Notwithstanding a slightly better than expected Q3 GDP print for Germany and France, the euro zone economy contracted in Q3 as forecasted. Q3 GDP for the region fell .1% q/o/q, the 3rd q in the past 4 of declines. At the same time, CPI rose 2.5% y/o/y in Oct, remaining above the 2% ECB target rate for a 23rd straight month. In the UK, retail sales in Oct fell more than expected. On Greece, the German Finance Minister said they’ll figure out by Tuesday on how to fill the 30b euro gap.

In Asia, the yen is down sharply for a 2nd day to near a 7 month low vs the US$ following the new gov’t turmoil with new elections coming and comments yesterday from opposition leader Shinzo Abe who said “we should set an inflation target and print unlimited yen until we reach that target.” The Nikkei was up 1.9% in response. The Shanghai index fell to a 7 week low after Q3 non performing loans rose in Q3 across the Chinese banking system.

In the US, post election and the subsequent market selloff has the individual investor at the most bearish since Aug ’11 at 48.8 v 39.9 last week. Bulls fell to 28.8 vs 38.5, near the lowest since July according to AAII. Combine this with a very oversold market and we’re close to a short term bounce.

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