Bumbling Along

01102019---europe-pmis

Image source: Julinzy, charnsitr, Protasov AN, Daniel Prudek, akiyoko - Shutterstock

What's going on?

Eurozone unemployment fell to an 11-year low in August, according to data out on Monday. And since things might not be as bad as the buzz, some analysts think now might be the time to flock to the bloc’s stocks…

What does this mean?

Despite Europe’s economic slowdown, its 19 euro-using countries reported unemployment of 7.4% in August, down from 7.5% in July. That bodes well – especially since this drop happened before its central bank decided to give the region’s economy a boost.


Germany’s unemployment data for September fell too. In fact, 10,000 more people were employed in September than in August, bringing unemployment to a near-record low. With Germany having borne the brunt of Europe’s trade war woes, the fact its companies seem to be keeping their workers on suggests things might actually be – dare we say it – kinda okay?

Why should I care?

For markets: The Ryder Cup of investing.


Investment bank JP Morgan thinks things are more than kinda okay: its analysts argue it’s time to move your investments from the US to Europe. They think European stocks are undervalued, and reckon the economic situation is bound to improve. US investors are already seeking out cheap stocks, so expect European markets to rise if they now roam across the Atlantic.



For you personally: Don’t forget about the B-word…


Brexit uncertainty still hangs over European stocks and may partly explain the unemployment data: some think firms are hiring rather than investing in their businesses because it’s easier to fire people than sell buildings if things go awry. And it’s not the only risk on the horizon. Munich, Amsterdam, Frankfurt, and Paris might all be vulnerable to a property bubble, where prices become unsustainably high. That’s bad news for renters, who have to pay more, and – if the bubble bursts – terrible news for owners who’ll see their house prices fall, à la London (tweet this).

Originally posted as part of the Finimize daily email.

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