The article explores the burgeoning partnership between Donald Trump and Elon Musk, highlighting its potential benefits and significant risks. Following Trump’s election victory, Musk has emerged as a key ally, praised for his technological expertise and efficiency. Musk’s influence extends to sitting in on cabinet appointments, advising on government efficiency, and shaping regulatory reforms. This alliance has already brought mutual benefits: Trump gains credibility from Musk’s endorsement, while Musk’s companies, including Tesla and SpaceX, stand to profit from favorable regulations and government contracts.

However, concerns arise over conflicts of interest and the risks of over-reliance on Musk’s businesses, particularly in areas like space and technology. Musk’s involvement in politics and foreign policy could complicate his business relationships, especially in sensitive markets like China. The article notes historical parallels of business backers clashing with presidents and questions whether the Trump-Musk alliance can sustain their shared ambitions without undermining public trust or Musk’s business interests. It concludes that while their partnership is unprecedented, its longevity and impact remain uncertain.

The article explores the unexpected drop in financial market volatility following Donald Trump's re-election, despite expectations of unpredictability during his presidency. Volatility, a statistical measure of price fluctuations, fell across major indices like the VIX (S&P 500), MOVE (interest rates), and major currency pairs, reflecting reduced short-term uncertainty as the election outcome was incorporated into prices.

However, the distinction between volatility and risk becomes evident. While volatility measures predictable price movements over a defined timeline, true risk encompasses unpriceable and extreme uncertainties, such as geopolitical crises or economic shocks. Investors view Trump’s presidency as highly unpredictable, with risks too complex to quantify. Thus, the decline in volatility does not equate to a perception of reduced long-term risk but rather highlights the limitations of volatility as a proxy for broader market uncertainty.

The article critiques China's cautious and slow response to its economic challenges, including a fragile property market, weak consumer confidence, and persistent deflation. Despite hopes for bold fiscal stimulus, recent government actions, such as local government debt refinancing and modest measures to boost consumer spending, have been insufficient to revitalize the economy.

China's leadership may be delaying stronger interventions, possibly awaiting the impact of a potential second Trump presidency and its trade policies, including steep tariffs on Chinese goods. However, the article argues that this "watchful waiting" strategy is a mistake. Greater fiscal stimulus now could reflate the economy, reduce the risk of deflation, and better position China to withstand external shocks like a trade war.

The piece emphasizes that underutilizing China's labor and capital resources in the present is a wasted opportunity, urging the government to act decisively to strengthen the economy before further challenges arise.

Singapore’s economy grew faster than initially expected in the third quarter, with GDP expanding by 5.4% year-on-year, the highest rate in nearly three years. This revised growth figure surpassed the October estimate of 4.1% and followed a 3.0% growth in the second quarter. The strong performance, driven by manufacturing, wholesale trade, and finance, led the Ministry of Trade and Industry to upgrade its full-year growth forecast to more than double the previous estimate, projecting 3.5% growth in 2024. While the outlook for Singapore's manufacturing and trade sectors remains positive, the ministry cautioned about rising global uncertainties, such as geopolitical tensions and potential disruptions to global disinflation, which could impact future growth.

The U.S. Justice Department has proposed that Google be required to sell its Chrome browser and make other changes as part of its antitrust case against the company. The government argues that separating Chrome, Android, and Google's search engine will restore competition in the online search market. Chrome, which controls about two-thirds of the global browser market, helps Google funnel users to its search engine. The proposal also includes preventing Google from paying to be the default search engine on browsers and mobile devices. Google has called the proposal "wildly overbroad" and plans to submit its own remedy. This legal battle stems from concerns that Google's dominance in search, aided by its control of Android and Chrome, stifles competition and innovation. If the court accepts the Justice Department's recommendation, it could significantly impact Google's business model, particularly its advertising revenue.

MicroStrategy, a software company that has heavily invested in bitcoin, introduced a new metric called “BTC yield” to measure its bitcoin holdings relative to its stock. The BTC yield is calculated as the percentage change in the number of bitcoins owned per share, and it has been rising significantly as the company continues to buy more bitcoin using funds raised by selling its own stock. As of November 17, MicroStrategy owned 1.29 bitcoins per 1,000 shares, a 41.8% increase from the start of the year. This metric is used to assess the company's bitcoin acquisition strategy, but it doesn't reflect the sustainability of the strategy or the true value of its holdings. While the company's stock price has soared, far outpacing bitcoin's price increase, the BTC yield itself doesn't provide insight into the potential risks, particularly if bitcoin's value were to decline. Investors speculating on MicroStrategy's stock are betting that the market's inefficiencies will continue, without the promise of actual yield or dividends.

