It’s not just our country that is experiencing profound political changes. Across the world, nationalistic fervor has erupted, causing severe consternation among progressives and liberals.
Arguably, however, the upcoming French elections will have a pronounced impact, greater even than the unprecedented U.S. general election. This extends beyond the obvious effect on French stocks. Beginning on Sunday’s first-round vote, the French could cement a new normal for the western world.
Most of the mainstream attention is centered on Marine Le Pen, and for good reason. She is the candidate for the National Front, a far-right political party if you couldn’t tell from the name. According to Britannica, the National Front initially started from the fringes of the political spectrum. But by the 1980s onwards, the party made considerable progress. A major reason they have not found decisive success was because rival politicians promised conservative goals, particularly tough immigration controls.
The danger for progressives and the French left is that National Front voters are no longer for sale. While politicians promised a crackdown on immigration, they were empty words. In recent years, France has become the hotbed of unimaginable horrors at the hands of radical Islamic terrorists. The French are many things, but they are not stupid. Something desperately needs to be done, and the National Front offers a visceral solution.
Indeed, a real possibility exists that Le Pen will rise as the victor of the French elections. We have witnessed similar shockwaves via Brexit and President Donald Trump. In both of these events, the mainstream media ridiculed the conservative opposition that would later win out.
Even more surprising, the financial markets responded optimistically to the two landmark decisions. Thus, it’s not unreasonable to assume that French stocks will rally under a Le Pen presidency.
In fact, French stocks are among the top performers in the global markets this year. And one cannot say that French investors are 100% sure that Le Pen will not win. The latest read on the upcoming vote is too close to call. Furthermore, they must surely realize that any outbursts of radicalism will only bolster the National Front.
Instead, I believe the rise in French stocks is an acceptance of the new normal. Should Le Pen win, she will steer France and the rest of Europe to the political right. If she loses, the National Front has done so much that their voices can no longer be ignored.
Don’t expect the markets to penalize the far right. Money only cares about stability, and if that means more nationalism, so be it. Here are three French stocks that will benefit, irrespective of who wins the French elections.