Equities: New extremes and a challenging opportunity set
Discover insights on the future of equity markets in Q1 2024 and navigate the potential recession with strategic investment choices.
Head of Macro Analysis
Summary: On 30 November, the far-right former TV pundit Eric Zemmour officially entered the race for France’s presidency. An Harris Interactive poll released before his announcement shows he is losing momentum. In recent months he was in second or third position depending on the polls. Now, he is in fourth position, behind President Macron Emmanuel Macron, far-right leader Marine Le Pen and former Sarkozy minister Xavier Bertrand. Zemmour’s fall is partially explained by a number of controversies and the lack of economic program. Is the Zemmour boom already over ?
French Election Preview published: We have recently published our preview for the 2022 April presidential election. It gives a broad overview of the current state of French politics and the main reforms which are currently put forward by the lead candidates. See here for the full report.
The message of the polls: In an Harris Interactive poll released on 30 November, Macron is still miles ahead of the pack, at 23%. This is lower than in previous polls. But he is still in a very favorable position. His popularity remains high. He has a strong electoral base. Marine Le Pen has successfully relaunched her campaign. In recent weeks, she focused on immigration to mobilize her electoral base. She is at 19% of voting intentions in the first round (+3 points compared with the previous Harris Interactive poll). The centre-right candidate Bertrand is stable at 14%. The big surprise is Zemmour’s fall, at 13% (-3 points). The poll was released before he formally announced run for president. But we doubt this will change anything. Is the Zemmour boom already over ? This is too early to say. The decrease in support is partially explained by a number of controversies (he used cursed words against journalists and he gave a demonstrator the middle finger, for instance). He also came under further scrutiny, especially regarding his economic program, or rather lack of economic program. This is where he is vulnerable. Until now, he has not advanced a single economic proposal. He wrongly considers that immigration is the birth mother of all sin. If he manages to solve it, he believes that all the other issues will be magically solved too. This is overly optimistic, in our view.
This is the end for the Socialist Party : Voting intentions for the Socialist Party’s candidate, Paris mayor Anne Hidalgo, are at a record low of 4% in most polls. Hidalgo officially launched her presidential campaign on 23 October. But she has failed to build a positive momentum. She is a poor candidate. When journalists ask her tough questions, she often appears ill-prepared. She is also criticized for the high crime rate and the garbage problem in Paris. On social media, residents used the #saccageparis (Trashed Paris) hashtag to post photos of rubbish piled up on the streets, for instance. This is disastrous for her image. The Socialist party is divided too. The majority is focusing on environmental issues and the preservation of purchasing power, with sometimes impractical ideas (i.e. doubling the teachers’ salaries). A vocal minority is promoting radical messaging on social issues, even culture war. That scares moderate voters the party needs to move upward in the polls. Unless there is an unexpected turn of events, Hidalgo and the Socialist Party will face a severe defeat at the 2022 presidential election. This would be the second time in the row that the Socialist candidate will get less than 10% of voting intentions in the first round (the 2017 presidential candidate Benoit Hamon gathered 6.35% of the votes). Expect a difficult recomposition of the Left and the Socialist Party following the election. There are no obvious leaders for the years to come. The third man of the 2017 presidential election, Jean Luc Mélenchon, is too old (70 years old). The candidate of the Greens, Yannick Jadot, is a talented and pragmatic negotiator. But he is not charismatic. There is basically a leadership vacuum in the Left. It will be complicated to fill in.
What to watch now : Besides the polls, we are focused on the primaries of the centre-right Les Républicains scheduled for 4 December. From yesterday to 4 December, about 139,918 members of Les Républicains are choosing between five candidates. The only requirement to vote is that membership fees are duly paid. Bertrand is the front-runner. Other candidates are the former EU Brexit negotiator Michel Barnier, the deputy Eric Ciotti, the former EU deputy Philippe Juvin and the head of the Ile-de-France region Valérie Pécresse. The name of the winner will be announced on 4 December in the evening. Expect Bertrand to win. However, it is unlikely to change the dynamics of the presidential race. Support for Bertrand has never really increased since he has officially announced his candidacy for President in March 2021. In most polls, voting intentions have been stable around 14% in recent months. This is not enough to make it to the second round of the presidential election.
What happened to the future?
What happened to the future?
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