Shares are set to receive a big bang on Thursday, due to the explosive results from Tesla, which is helping to somehow alleviate the grief over Netflix's disappointment.
With so much focus on current income, market attention to Europe's largest war since World War II has disappeared. While the financial markets have gone through the first shock of Russia's brutal attack on its neighbor Ukraine, it remains a major, unresolved dispute.
To bring that back to the focus of investors is our daily call from strategist Edmond de Rothschild, who set out three possible scenarios to end the conflict. It all involves high inflation, but different levels of economic and market risk.
The hopeful outcome set by Michaël Nizard, the head of the multiasset, and fundraiser Delphine Arnaud, involves the withdrawal of guns and the withdrawal of Russian troops from much of Ukraine - leaving Moscow centered on Crimea and Donbas. Russian President Vladimir Putin will be proud of his victory on the May 9 holiday, which marks the fall of his Nazi Germany in 1945 at the end of WWII.
Commodity prices will slow down as Ukraine's vital agricultural activity resumes, reducing the risk of wheat shortages in developing countries. Energy prices will drop to pre-attack levels, helping to reduce inflation and lower sanctions in Russia will also improve production regions.
"The decline in market resistance and the shock of consumer confidence will make it possible to predict economic growth by 2022 near the level expected earlier this year," the pair said, predicting US markets could increase by 4%. Europe 8% and China 20%.
The second condition predicts recovery, which may pass in the summer. “While investors, like the media, are gradually withdrawing their attention from the Ukrainian war, considering that the worst has already been sold, the headlines will always come back to haunt them with events that could lead to fears of a change in the conflict. in a dark state, ”said Nizard and Arnaud.
They raised hopes of job loss in Europe, equity, suspension of agricultural activity in Ukraine causing food shortages and unrest in developing countries. Stability could lead to a 3% decline in US markets, albeit a small profit in Europe and China.
They have left the worst in the end, a situation where the conflict grows, as sanctions fail to work against Russia, or China increases support for Moscow.
"In this context, we fear the disruption of the supply of European gas pipelines to Ukraine's gas pipelines, NATO military intervention and increased sanctions between the US and China. Global growth will decline and hazardous goods will fall by 15% to 30%," he said. ”They said.
"We may wonder if the financial markets are actually priced at the new level of the European economy, that of the military economy."
