Equity volatility, economists’ indifference

Daily update

Technology equities exhibited some volatility overnight (South Korea’s markets falling quite noticeably). This is not caused by shifting economic expectations, allowing economists to exhibit indifference. It is too soon to be talking about wealth effects, and for now, consumers’ desire to consume should outweigh any consequences of market volatility.
The situation in the Strait of Hormuz is about as transparent as the Lincoln reflecting pool, with the Financial Times reporting confusion amongst shipowners about whether to follow Iranian or US instructions on transiting the strait. The result is a slow increase in shipping volume, but investors were not expecting a rapid normalization.
It is confirmed that the UK will have its seventh prime minister in a decade. There is precedent—there were seven prime ministers in the first decade of King George II’s reign. The seventh, Lord North, governed for twelve years. Markets have reacted with indifference, which is probably appropriate to a change that is more spin than substance.
There are assorted business sentiment polls due. These have exhibited an historically significant departure from reality of late. There are several central bank speakers, coming after European Central Bank (ECB) President Lagarde failed to admit to committing a policy error but seemed to imply that the ECB would not make a further mistake.