{"id":17511,"date":"2016-02-08T15:30:03","date_gmt":"2016-02-08T20:30:03","guid":{"rendered":"http:\/\/olduvai.ca\/?p=17511"},"modified":"2016-02-08T15:30:15","modified_gmt":"2016-02-08T20:30:15","slug":"why-a-selloff-in-european-banks-is-ominous","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=17511","title":{"rendered":"Why a selloff in European banks is ominous"},"content":{"rendered":"<div id=\"above\">\n<div class=\"article-headline-wrapper\">\n<h3 id=\"article-headline\"><a href=\"http:\/\/www.marketwatch.com\/story\/why-a-selloff-in-european-banks-is-ominous-2016-02-07?link=MW_popular\" target=\"_blank\">Why a selloff in European banks is ominous<\/a><\/h3>\n<\/div>\n<\/div>\n<div id=\"topper\">\n<p>Europe\u2019s bank index has posted its longest weekly string of losses since 2008<\/p>\n<\/div>\n<div id=\"content-hole\">\n<article id=\"article\" class=\"with-hero \">\n<figure class=\"hero-figure has-caption\">\n<div class=\"hero-image-wrap\"><img decoding=\"async\" class=\"article-image ZH\" src=\"http:\/\/ei.marketwatch.com\/\/Multimedia\/2016\/02\/07\/Photos\/ZH\/MW-EF025_euro_b_20160207131311_ZH.jpg?uuid=73071018-cdc6-11e5-850c-0015c588e0f6\" alt=\"\" \/><cite>Everett Collection\u00a0<\/cite><\/div><figcaption>Dark clouds are gathering around Europe\u2019s banking sector.<\/figcaption><\/figure>\n<div id=\"article-meat\">\n<div id=\"article-body\">\n<p>European banks have been caught in a perfect storm of market turmoil, lately.<\/p>\n<p>Lackluster profits and negative interest rates, have prompted investors to dump shares in the sector that was touted as one of the best investment ideas just a few months ago.<\/p>\n<blockquote class=\"shareable\" data-share-hover=\"true\" data-share-modprefix=\"mw_pullquote_\" data-share-text=\"Why a selloff in European banks is ominous\"><p>\u201cThe current environment for European banks is very, very bad. Over a full business cycle, I think it\u2019s very questionable whether banks on average are able to cover their cost of equity. And as a result that makes it an unattractive investment for long-term investors.\u201d<\/p>\n<footer><cite>Peter Garnry, head of equity strategy at Saxo Bank.<\/cite><\/footer>\n<\/blockquote>\n<p>The region\u2019s banking gauge, the Stoxx Europe 600 Banks Index\u00a0<span class=\"quote down bgQuote\" data-channel=\"\/quotes\/zigman\/2380166\/delayed\" data-bgformat=\"\"><a class=\"qt-chip trackable\" href=\"http:\/\/www.marketwatch.com\/investing\/index\/fx7?countrycode=xx&amp;mod=MW_story_quote\" data-fancyid=\"XSTXIndexFX7\" data-track-mod=\"MW_story_quote\">FX7,\u00a0<span class=\"bgPercentChange\">-5.59%<\/span><\/a><\/span>\u00a0has logged six straight weeks of declines, its longest weekly losing stretch since 2008, when banks booked 10 weeks of losses, beginning in May, according to FactSet data.<\/p>\n<div id=\"ad-teads\" class=\"ad module in-view pixel \" data-name=\"Teads\" data-conditions=\"20\" data-proximic=\"true\">\n<div id=\"google_ads_iframe_\/2\/marketwatch.com\/markets_marketextra_1__container__\">\u201cThe current environment for European banks is very, very bad. Over a full business cycle, I think it\u2019s very questionable whether banks on average are able to cover their cost of equity. And as a result that makes it an unattractive investment for long-term investors,\u201d warned Peter Garnry, head of equity strategy at Saxo Bank.<\/div>\n<\/div>\n<p>The doom-and-gloom outlook for banks comes as the stock market has had an ominous start to the year.<\/p>\n<p>East or west, investors ran for the exit in a market marred by panic over tumbling oil prices\u00a0<span class=\"quote bgQuote down\" data-channel=\"\/quotes\/zigman\/2260836\/delayed\" data-bgformat=\"\"><a class=\"qt-chip trackable\" href=\"http:\/\/www.marketwatch.com\/investing\/future\/clh6?mod=MW_story_quote\" data-fancyid=\"XNYMFutureCLH6\" data-track-mod=\"MW_story_quote\">CLH6,\u00a0<span class=\"bgPercentChange\">-3.01%<\/span><\/a><\/span>\u00a0\u00a0and signs of sluggishness in China. But for Europe\u2019s banking sector, the new year has started even worse, sending the bank index down 23% year-to-date, compared with 13% for the broader Stoxx Europe 600 index\u00a0<span class=\"quote down bgQuote\" data-channel=\"\/quotes\/zigman\/2380150\/delayed\" data-bgformat=\"\"><a class=\"qt-chip trackable\" href=\"http:\/\/www.marketwatch.com\/investing\/index\/sxxp?countrycode=xx&amp;mod=MW_story_quote\" data-fancyid=\"XSTXIndexSXXP\" data-track-mod=\"MW_story_quote\">SXXP,\u00a0<span class=\"bgPercentChange\">-3.54%<\/span><\/a><\/span><\/p>\n<figure class=\"article-figure NS\">\n<div class=\"article-image-wrap shareable\" data-share-text=\"Why a selloff in European banks is ominous\" data-share-modprefix=\"mw_image_\">\n<p><img decoding=\"async\" class=\"article-image NS\" src=\"http:\/\/ei.marketwatch.com\/\/Multimedia\/2016\/02\/05\/Photos\/NS\/MW-EE930_Europe_20160205095103_NS.png?uuid=e0ae42a4-cc17-11e5-8e67-0015c588e0f6\" alt=\"\" \/><cite>Jeroen Blokland\/Robeco<\/cite><\/p>\n<div class=\"social-container\"><\/div>\n<\/div><figcaption>European banks have underperformed the broader regional market<\/figcaption><\/figure>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Why a selloff in European banks is ominous Europe\u2019s bank index has posted its longest weekly string of losses since 2008 Everett Collection\u00a0Dark clouds are gathering around Europe\u2019s banking sector. European banks have been caught in a perfect storm of market turmoil, lately. Lackluster profits and negative interest rates, have prompted investors to dump shares [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[63,281,8814,284,5220,12272],"class_list":["post-17511","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banks","tag-europe","tag-european-banks","tag-european-union","tag-marketwatch","tag-sara-sjolin"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17511","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17511"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17511\/revisions"}],"predecessor-version":[{"id":17513,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17511\/revisions\/17513"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}