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Futures, Global Markets Sink, Gold Soars On Trump Tariff Threat Stocks sold off and gold hit a new record as trade tensions between the US and Europe erupted over Trump’s push to take control of Greenland (which we learn today is due to Norway's snub of Trump for the Nobel peace prize). While US cash markets are closed for the MLK holiday, S&P futures dropped 1.1% and Nasdaq futures tumbled 1.4%, while Europe's Stoxx 600 was on track for its worst day in two months led by luxury stocks and German automakers as BMW dropped 3%. The dollar retreated 0.2%, while the Swiss franc outperformed. Gold topped $4,670 an ounce. US markets are shut today for a public holiday. In corporate news Nvidia supplier Micron Technology said an ongoing memory chip shortage has accelerated over the past quarter and reiterated that the crunch will last beyond this year due to a surge in demand for high-end semiconductors required for AI infrastructure. Apple Inc. retook the top spot in China after iPhone shipments jumped 28% during the holiday quarter despite a worsening shortage of vital memory chips, according to Counterpoint Research. Tesla Chief Executive Officer Elon Musk said the electric carmaker will resume work on the Dojo3 project after making progress on the design of its AI5 chip. Bayer AG’s shares surged after the US Supreme Court said it would hear the company’s appeal in a Roundup case that could undercut thousands of lawsuits tied to the weedkiller. Stocks around the world were knocked lower by Trump’s threat to impose levies on countries opposing his bid to assert authority over Greenland, which risks reigniting the tariff-fueled volatility that rattled markets in the early months of his second term. The selloff deepened as Monday’s session wore on after European officials signaled they were unlikely to back down and were considering retaliation. “Markets are sensitive to the dynamic developments regarding new tariffs as a basis for negotiating security issues,” said Guillermo Hernandez Sampere, head of trading at MPPM. “Rising uncertainty, as seen last year, will weigh on all markets.” The standoff is coming at a time when risk appetite has been supported by resilient corporate earnings and sustained investment in artificial intelligence. The outlook will hinge in part on the European Union’s response, with the bloc in talks to impose tariffs on €93 billion of US goods. “The key element to watch in the coming days is whether the message translates into formal measures or remains purely rhetorical, which would make a clear difference in the market reaction,” said Francisco Simón, European head of strategy at Santander Asset Management. The tensions are also adding to the significance of a pending US Supreme Court ruling on some of Trump’s earlier tariffs, with a decision possible as soon as Tuesday. “It is not about whether the US can roughly maintain its tariff levels,” wrote Krishna Guha, head of central bank strategy at Evercore ISI. It is “rather about whether Trump has to use regular order to impose tariffs, reducing uncertainty and his ability to weaponize tariffs for geopolitical purposes.” Trump’s threats raise the possibility of European governments trimming their holdings of US assets, supporting the euro, according to George Saravelos, Deutsche Bank’s global head of FX research. As we reported last night, Europe is the US’s largest lender with its countries owning $8 trillion of US bonds and equities, almost twice as much as the rest of the world combined. “The key thing to watch will be whether the EU decides to activate its anti-coercion instrument,” Saravelos said. “It is a weaponization of capital, rather than trade flows, that would by far be the most disruptive to markets.” While Trump’s threats have reignited the ‘Sell America’ trade, some traders expect the swings to be short-lived. “My working assumption is that an ‘off-ramp’ from these threats will soon be found,” said Michael Brown, senior research…

