#macro-events

#macro-events

An email was sent to White House staff on 24 March, warning them against using insider information to place bets on prediction markets like Kalshi or Polymarket.

The economics are hard to ignore. Shooting down a drone with AeroVironment's LOCUST laser system costs less than $10, using just two to five seconds of laser energy. Compare that to the interceptor missiles currently used against Iranian drone swarms, which cost orders of magnitude more and are in short supply across allied arsenals.

"The big recent changes are the war causing spikes in diesel, fertilizer, and chemical prices," Jeffrey Dorfman explained, highlighting the direct impact of the conflict on agricultural costs.

The overarching message of The Economics of Climate Change: The Stern Review was that failing to invest in mitigating climate change would exact an alarmingly high price, estimated between 5% and 20% of global GDP per year.

"Gambling on the weather has become an institution throughout a great part of the United States." This sentiment from the Fort Worth Star-Telegram in 1915 highlights the long-standing tradition of weather betting in American culture.

In Gaza, our suffering has come not only from the political war between Hamas and Israel but also from the economic war that we have been living with since October 7, 2023.

The conflict has driven up the price of oil and natural gas; damaged oil refineries, tanker terminals and other energy infrastructure; disrupted shipments of fertiliser that the world's farmers depend on; and damaged the confidence of businesses and consumers.

Major indices, including the Nasdaq Composite, S&P 500, and Dow Jones Industrial Average, all recorded gains, with the Nasdaq delivering its strongest weekly performance since November.

"It has nailed every recession since WWII without falsely predicting a downturn. If it is triggered, it may take a while for the Business Cycle Dating Committee of the National Bureau of Economic Research to confirm it, but we are already in a recession."

U.S. financial markets experienced a volatile week, largely influenced by geopolitical developments in the Middle East and fluctuations in energy prices. Investor sentiment was driven primarily by external events rather than domestic fundamentals.

Forecasters now predict that the coming El Niño—a warming of the Pacific Ocean that deeply affects global weather patterns—is likely to be as severe as the one in 2023-2024, which triggered severe flooding and prolonged heatwaves around the world.

The so-called 'petrodollar' system wasn't well understood for most of this time, but a secret deal between Henry Kissinger and Saudi Arabia ensured the dollar would remain the dominant reserve currency.

The challenges we all face are significant. The list is long but at the top are the terrible ongoing war and violence in Ukraine, the current war in Iran and the broader hostilities in the Middle East, terrorist activity and growing geopolitical tensions, importantly with China.

"The influx of visitors will likely generate billions of dollars in economic activity, benefiting the hospitality, transportation, and retail sectors. Host city hotels anticipate record occupancy, and local businesses will benefit from increased visitor traffic."

Markets were closed on Monday for Martin Luther King Jr. Day, compressing the week's activity into four sessions. Early in the week, stocks fell sharply after renewed concerns about a potential global trade conflict. Investor sentiment weakened following comments from President Donald Trump about imposing tariffs on certain European nations in connection with negotiations over Greenland. However, midweek optimism returned when the president signalled a softer stance and postponed the planned tariffs.

The International Monetary Fund has warned mounting geopolitical tensions and an escalation of Donald Trump's tariff war could hit global economic growth and trigger a backlash in financial markets. In an update as Trump threatens to impose tariffs on Nato allies opposed to his ambitions in Greenland, the Washington-based fund said a renewed eruption in trade tensions was among the biggest risks to global growth in 2026.