We just recently saw positive GDP numbers in France and Germany. Both economies grew 0.3 percent in the second quarter after contracting to start the year. Germany’s growth was the most surprising, considering that its GDP fell 3.5 percent in the first quarter.
Investors have been waiting for some kind of bright spot in a region that has been battered for more than a year now. But yesterday, Mark Hurd, Chairman and CEO of Hewlett Packard , with operations in more than 170 countries, told me not to believe the hype.
His most recent quarter, while better than expected on both the revenue and earnings lines, still showed a weak European region.
“Europe remains blah,” he told me in our phone conversation right after the company released its quarterly numbers. Investors will want to be cautious on companies that are largely dependent on this region of the world.
On the other hand, Hurd said business in China is vibrant, and he said not to believe the recent scare of a slowdown there. “China’s performance lifted our entire Asian region,” he said. “It is doing very well.”
As far as the U.S. is concerned, Hurd stopped short of predicting a true turn around, instead using the word “stabilizing” very often in our conversation.
China’s markets remain very much in the news, and I’ll have some additional thoughts on that in my next blog post.
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