May 09, 2017

DNCA's weekly market outlook by Igor de Maack

Management comment

Democracy has once again vanquished political extremists, but not without a struggle and considerable anguish. Austria, Spain, Italy, Holland and now France have chosen the moderate path towards maintaining the collective effort, even though it has admittedly not been simple to do so since 2008. Democratic electors kept a level head and tipped the balance in favour of a president offering a credible Europe-compatible economic programme tinged with social-liberalism. The president now requires a balanced parliamentary majority to govern and trigger the “confidence shock” required. The electors refused the temptations of populist sirens, proposing unfathomable economic programmes and public spending promises which were impossible to finance. It is now time to focus on the economy, as an improvement in economic conditions is steadily being confirmed in the eurozone.

The quarterly reporting season has got off to an encouraging start, amid a timid uptick in global trade. The multitude of observers who have been predicting the end of democracy and the death of the eurozone since 2011 are in part responsible for destabilising popular sentiment regarding Europe. For the time being, neither the terrorist attacks, nor the migration crisis, nor the lure of extremism, nor the economic crises have succeeded in undermining the European dream of peace and liberty in place since 1945: the freedom to live together, the freedom to educate our children, the freedom to protect our families, the freedom to become entrepreneurs, the freedom to create and to invest and save for past and future generations.

The term creation will be the keyword for the next few years in Europe and elsewhere: creating jobs, creating companies, creating wealth and creating talent, as Albert Camus wrote in his essay The Myth of Sisyphus, “creating is living twice”. After this crucial election and following the anniversary of the end of the Second World War, most Europeans are breathing a great sigh of relief, even though the future of France and the continent is far from certain.

Igor de Maack, Fund manager and spokesperson at DNCA. This article was finalised in May 9th, 2017.

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Democracy has once again vanquished political extremists, but not without a struggle and considerable anguish. Austria, Spain, Italy, Holland and now France have chosen the moderate path towards maintaining the collective effort, even though it has admittedly not been simple to do so since 2008. Democratic electors kept a level head and tipped...
2017-05-09