The Pope has published an Encyclical warning on the risks of an ill-considered rush towards AI. It comes at a time when AI is driving the markets, and AI leaders are whispering in Trump’s ear that regulation will destroy America’s lead. It’s not just the risk we will be turned to grey gloop by AI overlords, but how jobs, the economy, inequality and social equality are at all in play.

I know I should be talking about bond yields and inflation risks, but sometimes we have to stop and listen to the noise. When our idols say, do and enact stupid things there are always consequences. I know I should be talking about bond yields and inflation risks, but sometimes we have to stop and listen to the noise. Trump, Musk and Bill Winters. When our idols say, do and enact stupid things there are always consequences. This is a market perhaps too focused on the personalities, and not enough on the realities.

Trump has told us how fantastic the Beijing summit was – but what is the truth? China and the US agreeing on trade and growth over conflict is positive. They will remain polite to each other, but the struggle for hegemonic power will continue. Xi may be betting the state of the US economy, and the mistakes in Iran, means Trump will become less relevant from November.

Trump is running out of options over Iran. Bluff and Bluster won’t fix it. When he visits Beijing this week, he will be up against Emperor Xi – who holds all the cards; sufficient oil reserves, dominance over global supply chains, and critically the ability to shut off the single most important commodity in the world today – Chips.

2 choices for markets this week. Worry about where politics are headed in DC and London, and where the Beijing summit will lead us. Or join the AI party, bet everything on the upcoming IPOs, and dance yourself dizzy before someone pulls the plug. Interesting days ahead.

Today is the 81st anniversary of VE Day – the end of the Second World War in Europe. Markets are fixated on rising stock prices and probably won’t notice. Complacency is the danger. The Wars in Ukraine and Iran highlight success and failure and point towards a very different future world than the expected one. There are massive implications for markets – but that’s a tomorrow problem for markets focused on “now”.

Defence is among the most difficult areas to invest. Who would become an analyst after 30-years as a Cinderella sector in the wake of ESG and peace dividends? Now, the imperative for new defence investment is crying out for private capital. That puts a clear premium on knowledge, contacts and skill to invest. Here is a solution.

Interesting times indeed. Mr Market seldom looks beyond the end of his own nose, but the World is looking increasingly fraxious these days. Big nations have ever bigger problems. Maybe smaller ones will do better? The end of strong states often results in smaller nations competing harder to thrive, leading to competitive frictions!

Past performance is not a guide to the future. Tesla trades on a massive PE because folk believe Elon Musk will repeat his success in EVs across AI, Capacitance, Robotaxis, Autonomous Driving and Robotics. But hype, showmanship, undelivered promises and increasing competition are leaving his ventures in the literal rear-view mirror.

That was an interesting weekend. Trump announces a blockade that will impact the whole Global Economy – and South East Asia and China in particular. At least Europe got some good news from Hungary. More instability forecast before Trump inevitably TACO’s again. Markets are getting bored of it – which means the consequences could be even more volatile! That could double up No-See-Um Risks.