The popularity of the 'neither of the above' candidate RFK jnr raises an intriguing possibility of a contingent Election in the US, with the new House of Representatives picking the President. Smart analysts like Dr Pippa Malmgrem are starting to talk about it, while the betting markets are also starting to move. The financial markets? Not yet.

Today in the Alps it is -2 at the top of the mountain and 4 degrees in town. So what is the actual temperature in Chamonix? The reason for this post is that on Wednesday it will apparently reach 20 degrees in town, having been 1 degree in the morning, while still being below freezing up where they are skiing. This degree of variation in a single town on a single day gives lie to the idea that we can measure the average temperature of the whole world to within 0.1 degree, not only today, but over thousands of years and predict it into the future. On such false precision we are making huge economic decisions...

In the internet boom investors chased stocks like Nokia, Ericsson and Cisco to crazy sales multiples that required growth to be not just good, but parabolic to deliver any returns. A small disruption to those expectations led to a profit warning and a crash in the market. AI is the new 'internet' and investors are once again chasing picks and shovels. However, when a market is putting China stocks on less than 1x sales due to 'concerns over China/Taiwan while simultaneously paying 40x sales for a company where half its customers and all its manufacturing is done in the region, there is something of a disconnect in the risk management.

The Bond markets have curbed some of their enthusiasm over rate cuts while momentum stays with US tech. Japan and EM ex China continue to behave well, although China continues to behave like a bear market, This has little to do with fundamentals like value or earnings and more to do with perceptions of risk and uncertainty that are driving liquidity flows. However, we would note that the stock market is not the Bellweather of the Economy that it is in the US and that intervention will take place only for stabilisation. They do not believe in the so called Fed put, or the wealth effect.

The peasants are rebelling against the bien pensants. The people of Europe are pushing back against their would be masters, symbolised by the Tractors of the Dutch, German and now French Farmers as they blockade the Citadels. Misleadingly portrayed as 'Far Right', the key feature is the ESG and Green Leap Forward policies that have, unbidden, replaced the Common Agricultural and Common Industrial Policies as the Raison d'etre of the EU and that are, as the farmers put it " absurd, extreme and unworkable" . There is a high 'risk' that this will drive increased nationalism and ultimately seriously damage to the EU and the other associated Globalist institutions.