European stocks Crisis? What crisis?

Do eurozone stock market investors live in a parallel universe? Eurozone growth forecasts for 2005 have been cut in half since the beginning of the year. And political troubles have even raised doubts about the future of the euro. Yet, European stocks have outperformed every major market so far in 2005. The MSCI index has risen 7%, compared to almost flat markets in the US and Japan, and a 5% gain in the UK. But equity investors are not being irrational. While the economy is suffering, profits ...