2. EUROPE CAN’T GET OUT OF ITS OWN WAY
|The past ~week has presented investors with one the worst stretches we’ve seen from the perspective of economic releases throughout the entirety of our #EuropeSlowing theme, rendering our Real GDP tracker for the region to the slowest pace of growth since 4Q14.
Lowlights include, but are not limited to:
We probably sound like a broken record here, but we continue to believe global investors are unlikely to be rewarded for allocating assets to a [now-delayed] European economic recovery story here in Q4.
To that tune, our patience in not backing off the short side of Europe is being rewarded with the EuroStoxx 600 Index down another full percent today after making a lower-high last week.
The EUR is down -0.7% today and making fresh ~18-month lows vs. the USD, which is also confirming of our dour view on the Eurozone economy and the ECB’s likely path forward for monetary policy. Even Spain – which is narrowly tracking in #Quad1 after the OCT Composite PMI data (↑ +1.2pts to 53.7; TRENDING lower) and has arguably the best GIP Model outlook in the world – continues to make a series of lower-highs and lower-lows (IBEX).