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October 28, 2013  Mon 8:11 AM CT

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We're discovering something in these quarterly reports that are coming out now for the big industrials. We are discovering the importance of Europe coming back on line because Europe has, to a large degree, been a total black hole for pretty much every major company.

Europe has, in fact, been a savior this quarter for many companies, a talking point that allows the focus to be lifted from the stalling in the United States because of the paralysis stemming from Washington. So many companies made big initiatives in Europe going into the downturn in 2011 and they have then spent the last two years frantically right-sizing the operations or attempting to staunch the bleeding. That's contributing to what can only be described as a dramatic return to profitability for a continent of 730 million people and it's very much in its infancy.

When I listen to the big industrial companies like DuPont, International Paper, and PPG, I am hearing that the turn, or at least the end of the degradation, occurred literally intra-quarter. It's so early on in the turn that many international companies are JUST BEGINNING to revise up their expectations for less of a degradation--NOT AN ACCELERATION. The verbiage was best caught by Ford, which focused on the notion that the losses simply weren't going to be as big as they thought when they laid out the year.

Even as the European PMIs have been better and we have the beginning of an actual return to growth in countries like Ireland and Spain, the move seems to have caught many analysts by surprise. The number revisions still haven't really occurred. Plus, the run-up in the euro to $1.36 can only help the numbers going forward. Euro strength, again, was not in the numbers. That makes sense when you consider that a year ago the euro was still in question and two years ago this November we were expecting Spain and Italy to blow up, with peak rates in Italy occurring almost exactly two years ago next month.

TheStreet.com logoI think that this turn is blotting out the short-term stalling that we are getting in the United States and, just to be sure, there is no doubt that there isn't a short-term stalling. The combination of the fiasco that is the Affordable Care Act--and that's truly the fiasco in business that you see in the headlines--and the shutdown of the government here has shaken the CEOs in this country. Most that I talk to have very little expectations that things will get better. It's a pox on both houses for certain.

Not everyone has seen a turn. Avnet, huge in Europe, just sees a stabilization. I would characterize Honeywell as seeing just a stabilization, too. Google, which is huge in Europe, didn't even talk about anything good at all occurring. Given that about half of Google's business is currently in Europe, you can see how that company's estimates, still predicated on European weakness, may truly be guided up again. It makes you wonder what Apple, with slightly more than $36 billion in sales in Europe last year--more than a fifth of its revenue--has to say when it reports next week.

But overall, there is a grudging recognition that Europe's become a much better place to do business at the exact same time that we are a much worse place to do business.

I sure wish that the politicians in Washington could see this turn, because it is downright embarrassing. But for the companies that expanded aggressively in Europe, the news is just beginning to turn positive and the first half of 2014 will give you some comparisons so radically positive that you can see why the money will still pour into international companies after this quarter's over.

Disclosures: Cramer's charitable trust is long AAPL and F.
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