While the focus is on a potential government shutdown, my next guest says historically geopolitical risk has actually been conducive to growth, productivity, and asset returns overall. So, it's not a risk, it may actually be an opportunity. Joining me now is Marco Pepic.He's the macro and geopolitical strategist over at BCA Research. Uh, this is a perfect conversation to have right now, Marco, because we've just now heard the update from Megan with regard to trade and tariffs, the update from Emily with reg ...

Japan’s Defense Ministry requests a record $59.8 billion for its share of the national budget, to counter growing challenges from China and North Korea https://t.co/J4YStJ40oo ...

Project Overview - Turkey's first nuclear power plant, Akkuyu, is a $25 billion project funded, built, and operated by Russia, raising security concerns for NATO [1] - The plant aims to reduce Turkey's energy import volume by approximately 7 billion cubic meters annually [7] - Once fully online, the four reactors will have an installed capacity of 4.8 gigawatts, generating about 10% of Turkey's electricity [6] Geopolitical Implications - Russia gains a foothold in a NATO member through the Akkuyu project, potentially increasing its influence in the region [8][10] - Concerns exist that Russia could use the plant's seaport as a military facility or as leverage for political bargaining, such as halting fuel deliveries or maintenance [10][11] - NATO expresses concerns about potential security risks due to Russia's involvement, while the Kremlin asserts it's a mutually beneficial partnership [1][16] Turkey's Energy Strategy - Turkey seeks energy independence and economic development through the Akkuyu Nuclear Power Plant, reducing reliance on energy imports from countries like Russia, Iran, and Azerbaijan [2][3] - Turkey has been trying to build a nuclear power sector since the 1950s, with the deal with Russia signed in 2010 based on a build-own-operate model [4] - Turkey is in talks with several countries to build another nuclear power plant, but dependence on one supplier is a concern [19] Russia's Role and Investment - Rosatom, Russia's state nuclear agency, is responsible for all aspects of Akkuyu, from construction to decommissioning, representing a unique model for the industry [5] - Rosatom is investing around $25 billion in the project and needs to operate it for decades to recoup expenses, creating incentives for maintaining a stable political relationship [15] - The knowledge Turkish operators gain from Russia for this specific power plant deepens Turkey's dependency on Russia [14]

Market Trends & Investment Opportunities - Increasing numbers of Americans are seeking citizenship by investment programs, driven by political and economic uncertainty [1] - Inquiries about golden passports from Americans have surged by 182% in the first quarter of this year compared to the same period last year [3] - American inquiries regarding these programs rose by over 500% between 2019 and 2023 [4] Drivers of Demand - Anxiety over US politics and global wars is a major factor driving Americans to seek alternative citizenship [3] - The programs are viewed as an insurance instrument or hedge against geopolitical risk [4] - Pandemic-related travel restrictions initially boosted interest in these programs [5] Program Details & Economic Impact - Five Caribbean countries offer citizenship by investment for as low as $100,000 [1] - These programs fund infrastructure, education, and disaster preparedness in the host countries [6] - In Grenada, revenue from the citizenship by investment program constituted over 25% of the island's GDP in 2023 [6] Alternative Programs & Proposed US Initiatives - European countries like Portugal and Spain offer long-term visas in exchange for investments, though this practice is controversial [7] - A proposed "gold card" program in the US, requiring a $5 million investment, faces legal hurdles and limited interest [7]

Core Viewpoint - The content emphasizes the importance of conducting personal due diligence and consulting competent advisors before making any financial decisions, particularly in the context of investments and trading activities [1]. Group 1 - The website provides general news, personal analysis, and third-party content intended for educational and research purposes [1]. - It explicitly states that the information does not constitute any recommendation or advice for investment actions [1]. - Users are advised to perform their own due diligence checks and apply their discretion when making financial decisions [1]. Group 2 - The website includes information about complex financial instruments such as cryptocurrencies and contracts for difference (CFDs), which carry a high risk of losing money [1]. - It encourages users to carefully consider their understanding of these instruments and their ability to afford potential losses [1]. - The content does not guarantee real-time accuracy or completeness of the information provided [1].

Core Insights - Willis has launched 'Undercover', a $200 million insurance facility aimed at addressing geopolitical risks faced by cargo owners globally [1][2] - The product offers tailored coverage for various risks including war, terrorism, political violence, and confiscation, minimizing coverage gaps and claims disputes [2][3] - Undercover provides certainty of coverage during political instability and protects against fluctuating insurance costs due to changing country risk ratings [3][4] Company Overview - WTW, the parent company of Willis, operates in 140 countries, providing data-driven solutions in people, risk, and capital [5] - Willis has a long history in marine insurance, with over 650 specialists in marine risk and insurance, including more than 200 cargo insurance experts [6] - Markel, a partner in this initiative, is a leading global specialty insurer known for its people-first approach and expertise in complex specialty insurance needs [7]

