🇺🇸 Europe vs. the US

OECD predicted that the global economy will pick up | US job numbers weren't as high as expected, but they're not to be scoffed at | [Finimize](   TOGETHER WITH     Hi {NAME}, here's what you need to know for May 4th in 3:08 minutes.   ☕️ Finimized over a cappuccino at [Caffè Vergnano 1882 Amendola]( in Bari, Italy (☀️19°C/66°F). Today's big stories - The OECD's got big dreams for the global economy, but sneaky oil prices might just crash the party - From an inflation standpoint, the economy is starting to feel like a 1970s reboot – [Read Now]( - The US labor market held strong, despite falling a little shy of expectations A World Of Difference [A World Of Difference] What’s going on here? The OECD [predicted]( that the global economy will pick up more than expected this year, and suggested that Europe might be the first to bring out the rate-cutting scissors. What does this mean? The OECD now expects the global economy to grow by 3.1% this year, up from its previous prediction of 2.9%. What’s more, the Paris-based think tank expects that trend to stick around, forecasting a 3.2% uptick next year. But not everyone’s in the same boat: while the US bagged an upgrade to 2.6%, the fact that Europe’s biggest economy, Germany, is still lagging meant the eurozone’s projection stalled at 0.7%. So while the OECD expects global inflation to cool down, it might be the European Central Bank that’s pushed to snip economy-crushing interest rates first. Why should I care? Zooming out: There’s always a “but”. The OECD tossed in a curveball, warning that any Middle East flare-up could blow this forecast off course. See, oil prices spiking 25% could push inflation higher, force central banks to hike interest rates, and potentially shave 0.4 percentage points off global growth. Plus, while the global economy is managing inflation better than most expected, the OECD is still worried about the hefty debts that governments piled up during the pandemic. With interest rates stubbornly high, the burden of servicing those debts will only get heavier. The bigger picture: Holding the line. The Federal Reserve (the Fed) has held steady on interest rates, deciding to stay heavy on inflation since the economy seems to be handling the impact well. Now, much is made of the impact of lower rates, which tend to increase stocks’ valuations and make it cheaper for companies to borrow money. But a resilient economy bodes well for stocks too: the Fed can only afford to keep rates high because companies are still managing to grow, after all. You might also like: [Three reasons to not sweat the Fed’s rate decision](. Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=A World Of Difference&utm_campaign=daily-global-04-05-2024&utm_source=email) Analyst Take With Inflation Heating Back Up, Is This The 1970s All Over Again? [With Inflation Heating Back Up, Is This The 1970s All Over Again?]( [Photo of Stéphane Renevier] Stéphane Renevier, Analyst Inflation’s recent behavior has been a bit of a [throwback to the 1970s](: there was a sharp spike in consumer prices, followed by a swift, but partial, pullback. And lately, there have been signs that inflation might be heating back up again. So that’s got folks worried that we might be on the brink of another major surge – just like we saw all those decades ago. That’s today’s Insight: [a look back at that not-so-groovy era and what it tells us about today’s economy](. [Read or listen to the Insight here]( SPONSORED BY PROSPERO.AI Meet the AI-fueled startup that’s outperformed the S&P 500 for each of the last 3 years Prospero.AI’s picks are currently beating the S&P 500 by 88%* this year. We’re not telling you that to turn you green: Prospero shares those picks in its [investing newsletter](. See, the startup uses AI analytics tools to turn millions of data points into ten stock signals. Then, it produces [timely insights and predictions]( and [shares them for free with its subscribers](. And last year, that insight resulted in picks that [beat the S&P 500 by around 50%]( – and the same was true the year before, too. That’s three for three. Prospero is taking the pulse of long-term signals as we speak, and naturally, you can [find the results in the next newsletter](. [Discover The Free Newsletter]( *As of 05/03/2024 When you support our sponsors, you support us. Thanks for that. If you want your brand featured here, [get in touch.]( The “It’s Fine” Print [The “It’s Fine” Print] What’s going on here? The US [added]( fewer jobs than expected in April, but the details aren’t as devilish as they seem. What does this mean? The number of workers in paying jobs can make or break an economy, so US job numbers coming in below predictions might seem like a bad omen. The country added 175,000 jobs in April, below the expectation of 240,000. But that’s still an impressive 40th consecutive month of employment expansion, indicating that the labor market is still holding strong. Average hourly wages came in roughly in line with expectations, rising by 3.9% from the same time last year. That figure was 4.1% in March, suggesting a slight decrease in stubborn wage inflation. Unemployment, meanwhile, picked up ever so slightly more than expected. Why should I care? For markets: Small fish could fry. Job growth was a little lower than it was last month, granted, but it still indicates a strong economy. Combine that with seemingly contained inflation, and that should bode well for businesses – and the bigger the company, the better. That’s because they’re more able to handle expensive borrowing costs: not only do they tend to have more cash in the bank than smaller firms, but they also have more robust business models. No wonder the S&P 500 – made up of the biggest stateside companies – has outperformed the Russell 2000, which tracks much smaller firms, by 7% this year. The bigger picture: Money in your pockets. Pay rises might sound promising, but if prices increase at the same pace, your savings account will be flatlining. Sadly, that’s the case these days: the McDonald’s cheeseburger is 55% more expensive than it was three years ago, for instance. Problem is, if wages increase faster than inflation, folk will keep buying their usual baskets – and that’s a surefire way to keep prices on the up. You might also like: [Three portfolio steps to take while you wait for inflation to fall.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=The “It’s Fine” Print&utm_campaign=daily-global-04-05-2024&utm_source=email) 💬 Quote of the day "An investment in knowledge pays the best interest." – Benjamin Franklin (an American polymath and one of the Founding Fathers of the United States) [Tweet this]( 🤝 Tom and Jerry, Woody and Buzz Lightyear, Butch Cassidy and the Sundance Kid. You're a stellar fintech brand looking to get your name out there, and [we're a newsletter]( with hundreds of thousands of brainy, switched-on readers. Let's become the next picture-perfect duo: [Talk to the team](. [Get Your Name Out There]( 👀 The Big, Bad Inflationary Factor [US consumer prices]( are up 22% in total since March 2020. At a yearly pace of 3.5%, they’re still [rising faster]( than the Federal Reserve would like. It’s one of the big, uncomfortable changes the economy has seen since Covid. But there's something else to it: [this huge, underappreciated factor is keeping inflation hot](. [Read The Quicktake]( 🎯 On Our Radar 1. Twisted tornadoes. The [jaw-dropping natural phenomenon](, explained. 2. There’s value to be found in the NFT market. [Three key factors]( can help you separate the best deals from the rest.* 3. You know what they say about chickens. California is helping [animals walk safely]( across eight lanes of traffic – no matter why they want to cross. 4. Tax advantages, compounded returns, flexible inheritances. ISAs can have it all – so long as you [choose the right one](.* 5. Food of the future. From temperatures to soil conditions and rainfall, climate change is messing with [our favorite flavors](. When you support our sponsors, you support us. Thanks for that. 🌍 Finimize Live 🤩 Coming up soon... All events in UK time. 💃🏼 [Finimize Ladies Investing Club](: 6.30pm, May 9th 🏔️ [Gaining An Edge Beyond ETFs](: 8pm, June 19th 🚀 [2024 Modern Investor Summit](: 2pm, December 3rd ❤️ Share with a friend Thanks for reading {NAME}. If you liked today's brief, we'd love for you to share it with a friend. You stay classy, {NAME} 😉 We’d love to hear your thoughts. [Give feedback]( Want to advertise with us too? 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