Despite an ever-present terrorism, the markets are gradually entering the summer period. The barrel of crude seems to him already in the winter period! At more than $ 60 in the last few days, the oil shock is therefore continuing and its consequences are still before us. Economic growth remains vigorous and “energy intensive” both in the United States and Asia, will it be sustainable in this context of expensive oil?
Operators, insufficiently reassured by the increase in quotas decided by OPEC, are reduced to all bullish assumptions (up to $ 100 per barrel!) But must remember that the recessive effect, and therefore self-regulating, would then be vigorous especially in China.
However, there is good news for companies and their shareholders in a murky macroeconomic environment, the weakening of the Euro against all currencies. The ECB's rate cut is still not relevant after months of inaction and the causes of this readjustment are clear:
- political mistrust in Europe after the failure of constitutional referendums,
- significant differential in short-term interest rates after the sixth 0,25% increase in the FED,
- unwavering vigor of American and Chinese growth.
Also, even though the data underlying the dollar's exchange rate remains negative, the return to a more compliant parity of the Euro will not fail to act as a breath of fresh air for a Europe with asphyxiated growth ... Italy, for example, is today seriously affected by relocations, for lack of sufficient tertiarization of its economy.
The large European companies open to the international will thus find a greater place at the table of the globalization of trade. Investors, protected by high dividend yields and the liveliness of daily financial transactions, must clearly continue to favor equities over bonds for the future.
The level of long rates seems to cry out for recession! The revival of the indices indicates the clear return of confidence ... It is therefore probably too early to define the underlying trend. But like a falling barometer in a cloudless sky, minimal prudence will recommend regular profit-taking before holidays and the constitution of a monetary pocket for the start of the school year.
Good holidays !