5 Days of Fearful August Trading Provide ETF Insights

NEW YORK (ETF Expert) -- Five days in August cannot tell you much about the future direction of market-based securities or their respective asset classes. They may, however, be able to provide insight into the more pressing issues or lingering worries on the minds of investors.

For example, many folks believe that Europe's sovereign debt crisis effectively ended in 2011 when the head of the European Central Bank declared it would do "whatever it takes" to preserve the euro. Yet, the four worst borrowing-n-spending offenders in the eurozone -- Portugal, Italy, Greece and Spain -- chalked up the poorest five-day performances of any unleveraged vehicles in the entire exchange-traded fund universe. Perhaps the "PIGS" problem still has a way to go before reaching a resolution.

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Europe's Debt-TO-GDP Offenders Fall Off Their Horses Again  
             
            5-Day % For Aug
             
Global X FTSE Portugal (PGAL)       -12.2%
Global X FTSE Greece (GREK)       -7.5%
iShares MSCI Italy (EWI)       -7.4%
iShares MSCI Spain (EWP)       -6.2%
iShares MSCI Financials (EUFN)     -3.5%
             

In truth, not everyone concurs that peripheral countries in Europe are going to face debt scrutiny once again. Heck, Argentina has technically defaulted on its sovereign bonds, while stocks in Global X Argentina (ARGT) have fared better than the ETFs for Portugal, Italy, Greece or Spain.

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Does the selling have to do more with the Russia-Ukraine conflict, then? That may be an easy target, but my sense is that deflation and headline bank bailouts are reigniting old doubts about the euro-zone's ability to put recession in the rear-view mirror.

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