US futures rose slightly after Monday’s rout over valuations in the artificial-intelligence sector, while the dollar advanced after US President Donald Trump said he wants to enact across-the-board tariffs that are “much bigger” than 2.5%. After suffering a record drop on Monday, Nvidia led a rebound in premarket trading one day after Chinese upstart DeepSeek prompted traders to rethink the extent of US tech dominance. As of 8:00am ET, futures on the Nasdaq 100 rose about 0.2% after the tech index suffered its worst one-day drop since mid-December as Nvidia shares climbed as much as 5% in premarket, poised to claw back some of their 17% slump. Contracts tracking the S&P 500 gained 0.2% with semis poised to recoup some of yesterday’s losses. In Europe, stocks climbed on the back of upbeat earnings. Keep an eye on USD and bond yields, which moved higher as Trump looked set to add a blanket tariff on Feb 1 which could start with a 2.5% blanket tariff and ramp from there. The commodity complex is seeing strength in Energy, weakness in Ags, and Metals are mixed. Today’s macro focus is on Durable/Cap Goods, Housing Pricing, Consumer Confidence, and regional activity indicators ahead of tomorrow’s Fed decision. Starbucks, GM and Boeing are among companies to report results today.

In premarket trading, Nvidia jumped 4% after plunging 17% yesterday as Chinese artificial intelligence upstart DeepSeek prompted traders to rethink the extent of US tech dominance. Chip-related stocks advanced (Broadcom (AVGO) +2%, KLA Corp (KLAC) +1%, Marvell Technology (MRVL) +2%) as did AI infrastructure-related stocks (Constellation Energy (CEG) +2%, Oracle (ORCL) +1%, NuScale (SMR) +2%). Mag7 names were mostly higher after yesterday’s rout: Magnificent Seven: Alphabet (GOOGL) +0.7%, Amazon (AMZN) -0.5%, Apple (AAPL) +0.2%, Microsoft (MSFT) +0.1%, Meta Platforms (META) +0.5%, Nvidia (NVDA) +2% and Tesla (TSLA) -0.2%. Here are some other notable premarket movers:

• JetBlue (JBLU) falls 6% reporting fourth-quarter earnings.
• Royal Caribbean (RCL) climbs 5% after the cruise operator forecast adjusted earnings per share for 2025 that beat the average analyst estimate, and said its busiest booking period is off to a record start.
• Roper Technologies (ROP) rises 1% as TD Cowen upgraded the software firm to buy, citing revenue acceleration into 2025 and saying that the company’s “US centric portfolio” could also be attractive to many investor groups.
• Sanmina (SANM) gains 1% after the electronics contract manufacturing services company reported adjusted earnings per share for the first quarter above what analysts expected.
• Synchrony Financial (SYF) falls 5% after posting fourth quarter results.

Nvidia was poised to recover some of its 17% slump on Monday as DeepSeek’s cost-effective AI model added fuel to the debate over the outlook for big spending by tech companies on the chipmaker’s expensive products, when lower-cost solutions are possible by fine-tuning models. That potential threat to semiconductor demand — albeit too early to gauge, according to Bloomberg Intelligence — was enough to spur concerns among investors over whether the tech megacaps deserve their premium valuations.

“Nvidia has been the number one driver of S&P 500 earnings growth over the past 18 months,” said Mike O’Rourke, chief market strategist at Jonestrading. “If Nvidia does not deliver on earnings growth, an expensive S&P 500 becomes much more expensive.”

Meanwhile, the dollar strengthened against its major peers and copper fell on President Trump’s latest comments about tariffs to reporters on Monday night. The US president said he wants to enact across-the-board tariffs that are “much bigger” than 2.5%. In a speech from Florida, he also pledged tariffs on specific sectors, including semiconductors, pharmaceuticals, steel, copper and aluminum.

“I remain an equity bull, and would view this as a dip to be bought,” said Michael Brown, senior research strategist at Pepperstone Group Ltd. “That said, understandably, conviction to ‘catch a falling knife’ might be a little lacking for the time being.” The new US administration has been debating trade levies through January, with FT reporting Trump’s advisers were considering a gradual increase of about 2% to 5% a month.

European stocks also gain with the Stoxx 600 rising and set for a record close thanks to upbeat earnings offering additional support while SAP and Siemens Energy gain after upbeat results. Retail and utilities are the best performing sectors with miners and banks lagging behind. Europe’s largest lender HSBC will wind down some of its investment banking operations in Europe, the UK and the Americas as part of its restructuring efforts. Here are some of the biggest movers on Tuesday:

• Sartorius shares jump as much as 17%, the most since Oct. 17, after the German lab equipment maker reported better-than-expected adjusted Ebitda for the full year and said it expects a moderate increase in sales revenue in 2025.
• Siemens Energy shares gain as much as 5.1% after it pre-released strong fiscal 1Q results.
• Mercedes shares rise as much as 2.4% after a pre-close call late Monday during which the German automaker indicated it had a stronger-than-expected end to the year, according to analysts.
• SAP shares rise as much as 3.1% to an intraday record, after the software company raised full-year guidance on cloud revenue and operating profit, helped by its clients’ migration to cloud.
• Comet shares jump as much as 6.3%, the most since October, after the Swiss supplier of radio-frequency tools to the semiconductor industry posted a strong revenue growth update that shows recovery has gained momentum, according to ZKB.
• Foxtons shares rise as much as 6.7% after the London-focused estate agent said annual earnings for 2024 will be ahead of expectations.
• Xvivo Perfusion gains as much as 14%, the most since July, after Bryan Garnier & Co raised its view on the Swedish organ-transplant technology firm to buy from neutral, saying solid 4Q financials bolstered the broker’s view on the firm.
• Schneider Electric falls as much as 4.9%, extending declines following a DeepSeek-driven selloff. Citi (neutral) said valuation support may be 20% below Monday’s closing price.
• Swatch shares fall as much as 2.1% after Morgan Stanley downgrades the watchmaker to underweight from equal-weight ahead of earnings, flagging further softness in the Swiss watch industry.
• Netcompany falls as much as 17%, the most in two years, after the Danish IT consultancy reported adjusted Ebitda, revenue, margins and gross profits for the fourth quarter that missed average analyst estimates.

Earlier in the session, Asian shares fell on concerns surrounding AI-inflated tech valuations, while several markets were closed or held shortened trading sessions for the Lunar New Year holiday. The MSCI Asia Pacific Index fell as much as 0.6%. Japanese chip-tester maker Advantest and Australian data center REIT Goodman were among the biggest decliners after DeepSeek’s cheap AI model triggered a selloff in related stocks. Stocks edged higher in Hong Kong, as Tencent and other Chinese internet stocks extended gains. Large-cap shares in India advanced, while Japan’s benchmarks were mixed. Bourses in mainland China, South Korea and Taiwan were shut.

“It’s too early to call the future impact from DeepSeek, but what it has demonstrated is the crowded positioning within the potentially impacted sectors,” said Matthew Haupt, a fund manager at Wilson Asset Management. “Questions around growth outlooks are now not a 100% foregone story, so probabilities have shifted and that’s all that’s needed for a selloff.”

In FX, the Bloomberg Dollar Spot Index rose 0.3% as the dollar strengthened against most major currencies after comments from US President Trump and his Treasury Secretary stoked concern about widespread US trade tariffs. The Japanese yen and euro are among the weakest of the G-10 currencies, each falling around 0.6% against the greenback.

In rates, treasuries fell with US 10-year yields rising 2 bps to 4.56%. Bunds also dip while gilts slightly outperform Treasuries and bunds across the curve.

In commodities, oil prices advance, with WTI rising 0.5% to $73.50. Spot gold is steady around $2,744/oz. Bitcoin rises toward $103,000.

