GLOBAL OUTLOOK

Will Germany Ban Its Far Right party?

Mateo Alvarez Vergara, ‘27

Ahh the 20s are back, time for jazz, the Charleston dance and rising fascist undertones in Europe. The German parliament has been debating on whether or not to ban the Alternative for Germany (In german: Alternative für Deutschland, AfD). The ruling coalition of the Social democrats and the greens have filed motions to ban the AfD. The German Constitution includes an article which allows banning any party that aims to impair or dismantle the democratic order. This debate comes less than a month from the German elections, where the AfD is expected to come second according to some opinion polls. The AfD has been accused of having ties to neo-Nazi groups, a German court even made a ruling in 2024 that found enough evidence to categorize the party as ‘far-right’, which would allow domestic intelligence agencies to spy on the party. The AfD has also received international attention after Elon Musk openly expressed his support at a rally. This also comes at a time where the ‘fire-wall’, which is the unspoken agreement amongst German parties to not cooperate with AfD has recently been broken, by the German opposition by passing legislation which would curb migration. Whether or not the German conservative opposition would side with the Greens and the Social democrats in the banning of the AfD remains to be seen.

WHO Needs Global Health Anyway?

Marcus Gonzalez, ‘28

After being sworn into office on January 20th, the Trump Administration immediately announced their plan to pull out of the World Health Organization (WHO) by 2026, which in turn raised concern among scientists and policymakers about the organization’s ability to perform its necessary functions in the future.

In a speech announcing our departure from the international forum, Trump outlined the difference in payments between the US and China and the organization’s failure to act on the Covid-19 pandemic as the main reasoning. While the US does pay 30% more into the WHO than China does , it is based on a mutually agreed upon equation that utilizes GDP and population statistics. Realistically, the entire budget for the WHO is around seven billion dollars, with the Department of Health and Human Services for Rhode Island having a similar budget of six billion dollars.

Experts believe that the impact of this decision will be primarily felt by those who depend on the WHO to set guidelines on national health policy. Moreover, areas in less developed countries that lack access to medical infrastructure will be negatively impacted as the WHO is essential to the implementation of vaccine and HIV programs. 

This is also expected to hurt the pharmaceutical industry, as oversized American influence has allowed for companies to maintain their patents overseas primarily through the WHO. Now, with the United States out of the World Health Organization, that power is no longer in American hands.

World Braces for Economic Disruption as Trump Tariffs Loom

Andrew McDonald, ‘26

Global markets and international allies of the U.S. are preparing for significant economic upheaval as Donald Trump's administration moves to implement sweeping tariffs on Canada, Mexico, and China, among others. The White House confirmed Friday that 25% tariffs on Canadian and Mexican imports, along with 10% duties on Chinese goods, will take effect February 1st.

The measure, which Trump has framed as addressing immigration and fentanyl concerns, threatens to disrupt nearly $1.6 trillion in North American trade alone. While the administration portrays the incoming tariffs as a revenue generator, citing Trump's “external revenue service plans.”

Canada and Mexico have already prepared countermeasures. Canadian officials have outlined an initial round of retaliatory tariffs covering C$37bn of US exports, with plans to potentially escalate to C$110bn worth of goods (Guardian), while Mexican President Claudia Sheinbaum maintains a "cool head" approach while readying contingency plans, Sheinbaum stated, "We will always defend respect for our sovereignty and a dialogue as equals, but without subordination." 

Canada and Mexico have already prepared countermeasures. Canadian officials have outlined plans for up to C$150 billion in retaliatory tariffs, while Mexican President Claudia Sheinbaum maintains a "cool head" approach while readying contingency plans. "We will always defend respect for our sovereignty and a dialogue as equals, but without subordination," Sheinbaum stated while keeping specific retaliatory measures private.

The move has revealed deeper contradictions in global trade relationships, with traditional allies now positioned and framed by President Trump as economic adversaries. Several economists note that despite the rhetoric of national interest, the tariffs could ultimately harm domestic consumers and industries while accelerating the fragmentation of established trading patterns.

