Thursday, February 20th, 2020

European Stock Opportunities

 

The European sovereign debt dilemma appears to be on the mend. Self-imposed austerity measures may result in a short term recession in the Euro Zone as the European Union puts is economic house in order. Options traders may wish to look for European stock opportunities as the Stoxx Europe 600 index has risen nearly ten percent this year, its best performance for a quarter in nearly three years. European stocks advance again on news that business confidence is rising in Germany. Also the chairman of the United States Federal Reserve, Ben Bernanke, has stated that continued economic stimulus is necessary. As European stocks rise it may be that the issue of Euro Zone austerity or growth is really one of austerity and growth!

When looking for European stock opportunities, options traders will want to consider a range of companies. There are those that are located solely in Europe and do business only in Europe. There are European companies such as Siemens and Roche that are headquartered in Europe but are truly multinational. And there are companies that are headquartered in Europe but sell their products across the globe. Foreign stock options trading can be done in foreign markets or traders can focus on ADR’s trading in the USA.

A European company that is located in Europe and only offers it services in Europe is EasyJet Plc. This discount airline flies to a hundred locations across the continent, including the British Isles. The stock popped up eight percent on an improved earnings outlook. As things stabilize in Europe, European stock opportunities may well include companies that will ride the improving economy to profits. An interesting stock that gained a few percent recently is Tullow Oil Plc. The company has announced the first oil reserves discovered in Kenya in the Rift Basin. This company is located in Britain but searches for and drills for oil in Africa, Asia and throughout the world. Such a stock will benefit from increasing oil prices if, one, the global economy improves, or, two, oil prices rise due to problems with Iran. Stock options trading of these and similar European stock opportunities require close attention to fundamentals as well as shifting market sentiment for profits.

The European multinationals may provide the options trader with the best European stock opportunities. Options traders need not limit their trading to stocks that they believe or hope will go up in price. As the world economy waffles back and forth between economic recovery and the double dip of a recession, these companies may act as accurate barometers of global fundamentals and market sentiment. By following their fortunes as well as the pronunciations of the Federal Reserve, European Central Bank, International Monetary Fund, and various national financial authorities, traders may be able to anticipate the rise and fall on various economies. However, each multinational is in a different line of business. Consumer goods companies tend to do just as well or better during an economic downturn. Companies like Siemens may find their fortunes more directly tied to the budgets of their customers. A company like Roche could surprise everyone with a new cure for some dread disease and an associated cash flow into the distant future.

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