Via ZeroHedge:
By Albertina Torsoli, Bloomberg Taking Stock author and analyst
Volatility in French stocks may just be getting started even though President Emmanuel Macron secured a safe spot in the election runoff alongside nationalist leader Marine Le Pen.
While the results of the first round vote may be reassuring for the pro-business incumbent, there’s still lots for investors to worry about. Le Pen still has a real chance after being defeated last time, a scenario that could be a drag on French equities, which outperformed under Macron.
Le Pen’s program is “everything but Europe,” says Philippe Waechter, chief economist Ostrum Asset Management. A victory for her would raise the question of what France’s role would be with regards to negotiations with Russia. “We could be entering a terrible zone of turbulence.”
In the short-term though, relief could still bolster shares in various sectors, including banks like Societe Generale and BNP Paribas. They are seen benefiting from Macron’s push for European Union integration amid a renaissance for Paris as a financial hub for firms looking to grow on the continent post Brexit.
Luxury is another sector that may benefit from the higher chance of a Macron re-election, having accounted for about 45% of the CAC’s total gain since he was elected in 2017. Toll-road operators Vinci and Eiffage could be boosted too after suffering last week as investors digested the possibility of victory for a candidate in Le Pen who has pledged to re-nationalize the country’s highways.
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Non, Le Pen does not have "a real chance", if for no other reason than her opposition to NATO, reiterated in Reims, Feb. 5: “Therefore, we will leave the NATO unified command so that we can no longer be drawn into other people's conflicts”.
The entire trans-Atlantic power structure is arrayed against her including the military, intelligence and Victoria Nuland diplomatic.
