Global Outlook: The Long Game
Weekly PROPHET NOTES 1/19/26
Welcome to another week! Let’s say yesterday was a free day due to the MLK day and today we are back in the game. There is plenty to cover this week and you’ve already waited long enough so let’s see the world as it is.
Weekly Outlook
US Inc.
This week the US was busy with the Minnesota situation and another SCOTUS case.
The state of Minnesota sued Trump admin over its mass deployment of ICE officials. In a quasi-response, Trump threatened to invoke the Insurrection Act, which he later walked back. And ultimately, the DoJ opened an investigation into Tim Walz over the protests.
Comment: just in time for the kick-off of the midterms campaign, the culture war will be at an all time high throughout the year. We will see more protests, more threats and more drama as illegal immigration is a topic that Trump is not afraid to milk dry.
SCOTUS signaled that it would uphold state laws blocking transgender athletes who are biologically male from competing in female sports teams. The court is expected to rule in June after hearing the arguments.
Comment: pretty logical if you ask me. However put them there in the first place was nuts.
The Americas
Last year this section was often empty. This year it is the most extensive. And today we have a mix of Venezuela, Greenland and other locations!
Machado met with Trump last week and gave him her Nobel Peace Prize. And while Trump liked the gesture, it didn’t translate to any gains for Machado as she later proclaimed she will be waiting for the country to run elections where she hopes to run and win.
Comment: Machado thought she could convince Trump to really take over the country and give it to her, but Trump doesn’t really have time to do that. The plan is to create enormous pressure, extract value and only later, when the regime is completely crushed, to run elections. Machado might wait for her turn for quite some time.
Greenland seems to be a hot topic now as Trump increasingly wants it and Europeans increasingly try to resist. The island’s prime minister is convinced they want to stay with Denmark vs the US and meeting JD Vance with Rubio on Wednesday didn’t change that - they were constructive, but a fundamental disagreement remained.
In the meantime some European troops arrived on the island (Britain, France and Germany send their troops, Germany later returned them) while Meloni urged for a NATO coordinated presence. All the while protests start in Denmark and Greenland.
Then Trump decided to threaten tariffs on Denmark, Britain, France, Germany, Norway, Sweden, Netherlands and Finland - 10% starting February 1st, rising to 25% starting June if no deal. Europe returned with a strongly worded statement with a possible escalation to be determined this week. Mentions are of retaliatory tariffs and anti-coercion mechanism.
Comment: Trump is not backing down and Europe chose a fight rather than a deal. There’s been almost a year in which Denmark could have engaged with Americans through back channels to understand needs and prepare a response. But whatever is happening right now is uncoordinated and impulsive, there is neither strategy nor thought to the whole process. Europe should have proposed a comprehensive security deal with some minerals as the icing on a cake. Instead we now have a public humiliation fight as ultimately Europe will fold to key demands. I understand the position of Europe, but the reality is that Europe cannot defend Greenland in the face of Russia and China.
The FAA asked airlines to exercise caution when flying over Mexico and parts of Central and South America. The alert will remain in place till March 17th.
Comment: drugs will be the casus beli, you can expect more kinetic action in Americas in the coming months.
Asia
Asia was fairly stable this week, with updates on the Yoon trials in South Korea and a snap election in Japan being announced.
Yoon Suk Yeol was sentenced to 5 years in prison for resisting arrest after he declared martial law in December 2024. Yoon will appeal, but it is only the first sentencing in multiple, connected trials of the former president.
Comment: this is only the beginning - the prosecutor is seeking death penalty and the courts will not be lenient as such actions need to be severely punished. Otherwise someone might try it again.
Japan will hold snap election on February 8th. Takaichi Sanae is looking to capitalize on her strong approval rating and possibly change her government from minority to majority after the election.
Comment: a ballsy move from the Japanese PM, it’s been a while since we heard such news. I like the spirit and it’s a good indication of her character.
Middle East & Africa
The tensions in the Middle East remain high with the situation in Iran, the beginning of the Phase II of the ceasefire in Gaza and some developments in Syria. We also had election in Uganda.
Last week was a culmination of tensions when it comes to Iran. First Trump said that countries doing business with Iran could face 25% tariffs. It came amid calls to strike Iran and Trump’s posts supporting the protesters and promising help “soon”. As the week progressed we learned that the US evacuated some bases in the region, as did Britain. But then Trump started to post that the killings in Iran are stopping as we learned that the US pulled out of striking Iran at the last minute.