On today’s calendar, we get the December durable goods orders (8:30am), November FHFA house price index, S&P CoreLogic home prices (9am), January consumer confidence and Richmond Fed manufacturing index (10am) and January Dallas Fed services activity (10:30am)

Market Snapshot

• S&P 500 futures up 0.2% to 6,061.75
• MXAP down 0.5% to 182.26
• MXAPJ down 0.3% to 572.54
• Nikkei down 1.4% to 39,016.87
• Topix little changed at 2,756.90
• Hang Seng Index up 0.1% to 20,225.11
• Shanghai Composite little changed at 3,250.60
• Sensex up 0.6% to 75,821.14
• Australia S&P/ASX 200 down 0.1% to 8,399.07
• Kospi up 0.8% to 2,536.80
• STOXX Europe 600 up 0.5% to 532.45
• German 10Y yield little changed at 2.56%
• Euro down 0.5% to $1.0442
• Brent Futures up 0.6% to $77.55/bbl
• Gold spot up 0.1% to $2,743.52
• US Dollar Index up 0.44% to 107.82

Top Overnight News

• Trump spoke after the Mon close and said “in the very near future” he would be placing tariffs on computer chips, semiconductors, pharmaceuticals, steel, aluminum, and copper. BBG
• Trump said he wants universal tariffs much larger than 2.5% and has a tariff level in mind but had not set it yet, which followed an earlier report in FT that Treasury Secretary Bessent is pushing for a gradual 2.5% universal tariffs plan in which the 2.5% levy would move higher by the same amount each month.
• Trump said he will work with Congress on a plan to secure the borders and that they need a massive increase in funding for border security, while he will work with Congress on tax cuts and must permanently extend tax cuts previously passed under the Trump administration. Trump reiterated “drill baby drill” and said he will give fast approval to anyone building a plant for electric generation. Trump also stated that tariffs will be placed on computer chips in the near future and he will place tariffs on producers of pharmaceuticals, while he added that steel and other industries will be considered for tariffs and tariffs will also be placed on aluminium and copper. Furthermore, he said if you want to stop placing the tariffs, companies need to build plants in the US and it is good that companies in China have come up with a faster method of artificial intelligence whereby Chinese startup DeepSeek should be a wake-up call.
• US Senate voted 68-29 to confirm Scott Bessent as Treasury Secretary who is pushing for new universal tariffs on US imports to start at 2.5% and rise gradually. The 2.5% levy would move higher by the same amount each month, giving business time to adjust and countries a chance to negotiate with the Trump’s administration. FT
• Speaker Johnson said he doesn’t think Trump’s tariffs will hit “whole countries or whole industries with across-the-board levies.” Politico
• NVDA (Nvidia) said on Monday that the need for its chips would rise as a result of increased demand for DeepSeek’s services (Nvidia also said that DeepSeek appears to be telling the truth when it said its model was made without access to the highest-end GPUs). BBG
• Pimco and Apollo are among asset managers considering buying a portion of the next $3 billion of debt tied to Elon Musk’s buyout of X, people familiar said. BBG
• Japan’s government risks rejection of its annual budget if it doesn’t concede more ground to a small opposition party seeking a larger tax-free allowance. BBG
• Japan is considering an ordinance to allow GPIF to participate directly in government bond auctions, people familiar said. The fund at present purchases JGBs from auctions via securities companies. The change will make it easier for the fund to rebalance its portfolio. BBG
• Prime Minister Keir Starmer said the UK economy is starting to turn around and indicated he wanted a better trading relationship with the US. BBG
• A handful of GenAI stocks are pushing higher in the pre-mrkt: NVDA +5% (>8mn shares already trading) and ALAB, GEV, VRT, AVGO types up 4%+ on light volume.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mixed amid holiday-thinned conditions on Chinese New Year’s Eve and after the recent US tech sell-off. ASX 200 traded rangebound on return from the long weekend as gains in the consumer, healthcare, telecoms and financial sectors offset the losses in real estate, utilities, tech and miners, while improved Business surveys did little to spur demand. Nikkei 225 extended on the recent selling but was off worst levels amid a weaker currency and softer Services PPI data. Hang Seng kept afloat but with upside capped amid the absence of mainland participants and Stock Connect flows, while markets in Hong Kong closed early ahead of Chinese New Year celebrations.

Top Asian News

• US President Trump said they will have a lot of people bidding on TikTok and don’t want China involved in TikTok, while he confirmed Microsoft (MSFT) is in talks on TikTok and said he would like a bidding war over TikTok.
• US federal maritime official said the US is not without options in addressing the growing presence of China and Chinese companies in Panama, while the US seeks to increase support for American companies in Panama and throughout the Americas, ensuring Chinese companies are not the sole bidders on contracts.
• Japan’s government nominated Waseda University professor Junko Koeda as BoJ Board Member to replace Board Member Adachi whose term ends on 25th March 2025.

Sentiment has stabilised vs the considerable tech-induced losses seen in the prior session. NVIDIA (+5%) is higher in the pre-market, after sinking as much as 17% on Monday. US equity futures are mixed, but with very clear outperformance in the tech-heavy NQ +0.7% as AI-names jump higher in the pre-market, following the tech-rout seen in the prior session; NVDA +5.0%, AVGO +4.0%, MSFT +0.8%. In Europe, the Tech sector is found towards the middle of the pack; ASML (+0.8%), BE Semi (+0.3%) are both a little higher, but were initially on the backfoot. SAP (+0.2%) post earnings where the name lifted FY25 guidance.  European bourses (Stoxx 600 +0.5%) opened the session on a modestly firmer footing, and have generally traded sideways throughout the morning thus far. SAP (SAP GY) Q4 Earnings: Beat on Revenue, Net Income, adj. EBIT and Cloud Revenue. Lifts FY25 guidance and expects strong FY Cloud Revenue growth. CEO: Our strong position in data and business AI gives us additional confidence that we will accelerate revenue growth through 2027”.

Top European News

• ECB Euro area bank lending survey: Credit standards tightened for firms in the fourth quarter of 2024, driven by higher perceived risks and lower risk tolerance. Credit standards remained unchanged for loans to households for house purchase but continued to tighten for consumer credit. Housing loan demand continued to rebound strongly, while demand for firm loans remained weak.
• German economy output forecast to fall by 0.1% in 2025, according to BDI, while global economy expected to grow by 3.2%; must assume a leading role in Brussels with ambitions economic policy agenda.
• German Regulator BaFin says property markets correction among top risks in 2025; other top risks include financial market corrections and corporate loan defaults
• UK PM Starmer has reportedly requested that the relinking of the UK and EU emissions trading scheme is on the agenda for spring talks, via FT citing EU officials.

FX

• USD is bouncing back after being sold yesterday alongside the sell-off in the large cap global tech stocks and failing to act as a safe-haven. The rebound has been bolstered by overnight commentary from US President Trump who pushed back on reports that his administration could impose a gradual 2.5% universal tariff that would increase by 2.5% each month. DXY briefly made its way onto a 108 handle with a current session peak at 108.02.
• EUR is softer vs. the USD and to a lesser extent the GBP. Despite the global risk-aversion yesterday, EUR was actually able to eke out gains vs. the USD. However, this upside has been swiftly reversed on account of the aforementioned inflammatory tariff rhetoric from Trump overnight. EUR/USD is below yesterday’s trough at 1.0453 and the 50DMA at 1.0433.
• JPY has given back the bulk of yesterday’s gains vs. the USD that were triggered by the sell-off in global large-cap tech stocks. However, this move has been tempered during today’s session in the wake of the broadly stronger USD, which has been bolstered by inflammatory tariff rhetoric from US President Trump. USD/JPY is currently tucked within yesterday’s 153.71-156.24 range.
• GBP is softer vs. the USD but firmer vs. the EUR. Fresh macro drivers for the UK are light aside from the BRC Shop Price Index for January showing a 0.7% Y/Y decline vs. prev. 1.0%. Cable matched the bottom-end of yesterday’s 1.2426-1.2524 range.
• Another session of losses for the antipodes after suffering yesterday alongside the tech sell-off. This time around, the broader recovery in the USD is acting as a drag.

