Thu, Sep. 22, 10:52 AM
- Facing criticism the ECB's negative rate regime is crippling profits for EU banks, Mario Draghi says overcapacity is what's really hurting the sector. "The ensuing intensity of competition, exacerbates this squeeze on margins."
- A Citigroup report begs to differ: It notes share prices of banks in negative interest rate countries have fallen far more than those of lenders in regions with positive rates.
- Related ETF: EUFN
- Notable banks: Deutsche Bank (NYSE:DB), Santander (NYSE:SAN), Credit Suisse (NYSE:CS), ING (NYSE:ING), BBVA (NYSE:BBVA)
Tue, Sep. 6, 3:17 AM
- The ECB has passed the €1T mark for its controversial purchases of government bonds, putting pressure on policymakers to address the scarcity of available assets when they meet in Frankfurt this week.
- Despite being well beyond the halfway point of the €1.7T program, inflation remains virtually non-existent.
- The latest figure from Eurostat showed eurozone prices rising by 0.2% in the year to August - well below the central bank's inflation target of just under 2%.
- ETFs: EUFN, BUNL, BUNT, GGOV
Thu, Aug. 25, 4:12 AM
- The German Ifo Institute's business-climate index has dropped to 106.2 in August from 108.3 in July and missed consensus for a rise to 108.5.
- The current-situation reading fell to 112.8 from 114.8 and undershot forecasts of 114.9, while the expectations print dropped to 100.1 from 102.1 and missed estimates of 102.5.
- The DAX takes a plunge and is -1.13%, although the euro remains steady and is +0.1% at $1.1273.
- CESifo Web site
- ETFs: FXE, EUO, EWG, ERO, DAX, EUFN, GF, DRR, DXGE, DBGR, HEWG, ULE, EUFX, EWGS, BUNL, URR, BUNT, FGM, GGOV, QDEU
Sun, Jul. 3, 2:30 PM
- via Morgan Stanley:
- "The bottom line is that Brexit is ultimately a political crisis and one that is not likely to be resolved in a hurry. There will be many twists and turns in the path to ultimate resolution.
- "There may yet be circumstances that give rise to bigger systemically risky events. For now, we don't think we are quite there and we feel that the current architecture of the global financial system is more resilient than it used to be when the last big storm hit us.
- "That said, caution is clearly warranted. The global economy was not in great shape pre-Brexit and is now worse. There is likely to be more downside to come, particularly in European equities and in GBP.
- "We see US assets across the spectrum - stocks, FX, credit and government bonds - as relative safe havens, and parts of securitized products, particularly US resi credit and broad exposure to US housing, as being relatively insulated."
- ETFs: FXE, XHB, ITB, EUO, REZ, ERO, EUFN, DRR, CEE, TRF, PKB, ULE, GUR, EUFX, ESR, URR, IFEU, HOML, HBU, HBZ, NAIL, HOMX, CLAW, DBSE, FXB, EWU, GBB, EWUS, FKU, DXPS, DBUK, QGBR, HEWU
Tue, Jun. 28, 7:13 AM
- That $35B is through 2018, and it represents an 11% decline from what profits would have been without the economic shock of the Brexit, says Goldman. U.K. banks will suffer the most, with Nordic lenders least exposed.
- The team cuts Barclays (NYSE:BCS) to Neutral from Buy, citing "heightened operational risk due to passporting (system that lets EU members service clients in all of the bloc's states)."
- After the carnage of Friday and Monday, it's bounce day today. Lloyds (NYSE:LYG) +6.1%, RBS +4.05%, HSBC +1.7%, BCS +2.3% premarket.
- European lenders: DB +2.8%, SAN +2.45%.
- ETF: EUFN +4%
Mon, Jun. 27, 12:19 PM
- An attempt at an early rally failed badly and Europe ended closing pretty near session lows, with the Stoxx 50 down 2.9%. Germany (NYSEARCA:EWG) fell 3%, as did France (NYSEARCA:EWQ). Italy dropped 3.8% and Spain 1.5%. The U.K. (NYSEARCA:EWU) declined another 2.6%.
- Banks were hit hardest, with the iShares MSCO Europe Financials ETF (NASDAQ:EUFN) down 6.5%. The European banking index is down to its weakest in nearly five years.
- The pound is down 3.6% to $1.3171, its lowest level vs. the dollar in more than 30 years.
Thu, Mar. 10, 8:58 AM
- The ECB staff has cut its growth and inflation projections, and sees risks skewed to the downside, says Mario Draghi in opening remarks at his press conference.
- The central bank earlier fired its bazooka, cutting rates, boosting QE, and announcing four new LTRO operations.
