5 Top Stocks To Make The Most Of The Roman Impasse

Italy’s political mayhem has taken U.S. investors by surprise. Italy’s president, for the time being, restricted the formation of a new government backed by two euroskeptic, anti-establishment parties. But, if these populist parties win the upcoming election, it could endanger Italy’s membership in the single currency. Such likelihood sparked a global selloff, sparing neither European nor U.S. investors.

But, let’s admit that the stock market has weathered many debt and currency storms, including “Brexit” and “Grexit”. Based on such positive historic trends, investors should snap up solid stocks that will make the most of a stock market comeback in the near term.

Italy’s Political Scenario

Italy’s March election failed to yield definite results. Last weekend, the anti-establishment maverick 5 Start Movement and far-right League were on the verge of forming a coalition government. But, Italian president Sergio Mattarella blocked the coalition government. Mattarella vetoed the appointment of former industry minister Paolo Savona, who has been backed by the populist coalition. The 81-year old economist was proposed to help Italy reduce public debt and boost a weak banking sector.

Savona, however, is also known to have criticized the European Union and European integration which hasn’t gone down well with Mattarella. Instead, Carlo Cottarelli, a former International Monetary Fund official, has been asked by Mattarella to form a new government. But, it’s highly unlikely that he will be able to win a vote of confidence in the parliament and would thus continue to remain as the caretaker government till fresh elections take place.

What Italy’s Crisis Means for European and US Investors

Investors are worried that if the populist parties win the election, it can lead to the Eurozone’s third-largest economy leaving the shared currency. This, in turn, will, without doubt, disrupt Europe’s status quo. Italy’s efforts to abandon the shared currency will not only affect Europe but also U.S. markets. Any attempt to ditch the euro will hamper “euro boom” and delay the U.S. monetary normalization process.

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