Edmond de Rothschild Asset Management’s Post

Signs of an economic slowdown emerged in the UK, US and Europe – but equity markets rallied, led by the US, as hopes of business-friendly reforms by Donald Trump buoyed global markets... https://lnkd.in/eC9DqhYv #charlesstanley #lastweekinthecity #ifas

GLOBAL — PRISCILLA THIAGAMOORTHY The political drama in Europe continues… Right now, all eyes remain on France, where the government faces a no-confidence vote on Wednesday. Marine Le Pen—the far-right leader—is said to team up with the left-wing alliance to bring down Michel Barnier’s administration. French bond yield spreads to Germany were at the widest since the European debt crisis over a decade ago. Meanwhile, the CAC 40 was slightly higher at mid-session trade, while the euro rebounded to $1.05. And despite Germany’s political uncertainty, the DAX climbed above the 20,000-mark for the first time ever, before retreating. Meanwhile, U.S. equity futures were little changed this morning after the S&P 500 and Nasdaq closed at all-time highs yesterday. On deck today, we’ll get October’s JOLT survey, which is expected to show a rise in U.S. job openings. Recall that September’s vacancies fell to the lowest level since early 2021 amid moderating job growth. But overall, labour market conditions remain healthy and that should shore up households as the expansion looks set to continue. The all-important jobs report comes out on Friday, and we are expecting nonfarm payrolls growth to rebound by 180k net jobs in November. We’ll also hear from a couple of Fed speakers: Governor Kugler (12:35pm); Chicago’s Goolsbee (3:45 pm). Speaking yesterday, Governor Waller said: “at present I lean toward supporting a cut to the policy rate at our December meeting”. We’ll hear from Fed Chair Powell tomorrow at 1:45 pm as he participates in a moderated discussion. In the news…. “US Tightens Curbs on China’s Access to AI Memory, Chip Tools: The US unveiled new restrictions on China’s access to vital components for chips and AI, escalating a campaign to contain Beijing’s technological ambitions but stopping short of earlier proposals that would have sanctioned more key Chinese firms.” Bloomberg "Construction Industry Braces for One-Two Punch: Tariffs and Deportations: MCKINNEY, Texas—Two decades ago, this booming suburb on the northeastern edge of Dallas was a small town accessed by only a two-lane highway. Now, 200,000 people fill its sprawling subdivisions, with new construction everywhere.“ Wall Street Journal

https://lnkd.in/dmFN4qK2 In his recent speech, Alfred Kammer, Director at IMF addresses what is the EU main issue, lack of productivity vs the rest of the world. This is unfortunately a never ending issue that seems to be unmanageable. Kammer’s proposed solutions are obvious: more trade integration within the UE, accelerated integration of capital & labor markets, in one word more Europe. I subscribe to this point of view but one solution is according to me dramatically missing: change of mentality! Being forced to compete with the US, Cina, East Asia and now more and more with Middle East and Africa (meaning the entire world now) UE should be prepared to roll up his sleeves and to accept sacrifices, renouncing to a part of the welfare we cannot afford anymore.  And UE does not mean a supranational entity we are not involved in, UE means all of us! Change of mentality should start from us.

https://lnkd.in/dmFN4qK2 In his recent speech, Alfred Kammer, Director at IMF addresses what is the EU main issue, lack of productivity vs the rest of the world. This is unfortunately a never ending issue that seems to be unmanageable. Kammer’s proposed solutions are obvious: more trade integration within the UE, accelerated integration of capital & labor markets, in one word more Europe. I subscribe to this point of view but one solution is according to me dramatically missing: change of mentality! Being forced to compete with the US, Cina, East Asia and now more and more with Middle East and Africa (meaning the entire world now) UE should be prepared to roll up his sleeves and to accept sacrifices, renouncing to a part of the welfare we cannot afford anymore. And UE does not mean a supranational entity we are not involved in, UE means all of us! Change of mentality should start from us.

While we remain confident in our base case projections, with equity markets rallying against a backdrop of the new US administration taking shape, political turmoil in the core of Europe, and promises of increased economic stimulus in China, we should not lose sight of the wider range of outcomes

Adam Tooze traces the issues in the US where the market is growing strongly but the country has been running a fiscal and balance of payment deficit since the time Mr Clinton was president and has so far been financed by Wall street. Europe on the other hand as discussed in the recently published Draghi report has a trade surplus but is falling behind the US. Tooze in his article below discusses how today’s dissonance between industrial and macroeconomic policy is new and intense. It forms an anti-paradigm that adds materially to the uncertainty haunting the world economy. In 2008, the market forced the world economy to correct but since then the risk has been shifted up to the state, it has not gone away. The US 2 year and 10 year bond rates again show a falling yield curve which is not viewed as healthy and policies of both Presidential candidates have debt increasing. Uncertainty in the US very quickly transmitted globally in higher bond prices as we are in a globally competitive environment for funds. What Tooze is succinctly telling us is that we need a new global settlement but no Finance Minister or Central Bank Governor is raising this point and our discussions are all around data points, whilst important are just one thing in the mix for interest rates we pay. The UK has seen their 10 year bond rate go up from 3.75% in mid September to 4.2% and it is being blamed on worries about the budget but Mohammed El-Erian, the Chief Economic Adviser to Allianz believes there is a strong element of global competition for the increase. #macroeconomics #risk #funding

French markets are bracing for significant volatility. Read the latest article https://lnkd.in/g7nFYk22 from the Global Data Services team to understand investor concerns over fiscal sustainability. #GlobalDataServices

Investors are shifting their focus to the UK markets amidst growing political uncertainties in the U.S. and other parts of Europe. The recent decisive victory of Britain's centre-left Labour government is seen as a potential game-changer, offering the prospect of stable policies and increased trade with the European Union. This development indicates a significant resurgence for a country that had lost its appeal to global investors in recent years. With efforts to rejuvenate an economy facing challenges since the 2016 Brexit referendum, the UK is now on the brink of a new era of growth and stability. The UK economy has once again surpassed expectations, expanding by 0.4% in May following a period of stagnation in April, which was double the rate forecasted by experts. Economic forecasters and investment banks, including Goldman Sachs and Capital Economics, anticipate that the UK could replicate its first-quarter growth of 0.7%. Annual growth forecasts have been revised upwards, with Goldman and Barclays projecting 1.1% growth for 2024, a significant increase from the Bank of England's 0.4% projection. Reuters highlights that investors are eyeing the UK market as a potential safe haven amidst escalating political uncertainties in the US and other parts of Europe. #UKmarkets #economy #investors #growth #wayforward #newgovernment #trade #stability #UKgovernment #economicforecast Seema Malhotra FRSA Keir Starmer Pratik D. The Economist Uday Nagaraju

To avoid a decade of the 'tepid 20s', countries should adopt more growth-oriented fiscal and monetary policies, while investing in human capital to lay the foundation for digital transformation. Watch my discussion with Yahoo Finance's Brian Sozzi at the Milken Institute Global Conference. https://lnkd.in/gfWVEDd6