Mission Grey Daily Brief - November 06, 2024
Summary of the Global Situation for Businesses and Investors
The 2024 US presidential election has resulted in a victory for Donald Trump, with the Republican Party also taking control of the Senate. This outcome is expected to have a significant impact on the global economy, with stocks rising and the US dollar surging in anticipation of potential tax cuts, tariffs, and rising inflation. Meanwhile, Tropical Storm Rafael is approaching the Cayman Islands and Cuba, potentially causing significant damage. In other news, the US has written off over $1 billion of Somalia's debt, and the Iraqi government has approved compensation plans for oil produced in the Kurdistan Region, potentially easing a long-running oil dispute. Lastly, Mexico's National Guard has killed two Colombians and wounded four on a migrant smuggling route near the US border, highlighting the ongoing challenges of migration and border security.
The US Election and its Impact on the Global Economy
The 2024 US presidential election has resulted in a victory for Donald Trump, with the Republican Party also taking control of the Senate. This outcome is expected to have a significant impact on the global economy, with stocks rising and the US dollar surging in anticipation of potential tax cuts, tariffs, and rising inflation. Bitcoin has also reached a record high, as traders bet on potential tax cuts, tariffs, and rising inflation under Trump. Experts predict a turbulent day for financial markets as a response to global uncertainty and Trump's potential plans for the economy. Trump's global trade policies, particularly his pledge to dramatically increase trade tariffs, especially on China, are causing particular concern in Asia. His more isolationist stance on foreign policy also raises questions about his willingness to defend Taiwan against potential aggression from China.
Tropical Storm Rafael and its Impact on the Caribbean
Tropical Storm Rafael is approaching the Cayman Islands and Cuba, potentially causing significant damage. The Toronto Star reports that the storm is spinning towards the Cayman Islands and Cuba is preparing for a hurricane hit. The Northeast Mississippi Daily Journal adds that the storm has passed Jamaica and is heading towards Cuba, with the potential for significant damage. This event highlights the vulnerability of the Caribbean region to tropical storms and hurricanes, and the potential for significant economic and humanitarian impacts.
North Korea's Nuclear Ambitions and its Impact on Global Security
North Korea has told the UN that it is speeding up its nuclear weapons development, with the launch of a new ICBM and the deployment of troops to support Russia in Ukraine. This development has raised concerns among the international community, with the US accusing Russia and China of protecting North Korea and criticizing their failure to prevent North Korea's nuclear ambitions. The UN Security Council has met to discuss North Korea's nuclear program, but North Korea has doubled down on its plans, refusing to engage in nonproliferation efforts. This situation highlights the growing tensions between North Korea and the international community, and the potential for further escalation and instability in the region.
The Ukraine War and its Impact on Global Geopolitics
The Ukraine war continues to be a major geopolitical issue, with Russia engaging in a war of attrition and analysts suggesting that Putin is not in a hurry to end the conflict, regardless of the outcome of the US election. Russia has been ratcheting up pressure on Ukraine, with larger troop numbers and artillery supplies, and making incremental but important gains on the front lines. North Korean troops fighting for Russia have come under Ukrainian fire, adding to Ukraine's worsening situation on the battlefield. Russian advances have accelerated, with battlefield gains of up to 9 kilometers in some parts of Donetsk. This situation highlights the ongoing challenges for Ukraine and its allies, and the potential for further escalation and instability in the region.
Further Reading:
BREAKING: Trump wins US 2024 presidential election, foreign leaders congratulate - Kyiv Independent
Iraqi government approves compensation plans for oil produced in Kurdistan Region - The National
North Korean troops fighting with Russia are hit by Ukraine shells, official says - The Independent
Putin is in no hurry to end the Ukraine war, no matter who wins the US election - Business Insider
Stocks rise as investors await US presidential result - BBC.com
Storm in the Caribbean is on a track to likely hit Cuba as a hurricane - Toronto Star
Themes around the World:
Geopolitical risk: Taiwan routes
Persistent Taiwan Strait tensions elevate insurance premiums, rerouting risk, and contingency planning needs for shipping and air freight. A crisis would disrupt semiconductor-linked supply chains and regional production networks, prompting customers to demand dual-sourcing and higher inventories.
Logistics and labor disruption risk
US port throughput remains vulnerable to labor negotiations and regulatory constraints, amplifying shipment lead-time uncertainty. Any East/Gulf or West Coast disruptions would quickly cascade into inland transport, retail inventories, and just-in-time manufacturing, raising safety-stock and premium freight costs.
Infrastructure capex boosts logistics
Economic Survey signals sustained infrastructure push via PM GatiShakti and high public capex. Rail electrification reached 99.1% by Oct 2025; inland water cargo rose to 146 MMT in FY25; ports improve global rankings—lowering transit times and costs.
