Europe

(London)

Everything was expected to go very smoothly in the British election. The dominant Conservative party, led by Theresa May was expected to cruise to a huge majority in parliament. However, yesterday everything went wrong, as Labour (the left) gained a huge share of parliamentary seats and stripped the Conservatives of their majority. May may be compelled to resign as PM, potentially setting the stage for another election in the near-term. The lack of a majority means there is a “hung parliament”, which will force a coalition government. All of this is leading to doubts over the Brexit negotiations with the EU, and even Brexit itself. On the whole, it seems the coalition government will lead to a significantly “softer” Brexit, where the country might stay in the single market.


FINSUM: This was a shocking development. The Pound dropped on the news, but in the long run it is probably good news for the economy (i.e. a softer Brexit).

 

(Paris)

US and British investors tend to look down on France, but in fact its economy is strong comparatively. It has higher productivity than the UK and the much mocked 35-hour work is actually more hours on average than workers in the US put in. This, combined with Macron’s recent triumph, is exactly why it is time to invest in Europe again. After years of struggle and the rise of populism, it now appears as if the center has turned the corner in France. The economy is recovering nicely and it now looks like the continent is once again ready to thrive.


FINSUM: This is an insightful article. Now that populism seems to have been beat back, it would appear that it is a good time to get back into European stocks.

Source: Wall Street Journal

(Paris)

Today is a bright day across the European continent. For a couple years Europeans have been rallying to right-wing nationalists parties and the future of the EU and the Euro looked bleak. However, the center held yesterday as France’s independent centrist candidate beat the far-right candidate in a landslide, getting nearly 66% of the vote. The victory signals that France, one of Europe’s top economies, wants to remain in the EU and Euro.


FINSUM: Investors should breathe a sigh of relief as this as this result seems to affirm that the worst of Euro/EU breakup talk is now in the past.

Source: Wall Street Journal

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