As the United States makes its way to the voting booths, European stocks could soon present an opportunity, giving some life back to overseas exchange traded funds (ETFs).

European stocks have taken a beating over the past few weeks, but now Morgan Stanley is sending the message to European investors to buy stocks, reversing the “full house sell signal,” one of the first since last year, reports Pan Pylas for the Associated Press. It was one of the first major investment banks to head for the stock market exit door last year.

European shares have also been boosted by the ongoing decline in interbank lending rates ahead of expected interest rate reductions Thursday from the European Central Bank and the Bank of England.

The U.S. presidential election has undermined the U.S. sentiment for domestic markets overall, in response to the financial crisis. Democrats are reported to be in the lead for the White House, and could also be ready to take a firmer grip on Congress.

The iShares S&P Europe 350 Index Fund (IEV) is down 43.8% year-to-date.

Europe Exchange Traded Funds (ETFs)

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.