Author: Rebekah Stovall

Bi-Weekly Geopolitical Report – The 2022 Mid-Year Geopolitical Outlook (June 21, 2022)

Posted on by Rebekah Stovall

by Bill O’Grady and Patrick Fearon-Hernandez, CFA | PDF

(N.B. Due to the Fourth of July holiday, our next geopolitical report will be published on July 18.)

As is our custom, we update our geopolitical outlook for the remainder of the year as the first half comes to a close.  This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape for the rest of the year.  It is not designed to be exhaustive; instead, it focuses on the “big picture” conditions that we believe will affect policy and markets going forward.  They are listed in order of importance.

Issue #1: The Russia-Ukraine War

Issue #2: Xi as China’s President for Life

Issue #3: The Global Food Crisis

Issue #4: Weather Disruptions

Issue #5: Latin American Politics

Issue #6: The U.S. Midterms

Issue #7: Fed Policy and the Dollar

Quick Hits: This section is a roundup of geopolitical issues we are watching that haven’t risen to the level of the concerns described above but should be monitored.

Read the full report

Don’t miss the accompanying Geopolitical Podcast, available on our website and most podcast platforms: Apple | Spotify | Google

Bi-Weekly Geopolitical Report – Mineral Commodities in the World’s New Geopolitical Blocs (June 6, 2022)

Posted on by Rebekah Stovall

by Patrick Fearon-Hernandez, CFA | PDF

For many years, we’ve discussed how the United States has been backing away from its historical role as global hegemon, setting the stage for deglobalization and a fracturing of the world into separate geopolitical and economic blocs.  In our Bi-Weekly Geopolitical Report from May 9, 2022, we provided a detailed, comprehensive forecast of which countries are likely to end up in either the U.S.-led or China-led bloc, which countries will lean toward one or the other, and which ones will try to be neutral.  As a follow-up to that analysis, this report looks at the distribution of key mineral resources among those camps and what the different endowments might mean for geopolitics, the global economy, and financial markets in the future.

With China and Russia becoming ever more threatening from a military and geopolitical standpoint, and with the coronavirus pandemic demonstrating the vulnerability of supply chains even in peacetime, investors have become more sensitive to the security of commodity supplies and the way nations might try to monopolize or weaponize them.  As such, we conclude with a discussion of the ramifications for investors.

Read the full report

Don’t miss the accompanying Geopolitical Podcast, available on our website and most podcast platforms: Apple | Spotify | Google

Bi-Weekly Geopolitical Report – Going Nuclear with North Korea (May 23, 2022)

Posted on by Rebekah Stovall

by Thomas Wash | PDF

At nearly 5,000 nuclear warheads, Ukraine had one of the largest nuclear arsenals in the world on its territory. If Ukraine hadn’t transferred those weapons to Russia in 1996, it is unlikely that Moscow would have invaded. North Korea believes it is facing a similar threat which is why it has fought to maintain its nuclear program.

In North Korea’s first nuclear test in 2006, the bomb generated the equivalent of a 4.7 magnitude earthquake. In its next attempt in 2009, the bomb was four times stronger. The bombs tested in 2016 and 2017 each yielded more power than the atomic bomb dropped on Hiroshima in 1945. In short, North Korea clearly has the ability to develop and produce its own nuclear weapons. The country’s ability to deliver a nuclear weapon against the U.S. or any other adversary is less clear, but a flurry of recent tests suggests it is making incremental progress in its missile technology.

This report will focus on North Korea’s nuclear program and the implications for the rest of the world if North Korea is capable of striking the U.S. with a nuke. We start with a brief history of the country’s nuclear weapons program and discuss how the rest of the world has tried to denuclearize the country. Next, we examine North Korea’s current military capabilities and potential threats to the global order. As usual, we conclude with the potential impact on financial markets from these events.

Read the full report

Don’t miss the accompanying Geopolitical Podcast, available on our website and most podcast platforms: Apple | Spotify | Google