Fixed Income

• Overall, USTs are pulling back this morning as tech/market sentiment looks set to attempt a slight recovery from the substantial pressure seen on Monday, with NVDA higher by around 5% in pre-market trade. Supply the scheduled point of focus for the session ahead. Follows on from mixed auctions on Monday where the 2yr tap was a soft auction but was followed by the 5yr which experienced a much better reception. Today, USD 44bln of 7yr Notes are on offer after a 2yr FRN sale. As it stands, USTs are softer to the tune of c. 10 ticks at a 108-25+ low.
• Bunds are pulling back in tandem with the above though magnitudes are slightly more contained today on account of Bunds, relatively speaking, paring more of Monday’s upside in that session than USTs managed to do. No reaction to the latest ECB Bank Lending Survey or Germany’s BDI Industry Association forecasting a domestic output contraction in 2025. Bunds at a 131.42 base vs Monday’s 132.14 high, as such Bunds are back to within touching distance of Monday’s 131.38 opening level/trough.
• Gilts are echoing the above, at a 92.13 trough vs Monday’s 92.68 peak. A low which brings Gilts comfortably below the week’s 92.32 open and at an incremental fresh low for the week.
• UK DMO announces gilt tender for up to GBP 1.5bln of their 0.125% 2026 conventional gilt on Jan 30th.
• Netherlands sells EUR 2.45bln vs exp. EUR 2-2.5bln 2.50% 2030 DSL; average yield 2.493% (prev. 2.481%)
• UK sells GBP 1.5bln 1.125% 2035 I/L Gilt Auction: b/c 3.12x and real yield 1.128%.
• Italy sells EUR 3bln vs exp. EUR 2.75-3.0bln 2.55% 2027 BTP & EUR 2-2.5bln 1.50% 2029 & 1.80% 2036 BTP€i.

Commodities

• The crude complex is a little firmer and ultimately taking a breather from yesterday’s losses, whilst prices could also be underpinned to an extent from reports that protesters at Libya’s Es Sidra port prevent tankers from loading, according to engineers cited by Reuters. Brent Apr resides in a USD 76.12-76.90/bbl parameter.
• Mixed/flat trade across precious metals as prices take a breather from yesterday’s volatility and with newsflow somewhat light during European hours awaiting any impulse from Wall Street. Spot gold currently resides in a USD 2,734.81-2,745.30/oz range.
• Mixed trade across metals amid an overall cautious tone in the market and with Trump tariff threats continuing to cap gains. Adding to bearish sentiment, US President Trump is reportedly set to impose tariffs on steel, aluminium, and copper imports. 3M LME copper resides in a USD 9,016.00-9,115.50/t range
• Russia’s Kremlin says Russia is interested in the continuation of gas transit via Ukraine.
• Saudi’s Energy Minister met with Iraqi and Libyan counterparts and discussed efforts to support stability in energy markets, according to the Saudi state news agency.
• Petrobras CEO told Brazilian President Lula that the company will readjust diesel prices with the readjustment expected to occur in the next weeks.
• Slovakian Foreign Minister said they welcome the European Commission statement on gas supplies through Ukraine and see Ukraine’s willingness to discuss transit of non-Russian gas as a return to a solution they have proposed, such as Azeri gas.
• Protesters at Libya’s Es Sidra port prevent tanker from loading, according to engineers cited by Reuters. Protestors have halted oil loading operations at Libya’s Ras Lanuf port, according to Reuters sources.
• India is set to invest nearly USD 2bln to develop the critical minerals sector, according to Reuters sources

Geopolitics: Middle East

• US Secretary of State Rubio had a call with Jordan’s King Abdullah and discussed the implementation of a ceasefire in Gaza, the release of hostages and a pathway for stability in the region.
• “Iranian foreign minister told Sky News: If Iran’s nuclear facilities are attacked, it will be answered “immediately and decisively””, according to Sky News Arabia.
• “Hamas: Mediators have begun the process of taking the pulse of the two sides to start the second phase of the agreement”, according to Al Arabiya.

Geopolitics: Other

• US President Trump to sign an order to begin the process of creating the next generation of missile defence, while the order will call for the creation of an ‘Iron Dome’ for the US.
• UK Foreign Secretary Lammy and US Secretary of State Rubio spoke on the phone and said the UK and US will work together in alignment to address the situation in the Middle East, Russia’s war in Ukraine and challenges posed by China.

US Event Calendar

• 08:30: Dec. Durable Goods Orders, est. 0.6%, prior -1.2%
• 08:30: Dec. Durables Less Transportation, est. 0.3%, prior -0.2%
• 08:30: Dec. Cap Goods Ship Nondef Ex Air, est. 0.2%, prior 0.3%
• 08:30: Dec. Cap Goods Orders Nondef Ex Air, est. 0.3%, prior 0.4%
• 09:00: Nov. S&P/CS 20 City MoM SA, est. 0.30%, prior 0.32%
• 09:00: Nov. FHFA House Price Index MoM, est. 0.3%, prior 0.4%
• 09:00: Nov. S&P CS Composite-20 YoY, est. 4.24%, prior 4.22%
• 10:00: Jan. Conf. Board Present Situation, prior 140.2
• 10:00: Jan. Conf. Board Expectations, prior 81.1
• 10:00: Jan. Richmond Fed Business Conditio, prior 14
• 10:00: Jan. Richmond Fed Index, est. -10, prior -10
• 10:00: Jan. Conf. Board Consumer Confidenc, est. 105.9, prior 104.7
• 10:30: Jan. Dallas Fed Services Activity, prior 9.6

DB’s Jim Reid concludes the overnight wrap

This morning I’ve just released my latest chartbook, which is called “Deeply Seeking Comparisons to 2000”. We’d been working on a chartbook comparing today with 2000 for a couple of weeks (both positives and negatives), but with the emergence of DeepSeek and the selloff yesterday, it’s hopefully even more relevant now. It takes a look at crude equity valuations, looks at the earnings growth of the Mag 7 (past and future expectations), and shows how the largest stocks in the index today hold a much larger weight than they did in 2000. At a macro level, we’re in a much higher profit era relative to GDP than in 2000 which helps justify higher equities returns to some degree, even if growth is now much slower. The report should offer a framework for working out if today’s valuations are worryingly similar to 2000, or whether this time is different. See the pack for much more and remember Microsoft, Meta and Tesla report tomorrow with Apple on Thursday so there’ll be no shortage of Mag-7 headlines this week.

In terms of the last 24 hours, markets have experienced an aggressive selloff led by US tech, as there were growing questions about the sustainability of their valuations given DeepSeek’s new AI model. We’ll look at the situation in more depth shortly, but in terms of the headline moves, it meant the S&P 500 (-1.46%) and NASDAQ (-3.07%) posted their biggest declines of 2025 so far, with Nvidia down by a huge -16.97%, erasing $593bn of market cap value in a single day. In fact, it was the biggest single-day loss in a stock’s market cap ever in absolute terms. In fact Nvidia make up 8 of the top 10 on that list. Yesterday’s decline was larger than the total market cap of the likes of ExxonMobil and Mastercard. The effects were clear across the board as well, with the 10yr Treasury yield falling back to its lowest level since the start of the year (-8.7bps to 4.535%), whilst investors poured into havens like the Japanese Yen and the Swiss Franc.

Fundamentally, the reason that this DeepSeek release is such an issue is because the performance of global equities since late-2022 has been powered by US tech stocks. For instance, Nvidia was up +239% in 2023, and then another +171% in 2024, surging rapidly to become the world’s most valuable company by market cap as recently as Friday (down to third yesterday). And more broadly, this rally for the S&P 500 has been an unusually narrow one in terms of the companies pushing the index higher, of the sort we haven’t seen since the dot com bubble in the late-1990s. So while that doesn’t make it unsustainable per se, it means that it’s highly vulnerable to a correction among that Magnificent 7 group.

In terms of the specific moves yesterday, chipmakers were hit hardest, with Nvidia (-16.97%) and Broadcom (-17.40%) seeing sharp moves lower. The Philadelphia Semiconductor index (-9.15%) had its worst day since March 2020, while in Europe ASML was down -7.01%. But the largest declines within the S&P 500 came for electric power companies Vistra Corp (-28.27%), GE Vernova (-21.52%) and Constellation Energy (-20.85%), all three of which had been up over +150% in the past year benefiting from expected growth in power demand for data centres. By contrast, other Mag-7 stocks saw a mixed day, with the more AI-linked Alphabet (-4.20%) and Microsoft (-2.14%) losing ground but Apple (+3.18%) rising to again become the world’s most valuable company.

