Global Outlook: Wild Week Concluded by the European Blackout
Weekly PROPHET NOTES 4/28/25
What a week huh? What can I say… trust your gut! I fell like I’ve been saying that quite a lot this week, but not without a reason.
The thing is that despite being terminally online and tracking every possible headline, we are mostly in the dark. There are 100s of meetings and discussions being held that we have no idea about. We are drip fed major developments post factum and occasional leaks point us to the points of contestation.
With this little data to work on, intuition is key. Especially since Trump is in office. As you see, his presidency is a roller-coaster of the biggest proportions. Well, subscribe below and enjoy.
PS: Last week was pretty wild (and sad, RIP Lara, my dog). Missing deep dive out tomorrow and this week one more article!
Weekly Outlook
This week was riddled by Ukraine announcements of announcements, the possible new conflict ignition and more tariff talks.
US Inc.
Stating the obvious, Trump finally admitted that he has no intention of firing Jerome Powell. There is a reason why central banks are independent of the political cycle and it’s called hyperinflation. Hardly anyone took it seriously anyway:
In the tariff world, US Inc. has finally made some concessions on the China issue. Trump and Bessent folded and admitted that 145% tariffs will drop substantially. It later turned out that they will probably remain at 50%-60%. Still dismal for small businesses and consumers. IMO still undervalued, but we will see with the GDP numbers coming in this week how much so:
Moving to foreign policy, US Inc. continues to meet with Iran to negotiate a nuclear deal. They met on Saturday in Oman. Trump is somewhat hopeful while Iran is cited to be extremely cautious. Traders are split, but optimistic:
Lastly, Virginia Giuffre, one of the most prominent Jeffrey Epstein accusers was suicided. She was one of the first to call for prosecution and she also settled a lawsuit against Prince Andrew in 2022. Call me a conspiracy nut, but I don’t care. It’s all too convenient.
The Americas
Moving a bit north, just like clockwork, a couple of days before the election there was a terrorist attack in Vancouver. Over 20 people were killed after a car drove into crowds at festival celebrating Lapu Lapu Day, an annual celebration in the Philippines. The driver is supposedly an Asian man in his 20s.
Asia
Moving to Asia, there are now two nuclear powers on the brink of conflict. After a terrorist attack in the Indian Kashmir, that a Pakistani group took credit for, the tensions rose exponentially between two already unfriendly nations.
The borders were closed, diplomats were expelled and visas were cancelled. There were even border clashes and there are reports of a large amount of military equipment being directed towards the border.
That being said, the two countries have nukes. Any direct war between them is pointless. While the tensions are high, I expect diplomacy to emerge victorious. Traders tend to agree:
China seemingly recognized the US concession and offered to exempt some of US product from its won 125% tariffs. The drama continues, but we are still far from tangible results.
Middle East & Africa
Israel continues to strike Gaza and preventing aid to come into there. I feel like I’m writing this every week now, but I can’t stress this enough - there is no ceasefire coming!
Task is to eliminate Hamas from the face of the Earth and that’s what they are doing. No time to dabble in small wars when there is a non-zero possibility that the big one is coming.
I’ve been on no since the low 30s here. Awesome deal, with the haircut of Middle East being Middle East. Now the Palestinian Authority is calling for Hamas to surrender. I feel like they will be fighting to the bitter end - it’s not like they have much to lose now.
Next, Iran. The dealmaker in charged is getting outshined by Team East. After China signed 45 deals with Vietnam, now Iran signed a deal with Russia, where Iran will expand its agriculture cooperation with Russia while Russia will invest $4 billion in Iran to develop oil fields. Both also agreed to create a regional gas hub in Iran.
And lastly, there was a huge explosion in Iranian port of Shahid Rajaee. At least five people were killed with hundreds wounded. There were some rumors of Israeli involvement, but for now it is deed an unfortunate accident.
Europe
Before we go into the regular programing of Ukraine war - there was a situation on the Iberian Peninsula today. Both Portugal and Spain were (still are at the time of me writing this) undergoing a total blackout with addition of some parts of France.
Media are now reporting some “rare atmospheric phenomenon” around temperature spikes, but don’t kid yourselves. Unless it’s a massive solar flare (it wasn’t), it’s a cyberattack. They just don’t want you to panic…
Back to Ukraine. I’m meaning to write an update on the situation this week so I’ll say this now - saying “Vladimir, STOP!” reeks of desperation. Russia is playing to get as much concessions from the US, while (slowly) the rest of the world is realizing that any lasting ceasefire is almost impossible.
After a series of meeting it seems that the Russian position is largely unchanged and there are points that put them so far from the Ukrainian position that it’s impossible to resolve now.
It’s sad to say, but both sides still seem eager to fight it through. No fancy photo-ops in Vatican or nice meetings in Moscow will change that. Territories, Zaporizhia plant, demilitarization, weapon deliveries, NATO. Too far.
Stay vigilant when you next hear about some “great developments”.
Coming back to reality, Russia claims to have forced Ukraine out of Kursk. Ukraine denies it, but it seems that even western trackers start to acknowledge it now. It generally seems that Russia is on the roll, even western commentators say that they are making some gains. It can be a tough summer for Ukrainians.
Lastly, Jens-Frederick Nielsen, the prime minister of Greenland once again rejected Trump’s acquisition offer. He is bound to welcome the king on the island, but I have a feeling that during this term something will happen on Greenland. My initial thesis was a special military zone of sorts and it still stands.
Business, Finance & Economics
So, staying in Europe, the EC has fined Apple and Meta a combined $798 million for failing to comply with yet another regulation. Great achievement, neither company will feel that and you just wasted a year of bureaucratic time. Kudos…
Moving to something more real, IMF is now predicting there is 40% chance of recession in the US. I believe they are off and will be adjusting their models pretty soon. Especially considering that Germany now predicts flat GDP for 2025 and South Korean GDP shrunk 0.2% in the Q1. Not great telltales for the global economy.
In the meantime the tariff man is not backing down (well, he is, but he needs to show something). Now solar-related imports from Cambodia, Malaysia, Thailand and Vietnam will face a staggering 3,521% tariff. Well done.
And lastly some business news. Tesla had its earnings call (50/50 on the mentions calls, life be like that sometimes). Dismal results:
net income 39% down,
revenue 9% down,
deliveries 13% down.
Yet, Elon said he’s coming back to lead (finally?) and the stock ripped. Can’t discount the power of retail investors anymore.
Wrap up
That’s all for today. Had a bit checkered schedule lately with all the stuff around me + being immersed into the whole Ukraine situation, but the piece on Yemen is almost ready and Ukraine update is in the works.
Will do the Market Rundown as well, as soon as some nice markets appear. The recent resolutions issues bar me from punting some of the riskier markets around tariffs, but I hope I can see some nice markets soon.
Stay strong!
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.