Will the ongoing battle between bulls and bears be over soon? I think the next few months of U.S. economic data could be key in deciding an inflection point in market sentiment, which—despite the record highs seemingly seen day after day—remains quite cautious, if not outright bearish.

I’ve been pointing out a good part of 2019 that even though the contemporaneous economic data remains soft, there is growing evidence of the bottoming of the industrial cycle. Nevertheless, consensus still sees economic risks to the downside. My base case remains that the 2020 economy will be better than the 2019 economy, as the cumulative headwinds to global growth fade and become tailwinds, particularly in US, China and Japan.

Let’s look beyond the screaming headlines at the actual data.

● Financial conditions: The Goldman Sachs Financial Conditions Index (GSUSFCI ) have improved steadily in the past 3 months, and is now at the easiest level since March 2018. This index, which uses markets-based measures to estimate financing conditions, has seen a broad story of easing financial conditions and, importantly, this is the exact opposite of 2018 where financial conditions tightened steadily in the fall of 2018.

● This accommodation is so substantial that the investment bank ...

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