But outside of US tech, it really wasn’t a bad day for equities, with the equal-weighted S&P 500 (+0.02%) little changed on the day. In fact, nearly 70% of the S&P 500 constituents moved higher, with strong rotation into more defensive sectors including consumer staples (+2.85%) and health care (+2.19%). From March 2000 to the end of that year, after the tech bubble burst, there was a huge rotation into defensives such as utilities, consumer staples and healthcare. They were up around 40% over the 9 plus months.

If you’re looking for positives it was that the S&P traded in a very narrow range yesterday and closed towards the top end of it so the story didn’t accelerate to the downside once the US was in. And this morning US futures are fairly calm with S&P 500 futures -0.14% and Nasdaq futures flat.

In terms of macro I don’t think it’s an exaggeration to say the launch of ChatGPT played a notable role in helping the US avoiding a recession over 2023. Despite the most aggressive Fed rate hikes in a generation, the ChatGPT’s launch coincided roughly with the bottom for equities, before the market went on a tremendous bull run, which boosted animal spirits and wealth. The S&P is up around 50% since and has helped eased financial conditions. So while it was far from the only factor, the boost helped consumers to keep spending at a time when there was a lot of downward demand pressure from other sources. See Matt Luzzetti’s piece yesterday here on the impact of equity performance on consumer spending in recent quarters and what the implications could be going forward.

In terms of other snap analysis on the situation, Adrian Cox on my team (link here) sees DeepSeek’s release challenging the dominance of large computationally intensive AI models, suggesting that hardware scaling is less critical and that AI models may become commoditised. For FX, George Saravelos argued (link here) that if this becomes a sustainable trend it would work in a dollar negative direction, and the clearest analogy is the unwinding of the dot com bubble in the early 2000s, where the equity selloff spilled over into the real economy, leading to a mild recession, and in turn a more dovish Fed. In the meantime, Henry’s a bit more sanguine (link here), and makes the point that the Mag 7 fell -18% in the space of a month last summer, before rebounding back to record highs. So we’ve seen worse in recent months, and this decline still keeps the S&P and the Mag 7 inside their post-election range.

Amid public reactions to the news, Nvidia called DeepSeek’s new model an “excellent AI advancement” that “illustrates how new models can be created” using the Test Time Scaling technique. Meanwhile, Trump commented that DeepSeek “should be a wake-up call” to the US tech industry.

We also had new comments from Trump on trade yesterday evening. When asked on the possibility of a 2.5% across-the-board tariff, hinted at by Bessant, Trump said he wanted a rate that is “much bigger”. He also threatened tariffs on a range of sectors including semiconductors, pharmaceuticals, steel, copper and aluminum, while also singling out auto imports from Canada and Mexico. Off the back of this, the US dollar index is trading +0.52% higher this morning after a fairly steady session yesterday (-0.09%).

In Asia, most of the major markets (Chinese, South Korean & Taiwanese) are closed for the Lunar New Year Holidays. In terms of specific index moves, the Nikkei (-1.02%) is underperforming but with no additional follow through to the US weakness. On the contrary, the Hang Seng (+0.14%) is inching higher in holiday-thinned trade and is set to close early today. Elsewhere, the S&P/ASX 200 (+0.08%) is fairly flat ahead of key fourth-quarter CPI data due tomorrow. Meanwhile, 10yr USTs yields have edged +1.5bps higher to 4.55%, slowly reversing some of the big rally yesterday.

Given the scale of the equity slump yesterday, investors dialled up their expectations for Fed rate cuts this year. For instance, the amount priced in by the Fed’s December meeting moved up +7.8bps on the day to 50bps, though this has reversed by around -1.5bps this morning. So markets are now pretty much in line with last month’s dot plot that penciled in 50bps for this year. It’ll be interesting to see if Chair Powell backs up that assessment at tomorrow’s press conference. That shift helped support a sizeable rally for Treasuries, with the 2yr yield (-6.9bps) down to 4.20%, whilst the 10yr yield (-8.7bps) fell to 4.535%.
Over in Europe, markets put in a relatively stronger performance yesterday, with the STOXX 600 only down -0.07% on the day. In reality, there was a fair bit of regional divergence, with sharper losses for the DAX (-0.53%), and minor gains for the FTSE 100 (+0.02%) and the IBEX 35 (+0.12%). Meanwhile for bonds, there was an advance across the continent as we approach this week’s ECB meeting, with yields on 10yr bunds (-3.7bps), OATs (-3.1bps), and BTPs (-2.3bps) all moving lower.

Looking at yesterday’s other data, Germany’s Ifo business climate indicator ticked up to 85.1 in January (vs. 84.8 expected). However, the expectations reading fell to its lowest level in a year, at 84.2 (vs. 85.0 expected). Over in the US, we also had new home sales for December, which came in at an annualised pace of 698k in December (vs. 675k expected).

To the day ahead now, and data releases from the US include the Conference Board’s consumer confidence for January, the preliminary reading for durable goods orders in December, and the FHFA’s house price index for November. Otherwise, we’ll get French consumer confidence for January. From central banks, we’ll hear from the ECB’s Villeroy and Cipollone, and we’ll also get the ECB’s Bank Lending Survey. Finally, earnings releases include Boeing, Starbucks and General Motors.

Authored by Joe Buccino via RealClearDefense,

American energy independence is under attack from a shadowy alliance that threatens the foundation of our national security and economic prosperity. On the surface, we see radical environmental activists interrupting corporate shareholder meetings, blocking traffic, and vandalizing artwork. But behind these increasingly aggressive protests lies a more insidious threat: the Chinese Communist Party, which quietly bankrolls these same activists through a complex web of foundations and activist networks. Through dark money, China exploits environmental activism to undermine America’s energy sector. This dangerous partnership between foreign adversaries and domestic extremists demands immediate Congressional action – including comprehensive investigations into Chinese funding of domestic American nonprofits and new laws protecting American energy infrastructure. The security of America’s energy future hangs in the balance, and we can no longer afford to ignore this coordinated assault on our nation’s vital interests.

The evidence of Beijing’s strategic manipulation of American environmental groups has been mounting for years, but recent investigations have exposed the actual depth of these connections. Through a sophisticated network of foundations, consulting firms, and environmental organizations, the Chinese Communist Party has established multiple channels to funnel money and influence into groups working to obstruct American energy development. Beijing’s influence becomes clear when following the money. For example, Climate Defiance is one of the most aggressive new environmental groups making headlines nationwide. More than half of their 2023 funding flowed through the Oil and Gas Action Network – an organization supported by the Energy Foundation, whose Chinese office maintains deep ties to the Chinese Communist nation and Chinese nationals with direct links to the regime. Similarly, investigations reveal several other prominent environmental groups receive substantial funding through organizations with documented connections to Beijing, including research institutes that coordinate with Chinese state entities and foundations that partner with CCP-controlled ecological agencies.

China’s financial support of American environmental groups raises a crucial question that cuts to the heart of Beijing’s strategy: Why would the world’s largest greenhouse gas emitter and most prominent financier of fossil fuel projects globally invest in funding American environmental protesters? The answer reveals a calculated effort to weaken American energy independence: these radical groups are unknowingly doing China’s dirty work by targeting and disrupting America’s vital energy infrastructure projects.

The numbers tell the story of China’s true environmental priorities. China’s greenhouse gas emissions are double those of the United States, while Chinese institutions lead the world in financing new fossil fuel developments. These facts expose an obvious truth—China’s interest isn’t in saving the environment but in sabotaging America’s energy independence and economic competitiveness.

The tactical playbook of these Chinese-backed environmental groups has become increasingly aggressive and disruptive. Environmental activists have shut down a New York Times climate conference, declaring that “climate criminals should not be allowed in polite society.” They’ve disrupted major sporting events, vandalized priceless artworks, blocked highways during rush hour, and damaged construction equipment to cause massive delays at pipeline sites.

These aren’t random acts of civil disobedience – they’re part of a coordinated strategy to weaken American energy infrastructure and drive-up consumer costs. The groups behind these actions openly admit their radical aims. The Climate Emergency Fund’s executive director recently told The New Republic that movements “need to have a radical flank that is disrupting normalcy.”

