Uddrag fra JP Morgan
JPM is caution optimism that the apparent chaos over Trump’s Greenland plans, will eventually de-escalate and translate into a “negotiated arrangement.”
Here is the excerpt from JPM’s Federico Manicardi who mans the bank’s International Market Intel team.
A strong start of the year with sector and regional leadership (Broadening in the US and RoW o/p) very eloquently saying that investors anticipate a 2026 growth reboot (Chart below), and for a myriad of reasons. Rates markets have finally started to react to firming data… and we (Fed/Vic) have been receiving UK vs US rates since September.
Trumpism is causing some volatility, and it is hitting markets at a point where there is an orange flag on the risk of an Equity drawdown (think of TPM 4w change, EM Risk Appetite, Bull/Bear etc.). The main incremental news is that the US is now floating a 10% tariff on some EU countries (but SCOTUS could rule them unusable as early as tomo) over the absence of a “deal” to sell Greenland while the EU responds with posturing as it considers retaliatory levies and the use of the anti-coercion instrument while saying that the US-EU trade deal struck last year could now be jeopardized.
I think we need to read this from an ‘Art of the Deal’ perspective. Trump creates noise and throws in a maximal stance designed to trigger negotiation and create leverage/urgency. Ultimately, I would be surprised even if we get to a MSD drop because it doesn’t seem like a particularly difficult issue to resolve and this might as well happen at Davos. Hence, I stand by the scenarios outlined below:
- The most likely outcome is a NEGOTIATED ARRANGEMENT that expands US security/eco presence in the territory and addresses US stated objectives – stronger Artic security posture, enhanced early warning for missile defense and access to Greenland’s natural resources – while Denmark preserves sovereignty.
- See table below for more nuances.
- A SALE is less likely because the US does not need formal territorial control to achieve the stated objectives, and it would seem had to get approval from both Denmark and Greenland.
- An INVASION is really a tail outcome for more than one reason: polls horribly with voters and, needless to say, it would melt NATO faster than Artic ice….
Greenland aside, here are the key catalysts JPM is keeping an eye on include:
- On the macro front, a slew of China releases, US GDP & PCE, UK CPI & Flash PMIs; the WEF in Davos (Jan 19th-23rd) with Trump’s address (Jan 21st) likely focused on potential Fed chair announcement and Affordability;
- in Central Bank land, we have the BOJ (especially in focus given election chatter) & the Fed enters blackout period; Q4 reporting will pick up, with key releases from Netflix, Intel, J&J;
- SCOTUS due to hear oral arguments on Fed Governor Cook; French budget debate resumes next Tues with Lecornu increasingly likely to trigger article 49.3. Meanwhile, betting odds and oil options (Chart below) keep suggesting that IRAN is a relevant geopol flashpoint. The consensus assumption is that any strikes will be surgical and there aren’t going to be any unintended consequences.
