Global Outlook: Moscow On Fire
Weekly PROPHET NOTES 6/22/26
Welcome to another week! Last one was dominated by the Iran MoU narrative. However, as usual recently, nothing is as it seems. The US says the Strait of Hormuz is open, while AIS data and ship trackers tell a different story.
Outside of the Iran war, we had some escalations between Russia and Ukraine, as well as a G7 summit in France, where both wars were discussed. Finally, among big news, Keir Starmer has resigned from office, ending a months-long saga.
This and more in today’s Global Outlook!
Weekly Outlook
US Inc.
A B-52 bomber crashed after taking off from Edwards Air Force Base in California, killing eight people aboard. The Stratofortress was on a routine test mission. Two of the dead were employees of Boeing.
Comment: not sure what to think about this one. Probably a mistake rather than some deliberate action. RIP to all the people inside.
General Motors and Lockheed Martin announced a partnership to boost weapons production in America. The Pentagon facilitated the deal where LM will invest $9 billion on modernizing facilities over four years while GM will invest $7 billion on R&D.
Comment: all these wars surely put American MIC on full capacity. No wonder they need to invest in capacity expansion.
The Fed left interest rates unchanged at 3.5% to 3.75%. Nine out of 19 officials forecast at least one rate hike this year though. However, Kevin Warsh did not submit his guidance, inducing a bit of volatility into market expectations.
Comment: hike expectations are pretty much unchanged since early June. Traders still see 61% chance we will see a rate hike this year. However, 61% means that we are barely above coin-flip odds. Despite the headlines, it will be global volatility that will dictate the rates.
The FBI said it thwarted an attack on the White House during Trump’s birthday celebrations. They said that a drone attack was planned on an UFC cage fight. Five people were arrested.
Comment: what can I say, Trump is a polarizing figure…
SCOTUS ruled that marijuana users should not be barred from owning guns, siding unanimously with a man who was charged with illegally possessing a firearm after admitting to regularly using cannabis. Justices argued that such a ban would violate constitutional gun rights.
Comment: SCOTUS also argued that since most states have legalized cannabis to some degree, “marijuana use today is like alcohol use at the founding”. It paves the way for weed rescheduling and traders noticed that, increasing the Yes price from 28c to 32c.
The Americas
Abelardo de la Espriella won the presidential run-off election in Colombia. After an initial count he got 49.7% of the vote vs 48.7% for Ivan Cepeda.
Comment: traders saw that coming after Abelardo unexpectedly won the first round, giving him around 90% chance to win the run-off. Trump must be happy now since the president elect is a right-winger.
Asia
China imposed export controls on two American rare earth firms, among others, in another small escalation of the trade war between the two countries.
Comment: the news had little effect on overall tariff agreement chances. With Xi’s visit to DC later this year, traders remain extremely bullish on a deal happening this year.
Middle East & Africa
This week was all about the MoU between the US and Iran. The details of the deal emerged gradually as Trump made various comments during the G7 summit in France. His visit commenced in him signing the deal, however no Iranian representative was present at the time to sign it along.
However, shortly after the Pakistan prime minister announced that Iran had also signed the deal. The difference is that while Trump touts the agreement as a major victory, Iran is still waiting for a ceasefire in Lebanon to implement the pre-agreed clauses.
Israel is obviously furious with the deal as it promises a lot of wins for Iran (release of frozen assets, sanctions relief, etc.), while it ties Israel’s hands when it comes to Hezbollah. JD Vance is the one to push back on these claims.
The US also lifted its naval blockade of Iranian ports, but outside of that the Strait of Hormuz remains effectively closed as Israel and Hezbollah continue fighting. Even a ceasefire failed to stop either.
Finally, JD Vance, Steve Witkoff and Jared Kushner travelled to Switzerland and held talks with the Iranian delegation. However, nothing constructive came out of the talks and we await any progress.
Comment: a slop deal has been signed. However, a slop deal does not resolve the underlying issues between the US, Israel and Iran. Thus nothing material has changed. More on the Iran war tomorrow.
Europe
The G7 summit in France saw world leaders talk about the Iran war and the Ukraine war. Trump even said that “maybe we can do something” about the Ukraine war and that Russia should make a deal. He talked with Zelensky and supposedly both reached a deeper understanding when it comes to the territorial integrity of Ukraine.
Comment: strongly worded statements do not change anything. Traders still see little chance for a sustained ceasefire in Ukraine this year.
Ukraine attacked Moscow with nearly 200 drones. Zelensky said it was a response to Russia’s attack on Kyiv earlier in the week.
Comment: this summer we should see an escalation in the war. Both sides feel the attrition and without any breakthrough neither can hope for a good deal.
The European Parliament voted to allow countries to open “return hubs” outside EU borders. Illegal migrants may be held there while awaiting deportation or detained indefinitely.
Comment: the public backlash needed to be addressed. The EU is slowly changing course on migration as right-wing parties rise. However, it might be too late to prevent the right-wing rise.
Keir Starmer has resigned from office after Andy Burnham won his Makerfield by-election. Starmer faced mounting pressure for months and Andy’s victory finally tipped the scales.
Comment: it’s been long time coming.
World, Business, Finance & Economics
SpaceX agreed to buy Anysphere for $60 billion, the creator of Cursor, a popular tool for coding with AI.
Comment: well-spent IPO funds? I don’t think so. But maybe Grok will finally improve…
Comment: it pays to hold any company with government stake.
Wrap up
That’s all for today! We’re back to regular programing after my trip. Jet lag is still an issue, but with my time free, expect a deep dive tomorrow, a video during the week and a portfolio update on Friday.
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.