FYI: European equity markets have gotten absolutely slaughtered recently. Interestingly, though, sovereign default risk for some of the countries that have seen their stocks fall hardest hasn't ticked higher.
Below are price charts for the major equity indices of France (CAC), Germany (DAX), Italy (FTSE MIB) and Spain (IBEX 35). Below each price chart for the various indices, we provide a price chart of that country's 5-year credit default swaps (CDS). CDS measures default risk for sovereign debt, and as you can see, we have yet to see any kind of spike in default risk during the current downturn. That's a bullish sign so far.
Regards,
Ted
http://www.bespokeinvest.com/thinkbig/2014/10/13/european-default-risk.html?printerFriendly=true
