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How The EUR Stock Market Performed in 2016

2016 proved to be quite a year for the EUR stock market. For the most part, the EUR stock market remained volatile and risky for most investors. In fact, it was a far cry from what stock strategists previously assumed. One unexpected event included Brexit. When Brexit vote occurred, the entire market remained on alert. Furthermore, its impact remained magnanimous. A perfect example remains what took place in the EUR’s banking sector. Due to such negative interest rates, the banking sector collapsed. Everything remained left in shambles. Other external factors that caused the EUR’s political decay included populism, terrorism, and political turmoil.

Due to such elitism taking place in the Europe, several countries experienced a revival in populism. From left to right, prominent leaders rose with populist rhetoric. Next, remains the issue of terrorism. Whether in France or in the U.S., the threat of terrorism remains a serious issue. As a result of numerous acts of terrorism, several ties with the Middle East remain strained. Therefore, it had a significant impact on the global economy. Next, remains the recent elections in Germany and France. Due to such tension stemming from public uprisings, the EUR stock market remains greatly impacted by it. Due to these reasons, several investors turned their back on the entire region.

The extent of the EUR stock market’s decline remained throughout most of the year. In fact, the pension savings of millions of Europeans remained at risk. Moreover, the Brexit exit from the union brought about an estimated loss of $6 billion Euros in one day. Furthermore, a professor at the London Business School deemed the loss of football competition as the reason why investors felt negative about investing in Europe. In addition, he believes emotions play a huge role in share prices and investing. In particular, football in Europe remains insanely popular. Therefore, football directly affected the stock performance of at least 39 countries. To be exact, studied have shown the national market decline by 0.3 percent every day. In positive news, experts believed the economy stood to benefit from Wimbledon and the Rio Olympics. Companies also remained in a position to grow. To name a few, this included Just Eat, Sainsbury’s, Ladbrokes, easyJet, Sports Direct, Halford, and so forth.

Another attributable cause to positive growth included retail, pubs, and gambling firms. Retail, pubs, clubs and gambling firms remained among the more general sectors that could score a win if British stars and teams performed well. Furthermore, the rise of retail sales from people buying TVs played a pivotal role. In addition to TVs, people needed snacks and alcohol. Therefore, these goods also performed well. However, these efforts remain ineffective in addressing Europe’s dilemma. In fact, some of the top banks in Europe lost half of their value. To name a few, these institutions included Deutsche Bank, Barclays, Credit Suisse, and Allied Irish Banks. Moreover, these banks remain integral to the entire EUR stock market. To be exact, only one European stock experienced growth in 2016. It remains known as the Hungary OTP Bank. Moreover, the bank remains relatively unknown.

The culprit behind such failure remains attributed to bad assets and balance sheets. Furthermore, the contagion from one country to another remained extremely high. This remains attributed to bad loans. In stress tests conducted by numerous researchers, 29 out of 51 banks would have failed an American-style variation. Moreover, they needed to raise 123 billion Euros. to make up their finances. Furthermore, Italian banks performed poorly. Moreover, the Italian sector remained fragile and susceptible to bailouts. In addition, Germany remained vocal about their distaste for negative interest rates and an adverse market. They predicted how it would hurt earnings. Also, it remained a record low.

Negative interest rates that remained set by central banks, charged banks for holding money. The objective remains to get them to loan money to businesses and individuals to boost the economy. Unfortunately, this was not the case in 2016. As a result, they failed to acquire revenue from their loans. In a nutshell, the U.K.’s decision to leave the European Union remained largely responsible for the demise. As a result of the Brexit vote on June 23, shares went tumbling down.

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