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Once a European financial stalwart, Germany now in trouble

NOTE: The following was written by Yahoo Finance Contributor Milanee Kapadia. You can follow her on Twitter @MilaneeKapadia

The standoff between Russia and the European Union is hurting the outlook for Germany. Europe’s biggest economy may have contracted for the first time since 2012 in the second quarter. We get Germany’s GDP data on Thursday, but Bob Doll, chief equity strategist at Nuveen Asset Management says Europe was fragile to begin with and then the standoff happened.

“As you know even prior to this, Italy was dipping back into recession, we’ve got some macro-economic numbers out of Germany that have been on the weak side, and so Europe is just kind of muddling through at best,” he says.

Doll adds quantitative easing may “not be out of the question, Mario Draghi recently hinted at that at some point, should Europe need it. Which should be a good help for risk assets (stocks) in Europe.” The ECB President recently said policy makers are willing to use unconventional measures including QE if needed.

Separately, inversions deals took a hit last week when Walgreens (WAG) decided it wouldn’t reincorporate overseas. Inversions refers to the practice of U.S. companies purchasing foreign firms so they can lower their tax bills by moving their domiciles out of the U.S. The move followed political pressure from the administration with President Obama threatening legislation. Doll dismisses it all as noise in an election year and he says unless the U.S. lowers it corporate tax rates, inversions aren’t going anywhere.

“I am surprised that we did not get a whole lot more prior to the last few months. I mean, it's part of the tax code, corporations have a responsibility of maximizing their bottom line and their growth rate for their shareholders. And if I can minimize my tax rate by moving to another geography, why wouldn’t I do that?”

One of Doll’s stock picks for 2014 is Pfizer- a company that attempted an inversion with its failed bid for Astra-Zeneca. If you want to find out more of the stocks Bob Doll likes, check out our interview with him on Yahoo Finance Wednesday morning.

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