Tikehau, a fast-growing European investment manager with €47.1bn in assets, is considering relocating its listing from Paris to New York or adding a secondary listing there. The firm, known for its strength in private credit, was founded in 2004 and has been listed on Euronext Paris since 2017. The move aims to tap into the more liquid US markets and enhance its brand recognition, particularly as individual investors replace institutional ones as the key source of growth. Tikehau joins a growing list of European companies, including Klarna and TotalEnergies, exploring US listings to access better growth opportunities and capital. This trend comes amid strong US stock market performance, with companies raising over $30bn through US IPOs this year.

The author reflects on the concept of "linked costs" and "linked benefits," drawing from a lesson learned as a child. He compares this idea to investing, particularly in the context of index funds. Index funds offer significant linked benefits, such as lower fees, reduced underperformance (since most actively managed funds underperform benchmarks like the S&P 1500), and lower tax liability due to low portfolio turnover. The biggest benefit, however, comes from behavioral economics: index investing helps avoid the detrimental impact of investors' actions, such as frequent trading, which typically reduce returns. The author argues that long-term, passive investing via index funds minimizes costs and maximizes the power of compounding, leading to superior returns over time compared to actively managed funds.

Asia’s defense companies, particularly in South Korea and Japan, are leading a global surge in defense stocks in 2024, driven by increasing geopolitical tensions and rising rearmament demands. Stocks of major Asian defense contractors, like Hanwha Aerospace and Mitsubishi Heavy Industries, have seen triple-digit gains, reflecting the region’s growing importance in global defense markets. The shift away from reliance on the US for security and the need for fast, cost-effective rearmament have benefited these companies, with South Korea and Japan boosting their defense exports and production. Additionally, other countries in Asia are investing in domestic defense capabilities to develop high-tech sectors. However, this defense stock boom has sparked ethical concerns and geopolitical risks for some investors, particularly regarding Chinese companies involved in "military-civil fusion."

JD Sports reported weaker-than-expected sales in October due to mild weather and heavy discounting by competitors, particularly in North America and the UK. This prompted the retailer to revise its profit forecast to the lower end of its expected range (£955m-£1bn), causing a 15% drop in its share value and wiping over £800m from its market capitalization.

Sales in the UK fell 2.4%, and North America saw a 1.5% decline, while Europe experienced modest growth of 3.5%. The outdoor wear segment, led by Millets and Blacks, outperformed with a 6% sales increase, aided by rainy summer weather and a growing interest in outdoor activities and staycations.

Analysts attribute JD’s struggles to cautious consumer spending amid economic pressures, including high energy bills, rising housing costs, and a shift in priorities toward experiences like holidays. The wider sportswear market also faces suppressed demand, raising concerns about a challenging winter for fashion retailers.

HSBC is set to open its first UK "wealth centre" in Mayfair, London, targeting affluent clients with assets or income between £100,000 and £2m. The 8,000 sq ft centre, located in the Smithson Tower near the Ritz and Fortnum & Mason, will offer premium services such as a concierge, catering, a coffee bar, and meeting rooms with panoramic views. It will also host exclusive events like wine tastings. This initiative follows HSBC’s success in Asia and is part of the bank’s broader strategy to expand its wealth management division, aiming to double UK assets under management to £100bn in five years. HSBC's push into wealth management reflects its growing focus on stable, long-term income sources amid restructuring efforts. If successful, the Mayfair centre could lead to further locations in other UK cities.

Global stock markets fell and bond prices surged after reports that Ukraine had used US-made long-range missiles to strike Russia for the first time, and Vladimir Putin approved changes to Russia’s nuclear doctrine. Investors sought safe-haven currencies like the US dollar, Japanese yen, and Swiss franc amid escalating concerns. Ukraine’s missile strike, using US-supplied Atacms missiles, came after US President Joe Biden relaxed restrictions on their use. Meanwhile, Putin’s decree lowered the threshold for using nuclear weapons, considering any conventional attack on Russia supported by a nuclear power as a joint attack. The news rattled markets, causing significant drops in European and US indices, including the Stoxx 600 and Dow Jones. Investors were also worried about possible nuclear escalation and sabotage of undersea cables in the Baltic. Additionally, market optimism following Donald Trump’s election win showed signs of fading.