Germany's Economic Outlook Taking A Dive

Germany's Ifo business confidence index fell sharply during July, led by its expectations component, which is near the lows of the Great Financial Crisis and the Great Virus Crisis. The current situation component is holding up reasonably well considering that Germany's inflation has been soaring and the country faces a severe energy crisis (chart below).

In any event, pessimism is mounting throughout Europe as evidenced by the -16.9% and -25.3% ytd drops in the EMU MSCI stock price index in euros and in US dollars (chart below). (The US MSCI is down -17.9% ytd.)