Under the radar: Some trends are obvious enough and visible to all investors. Others are more-subtle, but are just as potent, and these often slip 'under the radar.'Case in point: German business confidence, which climbed to a nine-month high ---- suggesting Germany's economy is poised to rebound.
According to the Ifo Institute index of business sentiment, sentiment in Germany increased to 87.3 in July from 85.9 in June. It was the index's highest reading since October 2008, or when the acute phase of the global financial crisis started.
The significance for investors? The reading provides additional evidence that Germany's business community believes commercial conditions are improving, and that reading, combined with stronger than expected industrial orders, suggests Germany's economy will begin to expand soon. Moreover, a recovery in Germany's $2.86 trillion economy bodes well for the 16-nation euro-zone, or as economists say, 'As Germany's economy goes, so goes the euro-zone.'
Further, Europe's economic health is critical to the global recovery. Due to decreased consumer spending in the United States, other major economic regions (Europe, China/Asia, Brazil/Latin America) must increase both consumer spending and commercial activity to serve as growth engines for the global economy. Without those growth engines outside the U.S., the global economy will not be able grow at an adequate rate. Hence, additional signs pointing to Germany's recovery represents good news for investors.
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