The European equity markets spiked significantly amid a widespread easing in the level of risk aversion in October. There were three main reasons that the market’s fears were dissipated:

1) though sluggish, macroeconomic indicators have yet to show any signs of an imminent recession.

2) Companies posted solid results for the third quarter, although caution is still the watchword whenever CEOs choose to give guidance on their short-term outlook.

3) The political solutions proposed at the European Summit to resolve the sovereign debt crisis were well-received to begin with by the financial markets.