Immigration tightening and talent constraints
Stricter U.S. visa policies are disrupting global talent mobility. H‑1B stamping backlogs in India reportedly extend to 2027, alongside enhanced vetting and a wage-weighted selection rule effective Feb 27, 2026, raising staffing risk for tech, healthcare, and R&D operations.
Energy export squeeze and rerouting
Proposed EU maritime-services bans for Russian crude and tighter LNG tanker/icebreaker maintenance restrictions aim to cut export capacity and revenues (oil and gas revenues reportedly down about 24% in 2025). Buyers rely more on discounted, high-friction routes via India, China, and Türkiye.
Labor shortages and foreign workers policy
Mobilization and restricted Palestinian labor have intensified shortages, especially in construction; courts are also shaping foreign-worker rules. Project timelines, costs, and contractor capacity remain volatile, impacting real estate, infrastructure delivery, and onsite operational planning.
Industrial decarbonisation via CCUS
The UK is moving carbon capture from planning to build-out: five major CCUS projects reached financial close, with over 100 projects in development and potential 100+ MtCO₂ storage capacity annually by mid‑2030s. Policy clarity and funding pace will shape investment, costs, and competitiveness for heavy industry.
Regulatory shocks at borders
Abrupt implementation of Decree 46 food-safety inspections stranded 700+ consignments (~300,000 tonnes) and left 1,800+ containers stuck at Cat Lai port, exposing clearance fragility. Firms should plan for sudden rule changes, longer lead times, higher testing costs and contingency warehousing.
Transbordo China y cumplimiento aduanero
EE.UU. acusa a México de servir como “staging area” para bienes chinos y posibles prácticas de evasión arancelaria. Aumentará escrutinio aduanero, auditorías de origen y medidas antidumping, elevando riesgo de detenciones en frontera, sanciones y mayores costos de compliance.
Critical minerals alliance, China risk
Japan is aligning with the US and EU on a critical minerals framework to diversify mining, refining, recycling and stockpiling, responding to China’s export controls on rare earths. Expect tighter compliance expectations, higher input costs, and new investment incentives in non-China supply.
Climate and cotton supply vulnerability
Cotton output recovery to about 5m bales still leaves Pakistan importing $2–3bn annually, pressuring FX and textile margins. Heat, erratic rainfall and pests threaten yields. Apparel supply chains face higher input volatility and potential delivery risks in peak seasons.
Industrial relations and project risk
Rising union activity and expanded workplace rights are increasing operational complexity, notably in WA mining where right-of-entry requests rose ~400% in 12 months. Alongside corruption probes in construction unions, investors should price in schedule risk, bargaining costs, and governance diligence.
Digital markets enforcement on platforms
The UK CMA secured proposed commitments from Apple and Google to improve app-store fairness, limit use of rivals’ non‑public data, and expand interoperability. This signals tougher UK digital regulation, affecting monetization models, developer access, and platform compliance obligations.
Reforma laboral: semana de 40 horas
Avanza la reforma constitucional para reducir la jornada a 40 horas (implementación gradual 2026‑2030), sin bajar salarios y con cambios en horas extra y registro electrónico. Implica presión de costos, rediseño de turnos y productividad en manufactura, logística y servicios.
Technology dependence and shortages
Despite ‘import substitution’ rhetoric, Russia remains reliant on high-tech imports; Chinese microchips reportedly supply ~90% of needs. Gaps persist in transport and industrial capabilities, raising risks of equipment shortages, degraded maintenance cycles, and unpredictable regulatory interventions to secure inputs.
U.S. tariff and ratification risk
Washington is threatening to lift tariffs on Korean goods from 15% to 25% unless Seoul’s parliament ratifies implementation laws tied to a $350bn Korea investment pledge. Exporters face pricing shocks, contract renegotiations, and accelerated U.S. localization pressure.
Fiscal rules and policy volatility
Chancellor Rachel Reeves faces criticism that the UK’s fiscal framework over-emphasizes narrow “headroom,” risking frequent policy tweaks as forecasts move. For investors, this elevates uncertainty around taxes, public spending, infrastructure commitments, and overall macro credibility.
Lojistik ve demiryolu koridorlarının güçlenmesi
Ford Otosan’ın Romanya–Kocaeli araç taşımada Marmaray üzerinden demiryolu koridoru kurması ve yeni hızlı tren projeleri, Türkiye–Avrupa tedarik zincirinde süre/karbon avantajı sağlayabilir. Liman entegrasyonu, kapasite tahsisi ve gümrük süreçleri operasyonel performansı belirleyecek.
Defence build-up drives local content
Defence spending is forecast to rise from about US$42.9bn (2025) to US$56.2bn (2030), with acquisitions growing fast. AUKUS-linked procurement, shipbuilding and R&D will expand opportunities, but also stricter security vetting, ITAR-like controls, and supply-chain localization pressures.
Wider raw-mineral export bans
Government is considering adding more minerals (e.g., tin) to the raw-export ban list after bauxite, extending the downstreaming model used for nickel. This favors in-country smelter investment but increases policy and contract risk for traders reliant on unprocessed feedstock exports.
