The expert magazine of Ostrum AM

Read our market review and find out all about our theme of the week in MyStratWeekly with our experts Stéphane Déo, Axel Botte, Aline Goupil-Raguénès and Zouhoure Bousbih.
This week :

Topic of the week: Capitalism without capital

  • Markets have consistently rewarded companies that return cash to shareholders and penalized those that invest. Result: a very clear distortion of cash flows in favor of buybacks and dividend, all at the expense of investment;
  • This has helped to transfer the capital-intensive part of production to emerging countries. It has also contributed to increased margins and cash flows for businesses;
  • It is not at all certain, in a post-pandemic world, that this logic of “capitalism without capital” will endure. In this case, the level of profitability of companies would inevitably be affected, and valuations, which are very demanding, could be difficult to justify.

Market review: When markets change their mind

  • Disappointing growth figures and dynamic inflation figures;
  • The curve now anticipates rapid rate increases;
  • This is accompanied by more stress on the curve and flattening on the long part of the curve;
  • This stress has not yet contaminated the stock market. But..

Chart of the week

Réduction des émissions de gaz a effets de serre

The reduction of greenhouse gas emissions will have to be all the faster as it is implemented later. The gradual adjustment, if it had started in 2020, quickly becomes a very steep slope.
The first consequence is that the objective set seems increasingly difficult to achieve and therefore unlikely.
The second consequence is that the probability of a “too traditional, too violent” adjustment continues to increase. By delaying the deadline, we expose ourselves to a significant climate risk.

Figure of the week

The average age of public infrastructure in the United States. It was 16.5 years in 1970 and the figure has been growing ever since. The need for public investment is very real.

MyStratWeekly : Market views and strategy

Download Download MyStratWeekly - November 2nd 2021
  • Stéphane Déo

    Stéphane Déo

    Head of markets strategy

  • Axel Botte

    Axel Botte

    Global strategist

  • Aline Goupil-Raguénès

    Aline Goupil-Raguénès

    Developed countries strategist

  • Zouhoure Bousbih

    Zouhoure Bousbih

    Emerging countries strategist

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