"Volatility comes from people having diverging views," he said. "In the absence of views, the market is inactive and therefore it's quite clear there's neither direction nor activity."
The U.S. gross domestic product (GDP) data for the first quarter is a key part of Gupta's expectation the pace of economic recovery may disappoint. Last week, data showed the U.S. economy contracted by 2.9 percent in the first quarter, much more than initially estimated and the worst performance for five years.
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"The U.S. GDP number will be lucky to come in at 1.6-1.8 percent this year," compared with a consensus forecast for around 3 percent at the end of last year, he said. DBS has cut its growth expectation to a below consensus 1.6 percent, with 2014 likely to mark the third year running that forecasts for GDP growth of more than 2.5 percent will be disappointed, he said.
"Each of the last two years, the final GDP numbers came in below 2 percent. So for three consecutive years, the sense of optimism about GDP growth has been totally misplaced," he said. "Everybody says the U.S. is growing very strongly and the rest of the economies are growing very strongly, but somehow it seems to me the data doesn't seem to bear this out."
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To be sure, he noted that May new housing data showed a huge 19 percent jump, while non-farm payrolls data is showing a "not bad" around 200,000 jobs being created a month, but he added, "consumption drives GDP and I'm not seeing the consumption number go up."