Europe - Stocks (General News)

[behappyalways]

Secondly, loose monetary policy by central banks has kept interest rates low for years – a move that has “artificially” boosted margins at companies in the West. When rates rise – as they will – refinancing debt will lead to higher interest payments, which will eat into margins. Many FTSE 100 companies are carrying a lot of debt. It is wise to look at the debt maturity profiles at each of your shareholdings.


Life on the margins – investors, don’t look away now
http://www.telegraph.co.uk/finance/pers ... y-now.html

[winston]

Europe's bull market continues as European stock fund FEZ hits a five-year high.

[winston]

IT'S A BULL MARKET IN EUROPE

After six months of sideways action, European stocks are heading higher.

Regular DailyWealth readers are familiar with Steve's bullish case for European stocks. They are cheaper than their U.S. counterparts. Plus, the European Central Bank is desperate to pump up stock and real estate prices... just like the U.S. Federal Reserve has done in the past few years.

A good way to track (and trade) this idea is with the SPDR Euro STOXX 50 Fund (FEZ). It holds a diversified basket of top European companies.

This fund enjoyed a solid rally from last July to last October. It spent the next six months "digesting" this gain and bobbing around the $41 to $42 area. But just recently, the fund broke out to a new 52-week high in the $43 area. It's a bull market in Europe!


Source: Daily Wealth

[winston]

Europe's uptrend keeps rolling… Spain (EWP), France (EWQ), and U.K. (EWU) stock funds surge to new multiyear highs.

[winston]

If You Missed Out on U.S. Stocks, Buy This By Dr. Steve Sjuggerud
Thursday, May 29, 2014

If you haven't taken my advice to buy Europe… don't wait much longer.

European stocks are really starting to move… and they have major upside potential.

For months now, I've been urging you to own European stocks. I've shown you how European stocks are cheaper than U.S. stocks. Plus, Europe's version of the U.S. Federal Reserve is committed to pushing up stock and real estate prices.

Right now, the market is moving in our direction…

For example, take a look at German stocks. Germany is the fourth largest economy in the world. It's the manufacturing engine of the European Union economy (which is larger than the U.S. economy).

An easy way to buy and sell German stocks is the iShares Germany Fund (EWG). This fund lets you own Germany's biggest and best businesses. It owns major German companies you've probably heard of like Volkswagen, BASF, Bayer, and Deutsche Bank.

As you can see from the chart below, EWG spent the last half of 2013 rallying from $26 per share to $31 per share. It spent the next five months "digesting" those gains. That period is likely over. In the past week, EWG has broken out to a new 52-week high.

And German stocks aren't alone… The European market as a whole is sitting near 52-week highs. But this move is likely just getting started. Here's why…

As I've mentioned before, our thesis in Europe is simple.

Mario Draghi is the head of the European Central Bank. And right now he's taking a page out of former U.S. Federal Reserve Chairman Ben Bernanke's playbook.

In short, several years ago, Bernanke put unprecedented economic stimulus measures in place in the U.S. – cutting interest rates to zero and printing money. This caused stock prices (and other assets like real estate) in the U.S. to soar higher than anyone could have imagined. I call this the "Bernanke Asset Bubble," and it makes the U.S. appear much healthier than Europe today.

Now, Draghi is following Bernanke's lead.

In words practically straight from Bernanke's mouth, Draghi said interest rates in Europe will remain "at present or lower levels" for an extended period of time. He also said he's willing to deploy unconventional measures if needed. He said these things would likely happen in early June.

In the U.S., I've said we're in about the seventh inning of this great Bernanke Asset Bubble. I expect stocks in the U.S. can still go higher… but it's getting late in the game.

However, in Europe, we are probably closer to the fourth inning of the "Draghi Asset Bubble." So there's a lot left to go in that game.

In short, Europe looks a lot like the U.S. did a couple of years ago. It's cheap and folks aren't interested. Its central bankers are finally in panic mode, willing to crush the currency. A weaker euro will improve corporate profits, further helping European stock prices. Our opportunity is great.

