Spain Unlikely To Prolong Europe Bank Aid Programme

yet, so its too early to start cheering, said Peter Dixon, strategist at Commerzbank in London. There is no real reason to expect markets to rally strongly from here. If we do get some gains it could turn out to be a temporary relief rally, which could be pulled back when earnings start to bite, he added. On the longer term, however, there should be more room for upside. By the year-end or early 2014 there should be more scope for a modest uptrend triggered by expectations for a better outlook for 2014, especially in the U.S. And of course, we would expect to see tapering come back onto the agenda. Investors will start to rotate out of fixed income and into equities, Dixon said. Among notable movers in the index, shares of Rio Tinto PLC /quotes/zigman/155899 UK:RIO +4.25% /quotes/zigman/182541/quotes/nls/rio RIO +2.62% /quotes/zigman/176317 AU:RIO +2.51% gained 4.3% after the heavyweight miner said its iron-ore output rose to a new quarterly record . /quotes/zigman/68270/quotes/nls/aapl AAPL +0.53% named the luxury-goods firms Chief Executive Angela Ahrendts as senior vice president of retail and online stores. U.S. deal optimism More broadly, investors in Europe welcomed developments in the fiscal negotiations in U.S., with the debt ceiling looming and the government shutdown moving into Day 15. On the Senate floor on Monday, Senate Majority Leader Harry Reid said he was very optimistic about concluding deals this week to raise the debt limit as well as end the government shutdown.

Europe prepares to come clean on hidden bank losses

During the region’s debt turmoil, the European Union conducted two bank stress tests, considered flops for blunders such as giving a clean bill of health to Irish banks months before they pushed the country to the brink of bankruptcy. The ECB’s new checks are seen as the last chance to come clean for the euro zone as the bloc tries to set up a single banking framework, known as banking union. The debate opens amid ebbing political enthusiasm for banking union – originally planned as a three-stage process involving ECB bank supervision, alongside an agency to shut failing banks and a system of deposit guarantees. It would be the boldest step in European integration since the crisis. “We have to find a solution now,” said Michel Barnier, the EU Commissioner in charge of financial regulation, urging faster progress in the slow talks. “The next financial crisis is not going to wait for us.” ANGLO-GERMAN AXIS? In one sign of the divisions, Britain has repeatedly refused to sign off on the first pillar of the banking union framework, allowing the ECB monitor banks. Having earlier agreed, London now wants additional assurances from ministers this week that Britain, which is outside the euro and polices its own banks, will not face interference from the ECB-led euro bloc. Britain is likely to find a sympathetic ear in Berlin, which wants to keep London on side in its push to prevent stricter EU emissions rules to protect its luxury car makers. Before the ECB takes over as supervisor late next year, it will conduct health checks of the roughly 130 banks under its watch. This is the nub of the problem facing finance ministers at the two-day talks. With the euro zone barely out of recession, a failure to put aside money to deal with the problems revealed could rattle fragile investor confidence and compound borrowing difficulties for companies, potentially killing off the meek recovery. In turn, that raises the question about who pays for the holes that are found in balance sheets in countries such as Spain and Italy. While Rome and Madrid would like easy access to the euro zone’s permanent bailout fund, the European Stability Mechanism, Germany, Finland and other strong countries say each country should pay for its own clean-ups. This time around, the task of cleaning up banks should not be quite as daunting as five years ago because shareholders, bondholders and wealthy depositors can expect to take some of the losses, as happened in the bailout of Cyprus in March.

Europe stocks rally on U.S. budget deal progress

Earnings Wall

Credit: Reuters/Francois Lenoir LUXEMBOURG | Tue Oct 15, 2013 9:46am EDT LUXEMBOURG (Reuters) – Spain will probably bring an end to the programme of international aid for its banks on schedule this year, Economy Minister Luis de Guindos told a news conference in Luxembourg on Tuesday. Madrid turned to Europe last year for 41 billion euros ($56 billion) to help the weakest of its banks, which have been crippled by the collapse of its real estate market and resulting mass of failed loans to developers and houseowners. With the economic fortunes of Europe’s debt-ridden southern half showing signs of improving, a senior official in Brussels told Reuters last week that Spain was unlikely to seek more financial aid for the banks when the current programme runs out. “The central scenario, and the most probable one, is that on November 15 (it will be decided that) Spain’s banking programme will come to a close,” de Guindos told reporters at a meeting of European Union finance ministers. The European Central Bank and the European Commission, which backed the rescue, last month said in a review of Spanish banking reforms that the sector remained comfortably solvent, and praised its turnaround. They stressed, however, that Spain’s weak economy – set to emerge from a two-year recession by the end of the year – and a fall-off in lending still posed a risk. Like their European peers, Spanish banks also face a European review of their balance sheets early next year before the ECB takes over as supervisor. Some believe their restructured or refinanced loans could come under particular scrutiny, and that they could be told to put more cash aside to counter potential losses on these, banking sources in Madrid have said. Any capital gap that that process leaves is likely to be manageable, though smaller banks that are owned by the state are unlikely to be able to turn to the market like some of their peers. The Spanish government currently estimates that lenders will have to put aside an extra 5 billion euros in provisions to counter such losses, a source at the Economy Ministry said. “The general perception is that in Europe the banking system has not been as thoroughly cleaned up as in the United States … which is among the elements holding back economic growth in Europe,” de Guindos told the news conference, in reference to the European review of banks’ books. (Reporting by Robin Emmott and Martin Santa in Luxembourg, Sonya Dowsett, Jose Elias Rodriguez and Jesus Aguado in Madrid; Writing by Sarah White; editing by Patrick Graham) Tweet this

Europe ETFs Survive U.S. Shutdown

SCZ boast s a price-to-book of 2.85, dividend yield 2.75% as well as less beta volatility than the S&P 500. The current price is solidly above both a 50-day and a 200-day moving average. The 19% gains off of the June lows arent too shabby either, wrote Gordon. SCZ allocates over 49% of its combined weight to Japan and the U.K., but the ETF does have Eurozone exposure via Germany, France and Italy. The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product. @yahoofinance on Twitter, become a fan on Facebook Related Content Chart Your most recently viewed tickers will automatically show up here if you type a ticker in the “Enter symbol/company” at the bottom of this module. You need to enable your browser cookies to view your most recent quotes. Search for share prices Terms Quotes are real-time for NASDAQ, NYSE, and NYSEAmex when available. See also delay times for other exchanges . Quotes and other information supplied by independent providers identified on the Yahoo! Finance partner page . Quotes are updated automatically, but will be turned off after 25 minutes of inactivity. Quotes are delayed at least 15 minutes.