Market Risk Returns As Tariff Shock Jolts Stocks; Goldman Maps Three Retaliation Paths Against Trump Over Greenland The Euro Stoxx 50 is down 1.5% on elevated volumes, while Nasdaq 100 futures are also lower amid overnight risk-off across Western markets. The selloff follows the latest trade escalation after President Trump said he would impose a 10% tariff on imports from eight European countries in retaliation for their opposition to U.S. control over Greenland. On Sunday, Trump wrote on Truth Social that beginning on February 1, Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland will be charged with a 10% tariff on all goods sent to the US. That tariff rate would be increased to 25% by June 1. "This Tariff will be due and payable until such time as a Deal is reached for the Complete and Total purchase of Greenland. The United States has been trying to do this transaction for over 150 years. Many Presidents have tried, and for good reason, but Denmark has always refused. Now, because of The Golden Dome, and Modern Day Weapons Systems, both Offensive and Defensive, the need to ACQUIRE is especially important," Trump said. European countries released a joint statement opposing US control of Greenland, blasting Trump's move, saying the president's threats "undermine transatlantic relations and risk a dangerous downward spiral." The statement from the European countries said that troops deployed to Greenland for the operation "Arctic Endurance" pose "no threat to anyone." Late Sunday, Trump posted on Truth Social that "NATO has been telling Denmark for 20 years that you have to get the Russian threat away from Greenland. Unfortunately, Denmark has been unable to do anything about it. Now it is time, and it will be done!!! — President Donald J. Trump." It's important to note that Europeans cannot compete militarily, but Brussels can wield reciprocal tariffs and other economic weapons. This tariff threat prompted Goldman analyst Adam Crook to tell clients Monday that a 10% tariff rate on EU goods would "lower real GDP in the affected European countries by 0.1-0.2% via lower exports. The inflation effects would likely be very small and a Taylor rule would point to modestly lower policy rates, all else equal." Crook outlined three potential levels of EU trade retaliation: stalling the implementation of last year's EU-US trade deal, imposing counter-tariffs on US goods, and launching the Anti-Coercion Instrument, which would allow for a broader range of non-tariff retaliation options Also on Sunday, Treasury Secretary Scott Bessent defended Trump's proposal to impose tariffs on the European countries. He told NBC News' "Meet the Press" that the move to acquire Greenland is to avert a future national emergency. "It is a strategic decision by the president," Bessent said. "This is a geopolitical decision, and he is able to use the economic might of the U.S. to avoid a hot war." In response to Trump's tariff threat, European Council President António Costa told EU members that he would convene "an extraordinary meeting of the European Council in the coming days" (more details here). Commentary from Deutsche Bank's chief FX strategist George is key (view note here): Europe owns Greenland, it also owns a lot of Treasuries. Saravelos spent most of last year arguing that for all its military and economic strength, the US has one key weakness: it relies on others to pay its bills via large external deficits. Europe, on the other hand, is America's largest lender: European countries own $8 trillion of US bonds and equities, almost twice as much as the rest of the world combined. . . . Remember the Munich Security Conference. It was the US Vice President's Munich speech last year that proved the proxy catalyst for an acceleration in European defence spending. Could it be Greenland this year that catalyses an acceleration in European political cohesion? UBS analyst Joe Dickinson told clients earlier, "The renewed…

PCR: The EU Elite Have Banned European Democracy Authored by Paul Craig Roberts, In a democracy, the government in office cannot ban an opposing candidate from running on the grounds that the candidate would win and take the place of the current government. But that is what President Macron has done to Marine Le Pen. Le Pen heads the largest political party in France. She has been banned by a French court from holding office for five years. This prevents her from competing in the 2027 presidential election, where she has long been considered to be the leading candidate. The excuse used by the French government to frustrate the popular will is that Le Pen was convicted of “misappropriating EU funds.” She was convicted of using money intended for her European Union staff for her French staff. Money, of course, is fungible, and the orchestrated charge succeeded only because the establishment presstitutes hyped it over and over. Marine Le Pen is a controversial figure with the French establishment because she represents ethnic French nationalism, not the globalism of open borders and multiculturalism, that is, she stands for France, not for a Tower of Babel. All over Europe the left-wing ideologues have succeeded in associating