Credit Suisse has raised its price target for the Eurostoxx 50 from 3,600 points to 3,900 points for the year; the index is listed at around 3,600 points today. In total this would amount to an increase of 25 percent and the further increase would put European stocks among the best performing stocks in the world this year.

Credit Suisse has different reasons for its higher price target for the European index. The bank finds, for example, that Europe’s recovery is looking more real every day and investors are taking notice. Below you can see one of their best charts that shows how investors have mostly left North American ETFs in favor of other regions, especially Europe:

The chart shows clearly that about 20 billion dollars have left the United States of America for greener pastures, while Europe and the Broad Developed Markets in general have seen an inflow of 10 billion dollars.

This is all because of the European Central Bank, which has recently kicked off its QE program. The US Federal Reserve, conversely, is looking at tightening its monetary policies by raising interest rates. Now that the outlook is improving for Europe, many are taken by surprise.

Below you can see the ‘macro surprises index’ of Credit Suisse. A negative figure indicates that the macro-economic data was worse than expected by analysts and a positive figure points to the opposite. Europe’s index is now at the highest level in 2 years.

Good news for the one, but bad news for the other. Credit Suisse admits to be overweight on Italian stocks considering the changes that are going on in the background. The bank stated that there is much more reform going on than investors realize.

France is looking less positive in the eyes of the bank, because the country has much more work to do on the fiscal side than Italy. The momentum for reform is weak in the country and there are barely any signs of cyclical revival as is the case in the rest of Europe, says Credit Suisse.