Spain's Unemployment Is Crazy-High

The big macro can cause big moves in the market. What does today's headline macro news mean for your portfolio?

What's happening: Think U.S. unemployment is high? Today Spain's National Statistics Institute said that joblessness in the country rose to 21.5% in the third quarter.

In plain English, please: Though the country has almost continually struggled with high unemployment, the current rate is at a 15-year high. The issues that Spain is facing may highlight the debate over how Europe should best tackle the debt problems in countries such as Spain, Greece, and Italy. The approach thus far has been for the overly indebted countries to impose austerity measures to reduce spending in an effort to reign in budget deficits. However, some economists point to those austerity measures as a further trigger for joblessness and economic contraction. During the third quarter, 40,200 jobs were cut from public administrations in Spain.

Stocks to watch: Obviously, companies based in Spain could feel a pinch from higher unemployment and a softer economy. For U.S. investors, the major stocks to watch would include Telefonica (NYS: TEF) , Banco Santander (NYS: STD) , and Banco Bilbao (NYS: BBVA) . However, other businesses and banks in the region that do significant business in Spain, such as Vodafone (NYS: VOD) , could also be at risk.

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At the time this article was published The Motley Fool owns shares of Telefonica. Motley Fool newsletter services have recommended buying shares of Vodafone Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

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bps163

Think things look bad today, just wait till Friday! Then you will see them jumping out of windows when they find out that the EU has no money to help. Then you will see those banks start to fail and go bankrupt just like WAMU and so many others have here.

October 31 2011 at 7:53 AM Report abuse rate up rate down Reply