Global Outlook: Welcome To 2026
Weekly PROPHET NOTES 1/5/26
Welcome to 2026! I hope you had a great New Year’s Eve, because as you see there are no more lazy days. Even though the last week of December and the first week of January are historically less busy as even politicians need to rest. Not this time though.
Luckily you have me and I’ve been following developments in the world while you were taking a break ;)
So hit that subscribe button and see the world as it is.
Weekly Outlook
US Inc.
Surprisingly quiet on the domestic front - last week was all about foreign affairs.
Trump is withdrawing the National Guard from Chicago, LA and Portland as the SCOTUS refused to authorize the troops’ deployment in Chicago. Trump pledged to redeploy troops if crime inches up.
Comment: worry not, the orange man will think of new way to piss off Democrats.
Zohran Mamdani was sworn in as mayor of New York City.
Comment: Trump has a new adversary and he won’t be afraid to use him to his advantage during midterms. I expect a proper rivalry for a good show since Mamdani promised a socialist democratic agenda.
The Americas
Here we had the main headline of the week. Even the most bullish traders, expecting severe strikes on Venezuela, didn’t see it coming.
Initially, before the year’s end, Trump admitted that America had hit a dock area in Venezuela in December. The attack was supposedly carried out by the CIA.
And only days later, we saw a massive operation in Caracas - as Trump described it, air, land and sea forces were activated, to enable the US to extract Maduro from the US. There were no American casualties. And Trump was clear - the US will run Venezuela for the foreseeable future. If there is any resistance, a second attack is coming and it is supposed to be much larger.
Other countries didn’t really react, besides strongly worded statements.
And at least for now it seems that Delcy Rodriguez, the VP, is to assume the presidency. However, Trump did warn her that she would pay a very big price if she did not cooperate. Delcy herself seems keen on working with the Americans, but the extent of her cooperation, as well as control of different factions inside Venezuela is unclear.
Comment: I take pride in the fact that I was absolutely right the strikes are coming. However, I didn’t suspect taking out Maduro would be so easy. Now it seems that the Trump administration is hoping to see a smooth transition - a scared Venezuelan elites cooperating with the US to preserve themselves. But on the other side lies ego, national pride and a fight for the proximity to the money flow - each one working against a peaceful transition. Ultimately, it’s rather a beginning, than an end.
Asia
Considering all of the above, it was a rather quiet week in Asia.
China ended its 2-day military exercise around Taiwan, while Xi said that reunification of Taiwan is unstoppable during his New Year’s Eve address.
Comment: it was probably a response to the massive military equipment sales deal between the US and Taiwan. However, China is rather looking to get Taiwan bloodlessly, even if it take 20 years.
Thailand released 18 Cambodian soldiers it held for 155 days as part of the new ceasefire deal between the two countries.
Comment: the ceasefire is once again in, but the underlying causes of the conflict are not resolved. I expect it is not the end.
North Korea fired a ballistic missile towards its eastern waters. This comes just before the meeting between Xi and Lee Jae-myung, the South Korea’s president.
Comment: just a classic show of force.
Middle East & Africa
The Middle East also got its fair share of coverage as tensions in Iran and Yemen ose significantly.
First, Trump threatened to launch a strike against Iran should it rebuild its nuclear program.
Then we learned about protests in Iran, although opinions on their severity differ. Key reason though is a deteriorating economic situation (eg. inflation reached 40%), surely connected to the recent water shortage and continuing strong sanctions against Iran.
Despite Iran appointing a new central bank governor an announcing a public holiday, the protests didn’t stop. Several people even died in clashes, sparking rumors about an imminent US intervention. The biggest protests are on the west of the country.
Comment: I’m not sure if what we are seeing here is downstream of operation rising lion or just an (un)lucky coincidence, but the balance of power is definitely tipped in Iran. Is it enough to trigger a US intervention; thus is it enough to topple the regime at a reasonably low cost? That’s a far deeper question, but a one I’m thinking on. This is surely a curiosu development in the string of new developments in the Middle East.
