Credit Outlook: Sector Updates and Top Bond Picks
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The recent ruling by the German Constitutional Court, which effectively allows the European Stability Mechanism to operate, removes a great deal of near-term risk for global banks and large U.S. banks with European exposure. In simple terms, by allowing the ESM, the German court has removed the short-term possibility of a eurozone break-up created by the inability of peripheral eurozone countries to fund their sovereign debt at reasonable levels. Although there are a still lot more issues to be addressed by the European Union and the European Central Bank in regard to peripheral sovereign debt funding, there a very few hurdles that need to be cleared in the near term.
David Sekera has a position in the following securities mentioned above: INTC, EIX. Find out about Morningstar’s editorial policies.