How to Profit from Rising Spanish Exports (STD, TEF, EWP, EPV)

The Bank of Spain announced on Friday that the Spanish economy grew by 0.2% during the 1st quarter of 2011, for the second consecutive quarter of 0.2% growth. Spain's central bank also noted that the Spanish economy was up 0.7% from the same quarter a year earlier. The modest growth was said to be fueled by exports, while the country's austerity measures and high jobless rate limited domestic demand. The Bank of Spain said that although the country's economy was recovering at a slow pace, it was distinguishing itself from countries like Greece, Ireland and Portugal that required bailouts from the International Monetary Fund and the European Union. If the markets agree with this assessment, the borrowing costs of the Spanish government should fall and reducing the fiscal deficit will become less difficult. The Spanish government has taken steps to improve the country's fiscal health by enacting austerity measures such as spending cuts. However, reduced government spending and the country's extremely high unemployment rate of 21.3% continue to be a drag on domestic demand. Although the Spanish government is improving the country's fiscal health, the austerity measures are not popular with voters and may lead to the ruling party losing in upcoming regional elections. The regional elections are of particular importance in Spain because the regional governments have a great deal of control over spending. There are a number of options for investors who feel that the Spain will continue to distance itself from countries like Greece, Portugal and Ireland. Banco Santander, S.A. STD is a Madrid, Spain based international financial services firm with operations throughout Europe, Brazil, Latin America, and the United States and a market capitalization of nearly $100 billion. If Spain can stick to its austerity measures and exports continue to drive the economy's growth, Banco Santander will be in a good position to profit. Telefonica, SA TEF provides telecommunication services in Spain, Europe and Latin America and has a market capitalization of of over $112 billion. If the Spanish economy continues to improve, this telecommunications company should be a direct beneficiary. The iShares MSCI Spain Index Fund EWP seeks to provide investment returns in-line with the price and yield performance, before fees and expenses, of the MSCI Spain Index and has a daily volume of more than 400,000 shares traded. Investors who feel that the Spanish economy will continue showing signs of improvement and want exposure to a broad range of Spanish stocks should consider this ETF as an investment option. On the other hand, investors who feel that exports won't be able to keep Spain's economy afloat and that unpopular austerity measures and high unemployment rates will lead to the ruling party's downfall should take a look at the ProShares UltraShort MSCI Europe EPV. The ETF seeks daily results that are the inverse of the MSCI Europe Index and could be a good investment if Spain goes the way of earlier bailout recipients.