State of the European economy in February 2018


The stock market and economy move in sync over the medium-long term. That’s why it’s extremely important to understand the state of a nation’s/region’s economy. Is the economic data improving or deteriorating?
Let’s take a look at European economic data as of February 2018.

Germany

Germany is Europe’s economic engine.
Unemployment
Germany’s unemployment rate continues to fall.

Inflation
German inflation has stabilized under the 2% mark.

YoY change in Producer Prices
Like inflation, the YoY change in Producer Prices is flat.

Business Sentiment
The Ifo Business Climate Index continues to trend higher. This is one of the best leading indicators for the German economy.

Industrial Production
German Industrial Production continues to trend higher.

Conclusion
The German economy continues to grow at a healthy pace. There are no major signs of economic deterioration. This is a long term bullish factor for the German stock market. Here’s DAX on a monthly bar chart.

France

France has the 2nd largest economy in the Eurozone after Germany.
Unemployment
The French unemployment rate rose last month. However, the general trend is still DOWN.

Inflation
The French inflation rate continues to trend higher.

YoY % change in Producer Prices
The YoY % change in Producer Prices has been falling a little.

Business Confidence
French Business Confidence continues to trend higher.

Industrial Production
Despite a dip last month, French Industrial Production is trending higher.

Economic Sentiment Index
France’s ZEW Economic Sentiment Index has been flat for many months already.

Consumer Confidence
France’s Consumer Confidence has also been flat for months already.

Conclusion
France’s economy is growing, although it is a little weaker than Germany’s economy. There are no signs of significant economic deterioration yet. This is a long term bullish factor for the French stock market. Here’s the CAC 40.

Italy

Italy has the 3rd largest economy in the Eurozone.
Unemployment
The Italian unemployment rate is trending lower.

Inflation
Italian inflation is trending lower.

Business Confidence
Despite falling a little over the last 3 months, Italian Business Confidence is still trending higher.

Industrial Production
Italian Industrial Production has been falling over the past 3 months and flat over the past year.

ZEW economic sentiment index
Italy’s ZEW economic sentiment index has been trending higher.

Consumer Confidence
Italy’s Consumer Confidence has been flat over the past few months.

Conclusion
Italy’s economy is growing, although it is weaker than France’s economy, which is weaker than Germany’s economy. This is a long term bullish factor for the Italian stock market. Here’s FTSE MIB. It’s at multi-year resistance.

4 comments add yours

  1. We had a very positive and healthy employment report at 8:30 am, and the u.s. Stock market goes down 666 points?

    • The stock market doesn’t always go up on positive economic data and doesn’t always go down on negative economic data.

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