How the bond
markets -- and by extension stock markets -- digest the news that borrowings will remain extremely high is an open question.
For now, the best move is to start reducing your exposure to Europe. A number of companies in your portfolio likely have a degree of exposure to the continent, and you can get that information by looking at a company's 10-Q
filings with the Securities and Exchange Commission (they're also readily available in the Investor Relations
section of corporate websites).
To save you some time, I've made a list of companies that get at least 40% of sales from Europe. If you own any of the stocks in the table below, then you really need to question the merits of owning them right now..
The list of companies that derive between 30% and 40% of sales from Europe is considerably longer, including firms such as Hewlett Packard (NYSE: HPQ)
, Johnson Controls (NYSE: JCI)
, eBay (Nasdaq: EBAY)
, Google (Nasdaq: GOOG)
and Dow Chemical (NYSE: DOW)
. It's tough to say on a case-by case basis whether you should continue to hold these stocks or not, but you should review your thesis for owning any stock that falls into this range.
In some instances, share prices have already slumped due to weak European demand. That's surely the case with Ford (NYSE: F)
and Alcoa (NYSE: AA)
, two members of my $100,000 Real-Money Portfolio