sepeskoe

Trump's manufactured tariff crisis has overtaken the Russo/Ukraine conflict as critical issues he's working on (and I don't think he can handle many issues at a time -- he's somewhat one-track and not always up on the latest facts).  The reopening of Israel's invasion of Gaza, as defensible as it may be, is also getting more attention by Trump than is Ukraine right now.

Zelenskyy very unhappily agreed to the Trump proposed cease-fire, which appeared to favor Russia a lot more than it favored Ukraine.  But Zelenskyy had practically no choice -- Ukraine needs US weaponry and financial support.  Putin did not agree -- he didn't think the terms were favorable enough to Russia, and he didn't like the security agreement for Ukraine -- even though Ukraine would forego NATO membership, it still seemed to put the EU and NATO on Russia's doorstep.  So, it's going to take time to get to a full cease-fire.  Depends upon the tariff situation (quite notably, there's no reciprocal tariff on Russia) and the Gaza / West Bank situation.

So, I'm making a slight adjustment to lower weights on a deal before 30 September and adding it to the remainder of CY25.  I just don't think Trump is going to be putting pressure on Putin to come to the table for real -- he's too busy meeting with every country to "negotiate" bilateral tariff and trade deals.  Better off just to seize Russian assets in the US and EU and give them to Ukraine (after taking something off the top to repay the US for its investment so far).  Maybe that will make Putin come to the table.  Hard to judge how much influence the Russian Oligarchs will have on Putin -- do they have more spine than the Republicans in the House and Senate?

As a result of Trump's new reciprocal tariffs, there's a race to the bottom among the top tech companies' market cap.  Nvidia and Apple are heading downwards a little faster than Microsoft.  As of 8 April, MS is the largest, followed by Apple then Nvidia.  So, the question becomes more about which company will bounce back faster after Trump negotiates highly "tailored" trade agreements with China, Japan, Taiwan, India, South Korea, Vietnam, Cambodia, ...  Is there enough time for the market caps to bounce back prior to the end of May?  Maybe.  Which company can bounce back faster?  Which companies will deal with China's own pressure on US companies doing business in China better than the others?  My guess is that China would be tougher on companies that employ fewer Chinese resources and that can ship their goods from China to countries other than the US.  Does that mean that Apple will get a better deal in China than McDonalds gets? maybe.  A better deal for Apple than Nvidia? debatable.  Approx 90-95% of Apple's electronics products are manufactured in China; 20% of their sales of Apple's revenues come from China.  Nvidia exports H20 chips to China, accounting for ~12% of Nvidia's revenues.  However, China is encouraging their own manufacturers to decrease the reliance on Nvidia AI chips, so maybe Nvidia gets more pressure than Apple would get, since Apple might be more important to China's own economy than Nvidia is.  But Microsoft is least impacted by tariffs among the Magnificant 7.  https://fortune.com/2025/04/04/microsoft-stock-trump-tariffs-safe-haven-magnificent-7-big-tech-bloodbath/

So, unless Trump somehow backs off his newly intensified trade war with China (and Vietnam, Cambodia, India, ....), I expect MS to be the largest US company at the end of May, with Apple 2nd and Nvidia at best 3rd.

I view this as a truncated hazard function -- the longer the agreement lasts, the longer it's going to continue.  But it has to get over that 90-day hump.  I think there's a point of inflection at 30 days and 90 days.  But both Ukraine and Russia have suffered so many casualties and economic impacts that both entities will want to hang onto a ceasefire -- as long as Ukraine's security is guaranteed by Russia and enforced by the West and Russia gets to keep the land it's captured.

I'm giving Trump some credit.  Some smart person is going to come up with a deal that Trump can sell to Putin and Zelensky.   I don't know if it's dropping sanctions vs Russia, a deal for Ukrainian "raw mineral" rights (OK, I'm letting my anti-Trump biases slip in here), Ukraine agreeing to ceded land to Russia, Russia giving Ukraine complete and unimpeded access to Black Sea ports for grain shipment, an agreement to use impounded Russian funds in Europe and the US to help rebuild Ukraine's infrastructure.....far too many components for me to calculate any real likelihood now, which indicates to me that even good faith negotiations are unlikely to take less than 6 months to strike a sufficiently comprehensive agreement that could support a ceasefire.

China is busy figuring out what to do re: Trump's tariffs.  There isn't an immediate need nor upside to an action vs Taiwan at this time, nor do I think there would be an upside during this forecast's time horizon.  If Xi wants to make some financial headway while the US is distracted, he should move in Africa, Mexico or Canada, or even South America -- why use military assets when he can use some soft power to make headway vs the US and EU.

As time marches, I'm less sanguinary about an agreement.  This Black Sea agreement is taking longer than I expected, as is the agreement to stop bombing utilities/infrastructure.  Neither of those agreements would be sufficient to achieve a "yes" on this question, so the longer they take, the less likely it is that one or two such partial cease fires could grow into a full regional cease fire.