ETF Trends
ETF Trends

The European economy and proposed initiatives to promote its competitiveness, its sustainability and quality-based development, has been shadowed by bad economic news across the board. Is there any hope left for European exchange traded funds (ETFs)?

Europe first is going to have to compete with populist anger by cuts to social welfare benefits. Protesters in Spain, Greece and Ireland are letting themselves be heard. Even in healthier countries, such as Germany, cuts to these benefits may be needed to fully reassure the world. [Eastern Europe ETFs: Inflows Coming Later?]

Europe’s economy these days seems like a mix of both good and bad news as some economies do better than others:

  • European Central Bank funds suggested eurozone banks were managing to repay emergency short-term loans, reports Naomi Tajitsu for Reuters.
  • Moody’s suggested that it may cut Spain’s AAA ratings because of sliding growth expectations and rising fiscal challenges.
  • Spain, however, did have a successful bond auction, which helped propel the euro further  upward.
  • Official data show that the unemployment rate in Germany, Europe’s biggest economy, declined to 7.5 % in June from 7.7% in May, presenting a glimmer of hope amid the gloomy market conditions. BusinessWeek notes that Germany has settled into a modest recovery as the main export, motors, has helped strengthen the economy. [ETFs for a Greek Tragedy.]

At least one sector is thriving on the continent: tourism. It’s estimated that 40% of the world’s travelers make Europe a destination and it’s something that will need to be kept up, reports EU Commerce. Even though the economy is weak now, an even weaker euro may lure even those who had put off traveling there. [Bear ETFs Winning in Uncertain Markets.]

For more stories about Europe, visit our Europe category. These and other Europe ETFs are well below their long-term trend lines, and who knows how much trouble could be in store? To be alerted when any Europe ETF you’re watching crosses a key trading signal, we offer alert tools for our premium members. Find out more here!

  • iShares S&P Europe 350 Index (NYSEArca: IEV)
  • Vanguard European ETF (NYSEArca: VGK)
  • SPDR STOXX Europe 50 (NYSEArca: FEU)

Tisha Guerrero contributed to this article.

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.