Global Outlook: Disappointment
Weekly PROPHET NOTES 5/18/26
Welcome to another week! We were all waiting for Trump’s China visit. Expectations were high, but ultimately we were left with almost nothing. Both leaders failed to reach an agreement on a single issue between the two countries. However, both agreed that XI will visit the US in the coming months.
Outside of the China summit, we had quite a few developments around the world, with the Iran war not being one of them! There, a stalemate continues.
Let’s look at the markets to get up to speed with the most recent forecast.
Weekly Outlook
US Inc.
The events in the US this week revolved around Trump’s visit to China.
Trump took a wide array of business leader on the trip to China with him. The opening statement suggested a series of issues, from business dealings to the global security, would be discussed.
However, soon after it turned out that nothing of substance was achieved. The two main deals secured are the 200 planes Boeing sale and an inventory clearing exercise with Nvidia selling some of its older chips to the Chinese companies.
Trump was also short of announcing anything on Taiwan.
Comment: as you see on the markets, not a single big issue was resolved. From my pov the meeting was disappointing.
Kevin Warsh was confirmed as chairman of the Fed by the Senate in a close 54-45 vote.
Comment: Kevin Warsh is looking at a difficult beginning. He will have a hard time assuming authority with Powell still on the Board. Additionally, he is looking at a rising inflation as Trump is pushing for lower rates.
The Americas
A quiet week in the Americas outside of the surprise Cuba visit by the CIA director.
John Ratcliffe went to Cuba to meet with the regime as the US is looking to bring the country to its orbit.
Comment: another diplomatic meeting is expected by the end of June as the situation on the island deteriorates.
Asia
Dela Rosa, a Philippine senator, escaped arrest in a series of unbelievable events. Armed forces entered the country’s senate, where the senator was hiding. Wanted by the ICC arrest warrant for his action during the country’s war on drugs, he managed to flee the senate and is now nowhere to be found.
Comment: a rather inconsequential event, but in the light of increased Chinese pressure on the Philippines, it feels important to track the developments in the country.
Middle East & Africa
We had surprisingly little news from the Middle East as the Iran war stalemate continues.
Araghchi said that America’s contradictory messages erode his country’s trust in negotiations. He believes America is not serious.
With no progress in the negotiations, the Strait of Hormuz continues to be closed. However, during Trump’s China visit, over 30 ships crossed the strait, supposedly in line with the IRGC process.
Netanyahu secretly visited the UAE as the first round of the Iran war hostilities took place. Soon after a sale of the Iron Dome air-defense system was announced.
Trump teased an Iran invasion in a cryptic Truth Social post.
Comment: it’s a never ending cycle of pressure escalation/deescalation as the game of chicken over the double blockade of the Strait of Hormuz continues. More comments from me tomorrow in a new deep dive and on my recent video:
Israel launched strikes on a town in southern Lebanon, hours after the two countries agreed to extend their ceasefire. Six people were killed in the attack. Israel claimed it had targeted members of Hezbollah. Israel also announced elimination of Izz al-Din al-Haddad, the commander of Hamas’s armed wing, in an air strike on Gaza.
Comment: Israel’s campaign continues, slightly suggesting the whole quagmire will last for months to come.
Abu-Bilal al-Minuki, a senior leader of Islamic State, was killed in a joint Nigerian-American operation in north-east Nigeria. Minuki, whom Trump described as the most active terrorist in the world, directed IS operations across the Sahel and west Africa.
Comment: American actions in Africa continue. As I’ve repeatedly said the continent will see a lot of military action in the coming months and years.
An ebola outbreak killed 65 people in the Democratic Republic of Congo. Nearly 250 cases were reported at the border with Uganda and South Sudan. Authorities are alarmed as the region sees a lot of population movement.
Comment: hantavirus is already forgotten.
Europe
A busy week in Europe amid the ongoing Ukraine war and a turmoil in the British politics.
Russia and Ukraine swapped hundreds of PoWs as part of a deal brokered by Trump earlier this month. Overall, the swap is expected to involve 2,000 prisoners in tranches. However, fighting on the front continues.
Comment: the ceasefire markets are back and chances are low we will see a proper agreement anytime soon.
Keir Starmer is facing mounting pressure to resign. He even began the week claiming full confidence in Wes Streeting, who resigned from the cabinet days later and is expected to fight for the top job.
Andy Burnham, the current mayor of Manchester, is also expected to join the fight after he secures an MP seat in the June by-election.
Comment: the British political scene will get really intense soon.
France’s unemployment rate rose to 8.1% in the Q1, the highest level since 2021. It is also an issue for Macron, who’s been trying to lower the rate since he assumed office.
Comment: European job market is tough with little high paying jobs and close to no opportunities for the young.
Bulgaria’s Dara won the Eurovision Song Contest in Vienna with Bangaranga.
Comment: Bulgaria was not a favorite coming onto the contest, trading below 10c just hours before the announcement.
Business, Finance & Economics
An interesting week in business, despite lack of any serious deals coming out of the China summit.
Sam Altman took the stand to reject allegations that he broke a vow to keep OpenAI a non-profit organization. Elon Musk accuses Altman of trying to steal a charity by turning it into a commercial venture. Altman claims that OpenAI’s for-profit arm is a creative way to keep the lab going.
Comment: it’s just a feud of two business giants. Can be entertaining, but not consequential.
Tata Electronics, an Indian tech firm, and ASML signed an agreement to collaborate on building India’s first commercial semiconductor fabrication plant. Tata plans to invest $11 billion.
Comment: team west is looking to bring India on board. A smart bet considering India’s long-standing feud with China.
Wrap up
That’s all for today. I’m planning a deep dive on the Iran situation for tomorrow and another video on the markets later on.
Stay strong and see you soon!
This is not official investment or life advice. Do your own research. These are only my opinions and I encourage anyone to do their own research before putting any money anywhere.