Most of the results are in, and while it remains close, Macron will likely be the winner of the first French presidential round and is set to face Marine Le Pen in the runoff.
What does that mean for various asset markets and the bigger macro picture? Here are two forecasts, just released from Goldman and Citi.
First, Goldman Sachs:
The first results are in and according to IPSOS exit polls, Macron leads with 23.7% of the vote, Le Pen is second with 21.7%, with Fillon and Mellenchon tied for third at 19.5%. However, according to official results, from the French interior ministry, Le Pen is leading with 24.3% of the vote, Macron is at 21.4%, while Fillon has 20.3%.
Meanwhile, according to French official data:
While geopolitical concerns and French election uncertainty are factors, The Wall Street Journal notes that many markets are flashing red on growth as investors begin to return to pre-election bets on the ol 'new normal' - a persistently weak economic expansion.
There are clear signs that the sugar rush of Donald Trump’s victory and global-growth hopes has faded, raising doubts among some investors about whether stocks can stay high. The sharp drop in government-bond yields is the most obvious signal that something is amiss.
Having largely disappeared from the market's scope for the past 6 months, ever since Europe "bent" its rule allowing the bailout of Monte Paschi and several smaller banks despite Italy having the greatest amount of disclosed NPLs of any European nation, moments ago Fitch decided to drag Italy right back in the spotlight when it downgraded Italy to BBB from BBB+, citing "Italy's persistent track record of fiscal slippage, back-loading of consolidation, weak economic growth, and resulting failure to bring down the very high level of general government debt has left it more exposed to pote
Authored by Patrick Buchanan via Buchanan.org,
“You all start with the premise that democracy is some good. I don’t think it’s worth a damn. Churchill is right. The only thing to be said for democracy is that there is nothing else that’s any better. …
“People say, ‘If the Congress were more representative of the people it would be better.’ I say Congress is too damn representative. It’s just as stupid as the people are, just as uneducated, just as dumb, just as selfish.”