Editorial - August 2024
Temps de lecture : min
Warning, fragile
At a time of slowing globalisation (Covid revealed the weaknesses in fragmented supply chains), another obvious fragility but one that is widely accepted, either due to a lack of foresight or strategic courage, is the dependency of our digitalised business models on a handful of dominant oligopolies. In the end, it was not the major power outage that some were expecting but a version change in flawed software shared by multiple companies that crippled many sectors. Digitalisation is picking up speed, however, and outpacing the rest of the economy. And while artificial intelligence data centres represent a considerable future demand for electricity, both for their computing power and to cool their servers, the risk of a problem in this area at some point is high.
« One fragility can conceal another, and the return of Politics, touched on over the past several years in our Economic and Financial Outlook, is now a pressing theme. »
Following the results of the European and subsequent legislative elections, the conditions of the country’s governance have become inextricable. What is more, while France was ‘at war’ 4 years ago, it is now burdened by a war debt that will require the particular attention of any government. Lazy coalitions struggle to accept the principle that we cannot redistribute what we do not produce over time, and the fact that France is subject to a European excessive deficit procedure.
Finally, our financial markets are also fragile. It only took a certain lack of synchronicity between the Japanese central bank and the expectations of its US counterpart to provoke a massive unwinding of positions around the world, generating turmoil and volatility not seen since the 1987 crash for certain assets! Although this movement has been partially corrected, the illuminations of the summer could give way to a more destructive flame as all continents experience flare-ups.
Written by
Francis JAISSON
Deputy Director-General in charge of all Management, Marketing, Negotiation and Research
August 12, 2024
This document is prepared by Covéa Finance, a portfolio management company approved by the Autorité des Marchés Financiers under number 97-007, incorporated as a simplified joint-stock company with a capital of €24,901,254, registered with the RCS Paris under number B 407 625 607, having its registered office at 8-12 rue Boissy d'Anglas 75008 Paris. This document is produced for information purposes only and cannot be considered as an offer of sale or investment advice. It does not constitute the basis for any commitment of any kind, nor does it constitute a strategy assessment or any recommendation for investment in financial instruments. It contains general and non-personalized opinions and analyses designed by Covéa Finance on the basis of figures which it considers to be reliable on the day of their establishment according to the economic context, but whose accuracy and validity are not guaranteed. The opinions expressed in the document may be amended without notification. Covéa Finance cannot be held responsible for any decision taken on the basis of information contained in this document. This document is the intellectual property of Covéa Finance. Any Use (defined below), reproduction or distribution of all or part of this document must be the subject of prior authorization by Covéa Finance. The addressee of this document is aware of and accepts that the numerical data used to establish general and non-personalized opinions and analyses may be subject to the acquisition of rights vis-à-vis third parties. Consequently, the encrypted data may in no case be the subject of any Use by the recipient of the document without the prior acquisition of the necessary rights directly from the third-party holders of these rights. Furthermore, the addressee of this document is aware of and accepts that Covéa Finance will not be responsible for any use made of said encrypted data and will assume all the consequences vis-à-vis the third-party holders of the rights associated with this data. “Use” means, and is not limited to, the manipulation of encrypted data, distribution, redistribution, integration into an information system or into documents of all types.
