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Europe Isn't as Sick as the Crowd is Making Out

ByBrad Thomas
Published 12/15/2011, 09:21 AM
Updated 07/09/2023, 06:31 AM
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Beware of being a bear as Europe isn't as sick as the average punter is making out. Economic stats are actually surprising to the upside!

One would be forgiven for thinking that it is all over for Europe. But what investors don't realize is that because of all the doom and gloom promulgated by the press of popular opinion economists/analysts have overreacted and downgraded their expectations which has resulted in actual economic data releases coming in well ahead of doomy expectations.

What is the Citigroup European Economic Surprise Index? In essence it is an index of expectations vs. actual economic data releases. If it is "trending" higher it suggests that economic data releases are coming in ahead of expectations.

Citigroup European Economic Surprise Index



Remember it is not what is talked about in the press that is important rather it is the degree to which it has been priced into the market. Based on the  Citigroup European Economic Surprise Index it would appear that everything talked about in the press plus a whole lot more has already been priced in. This is actually a very bullish condition!

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