Europe

While geopolitical concerns and French election uncertainty are factors, The Wall Street Journal notes that many markets are flashing red on growth as investors begin to return to pre-election bets on the ol 'new normal' - a persistently weak economic expansion.

There are clear signs that the sugar rush of Donald Trump’s victory and global-growth hopes has faded, raising doubts among some investors about whether stocks can stay high. The sharp drop in government-bond yields is the most obvious signal that something is amiss.

Having largely disappeared from the market's scope for the past 6 months, ever since Europe "bent" its rule allowing the bailout of Monte Paschi and several smaller banks despite Italy having the greatest amount of disclosed NPLs of any European nation, moments ago Fitch decided to drag Italy right back in the spotlight when it downgraded Italy to BBB from BBB+, citing "Italy's persistent track record of fiscal slippage, back-loading of consolidation, weak economic growth, and resulting failure to bring down the very high level of general government debt has left it more exposed to pote

Authored by Patrick Buchanan via Buchanan.org,

“You all start with the premise that democracy is some good. I don’t think it’s worth a damn. Churchill is right. The only thing to be said for democracy is that there is nothing else that’s any better. …

 

“People say, ‘If the Congress were more representative of the people it would be better.’ I say Congress is too damn representative. It’s just as stupid as the people are, just as uneducated, just as dumb, just as selfish.”

Global markets were oddly calm on Friday, the last day of trading before the first round of France's closely fought presidential election, with European stocks posting modest declines ahead of Sunday's main event, Asian shares rising, and set for first weekly gain in the past month, while U.S. futures were unchanged. French bond yields hit three-months low even as the euro has seen some recent weakness.

Despite a resurging stock market and stabilized bond risk premia (cough Draghi cough), EurActiv reports the proportion of children living below the poverty line in Spain has increased by 9 percentage points between 2008 and 2014, to reach almost 40%.