Stock Markets partied higher yesterday, utterly unbothered by the optics of the Iran Deal. Bond markets look at the long-term risks – wondering what the consequences of the Iran war might trigger in the coming years when today’s new bonds are set to repay. Traders will be trying to figure out what a new world will look like, and just how sustainable US Bonds markets might be as the global economy shifts.

You can’t keep a good market down. New record US levels seem to occur daily. But, why? The underlying picture of the US economy is not weak, but the political structures around it seem to be fraying. What might give and trigger the kind of reversal many expect, or might we get a more fundamental reassessment of what the USA will look like post-Trump?

Stock markets are on a buzz. Central banks are expected to ease immediately. Joy unlimited. What war? Peace in the Middle East! Really? There are none so blind as salesmen wanting to talk a market higher.

Just how thick is the ice? Everything juddered last week – from AI to perceptions of Geopolitics. There are so many take aways. Are markets vulnerable to an AI/Credit Cascade event? How vulnerable are The Middle Nations (J-CAKE). China is a rising risk. Just how well will the USA handle a crisis? Is it time to exit Gold? But go where?

 Markets are winding down for the holiday break, but the news flow continues to hint at rising destability and noise, hinting the future economic path will get more twisty and difficult. Lower rates and QE fuelled markets (but not growth) in the 2010s, but won’t work when there is a strong inflationary impulse in place!

Politics was an overarching theme in 2024 – and, regrettably, will remain so in 2025 as global investors figure out likely policy action by central banks and the growth outlook for 2025. “This time it’s different” (TTID) and FOMO remain the most malign forces acting on asset prices, but is a new full blown European Sov Debt Crisis also on the cards?

Let’s be dispassionate about the US election result. What kind of upside will a Bonfire of Regulations and Surging Confidence bring to markets? What are the risks of Trump’s new start for US markets? The next four years look… interesting.

The market is under a glamour cast by Nvidia. It’s the most watched headline stock. In a perfect world, its position would mean there would be little to worry about, but US data and all the other market frictions are combining to challenge the market’s narrative – which is a long way of saying… THIS MARKET IS TOPPY.

Markets are shrugging off yesterday’s wobbles, but is it really over? The next few months are likely to remain volatile, fraxious and stressful – and we still don’t know what No-See-Ums are lurking in the background – but we can guess...

Whatever the Fed says or does today, markets have reached a cusp. How will they adjust to the reality of new higher, normalised interest rates: throw their toys out the pram, or acknowledge higher rates are the building blocks of a stronger economy?