Thought
leadership.

The fifth edition of the Trophées de la Finance Responsable, organised by Investissement Conseils magazine, took place in Paris yesterday. For the third year running, our Edmond de Rothschild SICAV Euro Sustainable Equity strategy, invested in eurozone equities and classified as ‘Article 9’ SFDR, won two awards:

- 1st prize in the ‘Eurozone Equities’ category
- 2nd prize in the ‘Carbone4 Finance Climate Prize’ category

We would like to warmly congratulate our management team dedicated to European equities, as well as the SRI team, for this award, which underlines the quality and relevance of our SRI approach.

Political tensions in France and also in Germany are inevitably weighing on PMIs.

Eurozone inflation has been slowing so the ECB can continue to reduce rates. 

Economic activity in the United States remains strong, while in Japan, inflation has resumed its upward trajectory.

The eurozone is still suffering from the conflict’s consequences and energy prices in particular are taking a toll as we enter winter.

The ECB is coming under increased pressure to ease its monetary policy and put a brake on the economic slowdown.

In Japan, the chances of the central bank tightening monetary policy are mixed.

As economic growth shows signs of overall resilience and interest rates begin to normalise, the High Yield market is now supported by a more favourable  environment.

Alexis Foret, Head of High Yield at Edmond de Rothschild Asset Management (France), believes that bonds in this segment – with their attractive yields and rising average coupons – have all the characteristics to cater to investors’ every need.

More than a victory, a triumph

Donald Trump and the Republicans have won full control of the White House and Congress. This scenario, which came with rather low odds in the opinion polls, has extended the “Trump trade” (bullish equity market and rising US long-term yields and dollar) and has this time around created a wider dichotomy between the United States and Europe (where equity indices and long-term yields are declining). Investors have focused on the Republican candidate’s promises of lower corporate taxes and deregulation in the US and rising tariffs for other trade partners – Europe included. 
They have also factored in deeper public deficits (rising real and nominal rates) and higher inflationary risks (rising inflation break-even rates). Markets have experienced violent swings since early October and the beginning of the “Trump trade”, with the S&P500 outperforming the Eurostoxx 50 by almost 9%.

The Republicans, under the leadership of D. Trump, have taken control of the House of Representatives.

Germany is preparing for political upheaval with a vote of confidence scheduled for December.

Markets have continued to rotate into exclusively US assets in another illustration of American exceptionalism.

Edmond de Rothschild announces the appointment of Nathalie Cerutti as Director of Corporate Social Responsibility. Nathalie joined the group on November 1st 2024.

• Donald Trump’s clear victory led to the yield curve steepening and the dollar rising
  
  
• China's economy offers a note of optimism
  
  
• The outlook in Europe has been weakened by the threat from the US to its exports and its reduced internal capacity to react.

The Republican candidate's victory has now been confirmed. D. Trump becomes the 47th president in the history of the United States. He particularly benefited from the crisis of confidence among Americans regarding the economic situation in their country, with over 50% of them indicating it was their main concern, according to exit polls.

US growth proved resilient in the third quarter, but US employment data remain contradictory.

The eurozone figures were a pleasant surprise with France expanding more than expected.

Japan's ruling party failed to get a majority in the weekend elections, reinforcing political uncertainty.

Edmond de Rothschild Asset Management has appointed Victoire Dubrujeaud as High Yield Portfolio Manager-analyst in the fixed income team. She starts on 28 October 2024.

The ECB’s governors are worried about soft eurozone growth and considering accelerating interest rate cuts to stimulate the European economy.

In the UK, investors are concerned about the Labour government’s intention to change budget rules to allow it to borrow more.

In China, the initial enthusiasm following the rate cuts earlier this week has already fizzled out.