Potential Europe contagion is the largest risk to equities

ON NORTH AMERICA

Smith & Williamson's Tana Focke examines the impact of Europe's sovereign debt crisis on the US

The market continues to oscillate on macro developments in the US and abroad. Europe has been the focus of the past few weeks. The bailout of Ireland appears to be behind us – the market will now start to examine the balance sheets of Portugal, Spain and Italy. The key is the ECB’s ability to instil confidence in the European system and its capacity to support its more exposed members. If it cannot, fears of contagion will spread and the fear is enough to drive up funding costs for these nations, and pressure financial markets. While US banks have relatively little exposure to Euro...