Even when these protests fail to stop energy projects completely, they succeed in driving up costs and causing delays that benefit America’s competitors. Look at what happened in North Dakota, where Greenpeace-organized protests against the Dakota Access pipeline resulted in such extensive damages that the energy company is now suing for $300 million in losses.

These protests achieve China’s goal: making American energy development so costly and complicated that we become increasingly dependent on foreign sources. While American companies battle protesters and legal challenges, China continues to expand its fossil fuel infrastructure at a breakneck pace.

The evidence suggests we’re watching a sophisticated influence operation: China provides funding to U.S.-based foundations, which then channel money to radical environmental groups, who in turn deploy increasingly aggressive tactics against American energy infrastructure. Meanwhile, China races ahead with its own energy development, free from similar protests or disruptions.

The Trump administration should spur Congress to act swiftly to counter this threat. The Select Committee on the CCP must launch comprehensive investigations into the flow of Chinese money to American environmental groups. Americans deserve to know which protesters are funded by foreign adversaries. Second, Congress must pass the Safe and Secure Transportation of American Energy Act, strengthening criminal penalties for individuals who vandalize or disrupt American pipeline operations. This legislation will convey that the Trump administration will not tolerate foreign-funded attacks on critical U.S. infrastructure.

The First Amendment protects Americans’ right to protest and voice dissent. But when foreign adversaries exploit these freedoms to advance their own strategic interests at America’s expense, we must draw a line. The Chinese Communist Party has found willing – though perhaps unwitting – allies in the radical environmental movement. Their partnership threatens not just American energy independence but our national security.

As these groups escalate their disruptive tactics in the months ahead, remember who benefits from their actions.

When protesters shut down American energy projects and drive-up costs for American families, they’re not just advancing an environmental agenda – they’re advancing China’s strategic objectives at America’s expense. The choice before us is clear: We can allow foreign-funded extremists to sabotage American energy independence, or we can take decisive action to protect our critical infrastructure and ensure America’s energy future remains in American hands.

Joe Buccino is a retired U.S. Army Colonel and the CEO of Vantage + Vox.

Nissan plans to cut 1,500–2,000 U.S. jobs and reduce production by 25% as part of a strategic review, according to GuruFocus.

It aims to close a production line at its Smyrna, TN plant by April and another at its Canton, MS plant later in the year. The company is reviewing its EV production and investment strategy.

Spokesperson Shiro Nagai stated the reports are unofficial, and Nissan declined further comment. However, it wouldn’t be an unreasonable move for the automaker which has struggled in recent years and is in the midst of considering a merger.

Recall back in late December we wrote that the struggling automaker was considering a tie-up with Honda that would make it the world’s third largest automaker. 

Facing competition from EV leaders like Tesla and China’s BYD, Japanese automakers are uniting to cut costs and accelerate their transition to electric vehicles.

Honda’s president, Toshihiro Mibe, stated last month that the companies plan to form a joint holding company, maintaining their brands while Honda leads management. A merger agreement is targeted for June, with the holding company expected to list on the Tokyo Stock Exchange by August 2026.

There is still to study and discuss, Mibe said. He commented: “Frankly speaking, the possibility of this not being implemented is not zero.”

“We have come to the realization that in order for both parties to be leaders in this mobility transformation, it is necessary to make a more bold change than a collaboration in specific areas,” he added. 

AP writes that a potential merger between Honda, Nissan, and Mitsubishi could create an automotive giant valued at over $50 billion, helping them compete with industry leaders like Toyota and Volkswagen.

Authored by Andrew Korybko via substack,

One of the Executive Orders that Trump just signed suspends some foreign aid for 90 days, specifically “development assistance funds to foreign countries and implementing non-governmental organizations, international organizations, and contractors”, in order to assess their “efficiencies and consistency with US foreign policy”. It remains unclear at the time of writing whether the State Department’s subsequent “stop-work orders” will affect military aid to Ukraine so that possibility won’t be covered in this analysis.

Most foreign aid programs have been exploited to meddle in other countries’ affairs by funding anti-government and even in some cases anti-state movements that later orchestrate Color Revolutions. Even if they’re not taken to that extreme, they at the very least create problems for the implementation of those countries’ domestic and foreign policies by artificially manufacturing grassroots opposition to them, which manipulates perceptions of their popularity and can thus influence national elections.

Such was recently the case in Georgia, which fended off a nearly-two-year-long Western-backed but superficially “NGO”-driven campaign against the ruling party. This was officially waged in response to their FARA-inspired foreign agents law but was really punishment for them pragmatically refusing to sanction Russia and open up a “second front” against it in the South Caucasus during Ukraine’s failed summer 2023 counteroffensive. Georgia can now rest a bit easier for the time being.

The same goes for the many African countries like new BRICS partner Uganda who’ve been aggressively pressured by American-backed “NGOs” into accepting the normalization of LGBT+ in contravention of their traditional values. As put forth in Trump’s Executive Order, “The United States foreign aid industry and bureaucracy…serve to destabilize world peace by promoting ideas in foreign countries that are directly inverse to harmonious and stable relations internal to and among countries.”

Observers also shouldn’t forget about India after the US meddled in last year’s elections despite their strategic partnership. Russia gave voice to India’s concerns at the time due to the sensitivity of India calling the US out while the political process was ongoing, after which the ruling BJP accused the State Department and the “deep state” of meddling in other matters last month. While independently financed Soros still remains a problem, the US government shouldn’t be one for now, to India’s relief.

Less political meddling and socio-cultural engineering, at least for the next three months, will be much appreciated by all those countries that have been targeted by “NGO”-driven Hybrid War.

The emphasis is on less of these efforts as opposed to their complete freeze since some programs might have enough funds left to partially operate during the interim while the Secretary of State can issue waivers for specific ones at his discretion. Some might therefore continue in full but most will be adversely affected.

The end effect is that American influence might rebound in the Global South since a large part of why many of these countries started turning away from the US since the start of the century was due to it violating their sovereignty by funding “NGOs” that meddle in their affairs.

If Trump reforms the US’ international lending strategy to remove political strings on aid programs, including from those institutions that it controls like the IMF and World Bank, then this process would further accelerate.

His promised imposition of more tariffs might trouble some of these same countries, but it’s not the same as coercing them into making political and socio-cultural changes against their will in exchange for emergency financial aid, which ultimately risks destabilizing them and later advancing regime change. This potentially new approach could restore some of the attractiveness in partnering with the US by partially evening the odds vis-à-vis its competitions with China and Russia in the Global South.

In the event that this comes to pass, then those two would be compelled to offer better deals to their partners in order to prevent them from being enticed by the US into accepting whatever it proposes, thus possibly catalyzing a cycle of competition that works to those other countries’ benefit. For that to happen, the US would have to treat its partners more as equals and less as vassals, but old habits die hard so this can’t be taken for granted even if Trump appears somewhat (key qualifier) interested in it.

Elon Musk’s Tesla filed a lawsuit against the European Commission in Luxembourg, challenging tariffs imposed on imported made-in-China electric vehicles. The lawsuit marks the latest friction between Musk and Brussels, further intensifying tensions following his public support for Germany’s AfD party that has infuriated EU progressives. 

Financial Times reports that the European Court of Justice published confirmation of a lawsuit filed by Tesla’s Shanghai subsidiary on its website early Monday. No further details were provided about the lawsuit, which follows similar claims filed by Germany’s BMW and three Chinese automakers.

In October, the EU imposed anti-subsidy tariffs of up to 7.8% on made-in-China Teslas and as high as 35.3% on some Chinese EVs. These were in addition to the standard 10% import tariff for vehicles. 

• EU Slaps Up To 45% Tariff On Chinese-Made EVs As “Economic Cold War” Risks Soar

The European Commission, the bloc’s executive arm, concluded its anti-subsidy investigation into Chinese imports of EVs in 2024. The findings showed China’s unfair support for its EV industry, which could produce cheaper EVs than EU automakers. The duties enacted would be active for five years. 

Transport and Environment data shows that Tesla accounted for 28% of the Chinese-made EVs imported into Europe in 2023. 

