Germany's economy contracted during the last three months of 2011, sending markets down sharply. - 

To paraphrase Rick Blaine in the movie "Casablanca": we’ll always have Europe. Or so it seems.

The markets fell before the open and struggled most of the day on word the mighty German economy contracted in the last three months of 2011. Industrial output in Spain was also down sharply. The specter of the Euro-crisis dragged the markets down yet again.

We decided to check in with Doug Cote, chief market strategist at ING Investment Management, and he offered some reassurance. While you can't ignore Europe, Cote says today's headlines were merely background noise.

His attention is on China, where signs are pointing to the end of a housing bubble. That could cause a hard landing for China's remarkably strong growth and spell trouble for the U.S. economy.

In the meantime, Cote says it's time to put some blinders on and stay optimistic about the strong fundamentals stateside. He cites surging corporate profits, improving manufacturing and declining unemployment.

What's more, Cote says, is that if you take the aggregate numbers, consumer spending and incomes are at record high levels. That's not shabby when your economy relies on consumer spending for 70 percent of growth.

To paraphrase "Casablanca" once more, I think this is the beginning of a beautiful recovery.

Follow David Brancaccio at @DavidBrancaccio