Automakers such as General Motors, Ford, and Stellantis, which have extensive cross-border supply chains, could face significant disruptions. Additionally, Eric Cremers, CEO of lumber and forest products company PotlatchDeltic, said in an earnings call, according to Reuters, that PotlatchDeltic is aware of another company in their sector that is likely to pass tariff costs directly to consumers.

MACRO

Germany's Economic Engine Sputters: Exports No Longer the Powerhouse

Francesca Bolastig, ‘27

Europe has traditionally proclaimed Germany its leading economic powerhouse, but recently, the country has struggled with main export challenges threatening its status as the region's economic leader. Audi and other vital automotive industries face profit reduction, which requires wide-scale job cuts and causes tax revenue reduction in their domestic locations. These industries are experiencing: 

1. Intensified competition from other countries, especially China, 

2. Increasing energy costs, and 

3. Emerging U.S. trade tariffs. 

Despite difficulties, German political leaders prefer minor adjustments over broad systemic reforms. The political leadership introduces short-term incentives and minor administrative modifications while avoiding substantially restructuring their economic system.  

The German strategic reluctance has produced negative results since their absence of innovative solutions weakens their business competitiveness. The German economy would be more efficient through bold initiatives, including strategic industrial investments, extensive labor market, and taxation system changes. 

Due to its constitutional restrictions, Germany functions with spending limits. The German government faces spending controls through an official law named the Schuldenbremse that regulates borrowing limits and budget restrictions. Due to its debt brake law, Germany faces limitations in investing in digitalization, infrastructure, and new emerging industries.  

The high dependence of Germany on export-based trade brings additional market risks to its economy. Germany faces substantial economic dangers due to decreased market activity in China and recent U.S. trade restrictions. The high energy costs faced by the German industry create significant strain on their market competitiveness. 

The absence of economic planning in Germany raises concerns about its ability to overcome these economic threats to economic strength because its path to stability remains unclear. Their country requires significant strategic changes, but political and financial obstacles stand in the way of transforming their economic strategy.

Wall Street’s Trending Loan Shark: Private Credit, the Flip Side

Mosammad Khanom, ‘28

Picture this. Your small business needs funding. With a bright smile, you knock on your local bank’s door. Unfortunately, you are in a post-2008 regulatory society, and with that, they slam the door in your face. What now? This is where private credit can come in – think private equity firms, hedge funds, asset managers – they are here to help (for a price). The finance version of a VIP loan club, where the dress code is looser, but the tab runs extremely high.

The numbers? Private credit went from $500 billion in 2015 to over $1.5 trillion in 2023, with estimates saying it could hit $2.3 trillion by 2027. Investors are interested because with rising interest rates comes higher returns. On the contrary, the borrowers are not at all in good terms with it. Often, buzz words and excitement surrounding private credit are on the news, but what about the downsides and macro risks?

Rising Corporate Indebtedness & Default Risks

Many, in the real sense of the word, private credit borrowers carry higher risk than that of a crypto startup promising “guaranteed” returns. These borrowers would load themselves up on high-interest loans, and if the economy were to falter, we could expect a rise in defaults that would send shockwaves through the financial markets.

The Wild West of Lending

With that in mind, whichever rules govern the private lending industry are more akin to the ones that apply to going on a trip to Las Vegas with your friends on a group chat. No everything is off the record, no safety net, and certainly no FDIC insurance to cushion your loss in case something goes wrong.

Loans With a Side of Sticker Shock

These lenders are not into charity work, so you can expect higher interest rates that will force hard decisions upon corporates. In other words: layoffs, budget cuts, and CFOs sweating through their shirts.

The Housing Market Isn't Loving It

Like Black Friday bargains, real estate is being swept up by private credit, fueling ever-increasing prices and making it harder for millennials and Gen Z to pursue their dream of home ownership.

So, be careful because those fees and drawbacks may hurt your pockets more than you may be willing to let them. 

