As we all know by now, the problems in the European Union are starting to increase by the moment. Many investors are now talking about a complete breakup of the European Union as we know it. The debt problems in all of these nations is simply becoming to much to for the European Central Bank (ECB) and the International Monetary Fund (IMF) to handle. In other words, debt can only bail out debt for so long. Has the debt society as we know it finally come to an end?
In this weeks report, we will examine three of most important European banking stocks in the stocks market. After all, the problems in Europe and around the world are really a banking crisis and not just a sovereign debt crisis. Austerity measures in Europe have been implemented and the banks continue to struggle. It appears that the one way the European banks could be saved in Europe is by the ECB printing money. However, at this time, the ECB can not print money. Therefore, we shall see if that rule is changed by the end of the year. I suspect in time it will, making the ECB more like the Federal Reserve.
Deutsche Bank AG (USA) (NYSE:DB) is a Germany-based global investment bank. This stock plunged lower by 3.10 percent on Friday, June 1, 2012. The stock will have some short term daily chart support around the $28.00 area, this is the weekly chart low from September 12, 2011. The weekly chart could be signaling a decline to the $19.00 area if this downside momentum continues over the next few months. Either way, unless some surprise resolution arises out of the European Union in the near term DB stock looks to be headed lower.
Banco Santander, S.A. (ADR) (NYSE:STD) is a Spanish based financial institution primarily engaged in retail banking. The stock chart of STD looks very similar to the Deutsche Bank chart. This tells us that the European banks are trading in tandem with each other and the banking crisis is systemic. Traders should watch for near term support around the $4.85 area which is also the March 9, 2009 low. Should the stock continue to decline below this support area the next support level on the chart is really anyone’s guess. Simply put, the stock looks dreadful on the charts at this time.
Credit Suisse Group AG (ADR) (NYSE:CS) is another leading European financial giant that has been under serious selling pressure in 2012. This leading financial stock made a new 52 week low last week and is also currently trading at the March 2009 low level. The next important support levels for the stock are around the 2003 and 2002 lows. The low in 2003 was at $15.53, this would be short term support for the stock. The 2002 low for CS stock was $13.25. This level will be the last line of defense before fresh all time lows are made for the stock.
Please remember, all of the stocks mentioned today are short term oversold on the daily charts at this time. The trend remains down in all of these stocks and that tells us that any bounces in the near term could be short lived. This year is going to be very challenging for the European bank stocks.