Donald Trump never disappoints in terms of “interesting”. MAGA/Trump might unravel, and Trump spontaneously combust, due to Epstein – but conflict was what we knew Trump would bring to the table. The real risk to markets is probably the US Consumer. They are not as resilient as the rosy earnings season thinks.
Three risks for markets to fathom this morning: What Tesla the Meme-stock means for the Mag7, how AI risks are multiplying, and what doing a course on AI revealed about its’ true purpose.
Ozzy Osbourne was an unlikely Prince of Darkness… but who’s US President? The “Trade Agreement” with Japan is a massive pre-emptive strike opportunity for Japanese Automakers. Will it benefit US Manufacturing? No way! And don’t forget your “Bullsh*t Bingo Card” for tonight’s Tesla numbers.
Trade tensions are set to dominate this week – particularly for Europe and Japan. While Trump upsets his allies, the global nexus is moving to the wealth concentration in South East Asia and the future evolution of tech – nothing lasts forever.
The Americans have passed rules to regulate and define the crypto industry. The first rule of finance is all rules are arbitraged. The second is that regulation strengthens incumbents. Very, very different to what Nakamoto and the original crypto acolytes envisaged for free, decentralised finance! Ha Ha Ha!
Powell was sacked and then he wasn’t. The market tumbled but swiftly bounced. It was another day of training markets for disruption. The reality is the ongoing shenanigans are undermining confidence in the Fed ahead of what could be a very testing time for the US economy when Trump policies start to bite.
Donald Trump’s BBC interview was… “surprising”. It was Trump, but elegiac? It won’t change the economic reality. The market is living in today – assuming the consequences of Trump policies will be limited. If they hit hard – which economy will suffer most? The USA or the UK?
The AI revolution is exceedingly expensive. It’s become a matter of who can chuck the most amount of money at it. But that’s forgetting it’s still evolving and there is little to stop it moving in new directions. Plus, The Morning Porridge experiments with AI generated graphs!
There are no thin summer markets – just an overload of improbable factors to process. How can you value the price of a stock market when the basis behind it – the economy, its financial system and its society - is under intolerable stress?
The scale of the UK’s funding crisis is becoming increasingly apparent. It can be fixed – but needs political sacrifice. “Changing Policy” and backing off promises has costs and consequences. The UK is not in dire peril - it remains a fine, innovative and strong economy, but we need to get real on spending and how its funded.
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