The correction of may should not be underestimated: it was of a crash. The word was used by one of the guests of our last circle. Other participants were not denied it. So, our four experts testified at the approach of the summer, trust that encourages them to remain invested in shares, to not miss the train of the recovery. However, the situation has changed. A new allocation of assets is required, and a new determination in typologies, between large and small cap, growth values or defensive. To speak about, four experts had to share their analyses. It was Pascale Auclair, Director General, delegated to management, the French of the investments, Jean-Pierre Hellebuyck, Chairman of AXA IM, Christophe Besson, Director of management actions in CM - CIC Asset Management, and Christophe Donnay, Director of strategy at Kepler Equities.
First of all, how analyze you what happened on the markets these last six weeks
PASCALE AUCLAIR. Events have surprised us by their violence and their amplitude, but they were not surprised us on the merits. Since the end of the month of February, we felt that the market had to catch his breath. We tablions on a consolidation of the markets, but in a rather flat register; We thought not the withdrawal of 10 of the major European stock markets.
However, a few important factors can explain it: the display of international coordination on currencies including at the Summit of the G7 at the beginning of the year and the new deal related to monetary tightening joint of all central banks, in particular that of the Japan. Liquidity are much less abundant in global and much better paid. This requires the restoration of the more volatile assets risk premiums, crushed so far by this abundance of liquidity. This effect affects the whole of the markets, including emerging, but also obligations. We therefore think we in a scenario less virtuous than in the first quarter of 2006. So, we are not catastrophés by the events of recent weeks. We remain convinced of a settlement of the American economy, then the world economy as a whole. Nothing in it we seems however augurer of a recession.
CHRISTOPHE BESSON. All markets plunged at the same time, regardless of their specific economic context. This allows to put into perspective the situation. A more important point to make me seems to be the return of volatility. For us, it is a positive sign. For almost two years, the market was one way but there no volatility, this is aberrant. Now, at least, we find a certain differentiation between sectors and assets. We are even to ask if after fashion "value" and the "small cap" mode, the mode action could not be launched.
CHRISTOPHE DONNAY. It is clear that the movements to which we have witnessed are of historic significance. Such stall was that on three occasions in the last twenty years on the European markets: in 1987, in 2001 and 2002. Basically, we face two problems. The first is the phase shift in the economic cycle. US economic growth has been a constant acceleration these past four years, with an average annual rate of 4.5. We know that this growth has a point too insofar as it relates to an excess of consumption. This excess was fed, inter alia, by the tax cuts intended by George Bush in early 2003 as well as by the increase in real estate which enabled American households make the "home credit" and fuel consumption. We know therefore that us growth should slow down, but we don't know what will be the extent of the slowdown.
The second problem relates to the US Central Bank. I'd be quite inclined to impute responsibility for the decline in the markets. As the new President, Ben Bernanke may seek to influence the philosophy of us monetary policy in which case we inscririons in a breach scenario. This would be the worst case scenario. Either Ben Bernanke some difficulties to position themselves, like Alan Greenspan in his service. In this hypothesis, we would be faced with a simple problem of adjustment. However, its resolution will take some time in a context where we have precisely no time to lose. Indeed, economic growth slowing, the market calls for lower rates. But inflation continues to be pressing for central banks and the Fed to raise its rates to maintain its credibility. In this context, the market turned to the Fed in the hope of a mode of employment. In the absence of responses, it remains outstanding.
JEAN-PIERRE HELLEBUYCK. Setting up markets appear delicate, but it remains classic. The peak of economic growth has been crossed between the months of March and May 2006, including in the United States. For the second half, we therefore expect a deceleration of the US growth which will have effects in the rest of the world. Unfortunately, inflation continues to advance. Here again, this is a classic situation: the peak of inflation is shifted relative to growth, even if these two phenomena are related.
The shock could occur earlier. Why only now The answer is in part in the conduct of monetary policy in the US and Japanese.
The US Central Bank tightens two years now. Counterparts of the euro area and the Japan is there are now also. In my view, the markets believed that two years of higher rates were sufficient, as Ben Bernanke first gave the impression of wanting to put an end to this escalation. However, nothing is today less safe: 25 or 50 basis points additional might break the backbone of the American economy.
If, since two years, the Fed tightening did not have significant challenges in global markets, it is because the Japanese, eager to get out of deflation, flooded the world of liquidity. It is for this reason, that diversification is often illusory because all asset classes have been "irrigated" by the Japanese liquidity.
So, we cross the peak of the strongest growth seen for twenty years and we are still very far from the risk of recession; in this context, it is normal that the companies are still euphoric. In addition, the levels of inflation do not justify a further important on the part of central bankers. In the eurozone in particular, only the microscope of the European Central Bank is able to detect
The correction of may should not be underestimated: it was of a crash. The word was used by one of the guests of our last circle. Other participants were not denied it. So, our four experts testified at the approach of the summer, trust that encourages them to remain invested in shares, to not miss the train of the recovery. However, the situation has changed. A new allocation of assets is required, and a new determination in typologies, between large and small cap, growth values or defensive. To speak about, four experts had to share their analyses. It was Pascale Auclair, Director General, delegated to management, the French of the investments, Jean-Pierre Hellebuyck, Chairman of AXA IM, Christophe Besson, Director of management actions in CM - CIC Asset Management, and Christophe Donnay, Director of strategy at Kepler Equities.
