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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (5709)	2/26/2002 10:42:53 AM
From: John Pitera	Respond to of 33421

German Bus. Sent. Points To Imminent Economic Rebound DOW JONES NEWSWIRES MUNICH -- German business sentiment rose in February for the third consecutive month, beating expectations and offering further indication that a turnaround is imminent in the euro zone's largest economy. The closely watched business-climate index of Germany's Ifo economic institute showed a typical picture of a late economic downturn phase, Ifo said Tuesday. The index's rise of more than two points to 88.7 was entirely based on a jump in its expectations component, which climbed over five points to 101 in February, Ifo said.The evaluation of the current situation, on the other hand, worsened again, with the index falling to 76.8 from 78. "The current situation is still evaluated worse than before Sept. 11," the Ifo institute said. The divergence of the directions of the current-conditions index and the expectations index is typical when the economy is approaching the bottom of a cycle, the institute said. "Such a divergent development in the current conditions and the expectations is typical for a late downturn phase and a nearing ... economic turning point," the institute said. The rise in February marks three consecutive monthly increases in the index beginning in November. The institute didn't do a full survey for December due to a change in the data-release schedule. Economists usually like to see three months of rising business sentimentefore declaring that economic recovery is imminent. The institute further said that February's rise was led by the manufacturing sector and the wholesale sector, while the construction-sector sentiment remained unchanged. The retail sector clouded over significantly, the institute said. The Ifo indicator normally leads the entire economy by a few months. That means that the German economy could reach its low point in this cycle in the second quarter, and then recover in the second half of the year, said Hans-Werner Sinn, president of the Ifo Institute, in an interview with CNBC Europe. "The divergence is an indication that we are close to the bottom ... which we expect to be in the second quarter of this year," Sinn said in a live interview with the financial news broadcaster. "The second quarter is the deepest point, thecovery will come in the second half of this yearinn said that doesn't mean that the European Central Bank should stop cutting interest rates.