Lingering debt crisis should still concern investors

ON EUROPE

Lazard's Aaron Barnfather says the fear of contagion persists.

The clouded future of the euro resulted in the European equity markets behaving in an unusual manner last year. The dominance of macro factors in the mindset of investors has meant individual stocks have been highly correlated with the broader market performance. For example, during a Spanish market sell-off in November, Santander, and Telefonica both fell by approximately the same amount despite the fact one stock is exposed to the debt troubles in the economy and the other is cashflow-generative. This is just one clear example of the indiscriminate market moves – a situation that ca...