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- Week of 1/22/24
Week of 1/22/24
The Republican Primary Consolidation & Middle Eastern Tensions Escalate
Will Nelson
January 22, 2024
Week of 1/22/24
Prepared by Will Nelson for Tom Donohue
Stories that drove last week
Republican primary race consolidates
Middle East tensions escalate with trade disruptions expanding
Housing markets continue to evolve
Domestic News
Politics
2024 Race
Trump (66.2%) [+3.4% since last week)
Haley (12.3%) [+0.4% since last week]
Desantis (11.1%) [-0.7% since last week)
Other Stories
DeSantis is out of the race and endorses Trump
Dean Phillips (Biden primary challenger) went on the Modern Wisdom podcast with Chris Williamson to discuss the state of American politics
Biden Administration
After cancelling a contract with SpaceX (from prior newsletter) to provide rural internet at a price of $1,377 per location for 10 years of support, Biden has announced $82M of funding to bring internet to 16,000 locations ($5,125/location)
Economics
Equities Performance
S&P 500 (+1.41% last week)
NASDAQ (+3.11% last week)
DJI (+0.96% last week)
Big Stories
Goldman Sachs was dumping billions in stock while telling its clients to buy
Logistics giant Flexport raised $260 million from Shopify
Housing markets are moving
In Canada there are finally signs of the market cooling after years of growth while in the US, mortgage credit continues to dry up:
Global News
Conflicts
Israel
After declaring that it was finished with “major operations” in north Gaza the IDF is seeing a resurgence of Hamas fighters in the region
Russia
I have talked about the munitions manufacturing challenges facing the West, but the President of the European Movement has put it more starkly: “We cannot produce enough ammo to fight Russia”
He cites Russian capacity at 2 million shells/year while purchasing another 1 million per year from North Korea while Europe’s capacity is <1 million annually
The US produces 24,000 shells/month, while Russia is firing 120,000/month
After Chinese banks started a review of Russian clients (from last week’s newsletter) Turkish banks have started doing the same
China
China’s Foreign Minister calls for a ceasefire and an independent Palestinian state
Xi Jinping urged the CCP to win the hearts of the Taiwanese people in a speech from 2022 that was just released
Other
After it came out that North Korea was supplying Russia with munitions it now appears they may also be working with Hamas, the Houthis, and Hezbollah
Pakistan and Iran exchanged airstrikes and diplomatic expulsions as tensions flare. As a reminder: Pakistan has ~165 nuclear weapons
The Red Sea is becoming a focal point of the expanding conflict in the Middle East
The Houthis are targeting three maritime commerce chokepoints, Bab Al-Mandab, Strait of Hormuz, and the Suez Canal hoping for further trade disruption
Qatari PM warns of “dangerous” Red Sea situation and halts natural gas shipments through the Red Sea
Shipping volume through Bab el-Mandeb has plummeted:
Reading List
Boeing may be on a losing streak in commercial aviation but its making up for it by selling trash cans to the pentagon for $52,000 each
A great reason to continue to push for growth, if we look backwards every society so far was at the beginning of the curve but was unable to imagine how it compounded
Another plug for Dean Phillips on Modern Wisdom
A reminder that seasonally appropriate tires are worth it for both you and the drivers you share the road with
A truly fascinating podcast about the art markets, fakes, and the incentives of appraisers by Michael Lewis
An incredible mission statement:
Learn more about Anduril and Palmer Lucky from THIS podcast, it may also give you some hints into why Boeing seems to be on such a losing streak. And why I said Anduril could be the solution to the asymmetric warfare problem we are having in the Red Sea.
A great visual to explain a complex business (h/t Brian Walker)
