconciled matters hugely to markets. If the hard data proves stubbornly unmoved by evidence of animal spirits, then investors may just give up on the reflation trade that has dominated markets since last summer. But if the surveys are pointing to real economic upswing, then the stock market bull run may have even further to run.
Now soft data is still data. And the roused animal spirits they indicate is clearly encouraging. It's hard to imagine them not translating into some more consumer spending and business investment.
The US fourth quarter growth was on Wednesday marked modestly up and analysed 2.1%, with better consumer spending making up for the still limp corporate investment. But with US equities at punchy valuations and a reduced likelihood of tax reforms, rising optimism needs to be translated into solid economic and earnings growth. Otherwise, markets might be in for a challenging year.