Montreal, Canada

Among the major industrialized economies, Germany ranks as one of the best performing economies this year in the G-7. A plunging EUR in 2010 has been a boon to exports, which grew 29% in June compared to 12 months earlier.

German GDP in the second quarter expanded by 2.2%, almost 9% on an annualized basis – the best performance since reunification 20 years ago. Germany had a trade surplus of $77 billion dollars for the first five months of the year, according to latest statistics.

German stocks, as measured by the Frankfurt DAX Index, have also been among the best performers in Europe this year and have over the last 12 months shown a 17.5% total return in EUR. On most days when European stocks rise, German blue-chips usually fare better and also have managed to decline less on days when equities are hammered.

German stocks sell at 16 times trailing earnings and yield 2.7%. The DAX remains about 27% below its all-time high.

Major German exporters like Siemens, BASF, Daimler, Hochtief and Volkswagen have witnessed a surge in sales – mainly to the emerging markets.

More than any other eurozone exporter, Germany is home to the largest concentration of manufacturing powerhouses; China was primarily responsible for the big rise in industrial orders during the first half as infrastructure projects boost demand for high-end German engineering.

A sharply lower EUR has propped up German exports and should continue to support the broader economy even as spending cuts curtail government outlays. Stocks are vulnerable to more selling pressure this summer as credit and banking fears dominate global markets. A correction will provide a better entry point this fall for value investors coupled with a weaker EUR. Germany looks brightest among the G-7 along with Canada. Wait for cheaper prices.