Earnings Extravaganza: AT&T Dials Up Profits, Starbucks Brews Success, and Defense Hits a Speed Bump

Shivam Kwatra, ‘28

This week, the corporate world served up a smorgasbord of earnings reports, giving investors plenty to chew on. Let's dive into the highlights:

AT&T: Dialing Up Profits

Last Monday, AT&T reported a 70% surge in profits! This far exceeded analyst expectations and the impressive performance led to an 8% uptick in its stock price. The telecom giant’s strategic investments in 5G infrastructure and streaming services appear to have paid off, at least for now.   

General Motors: Driving Forward

General Motors revved past expectations in its latest earnings on Tuesday, posting a cool $47.7 billion in revenue—an 11% jump—and an adjusted EPS of $1.92, up 55%. EV sales surged 50%, led by the Chevy Equinox EV, but gas-powered trucks and SUVs are still GM’s cash cows. Meanwhile, after its robotaxi dreams stalled, GM is putting the pedal down on Super Cruise, betting on $2 billion in annual revenue from the driver-assist tech. The road ahead? GM’s optimistic, but potential tariffs loom in the rearview mirror.

Lockheed Martin: Miss?iles  

Lockheed Martin hit some turbulence this quarter, with revenue dipping 1.3% to $18.6 billion and EPS nosediving to $2.22 thanks to a $1.7 billion charge on classified projects. Despite the hit, its $176 billion backlog is soaring, keeping long-term demand strong. Looking ahead, 2025 sales are projected between $73.8B-$74.8B, but with 11% profit margins, investors are keeping their enthusiasm in check. Defense spending uncertainty looms, but for now, Lockheed isn’t ejecting.

Starbucks: Brewing Success

Starbucks continued its winning streak last week, reporting increased same-store sales and a boost in customer loyalty program memberships. The coffee giant's expansion into international markets and innovative product offerings have resonated with consumers worldwide - coffee is proving to be a universal language. 

Tech Titans: Mixed Bag

The tech sector had a week of mixed results. Microsoft and Meta Platforms reported strong earnings, driven by cloud services and advertising revenue, respectively. However, Tesla faced challenges due to production delays, impacting its quarterly performance. 

In summary, this week's earnings reports highlighted the resilience and adaptability of major corporations across industries, and while challenges persist, many companies are finding ways to thrive in a dynamic economic landscape. 

TECH

The Commodification of Computation

Armaan Karnad, ‘28

The AI Plot Thickens

Be it customer service or your English paper, AI has a hand in everything these days. The engine behind this burgeoning technology is computation capacity, or “Compute” in tech jargon. “Compute” refers to the complex arrays of chips that enable the operation and development of all current AI models. Given the criticality of “Compute”, demand for it will only continue rising in lockstep with AI’s growing relevance. For some savvy investors, commodifying “Compute” is the next logical step. 

Who is Involved?

The two biggest players in the market for “Compute” are startups SF Compute and Compute Exchange. Both firms offer platforms where firms can pay for the use of AI infrastructure albeit in different ways. SF Compute’s offers on-demand access to “Compute” while Compute exchange holds periodic auctions for it. 

Critical Issues

Conventional commodities are mutually interchangeable. For instance, crude will serve its purpose regardless of whether it was found in Saudi Arabia, Texas, or West Africa. On the other hand, data center’s don’t have a set standard for the underlying chips and configurations of their “compute.” Thus, firms that are looking to switch infrastructure on the fly in the hopes of paying a cheaper price could face technical issues. With AI’s continuous integration into society, these outages and computational shortfalls could have disastrous consequences.  

Closing Notes

Historically, AI has been dominated by large companies such as Google and Microsoft. However, commodifying computational power will democratize the field, by enabling more firms to access critical infrastructure to develop and operate their AI models. The only hurdle to achieving this dream is the lack of a standardized setup for “compute” across data centers. If this single issue is rectified, then competition across AI firms will intensify, leading to more meaningful breakthroughs in this limitless technology. 

