Supply chain disruption has become the new norm: Analyst

European markets are under pressure after French President Emmanuel Macron called for a surprise snap election following the far right's trouncing of his centrist coalition in parliamentary elections . HSBC Americas Head of Global Trade Solutions Marissa Adams breaks down the news and how it affects global markets .

Macron's announcement is yet another example of how global politics can have resounding impacts on both markets and the economy. And one of the things that we advise our clients at HS BC is finding ways to, uh, to decouple their supply chains from geopolitical risk.So given all the multi polarity, obviously we can see that supply chain challenges remain regardless of which market you're in.

What that can do is obviously give you a bit more security in terms of where and how you can get your goods.But actually, sometimes that cost of production is is harder closer to home.Have we completely renormalized from that in terms of supply chains, or are there still areas that are still struggling to recover?So, I, I don't think that there is a normalisation anymore.We went from a world where goods were just in time.

What are you seeing there and then just the ultimate impact that this is going to have on these companies for investment portfolio?And I think there's sort of three things that I would say that investors need to look out for when they're looking at, um, companies they're investing in. And you bring up semiconductors, which is, you know, a very common, uh, challenge at the moment where you know, a lot of the production is in Taiwan.So the third thing I'd say that they should be looking out for is that are the companies talking about investment into infrastructure, investing in their supply chains and that diversification?

If the cost of inputs goes up 5 to 10% they might not not actually have that financing to to supply that.

Source: Financial Digest (financialdigest.net)

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