European Financials Winding Up For A Big Move?
Michael A. Gayed | Apr 29, 2012 02:34AM ET
- William Shakespeare
One of the most important sectors of the stock market to watch on the global front is European Financials. It is clear that investors in the sector have to pay very close attention to sovereign debt concerns and the overall state of the Eurozone's financial health because no area of the stock market would be as impacted as European banks themselves. This is especially true when compared against U.S. Financials, which for the most part are considerably more prepared for a crisis than they were in 2008.
With all that said, as fear has flared again because of Spain's deep recession and debt levels, European Financials which performed well at the start of 2012 gave back nearly all of their strength against U.S. markets. This may be about to change.
Take a look below at the price ratio of the iShares MSCI Europe Financial Sector ETF (EUFN) relative to the Financials Select Sector SPDR ETF (XLF). As a reminder, a rising price ratio means the numerator/EUFN is outperforming (up more/down less) the denominator/XLF.
Disclaimer: This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.
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