Americans Are (Almost) Ready to Plug Into EVs

Carson Panter, ‘28

The hype is real—but so are the hurdles. A new report by Verra Mobility posted last Wednesday, January 29th reveals that nearly half (47%) of Americans aged 25 and older plan to purchase an electric vehicle (EV) within the next five years. Even more ambitious, 21% say they’ll make the switch in the next two years.

While enthusiasm for EVs is steadily growing, key barriers remain. The biggest roadblock? Charging infrastructure—or rather, the lack of it. Nearly half of the respondents said their top concern was not having enough places to charge their vehicles, followed closely by the high upfront costs of EVs.

Meanwhile, "range anxiety"—the fear of running out of battery before reaching a charging station—still looms large, with 71% of consumers citing it as a concern. But there’s some good news: That number has dropped from 79% in last year’s report, showing that perceptions may be shifting.

Try It, You Might Like It

A separate study by Escalent surveyed 1,219 people and found that actually experiencing an EV can significantly change consumer attitudes:

• 81% of EV owners said their overall experience was better than expected.

• 60% found charging their EV to be easier than anticipated.

• Nearly half discovered that home charging was more affordable than they had thought.

The takeaway? The biggest barrier to adoption may not be the cars themselves, but the misconceptions surrounding them.

The Economic Impact of an EV Surge

The anticipated surge in EV adoption could have significant economic implications. Increased demand may drive growth in the EV manufacturing sector, potentially leading to job creation and advancements in related industries such as battery production and charging infrastructure. However, the upfront cost of EVs remains a concern for many consumers, indicating a need for continued incentives or financing options to make EVs more accessible. Additionally, the development of charging infrastructure presents both opportunities and challenges; while it could stimulate investment and innovation, it also requires substantial capital and strategic planning to ensure widespread accessibility. As the market evolves, stakeholders will need to address these economic factors to facilitate a smooth transition to electric mobility.

New AI Model from China’s DeepSeek deeply tanks NVIDIA

Rachel Wanagosit, ‘27

Last Monday, the release of DeepSeek's new AI model tanked NVIDIA’s stocks. It dropped by 17% in one day, wiping out $589 billion in value– the largest in stock market history. The NASDAQ(a tech-focused index fund) dropped by 3.1% that day. DeepSeek overtook ChatGPT as the most downloaded free app in Apple’s US App Store.

What is DeepSeek doing? How are they different?

China’s DeepSeek has found a way to train its open-source reasoning model DeepSeek R1 for a fraction of the price that OpenAI (ChatGPT developers) took. Although Wall Street analysts are skeptical, DeepSeek claimed it took 6 million dollars to develop, comparatively to the hundreds of millions it took for ChatGPT.  The model is on par with ChatGPT, if not more advanced and is free for users.  DeepSeek’s model seems to perform better at logical reasoning, while OpenAI products excel better with creative and conversational output.  DeepSeek new AI model emerges as a new competitor, threatening Nvidia’s pricing power, which may be good for sparking new innovation. 

Who else has it affected?

An impact so notable it has tanked the net worth of Jensen Huang’s, aka NVIDIA CEO and largest individual stockholder, by $20.8 billion by market close. Many Nvidia stockholders are devastated by this news, even fellow Fordham students who have invested have been negatively affected by this release. 

Final Notes

The servers being stored in China could hurt DeepSeek’s performance in America, posing a national security risk. Just look at what happened to Tiktok! It is important to note that NVIDIA is very sensitive to any news that happens in AI, and this could be an overreaction from investors. NVIDIA is recovering, up 9% last Tuesday, with some of those investors trying to buy the dip in price. 

CONSUMER TRENDS

Trump’s Proposed Tariffs: Implications for Consumer Spending

Sanjana Alam, ‘28

Since President Trump took office on January 20th, his promises to implement tariffs are coming to life. President Trump promises to implement a 25% tariff on trade partners Mexico and Canada and a possible 10% tariff on imports from China, which raises the question of how the impending tariffs will affect US consumer trends. Mexico and Canada have until February 1st to respond to Trump’s demands. While Trump promises that the proposed tariffs will protect American industries and address trade power, it will also lead to higher prices on everyday goods, affecting consumers’ spending habits. 

