Italians go to the polls on Sunday in a
general election that could unseat Prime Minister Silvio
Berlusconi after five years of economic stagnation.

Opinion polls have not been published in two weeks, but the
prime minister has trailed the opposition centre-left, headed
by Romano Prodi, for the past two years.

Berlusconi, the U.S. government’s strongest ally in
continental Europe and Italy’s richest man, still hopes his
promises of tax cuts will swing a surprise victory. But even he
spoke of possible defeat in the final days of campaigning.

In the mean time, iShares MSCI Italy (EWI) is trading close to all-time highs. The fund is full of the largest banks and telecom companies in Italy. Italian stocks have favored well lately despite the political and economic uncertainty. Maybe somebody is telling us something.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.