A Worldwide Whirlwind

We’ve just endured an exceptionally busy stretch of weeks as far as world news goes, and that’s not looking to let up any time soon. But just think about all of the geopolitical shifts we’ve seen lately, all of which had the potential to seriously shift the financial markets: Brexit, Iran, the China trade deal, the USMCA, and of course Trump’s impeachment and next week’s beginning of the Senate trial.

Iran was certainly top of mind when I dropped in here last week, and you’ll recall that I was worried Trump had brought us to the brink of war. That’s sort of dissipated over the past seven days – the Iranians blinked, which may have come as a relief to Trump – but it’ll still be a few weeks before things shake out enough to know what sort of threats could be on the markets… even though right now a seismic shift isn’t looking so likely.

Elsewhere, locking down Phase 1 of the China deal and getting Congress to sign off on the USMCA, Trump’s remodel of NAFTA, are both modest positives, and good for his political prospects. Of course, the impeachment isn’t, though that won’t be too bad so long as he doesn’t get thrown out of office.

Which brings us directly to the markets. We had a big look Wednesday on what repurchase agreements are doing to quantitative easing (complete with a numbers update after we got some bad figures from the Wall Street Journal). My two scenarios have favored the more bullish one: a continued blow-off rally into the middle of this year.

That’s all for this week. Thanks, as always, for reading and tuning in.