Daily update
Daily update
- In any society experiencing a period of economic upheaval, some people do better while others do worse. The causes are complex, but those suffering want a simple explanation. This encourages scapegoat economics—blaming economic problems on a minority group. Scapegoat economics encourages prejudice politics, where politicians promise everything will be OK if that group can only be excluded. This helps explain the extremists’ success in the European elections.
- The European parliament does not really matter to investors (or anyone else), so voter turnout was low; only the most impassioned were likely to vote. French President Macron responded to the strong performance of the far right by calling parliamentary elections (although not while standing in the pouring rain. The French do things differently). Another election adds another political risk to markets this summer.
- Friday’s strong US non-farm payrolls defied the consensus forecast, although the household survey signalled very weak employment. Markets blindly accepted the payroll data, but the survey on which it is based has a 25.2% response rate (down from around 75% a decade ago). In similar circumstances, the UK stopped publishing its employment data as being obviously unreliable.
- Japanese GDP had some minor revisions. The deflator was slightly lower, and inventories added a little more to first quarter growth.
