by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment begins with an analysis of TrumpRx and its potential implications for future government involvement in the economy. We then examine why Cuba is prepared to reopen talks with the United States, how rising tech spending is unsettling investors, and what’s behind Washington’s quiet efforts to ease tensions with North Korea. We round out the piece with a summary of key economic data from the US and global markets.

Fed Intervention: The White House has launched its first official online pharmacy, TrumpRx.gov, in a direct bid to lower prescription drug costs for Americans. The platform allows consumers to purchase medications at discounted rates, marking the administration’s most high-profile effort to tackle healthcare affordability through direct negotiations with pharmaceutical companies. While the initiative represents a tangible win for household budgets, it also highlights the federal government’s expanding influence within private markets and the broader economy.

• The TrumpRx initiative illustrates the effectiveness of governmental pressure in extracting concessions from drug manufacturers. Through the “most favored nation” executive order, the administration pushed companies — including Eli Lilly, Novo Nordisk, and Pfizer — to align US drug prices with the lower rates offered abroad. A central strategy was the threat of imposing tariffs of up to 100% on pharmaceutical imports, which prompted companies to agree to the price discounts.
• Furthermore, TrumpRx challenges pharmacy benefit managers, which often act as costly middlemen by capturing rebates and spreads while passing limited savings to patients. The government’s direct-to-consumer platform provides a transparent alternative, bypassing PBMs and insuring delivery of manufacturer discounts directly to households. This launch is just one day after Congress passed and President Trump signed a bipartisan spending bill with reforms to curb PBM power.
• The TrumpRx launch signals a broader strategy of using tariff threats as high-stakes leverage to restructure key US industries. This carrot-and-stick approach has already compelled automakers like Ford and GM, plus tech giants such as Apple, to accelerate reshoring of manufacturing and supply chains. Now it’s rippling into housing, where major builders are pitching a one-million-unit “Trump Homes” program to secure tariff relief on critical imported materials like lumber and steel.
• The government’s expanding economic footprint presents a dual-edged reality. On one hand, it offers market stability and shields strategically vital sectors, such as pharmaceuticals, semiconductors, and energy, from global volatility. On the other hand, it creates a “compliance-first” environment where industries that do not align with federal mandates face significant punitive measures.
• In the long run, this shift presents a fundamental challenge to the doctrine of shareholder primacy. For decades, corporate strategy prioritized short-term stock valuations above all else. Today, however, survival increasingly depends on national alignment and domestic investment more than on growth potential alone. We maintain a strong view that this new paradigm favors assets like precious metals, which are inherently harder to regulate and control within such a constrained environment.

Cuba’s Breaking Point: The head of the Cuban government has expressed readiness to hold talks with the United States. While making clear that Cuba does not intend to alter its political system, the government is prepared to engage in dialogue to improve bilateral relations. This push for dialogue coincides with an acute energy crisis in Cuba, triggered by a US-led oil embargo following its recent intervention in Venezuela. Talks between the two sides appear to be part of a larger US trend of forcing neighboring countries into its sphere of influence.

US-Russia New START: The United States and Russia are negotiating an agreement to extend the New START nuclear arms control treaty. Although the treaty was set to expire this week, both sides are actively seeking an extension, as neither appears willing to let it lapse. These talks are occurring amidst heightened tensions between Russia and the West over the war in Ukraine, a conflict during which Russia has issued threats of nuclear weapons use. An extension would help reduce the risk of a nuclear exchange between the world’s two largest nuclear powers.

Amazon Sell-off: The world’s largest online retailer saw its shares sell off after announcing a major ramp-up in capital expenditure. On Thursday, the company revealed plans to invest $200 billion in AI, data centers, satellites, and other large-scale projects. The move faced immediate investor pushback, driven by concerns that the massive spending may not translate into future profitability. The sell-off highlights the market’s growing sensitivity toward “build at all costs” models in the tech sector.

Japan Elections: The Asian nation is set to hold snap elections this weekend that will determine whether Prime Minister Sanae Takaichi retains her position and secures a mandate to advance her policy agenda. She remains highly popular, with recent polls indicating her party could capture more than 60% of the vote. A decisive victory could renew downward pressure on the yen as investors grow increasingly concerned about inflationary risks tied to expanding government debt.

Calming North Korea: The US plans to restore humanitarian aid to North Korea, a move intended to de-escalate recent tensions and maintain diplomatic relations. This outreach comes as Pyongyang accelerates its weapons program, which it frames as a deterrent against potential regime change. Washington also aims to prevent North Korea from deepening its strategic reliance on Russia and China. Despite these maneuvers, we assess that North Korea remains an underpriced geopolitical risk in global markets.

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