Sunday morning in Gibraltar, and the Levanter wind is already up, tugging at rooftop awnings and sending sheets of newspaper down Main Street like confetti after a wedding. The strait is restless with more ships queuing for passage than expected, their hulls marking the line between yesterday’s turbulence and this morning’s wary optimism. Last night’s flight in from Gothenburg leaving behind the cold clear clarity, replaced now by the Mediterranean light that makes everything seem possible — well, at least until the headlines roll in.
At breakfast just past Europa Point, the tables split between stevedores and strategy consultants nursing strong coffee and even stronger opinions. This week, even the waiters have a view on the Trump–Xi handshake, Japan’s record close, the Fed’s “hawkish maybe.” The talk isn’t just about what moved; it’s about what might move next, and whether peace in trade and tech is anything more than the latest stop-gap before the next market squall.
There are weeks when markets trade on rumour, and weeks when conviction finds its moment. Week 44 seemed to belong to the latter: a trade ceasefire that didn’t quite promise peace, tech earnings that dared the world to question capex sanity, and a central bank steering “by feel” as data stayed dark.
Sunday brunch on the Rock is rarely quiet, but this time, the sense is that resolution —for markets, for headlines, for all those ships headed East and West— might just last until the next wind shift. And so let’s see where the winds took us this week and next…
Recap: Where We Left Off (Week 43)
Week 43 was an instruction manual on how hope bends markets. The Trump–Xi summit countdown recalibrated risk across every asset class, US inflation readings undershot the sceptics, and global indices shrugged off shutdown uncertainty with record closes. The premium last week? Patience —for those able to hold their nerve through headline whiplash and portfolio volatility.
If you missed last week’s dispatch you can find it here:
Reagan’s Ghost, Rosneft’s Reality & the Trump–Xi Countdown: When Markets Trade on Hope, Not Headlines
Week 44 — Trade Ceasefires, Tech Validation and the “Strait” Truth of Hawkish Reality
Weekly Market Table
US & Global Equities
S&P 500, NASDAQ, and Dow all closed at record highs as the US-China trade truce and tech earnings spurred risk taking. Cyclicals and small caps joined the rally.
European indices hovered near their highs but profit-taking hit late week as rate-cut bets faded.
Asia led the charge: Japan’s Nikkei soared 5.5 % — best month in three decades — while Korea and Hong Kong followed on AI and trade optimism.
Gold, Digital & Other Assets
Gold fell 2.7 % to $4 ,001 /oz, its sharpest drop since early 2023, as safe-haven demand evaporated post-ceasefire.
Oil rebounded 4.5 % to $64 , as OPEC+ jawboning offset demand fears.
Bitcoin added 1 %, stabilising after “Rektober” liquidations.
Bond markets paused — 10-year Treasuries flat, spreads tightened with risk assets.
Macro & Policy
The US shutdown kept key data offline, forcing markets to steer by narrative.
The Fed cut 25 bp to 3.75–4.0 % as expected but Powell rejected a December pre-commitment; rate-cut odds fell to 63 %.
Dollar rose 0.9 % to 99.6 ; sterling and euro cooled after October strength.
Geopolitical & Trade
The US-China truce in Busan rolled tariffs back to 47 % for a year and suspended rare-earth threats, sending Asia surging.
OPEC+ and Russia headlines churned, but equities kept control of the narrative.
What’s Pertinent This Week (44)
Trade Ceasefires: The Busan handshake reset volatility. Tariffs trimmed, rare earth threats paused, Asia rallied historic highs.
Tech Validation: The Magnificent Seven delivered earnings that re-justified AI capex. Amazon AWS +20 %, Apple & Alphabet beat; sector rotation favouring cloud and AI.
The “Strait” Truth of Hawkish Reality: Powell tempered hopes for another cut; markets must price ambiguity again.
The Week Ahead (45)
• US Data Returns? If the shutdown ends, expect employment and CPI to jolt rate expectations.
• China’s Stimulus: Investors now want spending proof not promises.
• Tech Earnings Finale: Nvidia, Palantir, ARM headline AI scrutiny.
• Eurozone CPI: Could force or freeze ECB policy pivot.
• Private Equity Window: Expect cross-border carve-outs and roll-ups before 2026 macro resets.
Private Equity Insights – PE Mega-Financiers Fill the Banker’s Seat
Week 44 marked a shift — private equity as banker to the real economy.
Apollo and KKR financed Keurig Dr Pepper’s €16 billion deal for JDE Peet’s, outpacing banks hindered by regulation and volatility.
Capital as a Weapon: Sponsors now syndicate, underwrite, and structure on their own terms.
Fees & Influence: Private credit funds surpass loan desks in scale and reach.
Blurring Lines: Direct lending, hybrid capital, minority stakes merge into one toolkit.
The lesson: discipline beats hunger. Those who preserve liquidity and control timing will define the next vintage.
Ed’s Closing Bell
The Gibraltar Sunday doesn’t promise closure — only clarity. Trade peace, AI optimism, and a cautious Fed frame a fragile calm.
If last week rewarded speed, this one rewards patience. Forecasts are for meteorologists; the rest of us read tides.
Ships queue across the strait as markets learn to price resolution not rumour.
Next week brings data, AI earnings, and stimulus decisions — conviction, not confusion, will set the pace.
Final Words
As ever, these reflections are my own and not Beaufort Capital’s. If you think you know what Powell, Trump, or Xi will do next, you’re braver than me — or your coffee’s stronger.
Read. Doubt. Recalibrate. That’s the Strait truth.
From the Rock — Week 44, when conviction trumped caution and private equity became banker to the world. Clarity is temporary; discipline endures. That’s the Strait truth.
Further Reading
• Trump–Xi Trade Truce Analysis — China Briefing
• Powell’s Hawkish Pause — Federal Reserve FOMC Statement
• Mag7 AI Earnings Season — Trustnet
• Nikkei’s Surge — Nippon.com
• Private Equity and Credit — Bloomberg
• Deal Pipeline Reopening — EY Insights
These sources help separate the noise from the navigation — happy reading and fair winds for the week ahead!