With European stocks on fire, and US futures moving fast to recoup recent all time highs, it is no surprise that Wall Street is feeling particularly bullish this morning. Below is a sample of slleside analyst reaction to Sunday's outcome.
A Macron 'win' in the first round of the French elections has (judging by the initial reactions) allayed many fears of imminent doom. Dow futures are up around 200 points, Bond futures are down, gold is down (despite USD weakness)... However, as Bloomberg's Cameron Crise notes, "Enjoy the party, parkets; but beware of the bangover."
Most of the results are in, and while it remains close, Macron will likely be the winner of the first French presidential round and is set to face Marine Le Pen in the second round. What does that mean for various asset markets and the bigger macro picture? Here are two forecasts, just released from Goldman and Citi.
Silver was a safe haven at times during which gold failed to be. Platinum and palladium are increasing in investment importance. Research shows hedging,diversification benefits role of precious metals.
Global markets were oddly calm on Friday, the last day of trading before the first round of France's closely fought presidential election, with European stocks posting modest declines ahead of Sunday's main event, Asian shares rising, and set for first weekly gain in the past month, while U.S. futures were unchanged.
With establishment pollsters paniccing at the closeness of the first round of the French elections, it appears investors in every market - stocks, bonds, and FX - are just as concerned with hedges and risk premia at (or near) record highs across the board.
Jjust how overvalued the market is at this moment? Here is the answer broken down in 20 different valuation metrics, however as BofA notes, "valuations typically matter little in the final stage of a bull market" where the bank believes the market finds itself now.
"..the hurricane is not more or less likely to hit because more hurricane insurance has been written. In the financial markets this is not true. The more people write financial insurance, the more likely it is that a disaster will happen, because the people who know you have sold the insurance can make it happen. So you have to monitor what other people are doing.”
"This leaves markets with the “hope” trade in peril as Congress continues to trip itself up in moving its legislative agenda forward while, at the same time, the Fed has accelerated the pace of monetary tightening and sending clear warnings to the markets...This has “bad” written all over it."
South Africa's sacked finance minister Gordhan told reporters that he and his deputy "learnt our fate from the TV screen. Not from any phonecall, chat or conversation. So that was I’m sure as interesting for us as it was for you."
Global stocks are lower across the board to start the week, as concerns about Trump's administration to pull off a material tax reform plan finally emerge, pressuring S&P futures some 20 points lower this morning, following European and Asian shares lower, while crude oil prices fall unable to find support in this weekend's OPEC meeting in Kuwait where a committee recommended to extend oil production cuts by another 6 months.