Looking outside of Germany, it will be a dire situation before the European Central Bank will step in and take action to stem the crisis given its reluctance to do anything that could go against their mandate to manage inflation.

We heard last night it was unlikely the ECB would fund a recapitalization of one of Spain's largest lenders, Bankia ( BKIA.MC), despite its financial woes.

BlackRock expects the ECB to take action only when Italian and Spanish 10-year bonds spike to 7%-8% and short-term yields revisit their 2011 highs.

Given this backdrop, coupled with the strain Spanish banks pose, it's important that investors maintain a careful balance of investments. At the current crossroads, BlackRock is recommending investors "search for long-term value in risk assets with a buffer of safe-haven bonds and cash against short-term price declines. The latter is no investment strategy for the long run because it offers negative real yields. But it will help weather the storm and can be reversed if markets snap back."

Multinational companies with strength in overseas sales is one way they recommend investing in equities, with a focus on financials, dividend payers and domestically focused European companies when their valuations hit bottom. Multinationals are a crowded trade currently, so it will be necessary to do your homework in the space.

Another strategy one should consider is investing in a handful of quality domestic names in the U.S. We are beginning to see strength in housing and the consumer is benefiting from low oil prices. Toll Brothers ( TOL) and TJX Cos. ( TJX) come to mind as examples of stocks that have benefitted, but continued strength in these types of names will be contingent on our domestic market, making the jobs report this Friday very important.

-- Written by Lindsey Bell in New York.

>To follow the writer on Twitter, go to Lindsey Bell.

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