Perhaps the most effusive industrial was another company that had been held back by Europe: Johnson Controls (JCI). Consider this gem: "Our European automotive business turned profitable" and the company had 4% growth in its building efficiency business, which is said was "a real surprise." The company says it expects to see "good sequential improvement" in its hard-hit auto business, which will make the year finish stronger than expected.
It's not just industrials. VF Corp. (VFC) saw strength for its offerings in a host of European countries, including Germany, Poland, Austria and Switzerland. VF was also very positive on the U.K., making it one of many companies citing strength in that country. The U.K., if you listen to these companies, may be catching up to the U.S. when it comes to growth.
But perhaps the best tale of the turn came from Manpower (MAN), the temporary-employment company with 64% of its business in Europe. This was an amazing European quarter for the company, and I quote: "Revenue exceeded expectations due to modestly improving trends in France, Italy and Spain." This was the first company to talk directly about business improving in Italy, with this quote: "Revenue in Italy was $278 million, which was flat with the prior year in constant currency," and, with that, the company said "We seemed to have hit the bottom in Italy as we have witnessed notable improvements in year-over-year growth trends compared to the 2 last quarters."
Finally, the most encouraging statistic from last week? That would be SAP's (SAP) declaration of a bottom in Spain, where business is now improving in double-digits. Now, you bring in SAP to streamline employment, so you could say that ultimately Spain's 27% unemployment rate isn't going to go down because SAP's business is going up. I think the more important takeaway, though, is that the Spanish companies are actually spending money to bring in SAP. They sure weren't a few quarters ago, when Spain was in free fall.Now, what do we do with all of this? I think you can, of course, play European that make sense. You can do it with an ETF like the Vanguard FTSE Europe ETF (VGK), which tracks many of the best companies in Europe and sports about a 3% dividend. It sure hasn't done anything year to date, advancing from $49 to just $51, so I can't blame anyone for wanting to buy that. We are debating buying it for my Action Alerts PLUS charitable trust.
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