First of all, how analyze you what happened on the markets these last six weeks
PASCALE AUCLAIR. Events have surprised us by their violence and their amplitude, but they were not surprised us on the merits. Since the end of the month of February, we felt that the market had to catch his breath. We tablions on a consolidation of the markets, but in a rather flat register; We thought not the withdrawal of 10 of the major European stock markets.
However, a few important factors can explain it: the display of international coordination on currencies including at the Summit of the G7 at the beginning of the year and the new deal related to monetary tightening joint of all central banks, in particular that of the Japan. Liquidity are much less abundant in global and much better paid. This requires the restoration of the more volatile assets risk premiums, crushed so far by this abundance of liquidity. This effect affects the whole of the markets, including emerging, but also obligations. We therefore think we in a scenario less virtuous than in the first quarter of 2006. So, we are not catastrophés by the events of recent weeks. We remain convinced of a settlement of the American economy, then the world economy as a whole. Nothing in it we seems however augurer of a recession.
CHRISTOPHE BESSON. All markets plunged at the same time, regardless of their specific economic context. This allows to put into perspective the situation. A more important point to make me seems to be the return of volatility. For us, it is a positive sign. For almost two years, the market was one way but there no volatility, this is aberrant. Now, at least, we find a certain differentiation between sectors and assets. We are even to ask if after fashion "value" and the "small cap" mode, the mode action could not be launched.
CHRISTOPHE DONNAY. It is clear that the movements to which we have witnessed are of historic significance. Such stall was that on three occasions in the last twenty years on the European markets: in 1987, in 2001 and 2002. Basically, we face two problems. The first is the phase shift in the economic cycle. US economic growth has been a constant acceleration these past four years, with an average annual rate of 4.5. We know that this growth has a point too insofar as it relates to an excess of consumption. This excess was fed, inter alia, by the tax cuts intended by George Bush in early 2003 as well as by the increase in real estate which enabled American households make the "home credit" and fuel consumption. We know therefore that us growth should slow down, but we don't know what will be the extent of the slowdown.
The second problem relates to the US Central Bank. I'd be quite inclined to impute responsibility for the decline in the markets. As the new President, Ben Bernanke may seek to influence the philosophy of us monetary policy in which case we inscririons in a breach scenario. This would be the worst case scenario. Either Ben Bernanke some difficulties to position themselves, like Alan Greenspan in his service. In this hypothesis, we would be faced with a simple problem of adjustment. However, its resolution will take some time in a context where we have precisely no time to lose. Indeed, economic growth slowing, the market calls for lower rates. But inflation continues to be pressing for central banks and the Fed to raise its rates to maintain its credibility. In this context, the market turned to the Fed in the hope of a mode of employment. In the absence of responses, it remains outstanding.
JEAN-PIERRE HELLEBUYCK. Setting up markets appear delicate, but it remains classic. The peak of economic growth has been crossed between the months of March and May 2006, including in the United States. For the second half, we therefore expect a deceleration of the US growth which will have effects in the rest of the world. Unfortunately, inflation continues to advance. Here again, this is a classic situation: the peak of inflation is shifted relative to growth, even if these two phenomena are related.
The shock could occur earlier. Why only now The answer is in part in the conduct of monetary policy in the US and Japanese.
The US Central Bank tightens two years now. Counterparts of the euro area and the Japan is there are now also. In my view, the markets believed that two years of higher rates were sufficient, as Ben Bernanke first gave the impression of wanting to put an end to this escalation. However, nothing is today less safe: 25 or 50 basis points additional might break the backbone of the American economy.
If, since two years, the Fed tightening did not have significant challenges in global markets, it is because the Japanese, eager to get out of deflation, flooded the world of liquidity. It is for this reason, that diversification is often illusory because all asset classes have been "irrigated" by the Japanese liquidity.
So, we cross the peak of the strongest growth seen for twenty years and we are still very far from the risk of recession; in this context, it is normal that the companies are still euphoric. In addition, the levels of inflation do not justify a further important on the part of central bankers. In the eurozone in particular, only the microscope of the European Central Bank is able to detect
000 actions training in 2005 see oppositewhich is extended up to these past few weeksAnalysis also reveals that the exception of reciprocity may be widely invokedThese are different and complementary usesHowever the serious games to democratizeThen arises the miracle solution selected immigrationFinally DaimlerChrysler which still holds 22What Apple is not privy to via its Internet siteRevenues from the FFF have indeed already amputees of 4Those that are not pronounced continue to delay