Tesla received the lowest tariff rate among all other EV importers because Beijing provided it with the least financial support. 

BMW wrote in a statement that EU tariffs on imported EVs “do not strengthen the competitiveness of European manufacturers,” but instead “harm business model of globally active companies” and “limit the supply of e-cars to European customers and can therefore even slow down decarbonization in the transport sector.”

BMW considers it “preferable that a political agreement be sought through negotiation. As stated before, it is important to avoid a trade conflict that only has losers in the end.”

Meanwhile, Tesla’s lawsuit against the bloc complicates things for Musk as he made a recent surprise address at the campaign launch for Germany’s Alternative for Germany (AfD) party. 

The timing of Musk’s support for the AfD and Tesla’s tariff dispute with Brussels highlights the growing tension between the world’s richest man and the woke progressives running the bloc. 

Authored by Tuomas Malinen via substack,

The situation is developing rapidly in Ukraine. Many of the key towns and cities to Ukrainian defence seem to be falling like dominoes. Colonel of the Austrian Armed Forces, Markus Reisner, has warned that the collapse of the AFU (Armed Forces of Ukraine) is likely to be near. Developments on the ground are confirming this with, e.g., Kurakhove and Velyka Novosilka falling in consecutive (rapid) fashion.

A “peace plan” has also surfaced, allegedly from the Trump administration. It basically lays out a path, where a truce should be declared by Easter (April 20) 2025 and peace by May 9. If this is the actual plan, I have to ask in what reality are the people who wrote it living in? The collapse of the AFU may be just days (the worst-case) or few weeks away. And then there’s this proposition:

Ukraine does not reduce the size of the army. The United States is committed to continuing support for the modernization of the Ukrainian Armed Forces.

The idea that Russia would allow the U.S. to continue to create a proxy-force along its longest border in the west is ludicrous. For example, in the Paris Peace Treaties of 1947, the Finnish army was heavily sanctioned and it’s size diminished. No outside force was allowed to participate on its modernization or development, because the Soviet Union did not want to see another attack on their soil (Finland took part on the Operation Barbarossa, unofficially). Moreover, like I have noted in the Peace in Ukraine, there’s only one force in the world that can surveillance the line of ceasefire with any credibility: the U.N.

If this really was an actual (second) proposition of President Trump, it’s definitely better than the first one, but there’s still a long way to go. The main point to recognize is that the days of American military hegemony have passed.

To provide some additional motivation, I will now open the best and worst-case scenarios of post-AFU-collapse developments for everyone to read.

*  *  *

Update II 1/25/2025

It seems that I was a bit too hasty in my conclusions concerning the halt of U.S. military aid to Ukraine. First of all, the stoppage reportedly concerns only the part of the State Department, while most of the military aid (naturally) goes through the Pentagon. Zelenskyy has also just recently stated that U.S. military aid has not been halted (“thank God”). To note, the halt of foreign aid concerned all countries, except Egypt and Israel.

However, we should remember two things. In late-June, President Trump was presented a plan that suggested a halt of military aid to Ukraine, if it refuses to open talsk with Russia. Secondly, the Secretary of Defence, Pete Heghseth, was appointed (approved) by the Congress just yesterday.

These imply that the halt of the flow of aid through State Department could have been a warning. That is, it could have been used to signal President Zelenskyy that negotiations with President Putin needs to commence, asap. And, if this does not happen, actual curbs in the flow of funds through the Pentagon will be introduced.

Based on what I know from the negotiation strategies of President Trump,1 such a work-plan is plausible. Trump has also stated many times that he wants a peace to Ukraine, and it needs to start with getting the two sides to the negotiation table. “Blackmailing” Ukraine with military aid, will accomplish this, I am sure.

With the Kremlin, however, President Trump needs to pull out some (serious) carrots, not just sticks. Russians are progressing steadily in Ukraine and closing in on critical logistic hubs, most notably Pokrovsk. Russia is holding a serious upper-hand in the war, and further economic sanctions are a moot point (more on that later). I think everything needs to start with negotiations between Presidents Putin and Trump. Here’s the roadmap.

Let’s see what comes.

*  *  *

Update

Yesterday evening, we learned that the Trump administration halted almost all foreign aid, including military aid to Ukraine, for 90 days. This was reported by Politico, and it means that the clock truly starts to tick for the collapse of the AFU.

President Zelenskyy now effectively faces two options:

1. To start negotiations with President Putin.

2. Face an impending collapse or an unconditional surrender of the AFU, possibly leading to a military coup.

In other words, the stakes were just raised heavily. I am keen to think that President Zelenskyy will start negotiations, but first he has to change his decree making all negotiations with President Putin illegal.

In any case, things are in motion now.

*  *  *

Issues discussed:

• The best-case scenario leading to truce and negotiations after the collapse of the Armed Forces of Ukraine (AFU).

• The worst-case scenario leading to a regional war after the collapse of the AFU.

• How do we get to the path leading to peace.

Ukraine has become something of a re-entry way to geopolitics for me. This is mostly, because I have made a complete 180 degree turn in my views towards the war between Russia and Ukraine. I started with an over-whelming support for Ukraine (see, e.g., this, this and this), which turned into a suspicion in September 2022, and into a full opposition five months later. Now, I want to understand, what could happen in Europe, if the Armed Forces of Ukraine (AFU) would collapse, a point which edges closer each passing day.

I present two, the best-case and the worst-case, scenarios for post-collapse Ukraine (and Europe). By collapse I mean a mass retreat of soldiers and battle-field commanders from the frontlines across the nation. Such an event may come about much easier than many think. This is because in a situation, where reserves are highly limited, like they are now in Ukraine, collapse of some sections of the frontline can come rapidly leading to panicky capitulations across the entirety of the frontline. When there are no amble reserves to strengthen the failing sections, there’s a risk of forces becoming pocketed in, forcing a wide-scale retreat. This is, e.g., what happened to Finnish Defence Foces in the Karelian Isthmus in early summer of 1944.

More precisely, I will sketch two plausible paths of developments after the defences of Ukraine crumble. I will not go into specifics of possible military developments, because that’s not my expertise. No one also can honestly state that they would know what happens after a collapse of the AFU, but we can speculate. Let’s dive in.

Post-requiem of the AFU: The best-case

The best-case scenario assumes that there will be no aim of the NATO Deep State or Ukrainian leadership to push the whole continent into a war. Based on what we have seen, the opposite seems to hold. Moreover, the best-case scenario assumes that President Trump is willing to accept Ukraine losing a large chunk of its landmass and to end the open-door policy of NATO. We at GnS Economics have recently warned on the possibility of a failure of President Trump in Ukraine, as it appears that he would not be willing to commit to such conditions.

These assumptions lead to 10 developments that could occur after the collapse of the AFU, in the best-case:

1. Russian troops quickly progress to the banks of the Dnepr.

2. Generals of the AFU hastily secure the defences of Kiev.

3. The United Nations jumps into action with the Security Council calling for an immediate ceasefire supported also by Russia.

4. Russian troops halt their progress to the Kherson-Dnipro-Kiev -line (along the Dnepr).

5. NATO halts all Ukraine/NATO attacks to Russian troops in Ukraine, by the order of President Trump.

6. Presidents Donald Trump, Vladimir Putin and Volodymyr Zelenskyy agree on the terms of an U.N. monitored line of ceasefire along the Dnepr.

7. Russia limits its military presence to ceded areas and evacuates attack systems to sufficient distance from borders (established line of ceasefire) of the remaining Ukraine.

8. The EU and the US stop all deliveries of weapons and volunteers to Ukraine.

9. The EU and the U.S. agree on an emergency economic support package for the (remaining) Ukraine.

10. The neutrality of Ukraine is agreed as the starting point of peace negotiations including all the major parties: China, The EU, Ukraine, Russia, the United Kingdom, the United States and NATO.

Essentially, the best-case scenario mimic the developments and actions we would need to see to establish a (lasting) peace in Ukraine. At this point, this looks unlikely, which is why need to turn to the worst-case to understand what may come.

Post-requiem of the AFU: The worst-case

How could the situation develop in the worst-case?

