{"id":104902,"date":"2017-04-17T09:51:48","date_gmt":"2017-04-17T13:51:48","guid":{"rendered":"http:\/\/countingpips.com\/?p=104902"},"modified":"2017-04-17T06:52:21","modified_gmt":"2017-04-17T10:52:21","slug":"french-election-reaches-boiling-point","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/04\/french-election-reaches-boiling-point\/","title":{"rendered":"French Election Reaches Boiling Point"},"content":{"rendered":"<div id=\"inves-4039850509\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">April 17, 2017<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p>By <a href=\"http:\/\/WallStreetDaily.com\/\"><u>WallStreetDaily.com<\/u><\/a> <img loading=\"lazy\" decoding=\"async\" class=\"attachment-home-th size-home-th wp-post-image\" style=\"display: block; margin-bottom: 5px; clear: both;\" src=\"https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/04\/0417_frenchelection_feature.jpg\" sizes=\"auto, (max-width: 580px) 100vw, 580px\" srcset=\"https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/04\/0417_frenchelection_feature.jpg 580w, https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/04\/0417_frenchelection_feature-300x155.jpg 300w\" alt=\"French Election Reaches Boiling Point\" width=\"580\" height=\"300\" \/><\/p>\n<p><img decoding=\"async\" style=\"float: left; max-width: 85px;\" src=\"https:\/\/duip7hn7nchpo.cloudfront.net\/editor-circle-louis-basenese.jpg\" alt=\"Louis Basenese\" \/>The run-up to the presidential election in the United States was a spectacle. And Donald Trump made sure of it \u2014 with his heavy use of social media to ensure everyone was paying attention.<\/p>\n<p>We\u2019re just now contending with all the aftershocks from his stunning victory. From uncertainty over health care and tax reforms to skyrocketing global aggression and displays of military might.<\/p>\n<p>But don\u2019t let your preoccupation with the machinations at 1600 Pennsylvania Ave. blind you to the potential global impact of another historic election unfolding in France.<\/p>\n<p>Five candidates \u2014 including two unabashed socialists \u2014 are vying for power.<\/p>\n<p>May we live in interesting times, indeed!<\/p><div id=\"inves-2164746440\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<p>As always, I\u2019m most concerned with the investment implications of any unexpected political events, so I asked our global expert and senior analyst Martin Hutchinson to weigh in on the situation.<a name=\"video\"><\/a><\/p>\n<p>Tune him out at your own portfolio\u2019s peril!<\/p>\n<p>Ahead of the tape,<\/p>\n<p>Louis Basenese<br \/>\nChief Investment Strategist, <em>Wall Street Daily<\/em><\/p>\n<hr \/>\n<p><script src=\"https:\/\/fast.wistia.com\/assets\/external\/E-v1.js\" async><\/script><\/p>\n<div class=\"wistia_responsive_padding\" style=\"padding: 56.88% 0 0 0; position: relative;\">\n<div class=\"wistia_responsive_wrapper\" style=\"height: 100%; left: 0; position: absolute; top: 0; width: 100%;\">\n<div class=\"wistia_embed wistia_async_4h2da7z5r9 videoFoam=true\" style=\"height: 100%; width: 100%;\"><\/div>\n<\/div>\n<\/div>\n<hr \/>\n<p><strong>Question:<\/strong> Martin, we have a big one this week. France will elect a new president this weekend, and the result will likely send aftershocks through the entire global economy. Get us up to speed on what\u2019s happening.<\/p>\n<p><strong>Martin Hutchinson:<\/strong> The French presidential election comes in two rounds. The first is on April 23. The second round, if no candidate secures a majority, would be on May 7. In a runoff, the two biggest winners from the first round would compete.<\/p>\n<p>France has always had weak parties, but the current five-way race is extraordinary. You\u2019ve got five candidates with a good shot of getting into the second round.<\/p>\n<p>The current government of Fran\u00e7ois Hollande has been in since 2012. He\u2019s a socialist and has a poor economic record. He introduced a 75% income tax on earnings over a million euros and a 2% wealth tax in 2012, and they\u2019ve had low growth below 1% and high unemployment. Hollande, reasonably enough, decided not to run for re-election.<\/p>\n<p>Of the five candidates, two of them are socialists, one directly from Hollande\u2019s party. Beno\u00eet Hamon is one. Then there\u2019s Emmanuel Macron who\u2019s normally an Independent, but he served in Hollande\u2019s Cabinet. Macron, who\u2019s currently running second, would like you to forget this, because he\u2019s pretending he\u2019s not part of the Hollande cabal.