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Economy in Brief

German Financial Experts Are Upbeat On Prospects
by Robert Brusca   January 18, 2011

The German financial experts that respond to the Zew survey are a bit more upbeat this month. The expectations reading jumped quite a number of notches from a December value of 4.3 to a January reading of 15.4. Still, expectations reside in a weak position. Expectations are stronger than their current value most of the time, 65% of the time. But the current reading which advanced to 82.8 from 82.6 remains strong. It is stronger than this only 2% of the time so the 0.2 unit increase in that index this month is even more impressive. Amid continuing concerns about growth in the Zone it’s an especially important signal.

Looking at stock market sectors, expected profitability as gauged by the Zew financial experts is now at its range high point for consumption and vehicles. While the reported retail sales have not been blockbusters the Zew experts see the consumption and vehicle-producing sectors as being as attractive as they have been since April 1999. Telecoms are the laggard sector.

For stocks as a whole expected profitability continues to climb, indicating expectations of an ongoing recovery. Germany countries to do well but the problems of other countries in the Zone have raised question marks about Euro-growth in general. The Zew index and the Zew experts remain upbeat.

ZEW Economic Index For Germany
  Level of Zew Index   Averages
  Jan-11 Dec-10 Nov-10 Yr Ago 3Mo 6MO 12MO
Current 82.8 82.6 81.5 -56.6 82.3 70.6 21.9
Expectations 15.4 4.3 1.8 47.2 7.2 4.0 21.9
Current 96.8 96.7 96.1 21.4  
Expectations 51.7 44.4 42.8 72.4  
Percentiles are readings in this period as percentile of the full range of values back to 1/92
Count Percentiles: reading is stronger than this 'XXX' percent of the time...
Current 2.0% 2.0% 2.0% 59.1%  
Expectations 65.4% 77.0% 78.3% 43.5%  
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