Wednesday, August 13, 2014

Once a European financial stalwart, Germany now in trouble

The standoff between Russia and the European Union is hurting the outlook for Germany. Europe’s biggest economy may have contracted for the first time since 2012 in the second quarter. We get Germany’s GDP data on Thursday, but Bob Doll, chief equity strategist at Nuveen Asset Management says Europe was fragile to begin with and then the standoff happened.
“As you know even prior to this, Italy was dipping back into recession, we’ve got some macro-economic numbers out of Germany that have been on the weak side, and so Europe is just kind of muddling through at best,” he says.
Doll adds quantitative easing may “not be out of the question, Mario Draghi recently hinted at that at some point, should Europe need it. Which should be a good help for risk assets (stocks) in Europe.” The ECB President recently said policy makers are willing to use unconventional measures including QE if needed.

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