This is one of those weeks that carves lines in our designers’ brows and turns their knuckles white. That is because we have a dreaded triple bill of covers.
In America, Europe, the Middle East and Africa we focus on the stockmarket’s remarkable performance. In Britain we introduce our new build-a-voter tool, which models the country’s electorate. And in Asia we highlight India’s north-south divide.
As usual, each of these stories runs in every edition. We simply vary their order. But a three-way cover split creates a lot of work for our designers.
American share prices are up by 21% since the end of October and stand roughly 5% above their peak in January 2022. On February 22nd Europe’s equities set a new record for the first time in two years. Even Japanese stocks have nosed past the record in 1989 that preceded many years of slump. Our task was to explain what was behind this bull market and what comes next.
There’s no getting round the fact that markets are scarily high. The value of the top 10% of American firms as a proportion of the whole market has not been this extreme since the Wall Street crash of 1929. In the frothiest corner of the financial markets, bitcoin is trading at around $60,000 again, just shy of its peak in 2021. How much further could prices rise?
In our first cover we had one bull up where the air is thin, peering over a snow-capped mountain peak. In our second, we had another up to its horns in stratocumulus.
You might be expecting a crash. However, the boom is supported by techno-optimism and, for the time being at least, that does not look like a ChatGPT-esque hallucination. In October 2022, just before OpenAI released its now-celebrated chatbot, Nvidia, the leading AI chipmaker, earned around $3bn in gross profits each quarter. In the three months to the end of January 2024 it earned $17bn.
Our third cover tried stacking our title above the clouds, while our third showed a bull suspended by balloons. In the end, we brought them together for our final cover.
Under realistic assumptions about valuations, interest rates and taxes, America’s firms will need to increase their underlying profits by around 6% every year to keep the stock boom going. That would be close to their best-ever post-war performance. This doesn’t mean that share prices are about to crash. The balloons could pop one by one in a gentle bear market that takes years to reverse.
Leader: How to build a British voter
Britain: A changing British electorate is propelling Labour toward victory
Interactive: Can you build a British voter?
In Britain our model calculates the probability that a voter will pick a political party based on eight characteristics, from their age and educational attainment to their ethnicity and the kind of property they live in. (You can see how people like you might vote by playing with the model here.) It shows what is driving people away from the Tories and towards Labour.
We wanted a cover that illustrates the scope for readers to build their own voter.
If you play with the model you will discover that, whereas class was once the engine of British politics, it is now increasingly your date of birth. At the last general election, the age at which voters became more likely to support the Conservatives than Labour was 45. Our data show that at the next one this crossover age will be almost 70.
Our first choice was a collage showing the diversity of Britain in the 2020s. We used a version of this idea to illustrate our reporting, but for the cover it didn’t quite get across the do-it-yourself dimension of our model. A flip book was better, but a bit limited. In the end, we preferred a depiction of a snap-together electorate.
The electoral coalition that Labour is stitching together is broad. Its core voters are the urban young, but our model shows that the type of person who has swung most violently against the Conservatives is an older white man with a mortgage living in the north-west of England. In 2019 this sort of voter had an 81% chance of voting Conservative. The probability now is just 18%.
There is a lesson here for Labour. The party is likely to be elected by people who hold wildly varying views. Bitter rows over the war in Gaza show how such pressures might tug apart its electoral coalition. British voters are increasingly likely to shift their support from one election to the next. Labour cannot assume it will have two terms to get things done.
Leader: Stocks are booming. But their golden age is drawing to a close
Finance and economics: The good times for stockmarkets are unlikely to last
India is a rising economic power but its politics veer into chauvinism and authoritarianism. These two competing trends of development and identity politics are together fuelling a third: a growing north-south divide.
The wealthy south is where you will find the slick new India, with its startups, IT campuses and gleaming iPhone-assembly plants. Yet Narendra Modi’s Bharatiya Janata Party (BJP) gets a low share of its votes from there and relies on the poorer, more populous, rural, Hindi-speaking north.
How the split is managed in the long run is of critical importance to India’s prospects. Political and economic divisions could ruin India, but overcoming them could be the making of it.
We started with a collage of Mr Modi, India’s most powerful prime minister in decades. His face superimposed on a map of India is literally dividing the country.
The south acts as India’s economic engine, but its politics are on a separate planet from those of the north. For all Mr Modi’s electoral triumphs, he still lacks a truly national mandate.
Unfortunately, in this design Mr Modi looks disconcertingly like a cyborg. So we tried to illustrate the difference between north and south by having the Taj Mahal reflected as a factory.
Yet this has problems, too. India’s five southern states are home to startups and tech unicorns rather than to heavy industry. Besides, the Taj Mahal is a Muslim tomb and Muslims are often a BJP target.
We settled here, with India poised between futures. Pessimists fear Mr Modi will upset the constitutional balance. Southern leaders already accuse him of targeting them with bogus corruption probes, withholding central-government funds and extracting an unfair amount of tax to subsidise the north. Against the south’s wishes, the BJP could impose Hindi as the national language.
India and Mr Modi have a better alternative. The BJP could woo the south by moderating its Hindutva message, restraining its promotion of Hindi and focusing on economic development.
We tried the tiger on a black background. Although the shape of India was clearer, the whole thing was awfully morose. Amid booming markets and an excitable British electorate, we opted for a more optimistic green.
Leader: India’s north-south divide
Asia: Inside Narendra Modi’s battle to win over the south