ethnic nationalism with Nazism. An effort has been underway for decades to destroy the sovereignty of national states, and to merge them into the European Union. Le Pen has fought the effort to abolish France, and for her efforts she has been branded a Nazi. Despite the French establishment’s attempt to demonize her, her party has the largest public support. Over the years, the European left succeeded in branding national sovereignty “right-wing.” Even the Russian news site RT unthinkingly uses the propaganda term of the European left, thus demonstrating how unaware the Russian media is of the character of their European enemies. When Le Pen appealed the ruling at the European court of human rights the court side-stepped the issue by ruling that she had not shown an “imminent risk of irreparable harm” to herself. Of course, the harm was done to French democracy and to the French electorate, an issue that the court avoided. Clearly “European democracy” stands unified in opposing democracy and has prevented the French people from exercising their will in a presidential election by banning the opposing candidate from running for the presidency. Le Pen has again appealed and declared “I hope I will be able to convince the judges of my innocence.” But for the establishment, the question is not one of innocence or guilt. The the issue is that the European elite intend to prevent any revival of national sovereignty. The people’s will is no longer tolerated in Western Europe. Tyler Durden Mon, 01/19/2026 - 05:10

Trump's Planned Mediation Between Egypt & Ethiopia Might Worsen Regional Tensions Authored by Andrew Korybko, Trump declared in a letter to Egyptian President Abdel Fattah al-Sisi that he shared on social media that “I am ready to restart U.S. mediation between Egypt and Ethiopia to responsibly resolve the question of ‘The Nile Water Sharing’ once and for all’, adding in tacit support of Egypt’s position that “no state in this region should unilaterally control the precious resources of the Nile”. He concluded that “Resolving the tensions around the Grand Ethiopian Renaissance Dam (GERD) is at the very top of my agenda”. The fact is that “GERD Is Just A False Pretext For Egypt To Pressure Ethiopia” and “Ethiopia’s Final Filling Of Its Grand Renaissance Dam Debunked Years Of Egyptian Disinformation” in 2023. It was also assessed last summer that “Trump’s Latest Remarks About GERD Raise Questions About His Understanding Of This Dispute”, which weren’t corrected as proven by the substance of the abovementioned letter. Egypt might therefore be manipulating him into supporting its regional containment campaign against Ethiopia. To explain, GERD is a pretext for Egypt to justify meddling inside of and around Ethiopia by resuming its Old Cold War-era policy of backing armed anti-government groups and allying with Eritrea, whose independence was achieved with the help of Egyptian military aid during the decades-long civil war. The Ethiopian Foreign Minister suggested late last year that Eritrea is becoming an anti-Ethiopian state at its Egyptian patron’s behest just like Ukraine became an anti-Russian one at its NATO patrons’ behest. Egypt also exploited Ethiopia’s MoU with Somaliland in early 2024 for recognizing its 1991 redeclaration of independence in exchange for access to the sea to assemble a containment coalition with Somalia and Eritrea. Last week, Bloomberg reported that Saudi Arabia is finalizing an alliance with Egypt and Somalia for removing Emirati influence from Somaliland, which follows the Somali Defense Minister requesting that the Saudis replicate their successful South Yemeni campaign there sometime soon. Circling back to Trump’s letter to Sisi, his tacit support of Egypt’s position on GERD – which is a faux dispute since this megaproject is purely about powering Ethiopia’s economic rise and not cutting off water to Egypt – might embolden Cairo to more aggressively contain Ethiopia. After all, Trump’s implicit backing of Egypt could predispose him to believing that any Ethiopian response to its potentially intensified regional containment is “unprovoked aggression”, which could lead to US pressure upon it. For example, Ethiopia might use force to expel the Eritrean troops that still occupy parts of its restive Tigray Region and/or deter a Saudi-led coalition campaign against Somaliland by recognizing it and deploying troops there (possibly in coordination with Israel). Given the influence that Sisi now clearly wields over Trump due to how pleased Trump is with Sisi mediating the Israeli-Hamas ceasefire, which Trump considers to be an historic achievement, Trump might lash out at Ethiopia in those scenarios. Ethiopia might therefore soon find itself in a difficult position where it’s coerced by the US through various means, from tariff threats to support for Egypt’s regional containment campaign, into strategic concessions at the expense of its sovereignty. If Ethiopia can’t incentivize Trump via a minerals deal into pivoting to its side or being neutral, then maybe its close Israeli partner can help due to their convergent interests in Somaliland, Israel’s own tensions with Egypt, and its much greater influence with Trump. Tyler Durden Mon, 01/19/2026 - 04:00

