March 24, 2017

DNCA's weekly market outlook by Igor de Maack

Management comment

It was a more turbulent week on the global financial markets due to increasing impatience among investors concerning Donald Trump’s economic programme. The new all-time highs recorded on Wall Street will not be tenable if the US economy and corporate earnings slow down. Oil came off its highs, as the price trend turned bearish, following the announcement of higher than anticipated stocks and as shale oil production continued to increase in the US. The US oil engineering company Baker Hugues reported a further rise in the number of operational drilling sites for the 9th week in a row, which now stands at 631 platforms, a total last seen in September 2015.

The euro trended marginally higher against the dollar, towards the 1.08 level. The single currency’s sudden return to grace may be attributable to a possible change in tone from the ECB and amid increasing anticipation of an honourable result in the French presidential elections. With the first round of voting due in a month’s time, French electors are entering the last phase of their decision-making process. Further television debates involving a broader panel of candidates will soon be taking place. Furthermore, the economic programmes proposed by the most serious candidates should now take centre stage, finally eclipsing the fallacious legal and moralistic debates which mainly serve to feed spectators on the social networks. Previous elections, with the exception of the Italian referendum, have demonstrated that the consensus reflected in the opinion polls, or the political wishes of certain socio-professional groups, can be wrong-footed by undecided electors at the last moment, once they enter the voting booth. During the history of the fifth republic, France has never before been confronted with such a level of incertitude over the constitution of its future government, alongside its two neighbouring Latin cousins (Italy and Spain) which are now both bogged down by political bargaining as their party leaders attempt to form incongruous political coalitions.

Igor de Maack, Fund manager and spokesperson at DNCA. This article was finalised in March 24th, 2017.

This promotional document is a simplified presentation and does not constitute a subscription offer or an investment recommendation. No part of this document may be reproduced, published or distributed without prior approval from the investment management company.

DNCA Investments is a trademark held by DNCA Finance

It was a more turbulent week on the global financial markets due to increasing impatience among investors concerning Donald Trump’s economic programme. The new all-time highs recorded on Wall Street will not be tenable if the US economy and corporate earnings slow down. Oil came off its highs, as the price trend turned bearish, following...
2017-03-24