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Euro “accord” glow fades, pounding cyclical names and havens alike (UBS, JJC, GLD)

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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%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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