Welcome to another week! It’s never. boring time with Trump at the helm and the gradual deterioration of the global system. From Venezuela to Beijing, we have plenty of news to comb through.
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Weekly Outlook
I’m really not sure what’s the highlight of the week, choose for yourself and let me know in the comments.
US Inc.
First up, the issues with National Guard. A judge in California ruled that Trump illegally deployed them to carry out domestic law enforcement. They should rather be deployed to patrolling federal buildings. Additionally the attorney general of DC sued Trump admin over the National Guard deployment in August. I expect appeals in this matter as Trump is trying to strengthen the executive power.
Next up, the US finally moved on Venezuela. First, American forces struck a drug vessel leaving Venezuela and killing 11 people on board. Additionally the administration launched a campaign against Venezuelan drug gangs. This comes after a sudden build-up of American naval vessels in the region and the quite fitting change of name from Department of Defense to Department of War. And by this we are back to pre-WWII name. Back then all countries had departments of war. Seems like this time is coming back now and all the consequences right with it.
On top of that Trump admin is moving to classify two Ecuadorian gangs as terrorist organizations, opening the possibility of strikes there. America cleaning up the western hemisphere was long time coming and it just seems that we might witness some operations there in the coming months.
Lastly in America, a federal judge ruled that the Trump admin unlawfully cut off $2.2 billion of research funding for Harvard and should restore the money. This is another chapter in the fight against DEI on universities and Trump is expected to appeal the decision.
The Americas
Down south, apart from military action, Irfaan Ali, Guyana’s president, claimed victory in a general election. He platformed on making use of Guyana’s vast oil reserves and if he succeeds, the small country will become world’s newest petrostate.
Asia
We hd a busy week in Asia with the military parade in Beijing, where various leaders, including Vladimir Putin, Kim Jong-un and Modi, appeared (but no western leaders). We had a couple of comments from the event, including Putin saying that he had reached understandings with Trump on ending the war as well as snarky wish from Trump: “give my warmest regards to Vladimir Putin, and Kim Jong Un, as you conspire against The United States”. The parade was the biggest in history and images from it made some waves around social media.
A bit down south, Thailand is trying to reconcile after Paetongtarn Shinawatra was dismissed from being PM by the constitutional court. Initially Pheu Tahi, the ruling party, sought royal approval to call a snap election, but ultimately People Power, the country’s biggest party, backed former Pheu Thai ally, Bhumjaithai, to form an interim government. And so it happened - Anutin Charnvirakul was elected as the new PM by 273 votes vs 247 needed. Will we avoid a coup in Thailand? IMO it’s still debatable.
Lastly in Asia, Ishiba Shigeru, Japan’s prime minister, resigned from party leadership, effectively resigning from a PM position. This comes after his party had disappointing results in last election where his party lost majority in both houses of parliament. He will remain in office till a new leader is found.
Middle East & Africa
While the world changes, Gaza remains in the same situation. Destroyed and getting ready for yet another offensive, this time in Gaza City. Some 40,000 Israeli reservists are reporting for duty ahead of the action. At the same time Trump is urging Hamas to release all hostages and effectively surrender. We all know that’s not going to happen as long as current Hamas leadership is alive.
While Israel is attacking and trying to make up their image, the International Association of Genocide Scholars voted to declare that Israel’s actions in Gaza meet the legal definition of genocide. 86% of members voted for it. If you ask me, they are probably right. But what matters here is that despite having victories on the battlefield, Israel is horrendous in creating a good image for themselves. And in effect, the west loses its moral high ground.
Europe
Europe lives in alternative reality. Macron said that 26 countries are committed to providing security guarantees to Ukraine when fighting ends. The countries formalized their pledges on the summit in Paris. However these 26 countries do not include Russia, which makes the whole exercise pointless. Russia will never agree to western troops in Ukraine as part of a peace deal, a fact that seems to elude Europeans. Putin warned that any western troops would be a legitimate target for destruction. In the meantime hospitals in France are reportedly getting ready to handle a large quantity of wounded soldiers by March 2026. The leak about the plan might have been done on purpose to put pressure on Russia, however in vain for now.
Across the canal, Britain’s government said it would suspend applications by asylum-seekers to bring family members to the country. The move is aimed to curb immigration amid societal tensions and the rise of popularity of the ReformUK party.
Up north Norwegians were voting for the new parliament. While the votes are still being counted, there is no shocker in the results:
Lastly, at least 15 people died and 18 were injured when a funicular, the Ascensor da Glória, derailed in Lisbon. A truly tragic accident, I did ride on it a few years ago.
Business, Finance & Economics
As usual when the month begins we get a flurry of economic data. First up, OPEC+ decided to increase oil production by 137,000 barrels per day in October. The cartel has been rising quotas all year, in a move that in my opinion is aimed at US, trying to derail Trump’s plan to increase shelf oil output, by decreasing the price of oil on the markets and squeezing margins.
And in America we start to see first cracks in the labor market. The economy added only 22,000 jobs in August, significantly below 75,000 forecasted. Unemployment ticked only moderately to 4.3%, but traders took the weak print as confirmation of a rate cut. I’m still opposing this view, this weeks inflation and revision will tell us more.
Amid deteriorating economic conditions, growing government debt nd general geopolitical instability the price of gold reached another ATH, rising over 30% this year.
Long term government bond yields responded accordingly, reaching another highs, only tempered by the assumed rate cut and probable incoming relief to western economies.
Not only western economies struggle - Herman Gref, a top Russian banker, warned that Russia is sliding into technical recession. But Putin is more worried about a nearly 10% inflation and is looking to keep the rates high for now. I assume that he has better visibility on the overall economy and it indicates to me that we are still yet to see first major cracks in the Russian economy.
Another country battling with inflation is Turkey, where annual inflation eased to 33%, from 34% in July. This is amid 43% rates there. This is an ongoing problem in Turkey since at least a few years and global tensions are definitely not helping. urkey will probably seek some relief by aiding Syria nd trying to boost both countries economies.
Moving to business, after months of legal struggle, Google avoided a break-up. The judge only ordered them to share some data with rivals and stop paying for exclusive distribution deals. It’s a major win for Google, which surged 8% on the news. Maybe meeting Trump and pledging investment helped.
About Trump, he really has Google’s back. After the European Comission fined Google for almost $3.5 billion for breaching antitrust rules, Trump threatened to retaliate if the fine is not dropped. By tariffs of course.
Staying in tech, OpenAI is rumored to start producing its own AI chip next year in partnership with Broadcom. Amid decreasing returns to scale and high CAPEX related to chips in AI development, this move aims to decrease the costs and increase efficiency of the tailored-made chips.
And lastly in American business, Elon Musk may become a trillionaire after Tesla’s board proposed a $1 trillion compensation package for certain milestones related to company’s performance. Wild if you ask me.
And instead of tariff news (we didn’t have any) we have an obituary. Giorgio Armani died last week at the age of ripe 91 years old. The famous Italian designer really made a brand of himself as his works across clothes, fragrances and home decor are considered high-fashion throughout the world. Rest in peace.
Wrap up
And that’s all for the week. I will be on the lookout for new economic data from the US while I develop another thesis on the prediction 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.