China Tech Boom Leaves Economic Malaise Behind By Jeanny Yu, Bloomberg Markets Live strategist and reporter Nearly a year after DeepSeek’s AI breakthrough rattled global markets, China is entering 2026 with a fresh wave of technological advances that are powering a stock rally, even as its economy remains fragile. Thanks to fresh progress in sectors from commercial rockets to robotics and flying cars, Chinese tech shares have begun the new year with a bang. An onshore Nasdaq-like tech gauge has shot up almost 13% so far this month, while a measure of Hong Kong-listed Chinese tech firms has climbed nearly 6%. Both have outperformed the Nasdaq 100. Enthusiasm about homegrown technologies has been the single biggest driver of China’s equities bull run since April, even as the world’s second-largest economy remained mired in a housing slump and anemic consumption. The momentum may gain further support in the coming months as DeepSeek rolls out a new AI model and China unveils a five-year economic blueprint prioritizing technological self-reliance. “The stock market is telling us that what China is doing in technology sector is going to be very exciting going forward,” Mark Mobius, managing director of Mobius Emerging Opportunities Fund, told Bloomberg TV on Friday. “You must remember China’s goal now is to overtake the US in technology, in high-level chips, in all kinds of AI. So the money is going in that direction.” Since DeepSeek shocked global markets with its cheap and equally well-performing AI models on Jan. 27 last year, fellow Chinese firms have accelerated efforts to develop their own versions. Adoption of generative AI has also surged among the country’s Internet giants from Alibaba Group Holding Ltd. to Tencent Holdings Ltd. Elsewhere, Chinese robots have competed in marathons, sparred in boxing matches and performed folk dance routines. In manufacturing, large language models are being embedded into advanced equipment, such as flying taxis and precision machine tools. The developments are recasting China in investors’ eyes from a low-cost manufacturing base into a credible challenger to US tech leadership, just as global capital hunts for the next growth engine. In a basket of 33 Chinese AI stocks tracked by Jefferies Financial Group Inc., the rally in the past year expanded their combined market value by about $732 billion, the brokerage said in a Jan. 13 report. Jefferies said it sees further upside because China’s AI’s market capitalization represents only 6.5% of the US’s. The exuberance is spilling beyond the secondary market. A flurry of recent listing debuts of Chinese AI-related companies posted blockbuster gains, emboldening their peers to tap public markets. Among those in the pipeline are Xpeng’s flying-car unit, rocket maker LandSpace Technology and BrainCo, a potential rival to Neuralink Corp. “Looking ahead, we anticipate that the next major breakthrough in AI will occur at the application layer,” said Joanna Shen, JPMorgan Asset Management’s emerging market and Asia Pacific equities investment specialist. “China, in particular, is well-positioned to lead this evolution, given its vast array of user cases across wearables, edge devices, and internet platforms.” To be sure, the stellar rally has triggered concerns about stretched valuations. Cambricon Technologies Corp., an AI chipmaker that competes with Nvidia Corp., is trading about 120 times to forward earnings. A gauge tracking Chinese robots is trading at more than 40 times forward earnings, higher than the Nasdaq 100’s 25 times. Beijing’s latest decision to tighten margin financing was also a sign of authorities’ growing unease with speculative excess, especially in pockets of the technology sector. That said, some investors remain optimistic about the industry’s prospects due to advantages such as a low-cost base and strong state backing and planning. “China’s low-cost model for AI may well pay off faster” than its US peers, Gavekal Research’s…