<\/p>\n<p>A third candidate, Jean-Luc M\u00e9lenchon, is backed by the real left and thinks Hollande wimped out. He doesn\u2019t just want a 75% income tax; he wants a 100% tax rate.<\/p>\n<p>Then you\u2019ve got two candidates you might want. The fourth, Marine Le Pen, is a mix of Trump and the alt-right. She\u2019s nationalist, protectionist and anti-immigrant.<\/p>\n<p>Finally, you\u2019ve got Fran\u00e7ois Fillon, the Republican. That\u2019s the candidate you might actually want to vote for. He supports the free market. But unfortunately, he\u2019s been surrounded by petty scandals that have almost certainly been engineered by the left.<\/p>\n<p><strong>Question:<\/strong> Martin, from an investment standpoint, how would the fallout from this affect the markets, and what should we expect?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> Of the candidates, Fillon would be good news. He\u2019s essentially a Thatcherite, in British terms. He\u2019s the Thatcherite France needs. However, he\u2019s pretty unlikely to make it.<\/p>\n<p>Le Pen is bad news economically but would probably take France out of the euro and loosen the control of the Brussels bureaucrats, because she\u2019d fight with them. A weaker franc and a freer market would therefore bring a boom, whatever her other policies. In a normal-sized country like France, which isn\u2019t a behemoth like the U.S., you can always bring a boom by dropping the currency. You saw what happened in Britain after the Brexit referendum.<\/p>\n<p>Of the other candidates, Macron or M\u00e9lenchon are both bad news. Macron will continue the current decline. M\u00e9lenchon would worsen it, though he might take France out of the euro and cause a small boom that way.<\/p>\n<p>Hamon would be bad but hasn\u2019t got much chance. So frankly, <em>Faites vos jeux, messieurs et dames<\/em>. (Place your bets, ladies and gentlemen.)<\/p>\n<p><strong>Question:<\/strong> Martin, is there a way as investors we can get ahead of what\u2019s happening, or should we wait and see how it plays out first? What do you advise we do at this point?<\/p>\n<p>Martin Hutchinson: I think we wait and see how it plays out. But I think you might want to jump pretty quickly when you know the result, or indeed if you were to get a second round with two good candidates in.<\/p>\n<p>If one of the better candidates wins, you could look at one of the country funds, iShares MSCI France, which, oddly enough, is EWQ. You can alternatively look at Vinci SA, which is quoted as OTCBB: VCISY. That\u2019s a French-based contracting company that looks to me to be an excellent infrastructure play.<\/p>\n<p>It boasts 16 times trailing P\/E, 2.7% yield and 15 times perspective P\/E, according to the 4-Traders website. That looks to me to be a good solid play if one of the better candidates comes out ahead in France.<\/p>\n<p><strong>Question:<\/strong> Great insights as always, Martin. Thank you.<\/p>\n<p><strong>Martin Hutchinson:<\/strong> Great pleasure.<\/p>\n<p><strong>Question:<\/strong> This is <em>Wall Street Daily<\/em> signing off.<\/p>\n<p>Smart Investing,<\/p>\n<p>Martin Hutchinson<br \/>\nSenior Analyst, <i>Wall Street Daily<\/i><\/p>\n<p>The post <a href=\"https:\/\/www.wallstreetdaily.com\/2017\/04\/17\/french-election-reaches-boiling-point\/\" rel=\"nofollow\">French Election Reaches Boiling Point<\/a> appeared first on <a href=\"https:\/\/www.wallstreetdaily.com\" rel=\"nofollow\">Wall Street Daily<\/a>.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By WallStreetDaily.com The run-up to the presidential election in the United States was a spectacle. And Donald Trump made sure of it \u2014 with his heavy use of social media to ensure everyone was paying attention. We\u2019re just now contending with all the aftershocks from his stunning victory. From uncertainty over health care and tax [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-104902","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/104902","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=104902"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/104902\/revisions"}],"predecessor-version":[{"id":104908,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/104902\/revisions\/104908"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=104902"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=104902"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=104902"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}