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December 08, 2017
Sector rotation benefits value stocks.

Last week saw heavy sector rotation, involving profit-taking among tech stocks and resurgent investor appetite for telecoms, energy stocks and utilities.

The European banking sector was also driven higher by the announcement that the Basel 4 committee is ultimately imposing only a marginal increase in regulatory capital requirements upon Europe’...

1 December 2017
Stocks are uncertain despite a conductive economic framework.

OPEC finally extended its output freeze until the end of 2018. Russia may nonetheless review the agreement during the course of the year as its production units require a longer start-up period following a lengthy closure after the winter. The oil price must not be allowed to rally too sharply however, as this would make US shale oil and gas competitive once again. Global demand is still expected to rise by around 1.5 million barrels per day. It should be noted that Venezuela’s exporting capacity has collapsed as the country attempts to restructure...

24 November 2017
Return to favor of the stock market after "Thanksgiving"?

Thanksgiving, Black Friday, Cyber Monday... these key milestones in the US also represent major events for French investors. US consumer sentiment will be very closely watched at a time when nothing appears to be able to derail the current dynamic economic momentum.

Exceptionally however, the eurozone continues to beat forecasts, with indices and data hitting new highs across the board (business climate, industrial production) breaking the all-time records established in 2007 and 2011. The European economy is now in the capex-recovery phase,...

17 November 2017
European stock markets take a breath after several consecutive bearish sessions.

Equity markets rallied after a significant correction this week, particularly in Europe. Although some indicators triggered some (mild) panic, the global environment remains buoyant. The euro-dollar exchange rate momentarily strayed outside of the 1.18 - 1.20 trading range and the price of crude eased. The situation in the Middle East nonetheless continues to weigh on sentiment following intervention by Saudi Arabia and its ongoing proxy conflict with Iran in Yemen, combined with the destabilising influence in Lebanon and budgetary issues in Turkey...

10 November 2017
Stocks fall as corporate updates trigger profit-taking

The week closed on a dissonant note with volatility returning to the markets on Thursday and long-term rates steepening across the board amid thinly-veiled threats between Europe and the UK regarding the financial conditions of the Brexit.

As an interesting indicator of the overall level of stress, intraday volatility among companies releasing their earnings peaked at its highest level in five years, whereas overall realised market volatility in the S&P 500 index is at its lowest level since 1965. With the markets at all-time highs in almost all...

3 November 2017
Markets still fueled by the economical cycle and central bank’s policies

As the one-year anniversary of Donald Trump’s election approaches, the “Trump trade” has ultimately worked relatively well.

Since November 2016, global market cap has increased by USD 26,000 billion. Unexpectedly, bond markets have also continued making progress, although to a lesser extent (+ USD 2,000 bn). Investors have expressed an unfailing sense of optimism, focusing on the health of the economic cycle rather than on the tweets published by the US president. Highly bullish signals from the tech sector, typified by record Iphone X orders, and...

27 October 2017
Equinox and autumnal peak on stock markets

At the equinoxes, the sun rises in the East and sets in the West. For the markets, the sun rose in the East in Asia heralding three major events. Xi Jinping was re-elected, confirming his hold over the Communist Party at its nineteenth congress. He confirmed his resolution to extend the influence of Chinese model throughout the world by implementing the reforms required to improve the quality of economic growth and reduce the harmful effects of pollution and poverty.
Meanwhile in Japan, the land of the rising sun, Shinzo Abe also secured his hold on...

20 October 2017
Record-high stock prices indexes amid synchronized global growth

Dichotomy, paradox, bubble...are among the words which have begun to appear in the financial media over the past few weeks. Around the globe however, economists are welcoming a synchronised recovery, while investors, particularly in the bond markets, are not anticipating an uptick in inflation or a future increase in long-term rates. All 45 economies monitored by the OECD are nevertheless expanding, while the pace of growth among 33 of them is also accelerating. Commodities prices rallied sharply, driven by resurgent growth in China, along with...

13 October 2017
On the eve of third quarter publications, the good health of the US and European economies carries the markets.

US employment figures improved further and the economic climate continued to brighten in Europe, with industrial production data coming in at +3.8% vs an expected +2.6%. The Catalonian referendum did not drive markets lower, although the crisis has not yet been resolved, while the deadlock in the Brexit negotiations demonstrates the difficulty in escaping the stranglehold of a customs and commercial union. The Q3 reporting season is getting underway in the US and in Europe. The risk of disappointment appears low as confidence indicators and guidance...