Germany ETF Caught in Mixed Sentiment

| About: iShares MSCI (EWG)
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Germany’s sentiments are all over the map these days, making it a challenge to figure out whether its ETF is worthy of a look right now.

Germany’s economy is known as the bellwether for economic growth and health in Europe, so how it’s doing really matters.

As the largest economy and one of the healthiest exporters in Europe, sentiment is closely monitored but the signals are decidedly mixed. Let’s look at the good and not great:

  • Emese Bartha for The Wall Street Journal reports that consumers sentiment declined in January from December. However, the indicator’s level suggests that consumers still believe Germany will stay on track this year.
  • Jack Ewing for The New York Times reports that the December business climate index rose more than expected. The gain came from optimism among retailers.
  • German investor confidence improved for a second month in December, says Christian Vits at Bloomberg.
  • Bernard Radowitz for The Wall Street Journal reports that low interest rates and falling unemployment are expected to prop up the economy although consolidation programs in Germany and elsewhere may weigh on growth.The expectation is that the European Central Bank will keep rates at 1%.
  • The weak euro could be a big plus for Germany; exports surged in November on a combination of the weak currency and solid demand from emerging markets, says Monsters and Critics.

Despite the weaknesses, uncertainty and trouble spots, Germany looks poised to continue growing and making strides toward a full recovery, though its citizens are cautiously optimistic about that.

Watch iShares MSCI Germany (NYSEARCA:EWG) closely, though, because if fear spreads about the eurozone debt crisis, Germany could get dragged down with it. It’s already seen some weakness in the last month, declining 3.1%.

Tisha Guerrero contributed to this article.