Economic Uncertainty in Eurozone Remains

While the Eurozone economy has not suffered a blow as a result of the Brexit vote, economic uncertainties in its largest economies, namely Germany and France, continue to show that the world’s biggest economic region continues to sputter. This opens up the window on a number of time-sensitive investing opportunities.

Eurozone Economy Continues to Look Gloomy

The Eurozone economy has not been cobbled by the Brexit vote as many thought it would. However, that does not mean the Brexit vote will be good for the Eurozone economy.

At the same time, Europe’s two biggest economies, Germany and France, continue to show signs of slowing down. This could undermine investor optimism and the economic outlook for the Eurozone in 2017.

In August, the Ifo Business Climate Index fell by the most in four years. The key indicator, which is published monthly, fell to 106.2 points from 108.3 in July. Analysts were expecting the index to climb to 108.5. Business sentiment in France, the second-largest economy in the Eurozone, also slipped in August.1

Not surprisingly, second-quarter gross domestic product growth (GDP) in the Eurozone was underwhelming at just 0.3% and confirms the slowdown. This figure is half of the 0.6% GDP increase in the first quarter. Germany reported second-quarter GDP of 0.4% with Spain at 0.7% and the Netherlands at 0.6%. At the other end of the spectrum, though, France and Italy reported zero growth.2

Uncertainty over the long-term impact of Brexit is partly to blame for the poor results, but so too is weak retail sentiment. This does not bode well for the Eurozone in the third quarter. Nor does it suggest conditions will improve in the fourth quarter either.

IMF Lowers Economic Outlook for Eurozone

The outlook for the Eurozone is also bleak according to the International Monetary Fund (IMF). The fund cut its 2016 growth forecasts for the Eurozone to 1.6% and just 1.4% in 2017.3

The agency had previously forecast GDP growth of 1.7% for both years but downgraded its outlook after the Brexit vote on June 23, in which the U.K. voted to leave the European Union.

Again, there is more to worry about when it comes to the Eurozone economy than just the Brexit vote. Other risks that could undermine the Eurozone economy even further include broader issues with trade: the strong U.S. dollar, sustained weak growth and inflation, global economic uncertainty (Japan, China, U.S., and South America), and broader geopolitical tensions.

Learn-To-Trade.com, Toronto’s Leader in Stock Market Trading Courses

The financial markets do not need to be bullish in order for investors to make money. There are a large number of proven investing strategies that can help you make money when the markets are bearish, flat, bullish, and even crashing.

In fact, with the right investing tools, you can profit no matter what the markets are doing. And that’s happening right now with the Eurozone. Sentiment is down, the economy is sputtering, and the outlook is bleak, but that doesn’t mean investor should shun the Eurozone.

Learn-To-Trade.com is the leading and oldest provider of stock market trading courses in Canada. Led by licensed, industry professionals, Learn-To-Trade.com’s comprehensive stock market trading courses can help investors of every skill level trade more confidently and profit consistently.

The Learn-To-Trade.com stock market trading course will show you how to read and understand stock charts, explain both fundamental and technical analysis, teach  you about risk management, and capital preservation. You will also learn about a number of trading strategies, including stock option trading, stock index trading, futures trading, futures option trading, and FOREX trading.

Learn-To-Trade.com also has a unique Lifetime Membership, with which you can re-attend any part of the program as often as you’d like. To learn more about Learn-To-Trade.com’s stock market trading course, contact us at 416-510-5560 or by e-mail at info@learn-to-trade.com.

 

Sources:

  1. “German Ifo business climate unexpectedly drops in August,” NASDAQ, August 25, 2016; https://www.nasdaq.com/article/german-ifo-business-climate-unexpectedly-drops-in-august-cm670004.
  2. “German Economic Growth Beats Expectations but Remains Subdued,” The Wall Street Journal, August 12, 2016; https://www.wsj.com/articles/german-economy-grew-faster-than-expected-in-second-quarter-1470984392.
  3. “Uncertainty in the Aftermath of the U.K. Referendum,” Internal Monetary Fund, July 19, 2016; https://www.imf.org/external/pubs/ft/weo/2016/update/02/pdf/0716.pdf.
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George Karpouzis is the co-founder of Learn-to-Trade and has been personally providing education and mentoring to over 3000 members since 1999. George has been trading in the stocks, options, futures and forex markets using technical analysis since 1986. With the help of advancements in trading technology the Learn To Trade program is now accessible worldwide. His background and passion for teaching brings an invaluable asset to our members. George is constantly striving to improve the program content and develop new strategic relationships for the benefit of the members. Add me to your G+

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