Lack of US data is complicating economists’ jobs

The lack of US data is complicating the economists’ job. The problem should be solved in the coming weeks. Meanwhile, the WEI remains available and is pointing to a slower pace, however it already underperformed in the recent past to recover later, showing the resilience of the US economy, while November Empire State Manufacturing Survey (New York Fed), showed an improvement in the current conditions and finally, S&P500 earnings forecasts continue to be smoothly adjusted upwards.
Separately, as a value investor, we have been positive on Euro Area equities for several years mainly because valuations were more attractive. In 2025, finally, the Euro Area outperformed the US market, meanwhile, in general, our main valuation metrics continue to conclude that the Euro Area is more attractive, so we remain bullish on EA equities.

Assessing the US economy

Assessing the US economy pace without data is becoming more complex, the problem should be solved in the coming weeks. Meanwhile, the WEI (Weekly Economic Index), one of our preferred measures, remain available, however from the “10 different daily or weekly series, to provide a signal of the state of the US economy”, only 6 are available, as “Continuing claims for unemployment insurance”, “Initial claims for unemployment insurance”, “Fuel sales” and “Electricity output” are missing. So, the WEI is now at 2.00%, below moving averages and below a long-term trend (please see graphs below).
In the recent past, figures had already adjusted, during a short period of time, to recover later, showing the resilience of the US economy.
Separately, the Federal Bank of New York, released yesterday the results from the monthly “Empire State Manufacturing Survey”, “business activity increased at a solid pace” in New York State in November (survey responses between 3 and 10 of November). The “headline general business conditions index rose eight points to 18.7; the fourth positive reading in the last five months”, while the future business conditions index adjusted slightly (please see graph below).

Currently, is definitely more difficult to foresee how the economy is performing and would evolve, due to the lack of information. In the meantime, the earnings season clearly surpassed the forecasts, showing that sell side analysts were conservative vs. final figures, while forecasts continue to be smoothly adjusted upwards.

Euro Area equities

As a value investor, we have been bullish on Euro Area equities for several years, mainly because valuation, lower forward PE and higher ERP (Equity Risk Premium). In 2025, finally, the Euro Area stock market outperformed the US market, roughly 6%YtD, however, if we add the currency gains, the excess performance almost tripled. The outperformance is mainly justified, by Euro Area multiple expansion, the Euro Area, by the end of 2024, was trading at 13.1x forward earnings, while currently is trading at 15.5x; meanwhile the S&P500 was trading at 21.7x by the end of 2024, vs. currently, 22.4x.
Concerning the ERP, the conclusions are similar, by the end of 2024 the ERP at the S&P500 was close to current levels, while the ERP at the Euro Area was roughly 120/130bp above.
The Euro appreciation is, usually, negative to the Euro Area economy, as the impact is like higher interest rates, lower growth, nevertheless we remain bullish on Euro Area equities, valuation, namely forward PE and ERP continue to be more attractive, while the PEG is lower in the Euro Area than in the US; 2026 forward growth consensus is 15% in the Euro Area while in the US, figures are close to 13.5%.

US – Manufacturing Business Outlook Survey (NY Fed)

Source: Business Leaders Survey, New York Fed (Federal Reserve Bank of New York)

US – Manufacturing Business Outlook Survey (Philadelphia Fed)

Source: Federal Reserve Bank of Philadelphia (Manuf. Business Outlook Survey)

US –Weekly Economic Index (Dallas Fed)

Source: Federal Reserve Bank of Dallas, AS Ind. Research

US –National Financial Conditions (Chicago Fed)

Source: Federal Reserve Bank of Chicago, AS Ind. Research

Forward PE* vs. forward earnings growth (proxy)

*Forward Multiple – The current index divided by the 12 months forward earnings consensus (proxy). Historically, lower figures, namely below average, could indicate the stock market is undervalued and vice-versa. It is easy to calculate, straightforward, however it does not take in consideration the level of interest rates
Source: Consensus, AS Ind. Research

Forward Multiple (proxy)

Implied Equity Risk Premium (proxy)*

*ERP – the implied equity risk premium is our preferred measure to value the equity market. Basically, is a Dividend Discount Model, based on several premises that we keep over time. The historical data allows us to have a quantitative opinion regarding the equity market. The ingredients are, earnings consensus proxy, interest rates, 10-year government bonds and finally, inflation data, namely core data. Higher figures vs. historical data indicates the stock market could be undervalued and vice-versa.
Source: Consensus, AS Ind. Research

Disclaimer

This information is merely an auxiliary means of analysis to be used by its recipients, who will be solely responsible for its use, including for any losses or damage that may, directly or indirectly, derive from. The data herein disclosed are merely indicative and reflect the market conditions prevailing on the date they were collected. Thus, its accuracy and timing must absolutely be confirmed before its usage. Any alteration in the market conditions shall imply the introduction of changes in this report. This information/this opinion may be altered without prior notice and may differ or be contrary to opinions expressed, because of using different assumptions and criteria. The analysis contained herein is based on numerous assumptions. Different assumptions could result in materially different results. This information is not an offer to sell or a solicitation to enter any deal or contract. It consists of data compiled by or of opinions or estimates from AS Independent Research and no representation or warranty is made as to its accuracy or completeness. Reproduction is not allowed without AS Independent Research permission.
This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. 3Comma Capital does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.

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