Market Commentary

Will Italy Leave the EU

Over the holiday weekend Italy was in a political storm which may result in new elections after they just had them a few months ago. The pressure is coming from the politicians and their supporters who want more autonomy from the EU with a possible exit from the union like Britain is doing. The process is time consuming and still ongoing for them.

Why this affects U.S. stocks is a matter of what happens to the Euro and our Federal Reserve’s response to support and weaken the dollar.  Markets do not like uncertainty and an Italy moving out of the European Union or threatening to move out uncertainty. Italy is the third largest and founding member thus the threat is substantial to the overall health of the EU.

Will they leave, not likely? The benefits to Italy for staying in far out way the costs. Then again maybe the people of Italy do not see it that way.

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