Markov Saw Eurozone Improvement Before Economists

The Financial Times reported on Sunday that a closely watched survey of economists (Consensus Economics) was now indicating that the Eurozone would avoid a recession in 2023. The economists in the survey cited lower energy prices, government support and an earlier-than-anticipated rebound in the Chinese economy.

A look at four major stock indices in Europe (through the lens of Markov) shows that state changes in the middle of December led to those indexes moving significantly higher with a modest move higher in the Euro.

The Euronext 100 saw Markov states cross on Dec. 16 of last year. From the time of the state cross through last Friday (Jan. 20, 2023), the index is up 6.75%. The DAX 30 and CAC 40 both saw their Markov states cross on that same day. The DAX 30 is up 8.20% and the CAC 40 is up 8.42%. The Swiss Market Index was a little behind the others - its Markov states crossed on Dec. 22. But since that time, the index is up 4.87%

EURUSD crossed Dec. 15; it is up 1.71% since that time.