Many important products, such as groceries, clothing, and electronics, might see a price increase with the promise of tariffs. For example, a tariff on goods from Mexico could increase the cost of fruits and vegetables, which are a part of daily groceries. Similarly, tariffs on electronics made in China could raise the prices for higher-priced goods, meaning consumers would have to shift their focus from spending on discretionary purchases to prioritizing essentials only. 

Tariffs on imports from Canada and Mexico could also cause an increase in fuel prices, something that has already been on the rise for the past few years. A significant portion of the U.S.’s oil is imported from these countries. With the proposed tariffs, gasoline prices are expected to rise, further squeezing household budgets.

With the impending price hikes, consumer spending is expected to decrease. Lower-income families, who spend much of their income on necessities, could be significantly affected. Trump’s tariff policies might help some American industries but will likely create short-term challenges for consumers by raising prices on imported goods.

New Year, New Products: How Large Corporations Capitalize Off (Your) New Year's Resolutions

Caitlin Sigler, ‘27

The concept of making New Year's Resolutions has been around for thousands of years, and as society evolves, the culture around this tradition has changed as well. Typical Resolutions include things like losing weight, eating healthier, reading more, spending less, all things meant to improve your mental and physical health. 

Companies are aware of this, and will use your goals against you to push you to consume. People often need a push with their resolutions, so what better way to facilitate self improvement than by offering discounts on language learning platforms, therapy, and gym memberships. One example of this targeted marketing would be the brand campaigns organized by Talkspace, a platform for mental health counseling. Chief Marketing Director Katelyn Watson reported a 34% increase in sign ups in Q1 2023 –a direct result of the ambassador campaign with Michael Phelps. Gym memberships also recognize this and capitalize on fitness related resolutions by offering small membership fees and increasing its advertising in December. 

Large corporations such as Target and Walmart are also guilty of using the New Year to promote themselves; on Target's website in the New Years Sale section it says “deck out your space for a new beginning”. Walmart is promoting several electronics on sale, one advertisement for a nutribullet reads “jump into New Year’s resolutions with this sweet deal on the nutribullet.” 

This isn’t to say that you as a consumer should not buy anything in the new year, but rather be conscious of companies that actually want to set you up for success versus companies that simply lure you in in the hopes that they will get a good return on investment from your spur of the moment January 1^st purchase.

CVS’s Crazy Idea: Let Customers Grab Products They Want Themselves

Karam Youssef, ‘26

If you have been in any CVS recently, you might have discovered the fact that nearly all of the items in the store are placed behind locked display cabinets. To access these items and purchase them, you have to press a button that alerts a store clerk to come and assist you. 

Theft has unfortunately become a massive issue for all retailers worldwide. In 2023, there was an estimated loss of 121.6 billion dollars due to shoplifting throughout the United States. This number can be expected to increase to up to 150 billion dollars by 2026. Due to this, many retail stores have unfortunately had to resort to locking up items behind glass displays to try to prevent losing their items. 

However, what retailers such as CVS and Walgreens are unfortunately noticing is that in their attempt to negate shoplifting, overall sales have gone down. Sitting between a rock and a hard place, CVS has decided to try out a new way of letting people shop–letting consumers grab the products they want to buy themselves, but with a twist. 

Last Tuesday, CVS announced that they are allowing customers to open up the glass displays themselves through the use of the CVS health app. 

Tested throughout 2024 in 3 stores within New York City, the CVS App will now act as a “concierge” for CVS customers. With the help of AI, the app will assist customers in finding all products located within CVS stores and also allow them to open up the glass displays that contain them. Another feature includes the self-managing of all prescriptions–eliminating the need to directly call the pharmacy itself. 

CVS is taking a huge step forward in enhancing the retailing experience. Expect the implementation of AI to become a common trend throughout all retail stores.