As Europe Slows, the U.S. Economy Continues to Progress
Gas prices are falling, credit use is on the rise, and the trade deficit is looking more normal.
This week, as the flow of U.S. economic news slowed to a crawl and first-quarter earnings season drew to a generally successful end, Europe continued to be the market focus. The news there was not so good. Voters turned out the engineers of austerity programs in several countries, as they have in several earlier elections. Greece remained the epicenter of European problems. Greek election results have made it difficult to form a new government, and negotiations are still under way to avoid the need for yet another set of elections.
A weakening Europe generally had a smaller effect on U.S. and multinational corporations in the first quarter than most analysts had anticipated. However, this week Cisco (CSCO) did indicate that it believed the slowdown in Southern Europe was spreading to the rest of Europe.
Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.