These two Bloomberg headlines from this afternoon speak to the positive setup I see for much of our non-U.S. exposure:

With U.S. Stocks at Peaks, Gap With Europe Hits Widest Since ’12 

(Bloomberg) — When it comes to stocks, the rift between Europe and the U.S. keeps on widening. Companies in the Stoxx Europe 600 Index trade at their lowest valuations in more than four years relative to those in the S&P 500 Index, which hit an all-time high on Tuesday. And yet, investors are still shunning them. The regional gauge dropped 0.1 percent on Wednesday, halting a two-day gain. “Nobody loves and wants Europe,” said Benno Galliker, a trader at Luzerner …

Euro-Area Economic Growth Gathers Pace as Orders and Prices Rise 

(Bloomberg) — Euro-area economic growth accelerated to its fastest pace this year as growing order books prompted companies to add more workers and raise prices. A Purchasing Managers’ Index for manufacturing and services rose to 54.1 in November from 53.3 a month earlier, IHS Markit said on Wednesday. That’s the strongest level in 11 months and above the 50 mark that divides expansion from contraction.

For one, as I stress here on the blog ad nauseam, bearishness among the masses means bullishness among the smart money. And, for two, you want to own under-appreciated stocks when the economies of their respective domicile’s are looking up.

The obvious riposte to my constructiveness on Europe is, “but there are so many problems, Brexit, populist uprisings, and pending elections and referendums.” My reply is, ‘yep, that explains the nice setup. Which, again, is low relative valuations, bearish sentiment and improving economics.’

But we gotta be patient…