Investors Moving from Growth Markets to Brussels?

What happened to the European financial crisis?  Investors appear to be moving their funds from emerging markets–countries such as BRIC + Mexico, Korea, Turkey, and Indonesia that could account for a 46% share of global GDP:

Since the spring, investors have gradually been shifting away from emerging markets. The Financial Times is reporting now that American investors have put more money into European stocks than at any time since 1977.

Marketplace’s Stephen Beard joined host David Branaccio to discuss. He said this is another sign that the U.S. is becoming more confident about the Euro zone. But few believe the crisis is completely over.

“Greece needs a third bailout. That won’t go down well with German taxpayers. This crisis could easily flare up again in the fall,” he said.

via Move aside emerging markets, investors are now eyeing Europe | Marketplace.org.

Is Europe back?

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2 thoughts on “Investors Moving from Growth Markets to Brussels?

  1. alexkhirst says:

    Obviously, the United States’ greater investment in European markets is positive in that it shows the US is putting more confidence again in the global market, especially because American investment declined since European economic crisis. At the same time, investing in the Euro zone again could be a gamble because Greece and several other EU countries have shaky economies. Thus, the US should hold off on any heavy investments in the Euro zone until countries such as Greece and Spain become more secure economically.

  2. It is amazing what a role perception can play on things that many of us think should be dominated by logic and numbers (i.e., the stock market). The stock market seems to be like a game of musical chairs. The European market (not markets) is an important player in today’s world economy, as it has always been. For the sake of all of us, I hope it recovers, if not swiftly, steadily. As for the BRICS countries, Mexico, and Turkey, some of them have seen significant slowdown in their economic growth. Either way, these emerging economies cannot grow on their own; they need the larger consumerist economies of North America and Europe.

    Either way, I don’t know whether this shift in investor attention from the emerging markets back to Europe is due to complex market calculations or simply due to economics psychology (what I like to call the “herd effect”).

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