The article discusses the complexities of lending from China to emerging-market countries, particularly under the Belt and Road Initiative (BRI). Initially feared to be a strategy to trap countries in debt and gain control over their assets, these concerns now appear overstated, as China has largely refrained from seizing assets despite rising debt levels. However, borrowing from China still carries risks, as it has made borrowing more expensive for these countries by increasing their debt burden. A study by Harvard and Princeton researchers found that Chinese loans raise borrowing costs in international markets, especially when they are used to support liquidity or budgets, but not for infrastructure. This is partly due to the secrecy around Chinese loans and the perception that China may lend for political rather than commercial reasons, causing bondholders to view such debt as riskier than other sources.

European business faces significant challenges, with political instability, bankruptcies, labour unrest, and poor performance in sectors like artificial intelligence (AI). Despite this, Europe still boasts corporate strength in areas such as pharmaceuticals, airlines, luxury goods, and certain industrial sectors, where companies often outperform their American counterparts. Smaller European firms and those with focused R&D and balanced capital expenditure also tend to show stronger returns on capital compared to US companies. Moreover, European companies benefit from patient shareholders and lower expectations, which could allow them to see improvements if market conditions stabilise. Although Europe lags behind the US in overall corporate performance, its diverse strengths provide reasons for optimism.

France's economic challenges are intensifying, with rising fiscal deficits and debt levels drawing comparisons to the eurozone's past crises. For the first time, Greek bonds are seen as safer than French ones, as France's bond yields surpass those of Germany's by the widest margin since 2012. The country's fiscal deficit, exceeding 6% of GDP, is expected to remain high through the decade, contributing to a projected debt level of 124% of GDP by 2029. Political and economic instability has further strained the French government, which recently collapsed over spending disputes, mirroring challenges faced by other EU countries like Germany and Italy. Despite France's historically privileged borrowing position within the eurozone, continued inaction on deficit reduction could test investor confidence and the European Central Bank's support. The situation highlights growing fiscal pressures across Europe in the wake of pandemic-related spending and green transition investments.

Japan's economy grew faster than expected in the July-September quarter, with GDP rising by 1.2% on an annualised basis, up from the preliminary estimate of 0.9%. This solid growth has increased expectations that the Bank of Japan (BOJ) will raise interest rates soon, potentially as early as this month. The growth was driven by revisions to capital investment and exports, while consumer spending also showed improvement. However, Japan's economy faces challenges from a slowing global economy, particularly in China, and potential trade tariff increases under the next US administration. Despite this, economists expect continued growth in the current quarter, though some anticipate the BOJ may delay further rate hikes until January.

Dividend-paying stocks, such as JPMorgan Chase and Merck, are expected to perform better in the coming year as high-tech stocks become expensive and falling interest rates may reduce the appeal of bonds. Although dividend stocks have lagged behind in recent years, especially since 2020, many investors believe they are a good buy now. Dividend payouts from large US companies have not kept up with market rallies, but expectations are that dividends will increase in 2025. Even big tech companies like Meta and Alphabet have started offering dividends. While the S&P 500 has outperformed dividend stocks this year, there are signs of a dividend comeback, with sectors like healthcare and utilities potentially offering more stable returns. Investors are also finding higher yields from sectors like tobacco and healthcare. Despite challenges, dividend stocks remain attractive as safer bets compared to broader market volatility.

Wall Street is debating whether the stock market can sustain another year of strong gains, as the S&P 500 has surged 28% in 2024, with strategists forecasting more modest growth in 2025. While major banks like JPMorgan and Goldman Sachs predict a 6-7% increase in the S&P 500 next year, some analysts are more optimistic, expecting higher targets. Despite concerns over high interest rates, geopolitical instability, and potential trade wars, the broadening of the rally, with more stocks joining in, has provided hope. However, long-term expectations for the market are less promising, with forecasts of only 3-1% annual growth over the next decade. Key risks include uncertainty around the future of AI and the impact of a stronger dollar. While some investors remain cautious, others continue to seek value in cheaper sectors like small-caps.