- Staff sees inflation at just 0.1% this year vs. its previous forecast of 1%. For 2017, inflation is now seen at 1.3% vs. 1.6% previously.
- Rates will remain at present or lower levels for "an extended period," says Draghi.
- The banks are partying: Deutsche Bank (NYSE:DB) +5%, Santander (NYSE:SAN) +4.9%, Credit Suisse (NYSE:CS) +1.8%, UBS +1.7%, ING +5%, BBVA +5% premarket
- ETF: EUFN
- Previously: Stocks jump higher after ECB unloads bazooka (March 10)
Mon, Feb. 8, 2:24 PM
- It is the European banks and contagion concerns that are freaking out the markets today - not just the Fed, China and crude oil - according to David Rosenberg, noting that some of the European banks are trading at 2008 crisis levels after the group has tumbled 18% YTD vs. 11% for the STOXX 600 index.
- European financial firms are taking a beating amid fears of "a chronic profitability crisis that makes it impossible for banks to build up barely-adequate capital bases," WSJ reports.
- Deutsche Bank (DB -9.8%) is down another ~10%, bringing its YTD loss to nearly 40% while its valuation has fallen to ~30% of book value, and its credit default swaps spiked to their highest levels since 2012.
- News of major withdrawals out of Credit Suisse (CS -4.2%) caused its shares to sink 11% last week, hitting a 24-year low, and Santander (SAN -6.2%), BBVA (BBVA -5.4%), and UniCredit (OTCPK:UNCFF -5.5%) are down to lows seen during the last eurozone financial crisis.
- "Oil and the flatter yield curve alone do not explain the 12% plunge we have seen in S&P Financials so far this year," Rosenberg says, adding that BofA (BAC -6.1%), Citigroup (C -6.2%) and Wells Fargo (WFC -3.5%) all briefly touched 52-week lows last week - "an ominous signpost."
- ETFs: XLF, FAS, FAZ, UYG, VFH, PSP, IYF, EUFN, BTO, IPF, IAI, IYG, SEF, FNCL, FXO, PFI, IXG, PEX, RYF, FINU, KCE, RWW, KBWC
- Earlier: Markets extend two-day rout; gold gets 3% boost
Mon, Jan. 18, 5:58 AM
- European stocks are offering a chink of light for the global equity gloom, staging an early bounce after last week's bruising selloff.
- Middle Eastern stocks plunged overnight, while Asian bourses remained under pressure, due to lingering concerns about China's economy and a fresh fall in oil prices following the lifting of Iranian sanctions.
- FTSE 100 +0.4%; DAX +0.5%; CAC 40 +0.4%
- ETFs: EWG, EWU, EUFN, GF, EWQ, DAX, CEE, TRF, DXGE, HEWG, DBGR, GUR, EWGS, ESR, DXPS, FGM, FKU, QDEU, QGBR, DBUK, HEWU, DBSE, UK
Dec. 29, 2015, 10:24 AM
- Trading on Fridays is a necessary requirement to have Israel included in the MSCI Europe index, announced Yossi Beinart, the chief executive of the Tel Aviv Stock Exchange.
- The exchange currently conducts trading from Sundays to Thursdays but is studying a move to a Monday to Friday week.
- Related tickers: EUFN, DBEU, IEUR, IEUS, EUMV, HEGE, EUDV, HEUS, HEUV
Nov. 5, 2015, 7:49 AM
- The European Commission has cut its eurozone growth and inflation outlook for next year, citing lower oil prices, a weaker euro and challenging global outlook.
- According to the Commission, gross domestic product in the 19-nation bloc is set to grow 1.8% in 2016, down from a previous projection of 1.9% in May.
- Inflation is seen accelerating to 1% in 2016 and 1.6% in 2017 from 0.1% this year.
- Investors now look to next month's ECB meeting for further stimulus measures to kindle the economy.
- Previously: More weakness in Germany as factory orders decline (Nov. 05 2015)
- ETFs: EU, EUFN, FXE, EUO, ERO, DRR, EUFX, ULE, URR
Sep. 8, 2015, 5:24 AM
- Eurozone Q2 GDP growth has been revised up to 0.4% on quarter from an initial estimate of 0.3%, boosted by household consumption and exports. GDP expanded 0.5% in Q1. (PR)
- Meanwhile, Japan's economy contracted an annualized 1.2% in April-June vs an initial estimate of a 1.6% drop, although capital expenditure fell 0.9%, more than the original estimate of 0.1%, clouding growth prospects.
