Week 45 Wrap: Combat sports usher in Trump 2.0 – or is it male insecurity?; RBA boring; Propane suggests China alive

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11 hours ago

Donald Trump supporter photographed in lead up to 2024 election
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Let’s start with the obvious – Trump will be resuming the throne in the USA from late January, 2025.

The Dow Jones finished up +3% on election day; the NASDAQ and S&P weren’t far behind. Gold traders aren’t sure what to do: stick with the yellow metal, or pivot into equities. (Or crypto?)

But there is one downside to the Trump effect for markets – this pesky promise of his to impose 60% tariffs on China wholemeal. Despite what Trump says, it’s absurd to suggest this wouldn’t make the price of US goods more expensive. You can try and divorce China all you want, but the truth is they’re still the world’s biggest exporter of everything.

Australians are familiar with a government that talks tough on China then continues to trade with it; Americans are going to have to learn that for themselves.

The ultimate implication is the Fed would have to slow down the pace it’s cutting rates if tariffs saw prices on shelves climb back upward broadly.

UFC CEO at Trump victory speech

Trump’s victory speech was also, in a word, interesting.

It featured one perhaps odd character – UFC CEO Dana White. The combat sports extraordinaire thanked Joe Rogan, a nod to the recent interview Donald Trump did on the ex-fighter’s podcast. Donald’s mouth twitched a little.

Joe Rogan’s podcast is the world’s most popular, for those out of the loop.

This is worth exploring, even if I’m straying into political speculation. It’s widely accepted that young men, particularly those who haven’t gone to college, largely voted for Trump.

And while this 32 year old male finance journalist has never found UFC particularly interesting, he’s patently aware this puts him outside the zeitgeist.

What can we make of that?

For the most part, everybody loves UFC. In my view, this speaks to male insecurity in a world where young men are increasingly unemployed. (One is also tempted to consider the political implications of repeated concussions.)

Many young men in the modern world feel – whether based in reality or not – the professional class has pivoted towards being more interested in women (the data doesn’t back this up.) It’s not uncommon to hear young men complain that men have been reduced to grunt workers, or, soldiers-in-wait.

Strange, then, these same people are absolutely fascinated by fighting. But let’s leave that alone.

For anyone who can remember the world in the early 2010’s, it’s insane to take a step back and look at where we’ve ended up when it comes to American politics broadly. In a way, the smartphone shepherded us into this curious era.

(Also: taking all bets on how long Trump and Musk will last before a clash of egos.)

RBA keeps rates on hold

That’s enough about America. Let’s talk about Australia – only briefly, because nothing really happened this week.

The ASX200 was boring last week ahead of the US election and it remained fairly boring this week too.

There was the RBA decision to keep rates on hold, which pretty much everyone was expecting. Of course, ever optimistic betting markets pushed back rate cut expectations.

Also in Australia: the ACCC has greenlit Chemist Warehouse’s move to merge with Sigma Healthcare and in that fashion ‘reverse list’ on the ASX, if you will.

That hotly anticipated arrival was the talk of the town in early 2024; the market got tired of waiting, and now it’s back in vogue as the competition regulator has decided it won’t hurt competition – so long as Sigma’s customers have the right to terminate contracts.

China announces stimulus. Again.

That leaves me to talk about the other superpower: China. Closer to home for us than the USA, the materials sector has been rising and falling this week in line with iron ore prices as traders try to determine how meaningful a National People’s Congress (NPC) meeting this week really is for the Chinese economy, and the globe at large.

This would be yet another stimulus announcement from the world’s second largest economy – they’ve been announcing stimulus all year.

The only time it really did anything was when the Chinese central bank gave Chinese stockbrokers ‘free money’ to buy Chinese shares – right ahead of the Golden Week celebrations, no less.

Talk about vibes-based strategies.

But, here’s one little indicator I’ve been watching with a view to China’s economy: propane prices have been rising.

Saudi Arabia sets the international propane benchmark price; Saudi Arabia has pointed to strong demand pushing up prices as opposed to price fixing, and its larger customer is China.

The world has been waiting for a Chinese-driven demand boom for oil – but it could be we’ve all been looking at the wrong fuel.

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