This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Last Gasp Before Euro ETFs Slide

NEW YORK ( ETF Expert) -- Many member countries of the eurozone have had to agree to cut spending and increase taxes. Since there is no government stimulus to go around, unpopular austerity measures have placed a noticeable burden on businesses and consumers to grow respective economies.

Unfortunately, consumers do not appear to be capable of ending the region's recession. In the 17 countries using the euro, wages are growing at the slowest pace since the final quarter of 2010. Spain, Italy and Portugal are battling a deflationary spiral where lower prices are hampering wages and demand. Worse yet, the entire area's unemployment rate is trending higher; the eurozone's rate currently sits at a record high of 11.9%.

Granted, European stocks have had a pretty decent run... and why shouldn't they have experienced some success? The president of the European Central Bank (ECB) had vowed to do whatever would be necessary to protect the euro 7-1/2 months ago. European stocks do tend to move higher when the rest of the world's markets are climbing. Additionally, countries like Germany and Austria have been relatively resilient, providing Europe with some reason for hope.

On the other hand, hope has not translated into a renaissance. In fact, hope is so far out on the horizon that harsh realities may soon take a chunk out of the region's currency as well as unhedged European Stock ETFs.

Consider a handful of realities that currently exist. European institutions that are responsible for disbursements of loans to keep Greece afloat recently left Greece because the Athens government refused to release 25,000 government workers. The Italian government, nearly impotent after its anti-austerity election weeks ago, is asking for more "flexibility" to deal with its deficit.

French President Francoise Hollande is not even asking for flexibility, he is dictating. Essentially, he expressed that the French government would not cut its deficit spending to 3% of GDP.

If that weren't enough, the International Monetary Fund (IMF) believes many European Union banks are not only beleaguered by losses associated with ownership of sovereign country debt, but they are also struggling with additional losses on bad loans made to households and businesses.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.24 0.00%
FB $117.81 0.00%
GOOG $701.43 0.00%
TSLA $211.53 0.00%
YHOO $36.94 0.00%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs