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Remember that China has as much power as Trump to sway the market.

Podcast 24 minutes to read
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Saxo Market Call

Summary:  Yesterday saw a low-energy session in US equity markets, though as ever with considerable turbulence and divergence beneath the surface. We also underline that in this key US-China relationship that is the focus ahead of the November 1 deadline for a new deal to emerge, China is as important as the US if it simply decides that it wants to use its leverage now and not make any concessions. The market is pricing zero risk of bad outcomes, which looks complacent, even if we have no idea what the probability distribution should be. Plenty more on on macro, FX and much more also on today's pod, which is hosted by Saxo Global Head of Macro Strategy John J. Hardy.


Listen to the full episode now or follow the Saxo Market Call on your favorite podcast app.

Today’s Links

Eurointelligence.com at it again with drawing parallels between the current political environment and Zeitgeist with Germany’s Sturm und Drang (the post from October 20th) period of the late 18th century. Also, they have a piece on the implications of Italy’s “going grey”, as it has one of the oldest populations in Europe.

Stratechery has a post (for paid subscribers - it is a reasonably priced service) on a long-form interview on China’s capturing of rare earth and other minerals supply chains. But here is a free post from the IFP outlining how the US could mobilize a “warp speed” operation to break its reliance on China and build its own supply chains.

My friend and former colleague Peter Garnry with a post on the curse of dimensionality in finance, where overuse of variables has analysts drowning in information when a smaller subset of variables is likely superior for drawing signal from the noise.

A Fortune article (thanks PG for the heads up) asks whether OpenAI cofounder Andrej Karpathy just popped the AI bubble as he waxes skeptical on whether artificial general intelligence is possible within the next decade (still sounds extremely aggressive to believe it is possible at all, but some see it arriving far sooner than 2035). An authoritative voice to consider regardless - and here is a link to the full two-hour plus Dwarkesh Patel podcast where he weighs in on a number of AI topics.

Chart of the Day - 3M Company (MMM)

3M Company has an octopus of a product range, with a background in mining that has transitioned more to chemicals and materials and applications of these for industrial uses. They have around USD 25 billion in yearly revenue and a market cap of USD 88.5 billion, serving a myriad of end uses in “safety and industrial” (almost half the business), “transportation and electronics” and “consumer”. They have been weighed down in recent years by liability claims against their PFAS (“forever chemicals”) business which is about to be entirely wound down and a headphone product that was implicated in cases of hearing loss. The company is looking to to turn around back to a growing top-line next year, with their latest earnings report yesterday boosting shares a heady 7.7% as the turnaround plan is ahead of schedule on the earnings front.

22_10_2025_MMM
Source: Saxo

Questions and comments, please!

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