Posted on Monday, November 19th, 2012 | In Exchange Traded Funds
Finance officials met in France on Monday in effort to keep Greece within the Eurozone, sending European stocks skyward.
European stocks soared on Monday, as EU finance ministers, scheduled to meet in Brussels on Tuesday, met in Paris to discuss measures for keeping Greece within the Eurozone (NYSEARCA:VGK). Finance officials from Germany, France, Spain and Italy discussed lowering interest rates on EU loans to Greece, as well as extending the maturities on Greek sovereign debt (NYSEARCA:GREK).
Investors were willing to overlook a good deal of bad news on Monday, allowing the major European Stock Indices to skyrocket. Istat reported that Italy’s industrial sales declined 4.2 percent in September from August. On a year-over-year basis, Italy’s industrial sales fell by 5.4 percent (NYSEARCA:EWI).
The Bank of Spain provided some bad news in the form of its latest report on troubled loans. Bad loans increased to 10.7 percent of the loans outstanding during September, compared with August’s 10.5 percent. The amount of overdue loans increased by €3.5 billion to €182.2 billion. The new total greatly exceeds the €100 billion credit line extended by the European Union (NYSEARCA:EWP). Spanish Magic: Weekly International ETF Report
Eurostat reported that seasonally adjusted production in the construction sector fell by 1.4 percent in the Eurozone (EA17) and by 1.8 percent in the broader, 27-nation European Union during September on a month-over-month basis.
As of 11:13 EST, the Euro STOXX 50 Index soared 2.56 percent to 2,489 – staying below its 50-day moving average of 2,513 (NYSEARCA:VGK). The FTSE 100 Index surged 2.24 percent to 5,735 (NYSEARCA:EWU). The German DAX Index jumped 2.59 percent to 7,125 (NYSEARCA:EWG). France’s CAC 40 Index skyrocketed 2.89 percent to 3,438 (NYSEARCA:EWQ). Spain’s IBEX 35 Index surged 2.23 percent to 7,757 (NYSEARCA:EWP). Italy’s FTSE MIB Index jumped 2.80 percent to 15,272 (NYSEARCA:EWI). World Markets Weekend Review
As of 11:22 EST, the euro advanced 0.52 percent against the dollar, trading at $1.2810 (NYSEARCA:FXE).
Spain’s ten-year bond yield rose to 5.89 percent on Monday from Friday’s closing level of 5.85 percent. Spain’s two-year bond yield jumped to 3.32 percent on Monday from Friday’s closing level of 3.25 percent (NYSEARCA:EWP).
Italy’s ten-year bond yield climbed to 4.93 percent on Monday from Friday’s closing level of 4.89 percent (NYSEARCA:EWI).
On London’s ICE Futures Europe Exchange, January futures for Brent crude oil advanced by $2.85 (2.62 percent) to $111.80/bbl. (NYSEARCA:BNO, NYSEARCA:USO). Energy ETFs Rise with Middle East Rocketfire
December Gold futures advanced by $18.70 (1.09 percent) to $1,733.40 per ounce (NYSEARCA:GLD).
In China, stocks advanced following a report from the Shanghai Securities News that the nation’s Securities Regulatory Commission is lowering the benchmarks used in the calculation of capital requirements. The Shanghai Composite Index advanced 0.11 percent to 2,016 (NYSEARCA:FXI). Hong Kong’s Hang Seng Index climbed 0.49 percent to 21,262 (NYSEARCA:EWH).
In Japan, stocks had another day of big gains as speculation about the nation’s next government continued, enhancing hopes that the new government could advocate more aggressive monetary easing (NYSEARCA:FXY). The Nikkei 225 Stock Average jumped 1.43 percent to 9,153 (NYSEARCA:EWJ).
American stock index futures were in positive territory ahead of Monday’s opening bell, as investors were feeling confident that President Obama and Congress would be able to agree upon measures for avoiding the fiscal cliff. The December 12 Dow Jones Industrials future advanced 0.77 percent to 12,667 as of 9:15 EST. The December 12 S&P 500 future rose 0.92 percent to 1,372 (NYSEARCA:SPY). The December 12 Nasdaq 100 future climbed 1.03 percent to 2,559.
Bottom line: The major European stock indices made enormous advances on Monday as investors ignored disappointing data in favor of the good news that serious efforts were being made by Eurozone finance officials to keep Greece on the euro.
About John Nyaradi (http://www.wallstreetsectorselector.com)
John Nyaradi is Publisher of Wall Street Sector Selector: Your Home For ETF Investing! John writes a weekly guest column, John Nyaradi’s ETF Edge for MarketWatch.com and his investment articles have appeared in many online publications including Trading Markets, Money Show, Yahoo Finance, Investors Insight, Fidelity, ETF Daily News, iStock Analyst , among many others. His book, Super Sectors: How to Outsmart the Market Using Sector Rotation and ETFs, is published by John Wiley and Sons and included among the Years Top Investment Books in the 2011 Stock Trader’s Almanac.