Core Insights - A recent informal survey of bond underwriters indicates that there are no potential borrowers considering issuing new U.S. investment-grade bonds, suggesting that the primary market for this week is likely closed [1] - In June, syndicates issued $109.5 billion in new bonds, slightly exceeding the expected $105 billion, with strong performance in the latter half of the month and robust returns [1] - Despite increasing geopolitical risks, investor demand remained strong, leading to continued bond purchases, with U.S. high-grade bonds rising and achieving the second-best monthly return of the year, pushing year-to-date gains above 4% [1]

Market Trends & Geopolitical Risks - Asia is expected to open cautiously due to fatigue in Wall Street's rally and ongoing geopolitical risks [1] - The market is closely watching Asia tech, especially NVIDIA's suppliers, after NVIDIA's all-time highs [2] - The Hong Kong Monetary Authority intervened by buying $1.2 billion of local currency to defend the currency peg [3][13] - President Trump is considering naming the next Fed Chair early, potentially undermining Chair Powell [3][4] - The U S will hold a meeting with Iran next week, but the extent of damage to Iranian nuclear facilities remains uncertain [5][24][25] - Trade truce deadlines are approaching, creating uncertainty about the impact of unresolved tariff issues on inflation [35] Monetary Policy & Currency Dynamics - Markets anticipate that Trump naming a Fed Chair successor earlier could undermine Fed autonomy and lead to a dovish chair, impacting the U S dollar [18][35] - The broader dollar trajectory is for dollar weakness [14] - The Hong Kong dollar is at risk of falling out of its peg against the U S dollar, necessitating intervention [15] - The PBOC is helping to drive down benchmark borrowing costs in Hong Kong, creating an arbitrage opportunity that is pushing down the Hong Kong dollar against the U S dollar [16][17] Company Specific News - CATL is prioritizing overseas expansion due to irrational competition and price wars in China's EV market [1][35] - Zero acquired Melio, a payments platform, for $2.5 billion to bolster its U S offering and capture more market share [37][38] - Xiaomi is launching its first electric SUV, the YU7, and investors are closely watching the pricing and initial consumer reactions [56][57][58]

Core Insights - SLB anticipates flat revenues and core profit for Q2 2025 due to unexpected slowdown in drilling activity in Saudi Arabia and Latin America [1][9] - CEO Olivier Le Peuch highlighted that actual field activity diverged from original assumptions, particularly in the Middle East and South America [2][3] Drilling Activity - Several drilling rigs were demobilized in Saudi Arabia, and operations at the Jafurah unconventional gas field were paused, significantly impacting operational performance [3] - In Latin America, a decline in short-cycle project activity has further pressured top-line growth, reflecting shifting customer behavior [4] Margin Pressure - The company expects its margin profile to be affected by an unfavorable geographical activity mix, with declines in higher-margin operations in the Middle East and Latin America [5] - SLB anticipates Q2 EBITDA to be flat quarter over quarter, slightly below prior guidance due to cost rigidity in service delivery [5] Geopolitical Risks - The current forecast assumes no disruptions in the Persian Gulf amid ongoing geopolitical tensions, with any escalation posing additional downside risks [6] Shareholder Returns - Despite operational challenges, SLB remains committed to its capital return program, planning to return at least $4 billion to shareholders in 2025 [7]

Federal Reserve Policy & Interest Rates - Fed Chair Jay Powell indicated no rush to cut rates, refraining from pointing to any specific meeting for a potential rate cut, including July [2][3] - The market anticipates the Fed will cut rates this year if economic conditions, such as lower inflation or rising unemployment, warrant it, but the timing remains uncertain [7][12] - The majority on the committee still forecasts two rate cuts this year [12] Tariffs & Economic Impact - Tariffs' impact is expected to start showing up in economic data this month, potentially pushing up prices [4][9] - The effects of tariffs depend on their ultimate level and expectations, which reached a peak in April and have since declined [9] - The Fed is closely monitoring fiscal policy and its potential effects on the economy, refraining from commenting directly on the President's policies [8] Geopolitical Risks & Cease-fire - Geopolitical risks, including the fragile cease-fire between Israel and Iran, introduce uncertainty for policymakers [4][14] - The Fed is taking a cautious approach, monitoring geopolitical developments day by day, as the situation remains chaotic [15] - A fragile cease-fire has been reached between Israel and Iran [14][44] US Foreign Policy & International Relations - President Trump expressed frustration with perceived violations of the cease-fire by both Israel and Iran [23][44] - The US military action against Iranian nuclear facilities aimed to prevent Iran from developing a nuclear weapon [27][31] - The President is pushing NATO allies to increase defense spending, aiming for a 5% quota [19][93] New York City Mayoral Primary - Ranked-choice voting is in play for the Democratic mayoral primary, potentially leading to multiple rounds of tabulation [73][76] - Housing is a top issue for New York City voters, influencing the campaigns and their messaging [81] - Weather in New York City, with temperatures reaching 102 degrees Fahrenheit, could potentially affect voter turnout [73]