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Despite VGK's favorable valuation and decent performance, ongoing European economic and energy crises make it a sell until conditions improve. Europe's worsening natural gas shortage and geopolitical tensions, including US demands and trade issues, pose significant risks to the ETF's outlook. VGK's multinational companies offer some insulation from Europe's economic struggles but face challenges from deglobalization and higher production costs.
As the threat of new tariffs on Europe draws closer, the price of Vanguard FTSE Europe ETF has shown unusual growth. The VGK ETF's recent price increase is driven by strong Q4 earnings expectations for European financial stocks, not by reduced fears of Trump tariffs. Europe faces a complex economic landscape with challenges from China, Russia, and U.S. trade policies, impacting Euro GDP and VGK prospects.
Look at ETFs with exposure to the Eurozone, as political turmoil, Trump's economic policies and a weak Chinese economy paint a bleak outlook for the region.
I maintain a buy rating on the Vanguard FTSE Europe ETF (VGK) due to its modest valuation, rising earnings estimates, and solid chart performance. Despite macroeconomic concerns, global EPS forecasts, including those for EAFE and Europe, are on the rise, lowering the P/E ratio for ex-US equities. VGK's diversified portfolio, high yield, and favorable sector allocation make it appealing for both near-term traders and long-term value investors.
Europe has underperformed US markets since 2008, second only to Emerging Markets. Vanguard FTSE Europe ETF offers low-cost exposure to European equities, tracking the FTSE Developed Europe All Cap Index. VGK is diverse by country and holdings, with sector composition dominated by Industrials, Financials, and Health Care. No clear advantage over iShares Core MSCI Europe ETF (IEUR).
The European economy is performing better than many forecasters initially expected. From a macroeconomic perspective, while challenges remain, financial stability depends on the ability to absorb shocks.
By now, we have all heard that Europe had a fairly decisive turn rightward over the weekend in parliamentary elections. France is calling for snap elections.
Capitalize on Euro ETFs as the ECB goes ahead with a rate cut to bring down the interest rates from the all-time high of 4%.
On Thursday, the European Central Bank (ECB) delivered a 25 basis point policy rate cut. By contrast, the Federal Reserve (Fed) is set to keep rates on hold at its meeting this month.
As widely expected, the European Central Bank (ECB) cut its key policy rates for the first time in five years. The interest rate on the main refinancing operations, the marginal lending facility, and the deposit facility were each lowered by 25 basis points to 4.25%, 4.5%, and 3.75%, respectively.