The Spanish economy is still healthy and full of potential, however, signs that the economic landscape is shifting have emerged, effecting related exchange traded funds (ETFs). During recent years Spain has undergone an intense economic modernization, thus expanding the economy for 11 consecutive years. iShares MSCI Spain Index (EWP) gained momentum on the country’s economy, reports Don Dion for Seeking Alpha.
The signs of distress ring the same as for much of America: plummeting property values, after an intense multi-year housing boom, financial markets coping with bad debts, and rising oil and food costs are sending inflation to scary levels. Home values tripled in the last decade, forcing many Spaniards to take on a large debt. If home values drop 10% in the next year, serious economic woes face homeowners and developers.
EWP may have difficulty gaining much ground in the new year, but if investors remain optimistic, this ETF could keep its momentum, maybe even inch its way up higher. EWP is up 17.7% year-to-date.
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.