Weekly PROPHET NOTES 1/6/25
Global Outlook: A Sad Start Of The Year
Welcome to 2025! If the first week of the new year is any indication, we are in for a volatile time. The first week has started with a bang (literally), which truly makes for a sad inauguration. Sending my regards to all the families of the deceased and injured.
While the attacks were the lowlight of the week, the world of global affairs is eagerly awaiting the transition of power in the US. In the meantime Elon Musk is slowly showing his cards in terms of his plans for the future. I see him as a major player in the global politics this year, as outlined in the last deep dive:
The world is in preparation mode with everyone choosing their sides and starting to create new narratives to positions themselves better ahead of the 20th of January. Bear with me here as I unravel these moves. Subscribe below and be prepared, this year the pace will be excruciating.
Weekly Recap
Besides three attacks, two in the US and one in Europe, the wars were on the headlines last week. Not a shocker, as the wars are poised to be on the receiving end of major changes with the new administration coming in.
United States
The US had an especially sad start to 2025 with terrorist attacks in both New Orleans and Las Vegas. Initially thought to be connected, now the attacks are consider a separate endeavours.
The NOLA attack was done by a ex-US Army serviceman with Middle Eastern roots (he was a US citizen). He drove into a crowd with his car and then proceeded to shoot at the police. After they killed him, they found explosives in the vehicle.
The Las Vegas attack was also done by ex-military guy. He also published a rather interesting email with lots of accusations, but little in terms of proof. Linking the email below, be your own judge on the matter.
What we do know though is that Tesla has managed to use this event as a marketing campaign, saying that thanks to the vehicle being a Cybertruck, the damage was contained vs other, less durable vehicles.
From other US news, Trump has met with Italian prime minister Giorgia Meloni in Mar-a-Lago. Giorgia is know to lack a poker face and we can be pretty sure that she likes Trump and will cooperate with him closely and eagerly.
The Americas
In Canada, the prime minister Justin Trudeau is reportedly resigning from office on Wednesday. The pressure on him was mounting for months so it is not a surprise. With increased reporting around the event, we can expect it to happen.
Asia
In Asia, South Korea took once again a top spot in terms of headlines last week. While the authorities are scrambling to arrest Yoon, the president under impeachment, the interim president Han Duck-soo was impeached as well for refusing to fill vacancies on the Constitutional Court. These are needed for the Yoon impeachment process to continue.
Additionally we were hearing about Chinese hospitals being overwhelmed by a new flu-like disease - Human metapneumovirus (HMPV). Flashbacks from 2020 are strong, but it remains to be seen if the spread continues, both internally and globally. For now the sickness is rumored to target the weak and young.
Middle East & Africa
Same old news in the Middle East. In the war torn region, the Houthis continue to strike deep into Israel despite repeated strikes from the US planes on their positions in Yemen. The pressure is on at all times.
In the meantime there is reported progress in the ceasefire talks between Hamas and Israel, where supposedly there is a preliminary agreement on the list of hostages to be exchanged. At the same time the US has approved a huge military sales package for Israel, totaling $8 billion and including some heavy munitions. If you think that the war may be ending you are mistaken. All parties are gearing up for part two (or three now, maybe even four considering Syria) - the Middle Eastern war saga is not ending soon.
Europe
Starting with sad news, Europe was not spared its own attack. In Montenegro a drunk man went on a shooting spree across several locations, before being tracked down. Just before the apprehension he fatally shot himself. Further investigation revealed that initially the man has shot his relatives, supposedly out of a dispute gone wrong.
Staying with tragic events, German officials still do not know the motives of the Magdeburg attacker, despite keeping him in custody since Christmas.
In the meantime, there was a transition of power in Georgia. Protests lasting weeks did not change the fact that now the country is ruled by pro-Russian parliament and executive branch in the person of ex-Manchester United player Mikheil Kavelashvili. The country has suspended its accession talks with the EU. Big win for Putin.
Lastly moving to Ukraine. Starting January 1st, Ukraine has turned off the tap on its gas pipelines from Russia as old contracts for transit were fulfilled. Slovakia is furious as it was their main source of gas. With even less of this power source available now, Europe is looking at a tough year. Energy is already expensive in many European countries and sourcing gas from overseas is bound to increase its price even further, increasing the risks of a regional recession.
At the same time Zelensky appeared on the Lex Friedman podcast, where during a three hour conversation he proclaimed his support for Trump and fast resolution of the war. However, an attentive observer can easily notice that despite the vibe shift, the fundamentals did not change and both sides are very far from achieving any kind of understanding.
Business, Finance & Economics
Moving to the economy and finance, I can summarize the stock market performance last year. Both S&P500 and NASDAQ had a massive year with the indices increasing 23% and 30% respectively. This is the second year in a row of such a massive gain, fueled by liquidity injections by the government.
Valuations are through the roof, especially on the Magnificent 7 and all investors are looking to see what 2025 will bring.
Lastly, despite a regulatory threat, Tether is still available in Europe. Good news for crypto investors, at least for now.
Global Outlook
Global outlook is greenish this week.
United States
The US will be busy working on the ceasefire deal, but with 14 days till the change of power, the current administration is busy finalizing the transition and two weeks are hardly enough to finish the negotiations.
Additionally some eyes are watching the bird flu, although the spread seems to have stalled with no apparent human transmission.
The Americas
I am eagerly awaiting news on Trudeau as I expect him to resign. With election incoming, I am expecting the right to take the reigns after years of progressive rule. Canada that is politically aligned with the US can make for a strong ally.
Asia
In Asia we can expect to hear more drama around South Korea. The impeachment process will take several months to be completed and we should hear news every week on the progress. The path is clear though, the president will be impeached and the left will take control of both parliament and presidency.
I will be also watching the new outbreak closely. Chances are it will be contained, especially since the virus is not novel, but we all are cautious since 2020.
Middle East & Africa
In Middle East I am still bearish on the ceasefire in Gaza. Despite the effort on the American side, the parties to the conflict are poised to gain little from a temporary ceasefire.
Syria is still in shambles with no election in sights and little clarity on relations with Iran and Hezbollah. Houthis continuing to strike Israel are a good indicator that Iran is not ready to wave the white flag.
Europe
In the coming weeks we are bound to hear more about German election, where I expect AfD to overperform. Elon Musk’s support is important - we have seen what it can do during the US election.
With Elon’s interest in the UK politics, we can also expect to hear more from the island as I expect that Elon’s pressure is there for a reason. If he sees a chance of his play for election working, the chance might be higher than we think.
Business, Finance & Economics
Nothing to report. The next few weeks will shows us how the markets will play out in 2025. For now I am watching the bond market with more scrutiny with the yield on long-term US bonds rising despite the interest rates dropping. Next CPI print will also be telling.
Markets ending this week
In markets ending this week the focus is on Canada.
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