In the meantime, the protests subdued. Ayatollah accused Israel and the US of orchestrating them while we continue to hear larger and larger numbers when it comes to casualties - the current estimate is over 5,000 dead.
Ultimately, the protests lost momentum, but we learned that US carriers are coming to the region - it might not be over quite yet.
Comment: this isn’t the last time we heard about Iran and I will expand on my thesis in the deep dive coming this week.
The Trump administration also announced the beginning of the Phase II of the Gaza ceasefire. It includes demilitarization, technocratic governance and reconstruction of the Gaza Strip. When it comes to the oversight body - the Board of Peace - its founding members will include Tony Blair, Marc Rowan and Jared Kushner. Many other world leaders were invited to participate in the board, including Vladimir Putin.
Comment: the most interesting part of the news is inviting Putin to join the board, but not inviting Xi. Apparently Trump is still trying to pull Russia away from China, but I’m not sure this is the way. Unless this is part of a wider deal made with Russia re. Iran at some point. We’ll never know for sure.
There was a brief fight between the Syrian army and Kurdish Syrian Democratic Forces which ended in a deal including Syrian army taking control of 3 provinces, Kurdish language being recognized as official language in Syria and the armed forces being integrated into the Syrian army.
Comment: I definitely need to look into the situation more, but it seems the Kurds finally have their place in the region. I wonder what’s the real deal underneath.
Uganda’s main opposition leader, Bobi Wine, escaped a military and police raid as ballot counting continued. Now though Yoweri Museveni, the country’s veteran president, secured reelection.
Comment: business as usual in Africa. But the period to watch now is not elections themselves, but the period after. It might get interesting in more than 1 case.
Europe
There was a presidential election in Portugal. Antonio Jose Seguro ended up winning the first round with Andre Ventura coming in second for the run off in two weeks. However Ventura has little chances of beating Seguro.
Comment: results pretty much as expected. Ventura being from alt-right Chega has a ceiling below 50% of the voting population so the election is pretty much over at this point.
Robert Jenrick defected from the Conservative Party to ReformUK. It’s the second high-profile defection after Nadhim Zahawi, a former chancellor, switched parties previous Monday. Reform is now leading the polls.
Comment: the new right is coming. It already is entrenched in the US and will be soon in most of Europe. The AfD, RN, Vox, Chega, FdI, Konfederacja, is here to stay, soon as main parts of the government.
Business, Finance & Economics
It’s hard to beat investigation into Powell - this week was rather calm in finance.
The US inflation remained unchanged at 2.7% in December.
Comment: the order is to cut and eventually they will. But with the January decision projected as on Polymarket, we can expect pressure to ramp up again. After all the CPI is flat for a reason ;)
The Germany economy expanded by 0.2% in 2025, for the first time since 2022. Growth was mainly fueled by increased government spending under Merz.
Comment: structurally the country is still in shambles and 0.2% manufactured growth won’t change that. Tough years are still ahead for Europe.
BP will write down some of its green energy investments ($4-5 billion). BP has been moving away from renewables for some time now.
Comment: there are more important matters now than green policies.
Paramount said it would nominate directors to the board of Warner Bros Discovery to persuade investors to reject the Netflix offer in favor of Paramount’s.
Comment: this looks like a classic in the making, I bet the movie will be lit 10 years down the line. We will watch it on the platform of the winner as there will be no other ;)
Tariffs
The Trump admin eased restrictions on Nvidia to export the H200 to China, their second best chip. But since the chips need to be tested in the US, Trump announced a 25% tariff on these chips so he can fulfill the promise of the US government taking 25% cut on the sales of these chips.
Comment: I don’t think this is a good idea, China will build their own chipmakers anyway.
The US agreed to cap tariffs on Taiwanese imports at 15% in exchange for TSMC investing $500 billion in their American operations.
Comment: chipmaking is coming back to the US, but it will take years before we see the results of it.
Wrap up
And that’s all for today. After this small delay we are back to regular programing - the deep dive on Iran is coming by Friday. I also have some early ideas for a video, but let me know if you have any topic you’d like my commentary on.
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.