Although Bloomberg polls put Emmanuel Macron and Marine Le Pen ahead of the pack in the lead-up to France’s first round of elections this Sunday, Buxton confidently asserted: “I’m not worried about any of the European elections this year.”
“The French electoral system is designed to ensure the extremes can’t win it,” he said, adding that in Germany “there will be a coalition in September but it’s not going to produce any radical change in policy.”
“The real surprise this year is Europe will actually grow and is beginning to demonstrate that the consumer in the core countries is actually in a pretty good space.”
Generally speaking, he feels “without a shadow of a doubt things are getting better” for the economy.
Markets continue to rise not because of central bank activity but because they are entering a gradual period of “normalisation,” he asserted.
Although the current UK equity bull market has persisted for over eight years, Buxton cites academic theory that post-financial crisis, the recovery period will endure longer than a normal economic cycle.
“By that yardstick, we’re just entering the mid-cycle which is when, funny enough, things start getting better and central banks start raising rates as the Fed is gently beginning to do.”
Even concerns over president Trump’s protectionist stance are somewhat overblown, he thinks.
