Germany Stomps Market Optimism: What You Need to Know

By Matt Koppenheffer | More Articles
October 17, 2011 | Comments (2)

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

The big macro can cause big moves in the market. What does today's headline macro news mean for your portfolio?

What's happening: Steffen Seibert, the spokesman for German Chancellor Angela Merkel, said that while there will be a plan to combat the European Union's fiscal problems introduced next week, it won't be a quick fix. Specifically, he said, "The chancellor reminds [everyone] that the dreams that are emerging again, that on Monday everything will be resolved and everything will be over, will again not be fulfilled."

In plain English, please: Is the chancellor hoping to play a little "under-promise and over-deliver"? Or is she simply trying to bring hopes in line with reality? Either way, it's quite clear that she's making a strong effort to manage expectations for what will happen when EU policy leaders get together on Oct. 23 to introduce a regional rescue plan.

With the S&P 500 Index (INDEX: ^GSPC) rallying 6% last week and the Dow Jones Industrial Average (INDEX: ^DJI) tacking on nearly 5%, it was clear that U.S. investors were getting very optimistic that the EU crisis could be stemmed. If we continue to use these indexes as gauges of global economic optimism, then the comments out of Germany seem to be having their intended result; the S&P and Dow are respectively off 1.3% and 1.5% as of this writing.

Stocks to watch: Because this is such a massive issue affecting the global economy, the views on the EU crisis and the ability of the region's leaders to put together a workable plan that will avoid a massive blowup could be said to affect a high percentage of the publicly traded companies around the world and certainly has the power to move the indexes. However, banks will be particularly sensitive to this issue, so the stocks of regional banks such as Bank of Ireland (NYSE: IRE ) , Lloyds Banking Group (NYSE: LYG ) , National Bank of Greece (NYSE: NBG ) , and Banco Santander (NYSE: STD ) could move significantly on new developments.

Want to keep up to date on these stocks?

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

Read/Post Comments (2) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On October 19, 2011, at 12:13 PM, pete163 wrote:

You should not blame Germany for all of it, some companies had a big part in it to. Like IRE with there jackass reverse split. And how about some of the other banks using bailout funds to buy other really bad companies, BAC comes to mind on that one.
Report this Comment On October 21, 2011, at 1:22 PM, Teacherman1 wrote:

pete163
All the reverse splilt, and subsequent price drop did was make it so that the ADS (ADRs) were no longer trading at a premium to the basic shares on the Irish and London exchanges.
They are now trading at par.
There have been some large positions taken by institutional investors in the U.S., who now hold a 35% position, leaving the Irish Govt. with 15%.
If you are a "risk taker", you might want to revisit ,if not, then there are other places to invest.
I am long IRE and think they will do well over the long term.
JMO and worth exactly what I am charging for it.
Have a good week.

Add your comment.

Compare Brokers

Fool Disclosure

DocumentId: 1571099, ~/Articles/ArticleHandler.aspx, 5/26/2012 6:21:29 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 21 hours ago Sponsored by:
	DOW	12,454.83	-74.92	-0.60%
	S&P 500	1,317.82	-2.86	-0.22%
	NASD	2,837.53	-1.85	-0.07%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes