Best of the Week
Most Popular
1.The Trump Reset, US Empire's Coming Economic, Cyber and Military War With China (2/2) - Nadeem_Walayat
2.Now Is the Time to Buy Gold - 5th Jan 17 - John Grandits
3.CIA Planning Rogue President Donald Trump Assassination? Elites "Manchurian Candidate" Plan B - Nadeem_Walayat
4.The Trump Reset - Regime Change, Russia the Over Hyped Fake News SuperPower (Part1) - Nadeem_Walayat
5.Most Popular Financial Markets Analysis of 2016 - Stock Market Crash Postponed Again - Nadeem_Walayat
6.No UK House Prices Brexit Crash 2016 Despite London Weakness, Forecast 2017 - Nadeem_Walayat
7.President Trump Understands the NSA, CIA... LIE, America's Intelligence Agencies Crime Syndicate! -Nadeem_Walayat
8.President Donald Trump's 2017 New Year Message, BBC Fake News, Was 2016 a Dream? - Nadeem_Walayat
9.Major Stocks Bear Market Still Looms - Zeal_LLC
10.Biased 2017 Forecasts - Debt, Housing and Stock Market (1/2) - James_Quinn
Last 7 days
Stock Market Trading Patience Pays Off with CHK Using Momentum Reversals - 19th Jan 17
Gold - How to "Buy Low and Sell High" Like a Pro - 19th Jan 17
State of the Global Stock, Financial and Commodity Markets Report 2017 - 19th Jan 17
The Hunt for Russia's Next Enemy - 18th Jan 17
Returning Gold Bulls - 18th Jan 17
Biotech Breakthrough Could Create A $11.4 Trillion Opportunity - 18th Jan 17
Bitcoin and Gold - Outlook, Volatility and Safe Haven Diversification - 17th Jan 17
Stock Market Uptrend on Borrowed Time - 17th Jan 17
The One Stock to Retire On - 17th Jan 17
Trump anti-Communist Counter Revolution - 17th Jan 17
US Stock Market Update as the Trump Inauguration Approaches - 17th Jan 17
The American Crisis - Common Sense 2017 - 17th Jan 17
Obama Leaves, Hope Arrives, Will Stupid Stay? - 17th Jan 17
Damage Inflicted by Precious Metals Manipulation Is in the “Multi Billions” - Keith Neumeyer - 17th Jan 17
Gold Price Forecast 2017 Update - Video - 17th Jan 17
The Story of the U.S. Regime Change Plan in the Philippines - 16th Jan 17
Gold Price 2017 Trending Towards $1375 as Forecast - 16th Jan 17
'Deep State' CIA Director States We are Not NAZI's, Warns Trump Does Not Understand Russian Threat - 15th Jan 17
UK House Prices Forecast 2017 - Crash or Bull Market? - Video - 15th Jan 17
SPX Stocks Bull Market Update - 14th Jan 17
President Trump vs the Deep State that Hides in Plain Sight - 14th Jan 17
The Impact of Sir Alex Ferguson's Retirement on Man United's Share Price - 14th Jan 17
What Can Stock Market Tell You About Politics? - 13th Jan 17
Big Gold Buying Coming 2017 - 13th Jan 17
A Bullish Case for Gold 2017 - 13th Jan 17
Will Stocks Bull Market Continue to Charge or is it Time to Sell the News - 13th Jan 17
Gold and Silver Off To Shining Start to 2017 - 13th Jan 17
Gold’s Fundamental Outlook for 2017 - 13th Jan 17
Is trading stocks and shares just as luck-based as roulette? - 13th Jan 17
Trump CIA Like Nazi Germany - Fake MI6 Intelligence leaked to Fake News Mainstream Media - 13th Jan 17
USD in Decline. SPX and TNX May Follow - 12th Jan 17
CIA War On Trump - Leaks Fake MI6 Intelligence to Fake News Broadcast Media - 12th Jan 17

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

State of Global Markets 2017 - Report

New Economic Data Reveals More Bad News for the Eurozone

Economics / Euro-Zone Feb 25, 2013 - 06:12 PM GMT

By: InvestmentContrarian

Economics

Sasha Cekerevac writes: One of the biggest detriments to global economic growth has been the weak eurozone region. Not only has economic growth been dismal within the eurozone area, but the level of financial instability over the past few years has left investors and businesses uncertain about the future.

While there was some indication that economic growth might have been rebounding within the eurozone, new data point to a much weaker underlying economy than previously thought.


According to Markit Economics, which just published its Eurozone Purchasing Managers Index (PMI) for February, the situation amongst the region’s economies seems to be getting worse. The Flash Eurozone PMI Composite Output Index was 47.3 in February, down from 48.6 in January. Both the services and manufacturing PMI indexes also decreased for the eurozone. (Source: “Markit Flash Eurozone PMI,” Markit Economics web site, February 21, 2013.)

Even strong nations within the eurozone are experiencing a halt to any expansion in economic growth. The German PMI Composite Index was 52.7 in February, down from 54.4 in January. The U.S. PMI, meanwhile, showed a relatively strong manufacturing reading of 55.2 for February, down from 55.8 in January. (A number above 50 indicates economic growth; a number below 50 means economic contraction.)

This is an indication that the eurozone is far from generating strong economic growth. While many have hoped that strong nations, such as Germany, could pull up the rest of the eurozone into reasonably stable economic growth levels, it appears that the periphery eurozone nations might be bringing the stronger countries down.

For investors who have begun to dip their toes into eurozone investments, this appears to be a warning sign that economic growth is quite far away. In comparison, the U.S. reading of the PMI shows stable and relatively strong growth.

We will most likely see marginal investors in the eurozone sell some of their holdings and diversify into other regions around the world. Unless economic growth reignites within the eurozone, I think the euro currency will remain under pressure.


Chart courtesy of www.StockCharts.com

The weekly chart above is for the exchange-traded fund (ETF) that represents the euro. Note the weakness over the past couple of weeks, as feeble economic growth data are triggering a selloff in the eurozone currency.

I think we will continue to see a weak eurozone currency, especially with so much uncertainty regarding economic growth and politics. For example, Italy has an election coming up, which could throw any potential economic growth policies within the eurozone into doubt.

In addition to politics, significant structural issues for many eurozone countries remain. As economic growth stagnates, the unemployed become angry, and this causes more uncertainty in the political sphere. For now, I would avoid the euro and look for nations that have relatively improved possibilities for economic growth as a relative investment thesis.

Source:http://www.investmentcontrarians.com/recession/new-data-reveal-more-bad-news-for-the-eurozone-2/1481/

By Sasha Cekerevac, BA
www.investmentcontrarians.com

Investment Contrarians is our daily financial e-letter dedicated to helping investors make money by going against the “herd mentality.”

About Author: Sasha Cekerevac, BA Economics with Finance specialization, is a Senior Editor at Lombardi Financial. He worked for CIBC World Markets for several years before moving to a top hedge fund, with assets under management of over $1.0 billion. He has comprehensive knowledge of institutional money flow; how the big funds analyze and execute their trades in the market. With a thorough understanding of both fundamental and technical subjects, Sasha offers a roadmap into how the markets really function and what to look for as an investor. His newsletters provide an experienced perspective on what the big funds are planning and how you can profit from it. He is the editor of several of Lombardi’s popular financial newsletters, including Payload Stocks and Pump & Dump Alert. See Sasha Cekerevac Article Archives

Copyright © 2013 Investment Contrarians - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Investment Contrarians Archive

© 2005-2016 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

Catching a Falling Financial Knife