Global stock markets were higher post the weekend’s French elections. The 2 front-runners, far-right nationalist Marine Le Pen and centrist Emmanuel Macron won the first round of the French presidential election, triggering a runoff on May 7 between two radically different visions of the country’s future.
It was a close race, Le Pen was on course to take 24.3% in Sunday’s election, with Macron, a first-time candidate and political independent, on 22.2%, according to projections from the Interior Ministry based on more than a third of votes counted. While their tallies may change with projections showing Macron catching up, the top two candidates are clear – meaning that for the first time in modern French political history, both establishment parties were eliminated in the first round, reflecting another political rejection of the status quo.
The initial market reaction has seen a bounce in the Euro to a 5-month high, and it will be interesting to see how equity markets react. The assumption seems to be that centrist voters will now support Macron.
The week ahead also sees a raft of major earnings announcements in the US, with heavyweights such as Google, Amazon and Exxon Mobil set to release quarterly earnings figures. Investors are expecting a solid US earnings season especially given the high level of the market overall. Donald Trump has also stated he will provide more detail on his highly-anticipated tax reform plans this week.
In stock specific news, Sydney Airport (SYD.AX) released another set of solid air traffic numbers for March.
Sydney Airport (SYD.AX)
SYD has reported international passenger growth was up 5.7% for the quarter ending March 31 2017. Total passenger growth compared to the prior corresponding was up just 2.2%, although the exclusion of the busy Easter period in the most recent quarter would imply that total passenger growth is slightly better than the headline numbers.
SYD highlighted that 620,000 annualised new international seats have already been announced in 2017, with additional services focusses on Asia, with increased capacity to China, Vietnam, Korea, Indonesia, and Hong Kong.
A tourism boom across Australia & NZ is one of our key portfolio investment themes, and SYD is clearly befitting from the tourism tailwind.
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