There are also new developments in Yemen, where Saudi Arabia backed Yemeni government fights with UAE backed STC separatists (both are against the Houthis).
UAE said it would pull all troops from Yemen.
Yemen’s Aden airport closed and Yemeni government restricted flights to UAE. This follows a Saudi strike on Mukalla, targeting Emirati weapons shipment.
Then STC said it intended to hold a referendum on independence within 2 years.
Comment: Saudi Arabia was a bit boxed in. Ultimately we will have US-aligned forces controlling both sides of the Red Sea south entry, not only challenging Houthi control, but also allowing US to fully control the shipping lane.
Turkey carried out anti-terror raids across the country, detaining 357 suspected members of ISIS.
Comment: business as usual.
Botswana invited Russia to invest in its rare earths and diamonds.
Comment: a very niche news on a very important matter. Till today, the “scramble for Africa” focused on the sub-Saharan north. Now it expanded south. Europe could reinstate quasi-colonies in 5 years, but I think Israel is more eager to get its hands dirty.
Europe
European affairs were pretty uneventful this week outside of one development in Ukraine war.
Zelensky accused Russia of undermining peace talks after Russia accused Ukraine of trying to assassinate Putin by a drone attack on his residency.
Comment: maximum pressure campaign from Putin. Vibe has definitely shifted - Europe couldn’t really commit, Ukraine loses more ground every day and Putin is really pushing hard on all fronts. Feels like we are on a verge of some kind of a breakthrough.
Zelensky also appointed Budanov (current intelligence chief) to run the presidential office after Yermak had to resign.
Comment: Budanov is a US man. Even if it appears hands-off, the US is hands-on.
Finnish authorities seized a ship sailing from Russia on suspicion of damaging undersea telecoms cables.
Comment: hybrid war continues.
Denmark’s prime minister (Mette Frederiksen) urged Trump to stop the threats about America annexing Greenland. Last time I reported about a special envoy, now Trump says he will focus on Greenland in 2 months.
Comment: Trump will get what he wants here, but probably in a diplomatic way.
Munich Security conference will invite AfD politicians to its next meeting. It is the most important defense gathering in Europe, the one on which JD Vance condemned European behavior last February.
Comment: you can’t contain it anymore. The new right is in Europe and next elections are theirs.
Vulkangruppe, a left-wing activist group, took responsibility for an arson attack that left more than 45,000 homes in Berlin without power and heat. Homes can remain without electricity till Thursday.
Comment: I’ll be subjective here - it was a terrorist attack and it should receive such treatment, but Europe is not ready for that kind of action. Come 2028 though…
Business, Finance & Economics
Japanese stocks closed the year above the ATH reached over 30 years ago during a massive bubble on the Japanese stock market. The Topix rose by 22% this year, a third consecutive gain.
Comment: imagine being a Japanese boomer… but in all seriousness, it just might be a sign of times.
Europe’s manufacturing sector fell to 48.8 in December from 49.6 in November. Factory output also fell. And Germany led the way.
Comment: Europe is in for a tough time before anything can get better. Only hope is they start to be smart enough to extract value from somewhere.
Tesla is no longer the world’s largest EV maker as it gave the crown to BYD in 2025.
Comment: China is the new Germany (or Japan?).
Warner Bros. plans to reject the Paramount bid in favor of continuing with Netflix.
Comment: it may seem like a kind of my market, but in such a case there is no fundamental analysis to be made. My last M&A deep dive (Apple to acquire OpenAI) had a very clear fundamental angle ie. business compatibility. Now both Netflix and Paramount operate in the same vertical when it comes to the acquisition. Now way to have edge unless you are an insider.
Wrap up
And that’s all for the week! I know you must love my promises by now, but this week comes both the Portugal election article and December summary. Also a video is likely on 10 predictions for 2026 (or more?).
It’s my new year resolution to keep to the deadlines and I am fulfilling it! So stay strong and see you very 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.