16 Jan

Is Europe Becoming a Continent in Perennial Crisis?

WRITTEN BY Mohit Oberoi, CFA

Europe’s woes

Yesterday, the British Parliament rejected Prime Minister Theresa May’s Brexit deal by a massive margin. According to Reuters, this was “the worst defeat in modern British history.” Now that the British parliament has rejected the proposal, four possibilities exist.

First, Britain can negotiate a new deal before the March 29 deadline. However, the European Union isn’t enthused by this idea. Second, Britain can leave the European Union without a deal, the probability of which is high. Third, Britain can go for a new Brexit vote, the possibility of which has been denied by the prime minister. Finally, there’s a chance Brexit will be delayed, which Citi (C) says has a “very high” chance of happening.

Is Europe Becoming a Continent in Perennial Crisis?

A continent in crisis

While the rest of the world has recovered from the 2008 financial crisis, Europe has remained engulfed in one crisis or another. After the global financial crisis, the sovereign debt crisis hit Europe (VGK), followed by Grexit concerns in 2015. In 2016, the United Kingdom voted to leave the European Union. Last year, there was Italy’s budget deficit crisis. US (SPY) President Donald Trump has also taken an aggressive stance on trade relations with the European Union.

Another crisis year?

This year looks to be another crisis year for Europe. The Brexit vote loss has added an air of uncertainty as to how the United Kingdom plans to leave the bloc, and data points from Europe have done little to alleviate these fears.

The European Union’s industrial production fell 1.7% month-over-month in November, the worst performance since February 2016. Germany’s industrial production (GE) (BA) also fell 1.9% in November compared to October.

Concerns over Europe’s economic conditions couldn’t have cropped up at a worse time. The global economy is already reeling under the effects of China’s slowdown, which is looking more severe with each new data point. China’s December trade data, which came out on January 14, also spooked investors. Read China’s Trade Surplus Is Now Higher than We Had under Obama for a further analysis of China’s January trade data.

Latest articles

Apple (AAPL) stock is up almost 68% year-to-date. AAPL has returned 50% in the trailing 12 months and 125% in the last five years.

While the media caters to Millennial preferences, there’s one economic sector that’s shifting to a more seasoned crowd: healthcare stocks.

Despite solid earnings growth this year, Energy Transfer stock fell close to its multiyear lows recently. Could this weakness be seen as an opportunity?

Last week, Duquesne Family Office, managed by Stanley Druckenmiller, filed its Q3 13F with the SEC. We'll look at the fund's top holdings, buys, and sells.

Investors have waited for a peek at Tesla's electric pickup truck. Elon Musk hinted that it has the Porsche 911's performance and the F-150's functionality.

AT&T plans to launch HBO Max in May 2020. At $14.99 per month, this subscription video service could garner about 50 million subscribers over five years.