Investors have rediscovered their appetite for stocks at the same pace as the media has lost its enthusiasm for writing about the euro area’s debt crisis.
The CHART OF THE DAY shows in blue the word count for “debt crisis” from news feeds on the Bloomberg since March 2011. The red line tracks the inverse performance of the Euro Stoxx 50 Index of the euro area’s biggest stocks.
“Market sentiment has shifted to say the glass is potentially not half empty, but actually half full,” said Mouhammed Choukeir, who helps oversee $8.1 billion as chief investment officer at Kleinwort Benson in London. “The market is less concerned by the euro-zone crisis and is much more focused around growth. That is what we characterize as the animal spirits of the market.”
The Euro Stoxx 50 slumped 17 percent in 2011 as bailouts for Greece and Portugal triggered speculation that other countries in the 17-nation currency area would struggle to pay back their debt. Greece said today that private creditors holding 85.8 percent of eligible bonds will take part in the biggest sovereign restructuring in history.
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