By: Joseph Hogue of Street Authority
After nearly three years of extremely weak economic growth, the European Central Bank is finally delivering on Mario Draghi's pledge to do "whatever it takes" to get the region back on track.
The central bank is set to pump $64 billion into the economy through monthly bond purchases through September 2016. The quantitative easing program, alluded to in September, formally announced in January and started on March 9, may already be having an effect on the economy in terms of sentiment.
Q4 GDP growth of 0.3% beat expectations, and manufacturing data showed signs of life in March. Exports to the United States could get a big boost this year on a massive depreciation in the euro versus the U.S. dollar.
All things considered, I would say it could be a very good year for European stocks, and possibly most of 2016 as well.
There is one fly in the ointment. Greece is back in the headlines as officials were said to have informally approached the IMF to delay repayment on the country's debt but were denied. Thanos Vamvakidis, head of European G10 FX strategy at BofA Merrill Lynch Global Research, said the country may run out of money if a reprieve is not granted at the meeting of eurozone finance ministers on April 24.
How do we act on what could be a great opportunity in European stocks without running the risk that a "Grexit" wipes out returns? Continue reading "Don't Let Fear of a 'Grexit' Keep You Out of European Stocks"
