Credit Suisse: Why Germany Will Beat The Critics And Blow Away Your Expectations

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Credit Suisse’s global strategy team believes markets continue to undervalue Continental European markets, most importantly Germany.

Despite Europe’s debt and budget problems, the German economy has actually been performing remarkably well.

In many ways, its economy is at record levels.

First of all, European consumers have actually held up well over the stretch

Source: Credit Suisse

Valuations in Europe are also cheaper than in the U.S. generally

Source: Credit Suisse

You should focus on Germany, who has benefited from some of the recent Eurozone crisis

'Given its export orientation (with exports to outside the Euro-area being equivalent to 25% of GDP), Germany in particular benefits from the recent fall of the euro. As a consequence, the year-on-year change in exports orders and industrial production in Germany is at record levels.'

Source: Credit Suisse

Export growth has been enormous, which much thanks to the weaker euro and European demand

Source: Credit Suisse

Industrial Production expansion has been huge as well

Source: Credit Suisse

Germany's economy dwarfs much of Europe

Source: Credit Suisse

Momentum is strong

Source: Credit Suisse

Leading indicators are looking good

Source: Credit Suisse

With very healthy growth in the cards

Source: Credit Suisse

Which means markets are far too pessimistic on the nation

'PMIs in Germany are consistent with nearly 3% GDP growth compared with consensus forecasts of 1.8% this year and 1.7% in 2011 (our economists forecast 2.3% Euro-area GDP growth this year and 3.3% next year, i.e. nearly double the consensus estimates for 2011).'

Credit Suisse is overweight Continental Europe, and are obviously particularly optimistic about Germany.

Source: Credit Suisse

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