Global Outlook: A Packed Week
Weekly PROPHET NOTES 5/11/26
Welcome to another week! We are still in a difficult spot when it comes to the Iran war as we are awaiting the new narrative of the week amid the stalemate. But as usual, there are plenty of developments outside of the war.
So let’s look at what the markets forecast for the next week and beyond.
Weekly Outlook
US Inc.
While everyone is looking at the foreign affairs, domestic developments in the American politics ahead of the midterms are increasingly interesting.
China has confirmed that Trump will visit the country on May 13th-May 15th.
Comment: outside of tariffs and rare earth, I expect the Iran war to take the prime spot during Tump-Xi discussions.
Rubio went to Rome for a meeting with Pope Leo amid increasingly strained relations between the Vatican and the US over the Iran war. He also met with Giorgia Meloni to try and ease tensions.
Comment: Trump speaks what he wants, Rubio comes to explain and deescalate.
Virginia Supreme Court threw out redistricting referendum results.
Comment: with no new map in Virginia, Republicans are looking to win the redistricting war. They hope to cling to the slim majority they hold and this decision brought them one step closer to achieve it.
A refinery in Louisiana caught fire in yet another oil-related incident.
Comment: covert attacks on the oil infrastructure continue as there is no end in sight for the Iran war.
The Americas
This week we had interesting developments up north.
Separatists in the Canadian province of Alberta have gathered enough petition signatures to start the process for a referendum on independence. It can take place as early as October.
Comment: there are little chances Alberta will vote for independence. However, with the Trump admin having recently met with the separatists, it can be used as a small leverage for the US ahead of the USMCA renegotiation.
Asia
India is on the top of the headlines in Asia.
Modi urged citizen to use fuel sparingly. He also asked them to carpool, work from home and reduce non-essential travel abroad.
Comment: the energy crisis continues. For now these are just polite requests, but pretty soon they will turn into compulsory mandates.
The Bharatiya Janata Party, which runs India’s federal government, won a landslide in West Bengal state election. It has never held power before in West Bengal, which includes the city of Kolkata. Incumbents also suffered in other state elections. M.K. Stalin resigned as chief minister of Tamil Nadu after a party led by a former actor gained the most seats there. In Kerala the ruling communists were ejected from power by a coalition led by the Congress party.
Comment: it seem that Modi is tightening his grip on power. It will be importan once the energy crisis fully hits India.
At least 14 police officers were killed in a car-bomb attack in Pakistan, officials said. A vehicle blew up on Saturday night at a security post in Bannu, a city near the border with Afghanistan; the attackers proceeded to shoot at officers inside a nearby building. Ittehad-ul-Mujahideen, a militant group that has been linked to the Pakistani Taliban, claimed responsibility.
Comment: amid the Iran war, many of us have forgotten about the Pakistan-Afghanistan conflict. It is well alive.
Middle East & Africa
We had the usual roller coaster in the Middle East.
This week was full of conflicting developments in the Iran war. First, we had Rubio criticizing Iran, claiming it is leaving sailors stranded on vessels in the Strait of Hormuz.
Then we had limited strikes on US and IRGC navy, combined with attacks on the UAE and southern Iran. There were also claims that the UAE initiated some of the attacks.
The Operation Project Freedom ended only 2 days after it started amid all the strikes.
Additionally, the CIA leaked report claimed that Iran can outlast the US blockade for months before Iran’s economy would feel any real pressure.
The attacks stopped as we learned of an MoU aiming to end the war. Axios reported that the two sides are close to reach agreement, but the Iranian response that came today was negative.
Comment: my extensive commentary on the situation is linked above. However, to sum up my thoughts, the stalemate is more entrenched than many would like to think…
First Qatar LNG shipment moved through the Strait of Hormuz since the war started.
Comment: as the Strait of Hormuz continues to be effectively closed, more and more countries are cutting deals with the IRGC to move their ships out of the Persian Gulf. As I’ve been telling you for weeks.
Israel struck southern Lebanon and Beirut suburbs and issued new displacement orders, despite the ceasefire.
Comment: despite the next meeting between Israel and Lebanon taking place soon, the war continues. We can expect the war to continue at least as long as the Strait of Hormuz is closed.
Several drone strikes hit Khartoum, including its airport. The assaults end a months-long period of relative calm in the Sudanese capital, which the regular army retook from the paramilitary Rapid Support Forces last year.
Comment: the market doesn’t see RSF capturing Khartoum anytime soon, but the recent escalation can change the price soon.
Europe
It’s been a surprising week in Europe, especially around the Ukraine war.
Ukraine and Russia agreed to a 3-day ceasefire, creating a massive turmoil on the prediction markets. Both sides quickly resorted to accuse each other of breaking the ceasefire.
Comment: the ceasefire is not indicative of any permanent peace deal, making the markets’ resolution highly controversial. I’ve already shared some of my thoughts on X and I will publish a video on the consequences for war-related markets tomorrow.
Turkey unveiled a new missile touted as able to hit the US mainland.
Comment: amid chaos in the Middle East, Turkey is both providing deterrence and signifying strength.
Romania’s government collapsed after parliament passed a vote of no confidence. George Simon is reported to be the mastermind behind the move.
Comments: analysts don’t expect a snap election, but with George Simon as the mastermind, we can expect some chaos as the next government is being formed.
Danish Prime Minister Fredriksen failed to form coalition and the situation got way more complicated.
Comment: despite the problems, Mette Fredriksen is still the favorite to be the next prime minister.
Comment: it probably does, but are they ready to admit it?
Amid Starmer’s problems, Wes Streeting admits he is ready to be the next PM.
Comment: Wes Streeting is hardly the favorite, but he’s a smart operator.
Business, Finance & Economics
Region-agnostic news focused on the hantavirus this week.
MV Hondius, the cruise ship struck by an outbreak of hantavirus, arrived in the Canary Islands. Six cases of the disease have so far been confirmed on board; three passengers have died.
Comment: traders are dubious that we will see a hantavirus pandemic this year (or ever) as transmissibility is low and mortality is high.
SEC proposed scrapping a requirement for public companies to report quarterly earnings, instead allowing them to file twice a year.
Comment: Trump has already floated the idea during his first term, but it is unlikely to affect the reporting cycle inside large corporates as they have other bureaucratic issues to tackle on a monthly basis.
Wrap up
That’s all for today. I won’t tease another deep dive considering the volatile environment we are in, but something is definitely coming this week. Other than that. tomorrow I’m posting a video on the recent Ukraine ceasefire drama and consequences for future ceasefire markets.
Stay strong and see you soon!
This is not official investment or life advice. Do your own research. This are only my opinions and I encourage anyone to do their own research before putting any money anywhere.