Following a lopsided first half of 2012, many investors have found themselves trapped further deeper into the economic crisis plaguing most of Europe. Not only have the European debt mounted to ridiculously out of reach but also kept financial markets moving perilously slow as the global economy has shown more signs of inadequate growth. Looking optimistically for a way out sadly many analysts cautioned the world’s financial markets given its economic uncertainty will most likely suffer additional volatility in the next months before the end of this year.

FLUCTUATING FIRST HALF

The discrepancy between stocks and fixed-income markets resurfaced in the first half of this year and it supported fixed profit. Many US indexes posted tough gains in the first quarter but was soon followed by substantial losses earlier in May because of the ever deteriorating European debt crisis and frail economic data.

BIGGEST FEAR STILL LINGERS AROUND EUROPE

The European Union settled in to lend Spain as much as 100 billion Euros (126 billion dollars) to assist its failing banking system last weekend. The size of the aid package was bigger than what was previously anticipated and originally encouraged a relief rally in equity markets around the world. The enthusiasm however quickly withered amid apprehensions about the exactness in the details of the bailout measures and disbelief that any fundamental concerns have been resolved.

Meanwhile, the impending Greek elections have also put investors on their limits. If the party that is in opposition to the present austerity plan is elected, the debt-ridden country will most probably leave the Eurozone and in the process will cause more problems in the European and even global financial markets.

US FISCAL CLIFF

Whilst the trouble in Greece and the rest of the Eurozone dominate the headlines it became the largest mover in financial markets. Financial strategists pointed out that a hold back in the largest economy should be paid close attention. The unexpected rise in US unemployment rate in May this year is definitely a wakeup call.

MORE TURBULENCE IN THE COMING MONTHS

With all the ambiguity intimidating the Eurozone’s financial sector, the turbulence will be far from over as many factors still looms over the markets. The continuing and worsening crisis is Europe will result in a deficit cutting and disagreements of the upcoming US presidential election on how to stimulate the apathetic economy.

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