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Monday, June 14, 2010

The Global Recovery and Backward Looking Data

The AP details:

Stocks extended their climb to a third day Monday following signs that Europe's economy might not be badly hurt by its debt crisis.

The Dow Jones industrial average rose about 80 points in morning trading after rising 312 points in the past two days.

Major European markets rose following a report that industrial production in the 16 countries that use the euro grew more than expected in April. The euro also rose, climbing back above $1.22 for the first time since June 4.

The production report was encouraging because investors have been concerned that government spending cuts aimed at slashing debt would hurt Europe and slow a global recovery.
Below details what the media (and markets) seem to be excited about. My issue? This is backward looking data. Austerity measures, uprisings, and market sell-offs were broadly announced in May and June. These figures are from April.

Source: Eurostat