Once again, the flood of momentum-chasing hot-money provided by the world's central banks' printfest is leading investors to push up European equities markets to the highest level since 2011 amid optimism that the region is recovering (top-down GDP dashed that hope this morning [3]). Furthermore, since earnings are apparently the mother's milk of stocks, investors are entirely ignoring the fact that earnings expectations for the European region are collapsing to their lowest since September 2009. As Bloomberg notes, "investors in Europe continue to buy hope for an upcoming earnings recovery," but as Tristan Abet of Louis Capital warns, "there is a limit to that rationale... the risk is that the market loses patience."
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Chart: Bloomberg