While economic data are always important, how they fare relative to expectations is what matters most about it to investors. Even data that reflect lackluster economic growth can be welcome news for a market braced for something worse. Likewise, the same data points may not be such good news if market participants had priced in expectations for a stronger pace of growth.      
 
It isn’t surprising that the CESI has been falling during the first half of 2015. After all, this is the fifth year in a row that economic data have been disappointing in the first half of the year. The reasons for this pattern include first half increases in taxes and cutbacks in government spending, natural disasters and extreme weather, debt-related political showdowns, and the end of central bank stimulus programs, among others. Some of these drivers appeared again and impacted 2015.
 
Fortunately, in every one of these recent years the data turned around during the summer months and the CESI bottomed around midyear and generally rose during the second half, ending the year back near where it started.
 
We expect better second half economic performance again this year.
 
In recent years the bottom in the CESI has come as early as April and as late as August. This year it may have bottomed in June. Another recent year that saw an early bottom in the CESI was 2013. In fact, the pattern of the CESI in 2015 is increasingly starting to resemble that of 2013. This similarity has extended to the stock market, as well. The performance of the MSCI World Index has so far been similar to the pattern it took in 2013.
 
There are plenty of reasons why the similar pattern may not continue over the remainder of the year including the potential impact of rate hikes by the Federal Reserve (Fed), fallout from a potential Greek default, the changes that may come from European elections later this year, among others.
 
On the other hand, solid economic data that support rate hikes by a data-dependent Fed, a resolution to the Greek “crisis” one way or another that brings an end to the uncertainty, and the return of earnings growth as the drags from currency and falling oil prices begin to ease may support the global stock market and result in a repeat of the 2013 pattern.
 
If the MSCI World Index does continue to track the 2013 pattern, we could see a further dip in the weeks ahead but the pattern suggests the index could go on to post mid-single digit gains by year-end. [Editor’s Note: One way to play this index is with the iShares MSCI World exchange-traded fund.]
            

Kleintop is the chief global investment strategist with Charles Schwab.