LNG permitting accelerates exports
A faster, “regular order” approach to LNG export permits and terminal approvals is boosting long-term contracting (often 15–20 years) with Europe and Asia, shaping global gas pricing, supporting US upstream investment, and offering buyers diversification from geopolitically riskier suppliers.
Sanctions-linked energy procurement risk
U.S. tariff relief is tied to India curbing Russian crude purchases, with monitoring and possible tariff snapback. Refiners face contractual lock-ins and limited alternatives (e.g., Nayara). Energy-intensive sectors should plan for price volatility and sanctions compliance.
Tariff rationalisation amid protectionism
Recent tariff schedules cut duties on many inputs, improving manufacturing cost structures, while maintaining high protection on finished goods in select sectors. This mix changes sourcing decisions, compliance requirements, and effective protection rates, influencing export orientation versus domestic-market rent-seeking.
Semiconductor controls and compliance risk
Export controls remain a high‑volatility chokepoint for equipment, EDA, and advanced nodes. Enforcement is tightening: Applied Materials paid $252m over unlicensed shipments to SMIC routed via a Korea unit. Multinationals face licensing uncertainty, audit exposure, and rerouting bans affecting capex timelines.
Port labor and automation tensions
East/Gulf Coast port labor negotiations and disputes over automation remain a recurring tail risk for U.S. logistics. Even with tentative deals, threats of slowdowns or strikes can disrupt ocean schedules, raise demurrage, and push costly rerouting toward West Coast or air freight.
EU partnership and EVFTA compliance
The EU upgraded ties to a Comprehensive Strategic Partnership and pushes fuller EVFTA implementation. Exporters face tighter EU requirements on ESG, traceability, safety and carbon rules (e.g., CBAM). Firms should budget for compliance systems, auditing, and cleaner inputs to protect EU access.
DHS shutdown and border frictions
Repeated funding standoffs risk partial DHS shutdowns, creating operational uncertainty for TSA, Coast Guard, and oversight functions even if ICE/CBP enforcement continues. Cross-border logistics and travel may face delays, staffing disruptions, and heightened scrutiny at ports of entry and airports.
Water infrastructure failure risk
Water and sanitation systems face an estimated R400 billion rehabilitation backlog, with many municipalities rated “poor” or “critical.” Recent Gauteng outages affected up to 10 million people after power trips. Operational disruption risks include plant shutdowns, hygiene, and industrial downtime.
Sanctions expansion and enforcement intensity
U.S. sanctions policy is expanding and increasingly operational, raising shipping, insurance, and counterparty risks. New Iran measures targeted 15 entities and 14 vessels tied to the “shadow fleet” soon after nuclear talks, indicating parallel diplomacy and pressure. Firms need stronger screening and maritime due diligence.
Critical minerals investment opportunities, risks
Ukraine is advancing licensing and production-sharing models for strategic minerals, including lithium projects with large capex (reported up to US$700m initial; longer-term >US$1.8bn). Potential upside is high for EU battery supply chains, but war-risk insurance, permitting integrity, and infrastructure security remain decisive.
Semiconductor supercycle and capacity
AI-driven memory demand is lifting Samsung Electronics and SK hynix earnings and prompting large 2026 capex. Tight supply and sharply rising DRAM contract prices could raise input costs for global electronics, while boosting Korea’s export revenues and supplier investment opportunities across equipment and materials.
Financial conditions and liquidity volatility
Interbank rates spiked before easing (overnight near 8.5% after 17–17.5%), highlighting liquidity sensitivity and potential pass-through to loan/deposit costs. Off-balance-sheet guarantees are also growing. Foreign investors should stress-test funding, hedging, and counterparty risk for Vietnam operations.
Infrastructure theft and vandalism
Cable theft, derailments and vandalism continue to disrupt rail and municipal services, increasing insurance, security and downtime. Rail upgrades are estimated at ~R14bn annually (some estimates ~R200bn overall). Persistent crime risk could deter private participation and capex.
Capacity constraints and productivity ceiling
Business surveys show utilisation still elevated (around 83%+), signalling tight capacity and lingering cost pressures. Without productivity gains, growth can translate into inflation and wage pressures, affecting project timelines, construction costs, and the reliability of domestic suppliers for global value chains.
West Bank escalation and sanctions
Rising settler violence, expanded Israeli operations and growing international scrutiny increase risks of targeted sanctions, legal challenges and heightened compliance screening. Multinationals must reassess counterparties, project sites and procurement to avoid exposure to human-rights-related restrictions and activism-driven disruptions.
Red Sea shipping and insurance costs
Red Sea insecurity continues to distort trade lanes, with heightened risk for vessels linked to Israeli ports and periodic rerouting around the Cape. Elevated war-risk premiums and longer transit times affect inventory, freight budgeting, and supplier reliability for Israel-connected supply chains.