Finding value in today’s global asset markets has been a bit of a rollercoaster ride.
Populism and renewed protectionist rhetoric [https://thecapitalideas.com/political-populism-means-investors/] is increasingly becoming a threat to world trade. Political uncertainty used to be a key feature of emerging market economies, but now is part of the conversation on the developed world. Add the impact of a decade of unconventional monetary policy, and there are plenty of reasons why investors may be nervous.
But Noriko Chen, Capital Group equity portfolio manager, has a different view to share with the Morningstar Investment Conference today.
French voters will choose a new president next month in a pivotal election that has taken on global significance. With a rising wave of populism moving across Europe, the United States and elsewhere, investors are worried that France may be the next domino to fall, sweeping away the old-guard establishment and rejecting the geopolitical order that has dominated Western democracy since the end of World War II.
As the U.S. dollar has strengthened, the People’s Bank of China has tapped its foreign currency reserves to support the yuan, recently pushing its reserves below $3 trillion for the first time since 2011. This trend could continue as the currency remains pressured by the potential for changes in U.S. trade relations, continued capital outflows and quicker U.S. interest rate hikes.
The wave of political change that began with last year’s surprise decision by U.K. voters to leave the European Union has helped stoke uncertainty worldwide. In Europe, not only are there still many questions surrounding the U.K.’s exit from the European common market, but concern has grown surrounding France’s upcoming presidential election on April 23rd.