And the recent breakout of German stocks (the "manufacturing engine" of Europe) is a great sign that things in Europe are starting to go our way. Don't miss out!


Source: Daily Wealth

[winston]

Europe is in an uptrend… Spain (EWP), Italy (EWI), and Germany (EWG) country funds are up 20%-plus over the last year.

[winston]

Despite its Problems, Europe Could Soar More Than 70% from Here

By Brett Eversole

"We usually close down for around five months every year," my waiter told me. I almost choked on my eggplant parmesan.

"It's not just us," he continued. "The whole town closes down by mid-November. It won't open again until mid-April."

My location is Positano, Italy. A small village built into the mountainside on Italy's Amalfi Coast. To say the location is picturesque would be an understatement. Here's the view I enjoyed from my villa…

Positano was one of several stops I made while touring Italy's countryside over the last two weeks. In many ways, it's an extreme example of the long-term problems facing Europe.

You see, Positano is a town of less than 5,000. It thrives on tourism. Yet, the entire town closes down for roughly 5 months a year. I found similar circumstances around the country…

Shops close for hours in the middle of the day. And based on the folks I spoke with, everyone takes at least a month off work around August. If you can find a job, that is.

I met a group of young Italians from Venice who explained that young people can't find work. Jobs don't exist. With a youth unemployment rate of over 40%, they seem to be correct.

With all of these problems, the idea of investing in Italy – or anywhere around Europe – might seem crazy. But as Steve explained in yesterday's DailyWealth, it isn't.

In fact, there's an anomaly going on in the market that could cause Italy, along with the rest of Europe, to soar as much as 82% from here…

Interest rates peaked above 7% in Italy not long ago. Today, their rates are approaching U.S. levels. This is the anomaly I'm talking about. Take a look:

What does this mean?

It tells an amazing story about the relative value we have now in Italy and in European stocks…

In principle, the lower the interest rate, the higher the price people are willing to pay for stocks. When rates go lower, investors have to find something else to do with their money.

In short, you can't earn easy interest in Europe anymore – the easy money in European bonds is gone.

European stocks have already started moving higher because of this anomaly. But surprisingly, they're still incredibly cheap.

European stocks pay 3.4% in dividends today – more than most European government bonds. Now THAT is attractive!

And when you look at dividend yields and price-to-book value – two classic value measures – European stocks would have to rise by more than 70% to equal the valuations of U.S. stocks today.

In short, despite Europe's long-term problems, European stocks could absolutely soar from here.

The easiest way to buy a basket of Europe's strongest companies is the SPDR EURO STOXX 50 Fund (FEZ).

FEZ is up over 70% over the last two years. But with the current interest rate anomaly, it could go much higher from here. Check it out.


Source: True Wealth Systems

[winston]

AN INVESTMENT PARADOX AT WORK

There's a surprising leader on our investment "scoreboard"... it's Spain.

At DailyWealth, we monitor a list of more than 80 exchanged-traded funds. This list – or "scoreboard" – lets us track every major stock sector, global stock market, commodity, and currency. The Spanish stock fund (EWP) is the top performer over the past two years, with a gain of 115%.

This giant rally demonstrates what seems like an "investment paradox." The average investor often asks something like, "How can Spanish stocks do so well when the news about the economy is so bad?"

The answer is that the market is a forward-looking mechanism. It typically "prices in" developments before you ever hear about them on the news. A market will turn lower well before the news gets bad. Conversely, it will turn higher before the news gets good. Two years ago, the news surrounding the Spanish economy was absolutely horrible. Now, it's just "less horrible."

The rally in Spanish stocks also shows you can do well in an asset if you buy during periods of extreme pessimism... when you can buy at "bombed out," bargain prices. That was the case with Spanish stocks two years ago. And as we've seen, contrarian trading works!

Source: Daily Wealth

[winston]

Europe's uptrend is still going strong… big European stock fund FEZ breaks out to a new multiyear high.

[winston]

Europe's "out-of-favor" countries are quietly booming… Greece, Italy, and Spain funds are all up 70%-plus in two years.