- Euro ETFs: FXE, EUO, ERO, EU, EUFN, DRR, CEE, TRF, GUR, EUFX, ULE, ESR, URR
- Japan ETFs: DXJ, EWJ, FXY, YCS, JGBS, DFJ, JGBD, DBJP, NKY, JYN, JOF, EZJ, JEQ, JPNL, DXJS, EWV, YCL, SCJ, HEWJ, JSC, ITF, JGBL, JPP, JGBT, QJPN, JGBB, FJP, JPMV, DXJT, DXJC, DXJR, JHDG, DXJH, DXJF, JDG, HGJP, JPN
Sep. 2, 2015, 9:40 AM
- All five of the bank's market-timing signals are flashing a buy signal for the first time since near the epic lows of early 2009, says Morgan Stanley, issuing a "full house" buy alert.
- The five timing tools are valuation, fundamentals, risk, capitulation, and a combined market indicator.
- To take one: The trailing dividend yield on stocks as measured by the MSCI Europe Index is 240 basis points above the yield on a mix of European government bonds - pretty close to a one-century high.
- The best way to play the rebound is through eurozone bank stocks (NASDAQ:EUFN), says Morgan.
- ETFs: VGK, FEZ, HEDJ, IEV, EPV, EZU, FEU, EEA, EURL, FEP, UPV, DBEU, ADRU, HEZU, FEEU, IEUR, FIEU, DBEZ, FEUZ, SBEU, HFEZ, HGEU
Jun. 9, 2015, 10:57 AM
- A "close your eyes and buy moment" is approaching for recently-battered Europe, says BAML's London-based macro and events group, which would like to see four issues resolved over the coming two weeks before jumping in:
- 1) U.S. data has started to improve, making Thursday's retail sales number an especially important one for the direction of interest rates; 2) Bond volatility could be set to decline, especially given the light issuance schedule in July; 3) A last-minute agreement on Greece is BAML's base case; 4) Retail outflows and heavy supply volumes could lead to a final capitulation leg down in U.S. and global stocks.
- What to buy? Financial stocks continue to be a favorite for the team, with goings-on in Greece preventing the long-only community from accumulating the banks. The MSCI Europe Financial ETF (NASDAQ:EUFN) is up 7.1% YTD.
- Source: Barron's
- ETFs: VGK, FEZ, HEDJ, IEV, EPV, EZU, FEU, EEA, EURL, FEP, UPV, DBEU, ADRU, HEZU, FEEU, IEUR, FIEU, DBEZ, FEUZ, SBEU
Apr. 7, 2015, 4:19 AM
- The eurozone services PMI rose to 54.2 (flash 54.3) in March from 53.7 in February.
- Composite PMI increased to an 11-month high of 54 (flash 54.1) from 53.3. (PR)
- German services PMI grew to 55.4 from 54.7; composite PMI 55.4 vs 53.8. (PR)
- French services PMI slowed to 52.4 from 53.4 and composite PMI to 51.5 from 52.2. (PR)
- "Ireland and Spain continued to lead the charge, backed up by a fast-improving German economy," says Markit, but "rates of expansion in Italy and France were modest in comparison."
- While "the PMIs are indicating somewhat sluggish GDP growth of 0.3% for the first quarter," says Markit, "the pace of expansion looks set to gather pace in coming months."
- However, "an ongoing recovery is no one-way bet," Markit warns, "with the Greek crisis remaining a critical threat to stability in the region."
- The euro takes a dive and is -0.1% at $1.0906.
- ETFs: VGK, EWG, FEZ, GREK, EWP, EWI, IEV, HEDJ, EU, EPV, EUFN, EZU, EWQ, EIRL, FEU, EWN, GUR, FEP, EWGS, ESR, UPV, EURL, DBGR, DAX, ADRU, FEEU, DXGE, FGM, DBEU, QDEU, IEUR, FIEU, HEWG, QESP, HEZU, ESTX, DBEZ, SBEU, FEUZ
Nov. 27, 2014, 10:30 AM
- Failure to reform and shield weaker members threatens to divide the euro zone, announced ECB President Mario Draghi today, warning of the dangers should fears that some might quit the euro be revived.
- "Lack of structural reforms raises the specter of permanent economic divergence between members," said Draghi. "And insofar as this threatens the essential cohesion of the Union, this has potentially damaging consequences for all."
- Annual price inflation in Germany slowed to 0.5% in November, its lowest in nearly five years. Spanish consumer prices also fell for the fifth straight month.
- The euro is -0.1% at $1.2492.
- ETFs: VGK, FEZ, IEV, EU, EPV, EUFN, EZU, HEDJ, FEU, FEP, UPV, ADRU, FEEU, EURL, EURZ, DBEU, FIEU