| Good morning. Consumers power Chinese growth, Macron floats labor reform and Taiwan to buy 400 anti-ship missiles. Here's what people are talking about. China's economy grew at a faster pace than expected in the first quarter as the end of Covid Zero gave way to stronger consumer spending and factory output, a sign the recovery is on track. Gross domestic product expanded 4.5% in the January-to-March period from a year prior, data released by the National Bureau of Statistics showed Tuesday. That compared to growth of 2.9% in the final quarter of 2022, and was higher than the median estimate of 4% in a Bloomberg survey of economists. A rebound in consumer spending and a ramping up in government infrastructure investment helped to boost growth in the first quarter. Emmanuel Macron said he wants to work with unions to change French labor rules as the embattled president seeks to move past his controversial pension reform that has sparked widespread protests and dented his popularity. The government will make proposals on July 14, the Bastille Day national holiday, he said during a 14-minute televised speech in which he sought to convey a conciliatory tone, acknowledging that raising the minimum retirement age to 64 had not been accepted by the public. "We have ahead of ourselves 100 days of cooling off, unity, ambition and action at the service of France," Macron said, adding that he would reach out to all parties from mayors and elected officials to worker representatives. Taiwan will buy as many as 400 land-launched Harpoon missiles intended to repel a potential Chinese invasion, completing a deal that Congress approved in 2020, according to a trade group's leader and people familiar with the issue. Taiwan has previously purchased ship-launched versions of the Harpoon, which is made by Boeing. Now, a contract with Boeing issued on Taiwan's behalf by the US Naval Air Systems Command marks a first for the mobile, land-launched version, according to Rupert Hammond-Chambers, president of the US-Taiwan Business Council. Three other people familiar with the deal, including an industry official, confirmed the contract is for Taiwan. The deal comes as US-China tensions are high, particularly over Taiwan, the self-governed island that China claims as part of its territory. Climbing a wall of worry is one thing. Scaling the towering monolith of skepticism that currently comprises Wall Street's view of markets takes uncommon courage. The more the S&P 500 goes up — and it's risen 6% in a month — the less people trust it. Hedge funds have been loading up bets against US stocks, with S&P 500 e-mini futures data showing near the most bearish reading since November 2011. Mutual fund and futures-market outflows suggest that rather than rise, the index should have been down 3% over the past three months, according to a model kept by Goldman Sachs. "Being bullish today is a very lonely proposition," said Eric Diton, president and managing director of the Wealth Alliance. "Everyone is negative." European stocks are on track for a slight advance as investors mull upbeat economic data from China. Norway holds a parliamentary hearing on its sovereign wealth fund. Expected data include UK unemployment and Italy's trade balance. Ericsson's volume development and margin progress are in focus as the telecom-equipment company unveils results. Bank earnings also roll on, with Goldman Sachs and Bank of America scheduled to report. MLIV Pulse: Will risk aversion drive the dollar higher? Or will the banking-sector concerns die down and weaken the appeal of the dollar as the safe haven? What's the main purpose of crypto? Share your views in the latest MLIV Pulse survey. This is what's caught our eye over the past 24 hours Manias and panics aren't all that different. And it's not just that one generally precedes the other. It's that both require investors to be swept up in a wave of emotion, ignoring fundamentals to make decisions based on their reading of the herd. Fear and greed aren't even opposite sides of the same coin. They're expressions of the same desire to see one's own stack grow relative to those of all others. They're the same thing. Just like a mania, a market panic needs a constant stream of apparently supportive material to sustain the turn in sentiment, with new sellers taking the place of first movers. Charles Mackay made as much clear in his epic study of behavior of the human herd "Extraordinary Popular Delusions and the Madness of Crowds" back in 1841 (where he took on everything from the South Sea Bubble to witch burnings). Now that a month has passed since the collapse of SVB and takeover of Credit Suisse, it's worth asking whether the crisis that engulfed banking has run its course. Colleagues have asked exactly that question, with both Markets Live and Surveillance hitting the theme. And in fact, data has largely delivered a positive narrative, with small-bank deposits rising a second week (chart via Cameron Crise) and the Empire manufacturing index wildly beating expectations with the third-largest monthly rise in the history of the survey giving no indication of a credit crisis. Early bank earnings are feeding the all-clear narrative, which would remove the tighter lending conditions that many on Wall Street had seen as reining in future Fed hiking. And Deutsche Bank CEO Christian Sewing said the European banking system has withstood the challenge. So all signs are positive. But there is, in fact, a notable difference between manias and panics. Sentiment on the way up takes much more to pull in punters. Even the most parabolic of rallies (see Bitcoin circa 2011) are longer and slower processes than the subsequent crashes. In other words, the news cycle that forces the drawdown can be much shorter and build on fewer headlines than the rallies. Behavioral economists would file this anomaly under loss aversion, stemming from the idea that investors put a greater weight on the concern for losses than on the pleasure from market gains. It takes a lot of helium to fill a balloon, a single pinprick to burst it. Which is to say, a month is a short space of time, and while sentiment has improved a bit, it won't take much to send the herd hurtling over the cliff again. Eddie van der Walt is Deputy Managing Editor of the Markets Live blog on the Bloomberg Terminal, based in London. Follow him on Twitter at @EdVanDerWalt | 
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