But Goldman’s authors argue that investors should take geopolitical sabre rattling with a grain of salt, pointing out that it was less than a year ago, in August 2017, when Trump threatened North Korea with “fire and fury like the world has never seen,” elevating concerns of a military confrontation of the Korean peninsula, which has since receded in the face of greater rapprochement between the parties.
Yet Trump’s more aggressive stance towards Iran should give investors pause, according to GSIM. After withdrawing from the Iranian nuclear agreement and imposing sanctions on Iran, the administration has stated that it wants all countries to cease importing Iranian oil, which puts pressure on India and China, two countries who account for almost half of Iran’s oil exports. Iran is under less international pressure than North Korea to negotiate and acquiesce to U.S. interests.
After populism appeared to take a step back in 2017 with the defeats of Geert Wilders in the Netherlands and Marine Le Pen in France, a populist coalition government was formed in Italy this year. In Mexico, the Morena party won majorities in both houses the legislature and the presidency on a platform that included raising wages and nationalizing the country’s oil and gas industry.
In its 2018 outlook, GSIM anticipated that cryptocurrencies would not be able to retain value in their current form, a view that has largely been borne out so far this year. The report’s authors expected further decline in cryptocurrencies as they are unable to store value, are not a viable medium of exchange nor a useful unit of measurement. Furthermore, the report argued that cryptocurrencies like Bitcoin “garner far more traditional and social media attention than is warranted.”