Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
US Bond Market Yield Curve Patterns – What To Expect In 2020 - 25th Feb 20
Has Stock Market Waterfall Event Started Or A Buying Opportunity? - 25th Feb 20
Coronavirus IN Sheffield! Royal Hallamshire Hospital treating 2 infected Patients, UK - 25th Feb 20
Dow Short-term Trend Analysis - Coronavirus Trigger a Stocks Bear Market? - 24th Feb 20
Sustained Silver Rally Coming? - 24th Feb 20
Should Investors Worry about Repo Market and Buy Gold? - 24th Feb 20
Are FANG Technology Stocks Setting Up For A Market Crash? - 24th Feb 20
Gold Above $1,600 Amid FOMC Minutes and Coronavirus Impact - 24th Feb 20
CoronaVirus Pandemic Day 76 Trend Forecast Update - Infected 540k, Minus China 1715, Deaths 4920 - 23rd Feb 20 -
Ways to Find Startup Capital - 23rd Feb 20
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Beaten Down European Country ETFs

Companies / European Stock Markets Jun 03, 2010 - 10:51 AM GMT

By: Ron_Rowland

Companies

Best Financial Markets Analysis ArticleLast week I told you to keep your eyes on nine sector ETFs that have been crushed in the recent market downturn. Today I’m going to continue the same discussion starting with beaten-down ETF #10. This time, we’ll look at six specific international ETFs that are in the bargain basement.


As I did last week, let me stress that I’m not recommending you buy any of these ETFs right now. My point is that eventually they’ll find a bottom and represent good buying opportunities. As always, timing is the hardest part.

With that in mind, let’s start our world tour in Europe …

Beaten-Down ETF #10: iShares MSCI Spain (EWP)

Beaten-Down ETF #11: iShares MSCI Italy (EWI)

Beaten-Down ETF #12: iShares MSCI Ireland (EIRL)

If you read Money and Markets regularly, you know that most of Europe is in economic crisis right now. The problems are centered in the so-called PIIGS countries: Portugal, Ireland, Italy, Greece, and Spain.

Pigs eat well on their way to slaughter.
Pigs eat well on their way to slaughter.

For years these were some of the fastest-growing markets in the developed world. Fueled by easy money and increasing trade within the European community, their stock markets soared. And now we know the PIIGS were simply being fattened up for the slaughter.

On the other hand, these countries do have some advantages. They’re going through changes — sometimes dramatic changes — but they won’t just disappear into the abyss. Sooner or later, they’ll bounce back.

Right now U.S. investors can access most of the PIIGS markets via easy-to-buy ETFs. All of which have taken a hard fall the last few months.

For example, during the six-week period from April 14 to May 26, 2010, iShares MSCI Spain (EWP) shed 30.2 percent and iShares MSCI Italy (EWI) dropped 28.4 percent. There isn’t a Greece-focused ETF yet, but you can bet any such fund would have plunged even more.

iShares MSCI Ireland (EIRL) was just introduced a couple of weeks ago, so it missed most of the decline. However, it should be able to capture the Irish upside when it comes, so be sure to add EIRL to your watch list.

Keep your eye on the PIIGS. Now what about the rest of Europe?

Beaten-Down ETF #13: iShares MSCI France (EWQ)

France is the definition of 'civilization.'
France is the definition of “civilization.”

The Greeks are catching a lot of heat for the bailout they’re receiving. In reality though, it’s Greece’s lenders who are really being bailed out. Follow the money and you’ll see most of it is flowing right back to banks in the more powerful European countries.

Institutions in France have some of the biggest exposure to the PIIGS economies. Traders are well aware of this. That’s why EWQ lost about one-fourth of its value during the same six-week period.

Now this is not an “emerging market!” It’s France — the very definition of civilization according to some people. Yet the chart of their stock market looks anything but civilized right now. I doubt France will stay this low forever. So EWQ could be a great buy before long.

Beaten-Down ETF #14: iShares MSCI Austria (EWO)

Austria is another country not directly associated with the current turmoil in Europe, yet its stock market suffered a 27 percent decline right alongside the other victims. The fact that more than 40 percent of EWO is invested in the financial sector helps explain its predicament.

Beaten-Down ETF #15: iShares MSCI EMU (EZU)

One of the problems Europe is dealing with is their common currency, the euro. Nations that don’t control their own currency lose a lot of flexibility. By yoking themselves together monetarily but not politically, the euro-zone countries have created the worst of both worlds.

A common currency hasn't worked out so well for Europe.
A common currency hasn’t worked out so well for Europe.

The answer, in my opinion, is to get rid of the euro. Let each country do its own thing and face the consequences. However, this is not what they are doing. And Europe is heading in the opposite direction: More centralized control and less national autonomy.

I predict this experiment won’t end well, but it will end. Meanwhile, add EZU to your watch list. This ETF covers the euro member markets while omitting the parts of Europe (like the United Kingdom and Switzerland) that still have a national currency.

EZU has been crushed in 2010, dropping more than 23 percent since early January. Part of this can be blamed on the euro’s loss in value against the greenback, but these markets are doing terrible even on their own terms.

Will Europe get a summer rally? It’s possible. The French and Germans love their vacation time, so they may try to finish their selling in the next month or two. If so, we could see a bounce, or at least some stabilization, in the euro zone. Keep your eyes on EZU.

Now that our European tour is over, where else can we look for ETFs on sale? I’ll share some more ideas with you next week.

Best wishes,

Ron

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules