ETF Trends
ETF Trends

The eurozone delivered a nice surprise to analysts this morning, reporting better-than-expected second-quarter growth figures. European economies and exchange traded funds (ETFs) moved along their own individual trends.

  • The German economy grew 1% during the second quarter, Germany’s best quarterly performance since reunification. This made up for flatter moves by Spain and Italy, as well as negative growth for Greece.  [Can the Momentum Continue for German ETFs?]
  • Likewise, France’s economy, the second biggest in the euro zone, grew 0.6% on the quarter—slightly stronger than forecasts of 0.4% growth. French Finance Minister Christine Lagarde said she is “convinced” France will meet its target of 1.4% GDP growth for 2010. [What the French ETF Has That Others Don’t.]

Jack Ewing and Matthew Saltmarsh for The New York Times reports that on another positive note, the rise in gross domestic product in the 16-nation euro area was the fastest in four years. Analysts are not positive that the region’s growth can be sustained, and investors are fleeing riskier assets as diverging growth rates in the region are not entirely positive.

Nicholas Winning for The Wall Street Journal reports that GDP for the region, which measures the total value of goods and services in the economy, was also 1.7% higher than in the second quarter of 2009, the best since 2008. Rainer Brüderle, Germany’s Economy Minister, said the new data for the first half of the year “bring growth of well over 2% in 2010 into the realm of the possible.” The government has been forecasting growth of 1.5% for 2010.

Only time can tell is the rally is sparked simply by non-permanent German activity, such as construction and re-stocking.

For more stories about Europe, visit our Europe category.

  • iShares MSCI Germany Index Fund (NYSEArca: EWG)
  • iShares S&P Europe 350 Index Fund (NYSEArca: IEV): France is 15.7%; Germany is 11.4%
  • SPDR Dow Jones Euro STOXX 50 (NYSEArca: FEZ): France is 36.9%; Germany is 28.1%
  • iShares MSCI France Index (NYSEArca: EWQ)

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.