Italian stocks aren't letting a recession hold them back

Italy's back-to-back economic contractions to end 2018 put the country in recession and its stock market, like most of Europe, suffered. Things aren't looking to get much better this year, as country has a projected growth rate of 0.1%.

Yes, but: Since Dec. 27, Italy's benchmark FTSE MiB has been on a tear, rising to bull market territory and outperforming broader European stocks and the S&P 500. (The S&P 500 hit its lowest point on Dec. 24 and the FTSE MiB hit bottom on Dec. 27.)

What's happening: It's been a rally based on relief, says Joseph Trevisani, senior analyst at FX Street who just returned from a trip to Venice.

"Statistics have been a bit better than expected, or more accurately not as bad as feared. Domestic politics are tilting a bit to the League, which is viewed as more business friendly than the 5 Star, with which it shares power."

Between the lines: Most important to the bounceback, Trevisani says, "the Italians are clearly optimists."

Flashback: Markets at the start of Italy's technical recession