Back to top

Real Time Insight

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Have you see the European stock indexes lately? Or those Italian and Spanish government bond yields dropping to levels not seen since the fall of 2010?

Here's a chart of the EuroStoxx 600...

And I'll spare you a boring chart of the bond yields; suffice to say that the Italian 10-year fell below 4% and Spain's is hovering just above there.

Could these barometers of risk appetite be signaling that the worst is over for Europe? Or is this just a global liquidity event, especially after Japanese investors have been loosed upon the world to buy every other financial asset they can?

When you look at the following graph of Eurozone composite PMI and GDP, it's hard to get excited about an economic recovery any time soon.

And the bond market picture makes sense -- especially if the continent is staring down into the spiral of deflation.

The ECB finally capitulated last week and lowered short-term rates again in an effort to stem the slow-down. But it may be far too little, too late. What strong central bank action has accomplished in Europe with the ESM and OMT is that it helped stabilize the banks and provide the ultimate currency -- confidence.

But getting the economy to turn around while austerity is all the rage could be a completely different challenge. Here's what Chris Williamson, Chief Economist at Markit had to say in late April after the PMI data was released...

"Although the PMI was unchanged in April, the survey is signaling a worrying weakness in the economy at the start of the second quarter, with signs that the downturn is more likely to intensify further in coming months rather than ease.

The renewed decline in Germany will also raise fears that the region's largest growth engine has moved into reverse, thereby acting as a drag on the region at the same time as particularly steep downturns persist in France, Italy and Spain.

Policymakers will at least be relieved to see inflationary pressures cooling, which could further open the door to renewed policy stimulus."

The question is, will the ECB "evolve" their single mandate for price stability and embark on a full QE monetary stimulus plan to save their economy? And will they do it soon enough?

Also, why do you think European stocks have been so attractive to investors lately?

5 Stocks to Double in 2014

Today, you are invited to receive a free Special Report from Zacks Investment Research. It reveals five companies that could gain +100% and more in the next 12 months.

One is set to ride a little-known All-American energy boom. Another is a chip maker looking for big gains through Google Glass. Another could be the next alternative energy "Tesla."

Close This Panel X

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%