Christmas before the hour?
In pursuing the Trump effect, markets are still in a “Risk on” mode. The Italian referendum, despite the victory of the “no” and the resignation 2 days later of Mattéo Renzi, had a positive effect on the indices through the lifting of this uncertainty. The scholarships have gone up (+ 6% over the past week) with the bank values (+ 10%) in mind. The latter benefit from both the repentification of the rate curve and the asset buyback program by the ECB which is extended and extended, with amounts lowered to €60 billion (versus €80 billion previously) from April to 2017.
The probable increase in the rates required by Janet Yellen, already integrated into current courses, should not hinder this recovery but on the contrary validate the good health of the American economy (historically low unemployment rate at 4.6%, trust of agents Economic…).
Sectoral rotations have been extremely strong in the last two months. The banking, automotive and pharmaceutical sectors continue to evolve according to Mr. Trump’s tweets.
In addition, an agreement has been reached between the OPEC countries in order to lower oil production slightly to support crude prices. This decision was followed by “non-OPEC” countries which will also reduce their production. The barrel now fits above , which seems to be the new floor. Oil-related values have benefited from this embellishment with an index rising by almost 9% since the agreement.
These events allowed the main indices to reconnect with positive performances on 2016: The CAC 40 finally stepped out of its corridor to break up the 4700 points. The Dow Jones, meanwhile, flirts with the 20 000 points, historical record. The end of the year rally seems to be on.
2017 promises to be also a year rich in political events: the inauguration of Donald Trump on January 20 and the implementation of its electoral program, the presidential elections in France and the release of the United Kingdom of Europe via a Hard or Soft Brexit…
While waiting for these upcoming deadlines that promise to be exciting, Pergam wishes you great holidays.
Director of management under mandate
Finished writing at 11am on 12/12/2016