By contrast, improving US data hastens the moment when the Federal Reserve will raise interest rates from zero.  This, Friday’s announcement of continued strong employment data caused both bonds and stocks to sell off.  US stocks also face other headwinds.  Labor market strength is accelerating wage growth and raising unit labor costs, which will pressure profit margins.  Non-farm hours worked rose 4.9% in the fourth quarter, the fastest quarterly pace since the fourth quarter of 1998 and double the average quarterly gain since 2000.  With output rising only 2.6%, productivity fell.  Finally, the dollar continues to strengthen, breaking out to 12-year highs versus the euro and retesting December’s high versus the yen.

And: 

An analysis of Eurozone earnings by RiverFront’s Chris Konstantinos has revealed a two-speed Europe.  Companies that generate more than 50% of sales outside Europe surpassed 207’s peak profits in 2010 and have continued to climb; they also generate a return on equity (ROE) of 15%, comparable to that in the US.  In contrast, average Eurozone ROE is only 8% and earnings are still well below previous peaks.  We are currently positioned in the Eurozone’s global companies, watching for signs of a pickup on the domestic side.   

David Fuller's view

Here is The Weekly View.

The Euro’s weakness is a bonanza in terms of profits for Europe’s Autonomies (multi-national sector leaders).  In contrast, the Dollar’s strength is compressing profits for many of the USA’s Autonomies.