At La Financière de l’Échiquier’s (LFDE) Media Days 2024, after a macroeconomic introduction, Olivier de Berranger, CEO and co-CIO, gave a scenario of market trends that are likely to be altered by the future US policy envisaged by Trump. And finished off with a performance overview.
So far so good, even better than expected. US growth continues to make good headway, albeit at below-average speed. In the eurozone, it’s more meagre. Growth is timid at less than 1%, maintained in positive territory mainly by consumption, unlike industry, which is particularly lagging behind in the eurozone. One of the reasons for this is the cost of energy, which is estimated to be between 2.2 and 2.8 times higher than on the other side of the Atlantic. China, with estimated growth of between 3.5% and 4.5%, is looking for a second wind with successive stimulus measures.
Donald Trump has been elected the 47th President of the United States, and market trends are likely to change. Future US policy is likely to have a major impact on financial investments.
Olivier de Berranger believes that the new President’s programme will have a neutral to negative impact on growth in Uncle Sam, if all the promised measures are implemented. Initially, these measures will have an inflationary effect, but the medium-term impact is less clear. As far as equities are concerned, the effects of the new President’s programme are more favourable to small caps and cyclicals in the US markets, but will put pressure on European stock markets. Equities will not be the only asset class to suffer the collateral effects of the policies of the 47th President of the United States. The US long-term bond market is likely to be negatively impacted, while the effect on the European market will be neutral. Finally, the dollar king should shine.
Performance under the microscope
In terms of performance, US large-cap growth stocks take the cake. With an increase of 33% between 1 January and mid-November, this segment is on track to record one of the biggest increases this century, if not the biggest.
In the Eurozone, mid-caps led the performance hierarchy, but it was value stocks that were the best to hold, as they were the only ones to achieve double-digit performance: 10,6 %. But this best performer in the eurozone would rank last and lag behind the nine equity categories across the Atlantic (small, medium, large – classified as value, growth or mixed). The worst performer in the United States was small-cap value stocks, which rose by 16.6%….loin ahead of the best performer in Europe.
Finally, the category of shares that it was preferable not to hold since1 January is the Eurozone small-cap growth category. At this stage of the year, this segment of the coast is in the red, with a performance of -5.5%.
With more than €27 billion under management (30.06.2024), LFDE (53 fund managers and analysts) has been in business for 35 years and has been a “Responsible Investor” for 15 years.
Disclaimers: LFDE’s information, data and opinions are provided for information purposes only and do not constitute an offer to buy or sell a security, investment advice or financial analysis. Past performance is no guarantee of future performance.