1. Russian troops advance rapidly to the Dnepr.

2. NATO calls for imminent ceasefire and hails to send in a “peace-keeping force”, while announcing that Ukraine will be made member of the Alliance.

3. Russian troops cross the Dnepr and enact a siege of Kiev with the troops advancing from Belarus, while Russian troops in the South advance on the outskirts of Odessa. President Zelenskyy flees to Poland to oversee the “resistance”.

4. France sends troops to Odessa, while the U.K., in accordance with the 100-year Partnership Declaration, send troops to Lviv.

5. Russia strikes Lviv with Oreshnik or with a tactical nuclear weapons destroying the U.K. troops.

6. The U.K. declares war to Russia, and President Trump warns Russia not to escalate any further.

7. Poland strikes Belarus, while sending her forces to Lviv.

8. Russia and Belarus strike to NATO bases in Poland.

9. NATO enacts Article 5 and starts a massive buildup of troops along its eastern border. Russia and Belarus responds with mobilization.

10. A regional conflict forms.

NATO is yet not ready for a full military conflict with Russia, which is why the ladders of escalation end to “forming” of a regional conflict (on which more below). Naturally the sequence of events can also take a much darker turn with the 10 ladders leading into an onset of a nuclear war. There’s also the possibility that, when the imminent collapse of the AFU looms the Zelenskyy regime, with the help of the NATO Deep State, stages a false flag attack targeting either the NATO troops in Europe or a NATO country, blaming Russia. This would start a NATO-Russia war, or at least lead to widening of the conflict.

Conclusions

I have to say that I am not very optimistic on the prospects peace in Ukraine, currently. President Trump seems to be fixated to the old-dated view that NATO and the U.S. would hold a military upper-hand still. Developments in Iran and especially in Ukraine have already shown this not to be true.

Moreover, I worry on the growing military strength of Russia. Just yesterday, I learned that Russia has started to mass-produce battle-drones which are immune to electronic warfare. The story with Russian military development in a conflict is always the same. First, they screw up massively, then retreat, learn, regroup and strike with unmet fervor. During the past 90 years there’s only exception to this, the Soviet-Afghan war, which ended to the defeat of the Red Army and to the collapse of the Soviet Union (driving the defeat). At current time, I am rather certain that Kremlin seeks only peace. If the AFU and Ukraine become over-run, would that change? It probably depends on the scenario we end up to.

I honesty cannot conclude anything else from the actions and comments of some European NATO members than that the Alliance is seeking a pro-longed conflict with Russia. The likelihood of this grows with Russian military strength building up, because it will be met by NATO (eventually). It seems rather obvious that NATO is not yet ready for a pro-longed conflict with Russia, and the NATO Deep State, et al., may look to end the conflict in a way that would create fear and thus wide-spread acceptance in Europe for a re-armament. A false flag attack somewhere in Europe blaming Russia would suit this purpose well. Also, an unconditional surrender of the AFU combined with massive russophobic propaganda could also do the trick. When re-armament cycle gets going in Europe, wars result.

How long do we have, before the AFU collapses (or surrenders)? No one knows for sure, but most estimates put this in the range from months to a year. Yet, we have to acknowledge that this point can also arrive very quickly. Losses are massive and there are rumors of a mutiny building within the AFU. After the collapse, we would enter some very dangerous waters.

I dearly hope that President Trump changes his course in Ukraine rapidly.

Authored by Allan Stein via The Epoch Times (emphasis ours),

The landscape is stark and unforgiving, typical of deep winter in rural Montana.

The snow-covered Judith Mountains rise majestically in the distance, while vast fields of dormant wheat, hay, and barley stretch beneath a gloomy gray sky blanketed in white.

Ed Butcher, 81, peered through the cracked windshield of his red Honda all-wheel drive, which had been struck by a bird a few days earlier.

At the end of an eight mile gravel road, two miles east of the family homestead in Winifred (population 174), he could see his destination.

The one-acre plot is secured by a chain-link fence, complete with surveillance cameras, motion sensors, and barbed wire.

On the fence hangs a sign that reads “Restricted Area,” warning that anyone who breached the fence could be subject to the authorized use of lethal force.

“This is it—the grand tour,” Butcher exclaimed as he parked the vehicle and stepped outside into the biting cold wind and tundra.

He pointed through the fence and said, “There’s the missile.”

Beneath tons of reinforced steel and concrete inside the Hatch Launch E05 facility, the Minuteman III intercontinental ballistic missile (ICBM) has remained on alert for a nuclear attack for 60 years.

In 1964, when Butcher was in high school, his father sold a one-acre plot to the Air Force for $100, allowing it to house this single missile with a nuclear warhead, sitting thousands of miles away from a potential target.

The Minuteman missile system is a powerful weapon system, developed in the late 1950s and deployed a decade later at strategic locations across the United States.

It was a groundbreaking development at the time, combining speed, mobility, and reliability to achieve nearly a 100 percent alert rate—two launch crew officers provide around-the-clock alert ability in the launch center, according to the Air Force.

The missile stands 59 feet tall and weighs 79,342 pounds. It can travel up to 8,700 miles at speeds reaching 15,000 miles per hour outside the atmosphere.

As a weapon of mass destruction, it can deploy up to three Mk12A nuclear warheads, each with a yield of 300 to 350 kilotons of TNT.

Each warhead is more than 20 times more powerful than the atomic bomb that destroyed Hiroshima on Aug. 6, 1945, which resulted in the deaths of 140,000 people.

Butcher, a former Montana legislator, recalled a period of nuclear brinkmanship based on the principle of mutually assured destruction when the Minuteman missile first arrived on the family ranch.

This was during the peak of the Cold War, following the Cuban Missile Crisis, which brought the United States and Soviet Union closer to nuclear war than ever before.

Everyone was anxious about a potential nuclear exchange, Butcher recalled, and “duck and cover” drills were routine in schools.

Despite the context, Butcher adapted to living near the missile. He never truly feared a nuclear attack on “Missile Country.”

Logic told him that the Minuteman III would be launched long before any Soviet missile could reach its target.

Butcher, a fifth-generation rancher with 400 to 500 cattle, remarked: “They’d be hitting an empty hole.”

The 12,000-acre cattle ranch has been in the Butcher family since 1913 when Ed’s grandparents first settled there.

Missile County

Fergus County, Montana, approximately the size of New Jersey with a population of 11,772, is home to 52 operational nuclear missile silos. Lewistown serves as the county seat.

The 341st Missile Wing stationed at Malmstrom Air Force Base  in nearby Cascade County. The base is one of three—located in Montana, Wyoming, and North Dakota—that utilize the Minuteman III land-based missile system.

Butcher said that he had observed the Minuteman III missile outside the hatch at least once during scheduled maintenance.

“I was counting cows out in the pasture,” and the security gate to the missile silo was open, Butcher said. “One of the cows got inside near the missile.”

Butcher said he entered  the secure area to fetch his cow. He was immediately confronted by an armed military guard.

“Sir, you can’t be here,” the soldier said.

“I own this place,” Butcher responded. “These are my cows.”

The guard persisted, so Butcher replied, “Then you chase her out.”

The soldier’s eyes got “really big,” Butcher recalled. “He looked at the cow. He looked at me.”

“He finally decided it was OK for me to come riding in. He didn’t want to chase after a cow.”

His father, who was a licensed pilot, would also check on the cattle from the air.

“He’d always turn before he got to the missile [silo],” Butcher said. “ He didn’t want to be flying over if they decided to set it off. That was the closest thing Dad had for concerns” about nuclear missiles.

“Other than that, he didn’t care.”

Three Legs of Deterrence

The Minuteman III weapon system completes America’s nuclear “triad,” which includes submarine-launched ballistic missiles and strategic bombers.

The Sentinel ICBM program is set to replace the 400 missiles and 450 launch facilities of the aging Minuteman III weapon system by 2038, providing capabilities until 2075.

In September 2020, the Air Force awarded Northrop Grumman a contract worth $13.3 billion to design and build the Sentinel program.

However, on Jan. 18, 2024, the Air Force announced that the project’s costs had reached a critical Nunn-McCurdy breach, which is when initial estimate thresholds are exceeded by 25 percent or more, triggering a review.

