Despite Congress miraculously pulling the U.S. back from the brink of destruction by temporarily raising the debt ceiling and ending the U.S. government shutdown, Americans continue to be a pessimistic bunch. But can you blame us?

According to Gallup's U.S. Economic Confidence Index, consumer sentiment remains in negative territory. After falling to -39 during the recent standoff in Washington, U.S. economic confidence has improved to -36. To use the term "improved" is being generous; in late May, the index was at -3. (Source: "U.S. Economic Confidence Index [Weekly]," Gallup web site, October 14, 2013.)

While the brinksmanship in Washington is (temporarily) over, our pessimism isn't. According to another poll, 71% said economic conditions right now are poor, while just 29% said economic conditions are good—the lowest level of the year. Now granted, it takes time for economic confidence to return; following the debt negotiations in 2011, it took economic confidence five months to recover. (Source: Steinhauser, P., "CNN Poll: After shutdown, America is less optimistic about economy," CNN web site, October 22, 2013.)

Unfortunately, it could be worse this time, thanks in large part to high unemployment and stagnant income and wages. And there's also the fact that Washington only agreed to fund the government through to January 15, 2014 and extend the debt ceiling through February 7, 2014. Americans can't get too optimistic about the economy knowing the government is just taking time to reload.

Fortunately, there are economic lands where optimism is blooming in light of real economic change. Economic optimism in the eurozone improved for the fifth straight month and hit a two-year high in September. The European Commission said morale in the 17-nation euro zone bloc climbed faster than expected, to 96.9 from 95.3 in August; this represents the best reading for the eurozone since August 2011. (Source: Santa, M., "Faith in euro zone economy hits two-year high in September," Reuters web site, September 27, 2013.)

The positive trend in the eurozone was bolstered in part by the bloc's five biggest economies, with Spain and Italy increasing by 2.5 points and France inching up 1.6 points. Sentiment in Germany, the eurozone's largest economy, remained unchanged.

But that doesn't mean Germany doesn't have a lot of reasons to be optimistic. The eurozone country said its robust economy would stimulate record employment in 2013 and 2014 and boost consumer confidence, spending, and industrial investment. The eurozone's largest economy's gross domestic product (GDP) is expected to grow 0.5% in 2013 and 1.7% in 2014; as a result, the eurozone country's unemployment rate is expected to fall from the current 6.9% level to 6.8%. (Source: "Germany bullish on economy, jobs for 2014: ministry," The Business Times web site, October 23, 2014.)

Euro Sculpture by Lars Aronsson

Euro Sculpture by Lars Aronsson

Meanwhile, Spain's central bank said its two-year recession had come to an end in the third quarter, when Spain reported 0.1% quarter-over-quarter growth. While not exactly a robust number, it does show that the eurozone in general is getting stronger.

Investors looking to both fortify and diversify their holdings might want to consider exchange-traded funds (ETFs) with exposure to the eurozone. The Vanguard FTSE Europe (NYSEArca/VGK) ETF is up 17% since the beginning of July and four percent since the beginning of October.

Those investors looking for a more local flavor can consider any number of country-specific eurozone ETFs. The iShares MSCI Germany (NYSEArca/EWG) ETF is up 18% since the beginning of the third quarter and has gained 5.5% since the start of October. Meanwhile, the iShares MSCI Spain Capped (NYSEArca/EWP) ETF is up 34% since the beginning of July and more than eight percent this month.

Thanks to a weak U.S. economy, it looks as if the Federal Reserve is going to continue its $85.0-billion-per-month quantitative easing policy, at least until the U.S. economy shows signs of sustained growth—but that's still a ways away. What the current ongoing liquidity means is that cheap money can flow into stronger economies, including the eurozone.

This article Three Bullish ETFs for an Increasingly Optimistic Eurozone by John Paul Whitefoot, BA was originally published at Daily Gains Letter

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