Concerns that European economies are due to decline -- one way or another -- are putting pressure on a wide range of commodity-oriented names this morning while euro banks go back on the decline.
Despite support from big names like Goldman Sachs, copper ( JJC , quote ) is falling again today due to concerns about declining growth in Europe, the second-largest user of the red metal behind China.
While Europe only absorbs half of what China devours, funds like JJC are already down more than 20% for the year and should decline further.
As bulk commodities weaken, the exchange-traded fund ( SEA , quote ) for shipping will decline more as growth declines in Europe. While Europe is not the center of the shipping world any more, seaborne carriers have found the Asia-Europe routes extremely lucrative, but are already scaling back.
For the year, SEA is down more than 40%. High fuel costs, too many ships and fluctuating business demand has been a "perfect storm" for the shipping industry.
Gold continues to be pounded due to the euro zone crisis, interestingly enough. Traditionally viewed as a safe haven, the exchange-traded fund for gold ( GLD , quote ) is down significantly. While big-name investors such as George Soros and Steve Cohen are buying along with central banks, as detailed in articles on www.emergingmoney.com , there is now a short float of over 5% on GLD, which is considered troubling.
Another traditional safe haven asset, the Swiss banking system, has been suffering with UBS AG ( UBS , quote ) off by more than 30% over the last six months. Rocked by a billions in losses from a trading scandal, shares have rallied higher by more than 5% over the last month, but are now declining again even though new CEO Serio Ermotti, as reported on www.emergingmoney.com , is moving to restore investor confidence and reinstate the dividend .
Deutsche Bank ( DB , quote ) continues to take its share of beatings from the euro debt crisis. As detailed in previous article on www.emergingmoney.com , Deutsche Bank has been reducing its exposure to sovereign debt from European nations. Despite this, the stock is still down more than 20% for the year.
Despite the European Banking Authority's demand that Deutsche Bank raise more cash , the balance sheet looks relatively strong as the price-to-sales ratio is 0.83 and the price-to-book ratio is 0.51. There is also plenty of cash at a price-to-cash ratio of 1.20.
On a quarter-by-quarter basis,earnings growth for Deutsche Bank is up by more than 143% and sales growth is higher by over 28%. Deutsche Bank is profitable at a margin of over 14% and the short float is only 1.40%.
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