The cost of the Sentinel program is now estimated at $140.9 billion, representing an 81 percent increase from the program’s 2020 budget.

According to the Nunn-McCurdy review, the command and launch segment accounts for the majority of this cost growth.

In a statement, the Air Force indicated it is developing a comprehensive plan to restructure the Sentinel program, focusing on the root causes of the breach and establishing a suitable management structure to control costs.

“Our U.S. nuclear forces are ready, as they have been for decades, to deter our adversaries and respond decisively should deterrence fail,” said Air Force Chief of Staff Gen. David Allvin in the January 2024 statement.

“We face an evolving and complex security environment marked by two major nuclear powers that are strategic competitors and potential adversaries,” Allvin said.

“While I have confidence in our legacy systems today, it is imperative that we modernize our nuclear Triad. A restructured Sentinel program is essential to ensure we remain best postured to address future threats.”

Lewistown and Great Falls, 116 miles northwest, will be most affected by the Sentinel project in Montana.

The project will involve removing all 45 missile alert facilities from the missile fields and building launch centers in at least 24 locations.

It will include renovating all 450 existing launch facilities to a “like-new” condition.

The Sentinel project also involves the  construction of 3,100 miles of new utility corridors while using 4,900 miles of existing corridors and easements.

Read the rest here…

Authored by Bronson Winslow via American Greatness,

House Republicans and President Donald Trump are sponsoring legislation to dismantle 50 years of Democrat-led firearm laws that have stifled concealed carry reciprocity in America and unduly burden nearly 22 million gun owners.

The Constitutional Concealed Carry Reciprocity Act (H.R. 38) is backed by 120 House Republicans and would ensure consistent protections for responsible firearm owners nationwide while still respecting state-level laws and autonomy. President Donald Trump has expressed his strong support and readiness to sign the bill into law if it lands on his desk.

“Our Second Amendment right does not disappear when we cross invisible state lines, and this commonsense legislation guarantees that,” said North Carolina Rep. Hudson (R).

“The Constitutional Concealed Carry Reciprocity Act will protect law-abiding citizens’ rights to conceal carry and travel freely between states without worrying about conflicting state codes or onerous civil suits.”

Much like driver’s licenses, concealed carry permits would be recognized across state lines, with individuals required to adhere to the laws of their destination state. The bill upholds state sovereignty by refraining from imposing a national standard for concealed carry.

Instead, it ensures reciprocity while respecting each state’s authority to define its own regulations. If enacted, this legislation would empower an estimated 22 million Americans to travel freely without fear of punishment under restrictive laws in states with stringent gun control policies.

Modern concealed carry permitting first began in Georgia in the 1970s under Democrat Governor Zell Miller. The Georgia permit process quickly gained traction across America, and many states entered into reciprocity agreements to allow residents to travel freely.

But that wasn’t the case in all states. Numerous blue states began to reject reciprocity with states that fostered strong Second Amendment freedoms—effectively creating a dicey road map for traveling gun owners.

“At every turn, federal bureaucrats and Washington Democrats are relentlessly trying to undermine the Second Amendment rights of law-abiding Americans,” said Kansas Rep. Tracey Mann (R).

“Our constitutional rights don’t magically go away when we travel across state lines, no matter how badly states like New York and California wish they would.

Alongside President Trump, pro-gun advocacy group Gun Owners of America (GOA) has endorsed the legislation, saying, “Congress has the opportunity to deliver the greatest legislative victory for the gun rights movement in a century.”

“President Trump has already voiced his support. It is simply common sense for Congress to ensure that each state’s concealed carry license is valid in every other state,” said Aidan Johnston, GOA’s Director of Federal Affairs.

Stop Restriction Overkill

Many states across the U.S. enforce restrictive laws that hinder concealed carry permit holders from fully exercising their Second Amendment rights. Additionally, states often refuse reciprocity with others they perceive as having insufficient safety standards for issuing permits.

If enacted, H.R. 38 would prevent states like New York and California from barring law-abiding Americans from Texas or Florida from carrying concealed weapons for self-defense while traveling. However, while the legislation ensures reciprocity between states, it does not override or change the specific gun laws within individual states.

Yet even with enforced reciprocity, permit holders encounter significant challenges in blue states like New York, California, and Maryland, which enforce restrictive regulations that designate broad areas as “sensitive locations” where concealed carry is prohibited.

In 2022, the Supreme Court affirmed in the Bruen ruling that every American has the right to carry a firearm for self-defense. However, numerous blue states continued to impose restrictive measures—all while claiming they updated their laws to adhere to Bruen.

These states continue to restrict concealed carry in locations such as casinos, public libraries, museums, bars, and restaurants serving alcohol, entertainment venues, and even on private property without explicit consent—making concealed carry a nightmare even if nationwide reciprocity becomes a reality.

Moving Forward

The Constitutional Concealed Carry Act showcases the Trump administration’s willingness to assist law-abiding gun owners after four years of persecution under former President Joe Biden. However, it is only the beginning of what must be a broader effort to fully restore the freedoms the Left has strategically stolen from Americans.

As we look ahead to President Trump’s second term, it is crucial for the Supreme Court, lower courts, Congress, and state governments to reevaluate restrictive firearm laws, particularly those that unjustly designate vast areas as “sensitive locations” to undermine concealed carry rights.

President Trump has already expressed his commitment to signing this legislation, but this cannot be the end of the conversation. It must serve as the foundation for a larger movement to dismantle laws that unfairly hinder law-abiding citizens and to return power back to the people.

Jim Acosta, CNN‘s heckler-in-chief during Trump’s first term, is out at the network according to multiple reports, including from his former CNN colleague, Oliver Darcy.

On Monday night, Darrcy said Acosta plans to leave the network after CEO Mark Thompson removed him from his 10 a.m. slot, which came after Thompson reportedly asked Acosta to anchor a graveyard shift show from 12 a.m. to 2 a.m.

According to Darcy at Status News;

Jim Acosta is expected to exit CNN.

The anchor, I’m told, signaled to associates in private conversations over the weekend that he intends to depart the network after its chief executive, Mark Thompson, booted him from the morning programming lineup — a move that conspicuously coincided with Donald Trump’s return to power.

CNN brass, as we first reported earlier this month, decided to strip Acosta of his 10am show, which he has anchored to great ratings success over the last 11 months, at times even seeing higher viewership than programs in the channel’s prime time bloc. Acosta was instead offered the less-than-desirable option of anchoring a show from midnight until 2am ET. CNN pitched the gig to Acosta as anchoring during prime time on the West Coast and said he could move to Los Angeles to host the program. But the reality is the program would have aired at a time in which cable news viewership is at its lowest levels.

As Fox News reported several days ago, the 10 AM slot previously occupied by Acosta’s show is now being replaced with “The Situation Room with Wolf Blitzer and Pamela Brown,” while the move to midnight was viewed as a ‘sacrifice of sorts’ to Acosta’s longtime nemesis, President Donald Trump. While CNN has changed its scheduling several times in the last few years, this marks the first time that Acosta’s name has not been included.

HOLY COW!!! Congressman Tim Burchett just ended CNN live on air.

Jim Acosta: “This is CNN. This is the news.”

Burchett: “And that’s why more people are watching the cartoon network, Spongebob reruns right now.” 😂🔥

Well done, Congressman. pic.twitter.com/nIsv6iEod8

— George (@BehizyTweets) January 22, 2025

“They want to get rid of Acosta to throw a bone to Trump,” a source told Darcy. “Midnight is not a serious offer when his ratings are among the best on the network.”

Acosta gained notoriety as CNN’s White House Correspondent during the first Trump Administration. He repeatedly asked loaded, combative questions of President Trump, with tensions peaking during a briefing where Acosta got into a brief physical confrontation with a female White House intern. Acosta’s White House press credentials were briefly revoked following the incident.

Remember when Acosta pulled this dick move?

Video: Jim @Acosta asks Trump during signing about denuclearization and Otto Warmbier. Both legitimate questions and especially the second one for a lot of people. #TrumpKimSummit pic.twitter.com/hAiqFJ5DUd

— Curtis Houck (@CurtisHouck) June 12, 2018