The first round of voting in the highly anticipated French presidential election is just three days away. And it remains a close race, say pollsters, with four candidates all within a few percentage points of each other.
In fact, as we head into the final days of campaigning, almost a third of the voters are still undecided, leaving the candidates scrambling for new votes.
Based on the most recent polls, the two front runners are the far-right National Front’s Marine Le Pen and Emmanuel Macron – who served as economy minister under Socialist President François Hollande – but is now running as an independent.
A late surge by the hard-left candidate Jean-Luc Melenchon and scandal-hit right-winger Francois Fillon appears to be holding, keeping both within striking distance to the front-runners.
If the current polling results hold true, Le Pen and Macron will face off in the election’s second round on May 7.
This will be a political turning point for France: The first time since 1958 that the main parties of the left and the right are not represented in the second round. If Le Pen somehow prevails, this will have far-reaching implications … and not just for France but for the entire European Union.
If we look beyond the first round, the pollsters have modeled out several possible second-round scenarios. And they suggest that Macron would win the runoff no matter who opposes him, while Le Pen would lose against all comers. Melenchon would defeat everyone except Macron, and Fillon would lose to all except Le Pen.
What does this mean for you and your money?
According to Deutsche Bank AG strategist Andreas Bruckner, don’t expect a relief rally: European stocks are headed for a correction, regardless of who wins the French election.
I couldn’t agree more.
|In France, the upcoming presidential elections will be yet another turning point in the country’s controversial history.|
I also believe U.S stocks are headed for a correction sometime soon as well. And the French election could be the catalyst that sends the markets lower.
Both European and U.S. stocks are overvalued at current levels. And if you couple that with weaker economic data, this recent run in equities is going to be reversed sooner rather than later.
Even if a loss by the anti-euro Le Pen and Melenchon removes some uncertainty for the markets, I believe stocks are still headed for a correction.
By and large, the markets see any victory from the fringes — either Le Pen or a Melenchon win — as a negative. And that will, in turn, send stocks lower. A centrist win, from either Fillon or favorite Macron, would be a market positive.
However, the possibility of a Le Pen victory has hung over the stock rally all year. A Le Pen victory would trigger fears over France’s exit from the single currency AND consequently the euro’s ultimate demise.
And no doubt about it: That’s going to create opportunities. In fact, right now I have my sights set on a couple of sectors – including utilities and precious metals miners – that are likely to flourish no matter what happens in France.
But the name of the game, as always, is timing and patience.