The stock market had nothing to expect from the elections in France, but all from the FED and ECB

The world’s stock exchanges are sad when they listen to the American Federal Reserve but somewhat comforted when they hear the ECB.

The world’s stock exchanges are sad when they listen to the American Federal Reserve but somewhat comforted when they hear the ECB.

©JOHANNES EISELE / AFP

Atlantico Business

After a turbulent past week, a Monday in the red and times still uncertain, the world’s stock markets are saddened when they listen to the American Federal Reserve but comforted a bit themselves when they hear the ECB.

Ito nis not because the world stock exchanges preferespect the kindness of Christine Lagarde, preside of the ECBto the brutality of Fed Chairman Jerome Powell that global investors are followingeassured aboutfuture of the economy.

The result of too muchuncertaintys is that investors are acting in an unorganized manner.

SaAsia, prices have fallenand the perspective is difficult. Dfirst, because China is struggling to get out of the pandemic … Deconfinements are slow and painful; Iactivityis still lethargic. Das far as futures, the Asian zone is tredepends on the dicemouthWesterners fear a slowdown in global growth.

The US stock market is suspended on information from the Federal Reserveit expects a rise quite brutal rate. Lthe goal is to break rising prices, which are now being dragged into a relatively toxic price-wage spiral. But in a desire to break this logic, investors fear that the Federal Reserve will break theactivitye. And thatis not Joe Biden’s policy to ensure them. On Wall Street as on Nasdaq, the market is downright bearish and waiting a bitworriedstudy the FED meeting, this Wednesday.

Since early January, stocks have lost an average of 20% and fears of stagflation nnever been so strong. In other words, investorsexpect a slowdown in growth Number Dbusiness and especially incometricks.

On the European side, we remain a priori calmer because the ECB, the European central bank, is more committed toextent of possible decrease. Its program for the next six months is considered manageable by European economies. Price increases are real and painful for the most vulnerable categories, but it was increases imported fuel and food purchases associated with the war in Ukraine. Dohwhere series back and forth in stock prices.

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Environmentalists and anti-globalizationists will be more inflationary than the war in Ukraine and in Covid

What is intefeelingvsis that investors are relatively well defined those risksthey run over the next few months and thatthus they escape a deadly pessimismeD.

1eh point : Investors in Europe, in general and France in particularement, do not believe in serious political risks. bulkfor most ofbetween them, Jean-Luc Mélenchon seems not to them tooes serious in his beliefs. His career was tres winding, tres heysitting. They bet more on Emmanuel Macron’s ability to pilot a ship. For investors, theThe France-Germany pairing seems solid to them. This coupling is the guarantee of continuity ofa strict monetary policybalanceed and the pursuit ofconsolidation of public funds. The saying, hesndo not rule out the possibility of relatively violent social movements, as long as political representations do notdo not absorb the waves of regional or corporate discontent, because we are heading towards painful structural changes.

2e point : investors are clearly convinced that the pedagogy of structural changes to come nwas not made. Don the one hand, the fight for climate will require changes in consumption and lifestyle in the way of working, moving and housing. The resistance toheatingthe demand for organic or local products will result in different trade-offs and higher prices.

Danother side, the globalization that dominates the functioning of systemsemy production, the terms will change. Modern societies will bring the centers of production closer to the areas of consumption (relocation) but they will also separate the markets between those who respect the rules.erules of the market economy and those who do not respect them. The cynicism in international relations is likely to lose ground. This will be the main consequence of the war in Ukraine. More transparency, of honestyé and respect for Western values. But until when?

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The consumer complains against inflation but refuses to admit that his or her behavior (usually) accelerates rising prices.

Investors are increasingly aware nathey have a role in arbitrations regarding all CSR (social and environmental) issues. In the meantime and over many years, we must learn to live at a rate ofinflation of 2 or 3%. For investors cis fully manageable if the ROI, Cie the return on investment grows simultaneouslyhurry me up.

3e point. This evolution insteadoptimist ndoes not eliminate the risk of financial crisisere to start from the most indebted state. If investors are secured by their private investments in production, they are not secured by the management of public spending that does not result ineno return. This is the case with all the operational and support costs that modern states sindebted. Lthe debt -free interest rate is comfortable; but if open the States must sthe 3% debt will be destroyed. Dohwhere the real danger ofa financial crisiseagain seriously (as in 2008) that there will clearly be systematic effects.

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