Will Greece and Europe Hang On?
As Greek leaders have postponed their meetings yet another day while default looms around the corner, one may wonder if Europe and Greece will hang on?
Major stock markets and Euro ETFs have risen today in hopes that Greek political leaders will finally have drafted a final agreement to enable the country eligible for another European Union and IMF bailout. If the Greeks do not approve a deal which would involve steep austerity measures and bond write downs, the country is set to default by the middle of March. As of yet, the Greeks have not produced a deal which would enable bailout money, talks have been postponed to tomorrow (again) despite intense political pressure from the EU and IMF.
Markets and Europe ETFs have rallied hard in response to a near complete deal, as major indexes and European ETFs including the Currency Shares Euro Trust ETF (NSYEARCA:FXE), the Vanguard MSCI European ETF Fund (NYSEARCA:VGK), the iShares S&P Europe 350 Index ETF (NYSEARCA:IEV), the iShares MSCI Germany Index Fund ETF (NYSEARCA:EWG) and the iShares MSCI Italy Index Fund ETF (NYSEARCA:EWI), have all risen more than half a percent today. Meanwhile, the Euro dollar has risen to its December 2011 highs; one may wonder if this rally is centered around a hope that the Euro and Greece will hang on tight, or if Europe and Greece will actually hang on and finally make it through this dilemma.
Europe ETF Summary (Approximately 3PM Eastern Time)
- Currency Shares Euro Trust ETF (NSYEARCA:FXE):
- Vanguard MSCI European ETF Fund (NYSEARCA:VGK):
- iShares S&P Europe 350 Index ETF (NYSEARCA:IEV):
- iShares MSCI Germany Index Fund ETF (NYSEARCA:EWG):
- iShares MSCI Italy Index Fund ETF (NYSEARCA:EWI):
Bottom Line: I forgot to mention earlier that more demonstrators in Athens have come back to protest the austerity measures proposed by the Greek Government and EU to receive bailout money. As many Greek government employees face layoffs while the country faces default, possible exit from the Euro, and a five year recession, one may wonder how and if Greece or Europe will draw the line. At least for today, markets and investors are hopeful that Greece and Europe will hang on for now.
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Disclaimer: Wall Street Sector Selector trades a wide variety of ETFs and positions can change at any time.
