Not a week goes by without the stock market situation being mentioned. While there are no storms in sight, China/US trade tensions are disrupting markets.
This has prompted specialists to say it would be better to wait for July before increasing investment positions. With the eurozone more dependent than the US on global trade, this is even more true in European markets.
In an interview with French weekly news magazine Le Point, Serge Pizem, Global Head of Multi-Asset Investments at AXA, suggested a few ideas for the coming weeks: “In equities, you need to be betting on strong growth stocks.” As Warren Buffett has reminded us, it is important to focus not on the macro economy and the short term, but rather on positive stories from companies with strong brands generating high margins.
The fact is that the investment climate has changed, and some investors, keen to feel they are not squandering their investments, have shifted their focus to new products. Le Point reported the following figure, which speaks for itself: “Sixty-three percent of French people consider that responsible investment increases their trust in how their savings are managed.”
One private banker even said a client had for the first time asked him about the purpose of the products he was offering before enquiring about their expected performance.
This is a small revolution, especially with new, younger clients who have made their fortune by selling their businesses five or ten years after establishing them wanting to give back something of what society has given them. This new generation is doing so through philanthropy, but also through investing in just causes like saving the planet, combating climate change and helping the underprivileged.
Hence the proliferation of investments and products claiming to be responsible or sustainable, such as SRI funds. Furthermore, the European Commission has drawn up a definition of what constitutes green assets, defined new low-carbon indices and established a European standard for “green bonds”.
A more open, more environmentally friendly economic environment
In France, statistics this week showed that job creation remained strong in the first quarter. According to the latest figures from Insee, 93,800 jobs were added to the economy between January and March – the highest level since the fourth quarter of 2017. This 0.4% increase marks a quickening relative to the final quarter of 2018, when Insee reported 69,800 new jobs (up 0.3%). Paid employment increased most sharply in the private sector (with 92,800 new jobs, up from 67,900) while holding more or less steady in the public sector (with 1,000 new jobs, down from 2,000). Paid employment was up 0.9% or 218,600 jobs year on year, with 225,400 new private sector jobs and 6,800 public sector job cuts.
On Wednesday morning on CNews, Banque de France Governor François Villeroy de Galhau welcomed the “good news” and highlighted the buoyancy of the French economy, which, in his opinion, added 740,000 new jobs over the period 2016-2018. Over the first three months of 2019, job creation was given a boost by industry (adding 7,500 new jobs) and, above all, construction. This should encourage new investors to invest more in the economy so that recent strong figures also have a chance to become sustainable.