Since the U.S. presidential election in November, the market for "memecoins" has surged, with cryptocurrencies representing viral internet moments, such as a euthanized squirrel and a cartoon dog, gaining significant value. This trend is driven by speculation that the Trump administration will foster a crypto-friendly environment. While more established memecoins like Dogecoin have outperformed Bitcoin, critics argue that these tokens are highly speculative, lack intrinsic value, and rely on popularity to generate liquidity. Some memecoins, like CHILLGUY and PNUT, have seen massive market caps, but experts warn they are often "pump and dump" schemes. Despite the risks, crypto exchanges are capitalizing on the trend, with more tokens being launched and traded. However, some analysts draw comparisons to the NFT bubble, predicting a potential collapse if the market loses momentum.

Banks are once again using "credit risk transfers" (CRTs) to offload risks from their balance sheets, allowing them to take on more loans. CRTs enable banks to sell only the risks tied to loans to third-party investors like Apollo Global Management and Blackstone, while retaining the loans themselves. This market has grown rapidly, reaching $24bn in 2023. The goal is to free up capital for new lending, creating a cycle of risk reduction for banks. However, concerns persist about whether these risks are truly transferred or simply shifted to other financial entities. Critics, including former FDIC chair Sheila Bair and Nobel laureate Simon Johnson, worry that CRTs could become a systemic threat similar to the credit default swaps that contributed to the 2008 financial crisis. Some fear that leveraging in CRT transactions could concentrate risk within a few banks, raising concerns about the market’s stability.

Cocoa bean prices, which surged earlier in the year, are likely to rise again due to a structural supply-demand deficit. Despite a brief price dip, the global market is facing ongoing production shortfalls, largely due to a significant decline in output from key producers Ivory Coast and Ghana. The 2023-24 season saw a 500,000-tonne deficit, with a further shortfall expected in 2024-25. The situation is worsened by poor weather, deforestation laws, an ageing tree stock, and the spread of the cocoa swollen shoot virus, which severely impacts yields. As reserves dwindle and production challenges persist, cocoa prices are poised to reach new highs, as demand for chocolate remains relatively inelastic despite rising costs.

2024 is set to be the hottest year on record, with global average temperatures surpassing 1.5°C above preindustrial levels for the first time. November alone recorded a 1.62°C increase, with the annual average expected to hit 1.60°C, exceeding 2023's record of 1.48°C. While the Paris Agreement's goal to limit global heating to 1.5°C applies to long-term averages, this milestone underscores the urgency for ambitious climate action.

Despite pledges to transition away from fossil fuels, CO2 emissions are projected to rise in 2024, complicating efforts to cut emissions by 45% by 2030. The effects of the climate crisis are evident in unprecedented heatwaves, fiercer storms, and extreme wildfires, particularly in the Americas. Economic losses from extreme weather events have risen to $320 billion, with less than half covered by insurance. Experts emphasize the need for proactive adaptation measures, which are far more cost-effective than post-disaster rebuilding.

UK Prime Minister Keir Starmer is visiting the Gulf region to strengthen ties with Saudi Arabia and the UAE and push for a free trade deal with six Gulf nations. His trip aims to attract investment for overhauling British infrastructure and advancing green energy initiatives. Meetings include Saudi Crown Prince Mohammed bin Salman and UAE President Sheikh Mohammed bin Zayed Al Nahyan.

The visit is controversial due to Saudi Arabia’s human rights record, including the murder of journalist Jamal Khashoggi and its role in the Yemen conflict. Critics highlight Starmer’s past condemnation of similar outreach by previous UK leaders.

Trade with Saudi Arabia is valued at £17 billion, supporting nearly 90,000 UK jobs. Starmer also plans to advocate for a ceasefire in Gaza, hostage releases, and accelerated aid delivery. This trip follows recent UK agreements with Qatar on green energy and defense cooperation.

Donald Trump has recently highlighted tariffs as his favorite policy tool, using them to distract, exert dominance, and pressure foreign governments. He announced steep tariffs on major trading partners - 25% for Mexico and Canada and 10% for China - citing migration and fentanyl as justifications, though critics find these reasons unconvincing. Instead, the tariffs are viewed as a strategy to enforce loyalty within his party, compel foreign concessions, and maintain his grip on the post-truth political landscape.

Historically, Trump's tariff policies have negatively impacted U.S. workers and consumers, raising costs without boosting employment. Economic research predicts similar or worse outcomes if retaliatory measures escalate. Despite these drawbacks, Trump continues to use threats, including against BRICS nations, leveraging U.S. economic dominance to maintain influence. However, experts argue such tactics are unsustainable long-term and are more about distractions than effective governance.