Crypto News: The Forecast: Trump's predictably unpredictable foreign policy

Welcome to the first issue of The Forecast, a new Sunday newsletter from Bloomberg's Weekend Edition. We're here to help you think about the future — from next week to next decade — with predictions and analysis from around the world. This week we're looking at the response to the US election, the kickoff of COP29, AI at Wendy's and more.

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This weekend: The Asia-Pacific Economic Cooperation's (APEC) annual trade forum kicks off in Lima, in the shadow of Donald Trump's election on a protectionist platform.

Monday: The United Nations' COP29 climate conference begins in Azerbaijan (more below). China's Singles' Day shopping extravaganza wraps up.

Tuesday: The global inflation story gets an update, with consumer price index (CPI) data released in India, Argentina and Germany. Home Depot's earnings are expected to show declining same-store sales due to fewer US home purchases.

Wednesday: The US releases October CPI data on the heels of the Fed's quarter-point rate cut. Tencent's earnings will highlight the growth of its video games.

Thursday: Sri Lanka's parliamentary election begins.

Friday: The UK releases third-quarter GDP; Prime Minister Keir Starmer has pledged to boost growth but Bloomberg Economics expects a slowdown. China will publish several economic indicators, including retail sales and industrial output. Japan releases third-quarter GDP, Nigeria reports CPI and the US releases October retail sales data.

Also: Germany's ruling coalition imploded last week. The opposition has demanded a confidence vote ASAP — which Chancellor Olaf Scholz has rejected.

Donald Trump's allies argue that his unpredictability is a feature, not a bug — and a key asset in dealing with the rest of the world. That makes anticipating the course of his administration's foreign policy challenging. Trump has given few details of his plans on many key issues, however he has three "fixed beliefs," according to Elizabeth Saunders, a professor of political science at Columbia University.

"One, he really doesn't like alliances, especially big multilateral ones. Two, he really doesn't like multilateral trade deals. He wants to get out of them and then make them bilateral ones. And three, he admires authoritarian regimes," Saunders said. The specifics may be unpredictable, but these are the tenets guiding his approach to the world.

With those tenets in mind, here are three areas to watch:

Allies: On the campaign trail, Trump vowed to bring an end to the fighting in Ukraine before he even takes office, mainly by pushing Ukrainian President Volodymyr Zelenskiy and Vladimir Putin to reach an agreement. Without the US leading the push to support Ukraine, Europe's divisions on the subject would become more evident.

Trade: Some of Trump's first moves could come in trade policy, where a president has broader power to act without congressional approval. His threat to slap 60% levies on goods from China would all but cut off trade with one of the US's largest trading partners, although some allies have suggested it's more of a negotiating tactic than a policy prescription.

Authoritarians: Trump has sown doubts about US military support for Taiwan as China has stepped up pressure on the island it views as a rogue province. He has also defended his personal ties to leaders of US rivals like China's Xi Jinping, saying they are receptive to his tougher messaging. Trump told the Wall Street Journal in October that he wouldn't have to use military force against a Chinese blockade of Taiwan "because he respects me and he knows I'm f—— crazy."

In his first term, opposition from Congress and members of his own administration kept Trump from following through on some of his more radical ideas. This time, he's expected to fill key Cabinet posts with staffers more willing to do his bidding. —Daniel Flatley, Bloomberg News

"Donald Trump's return to the White House is predicted to seed the ground for more big-ticket mergers and acquisitions." —Michelle F Davis, Yiqin Shen, and Neil Campling, Bloomberg News

"The main economic impact [of the Trump administration deporting unauthorized immigrants already in the US] would be a smaller US economy. In the short run, deportations are likely to reduce consumption and investment enough to reduce GDP per capita and would be mildly deflationary." —Chris G. Collins, Bloomberg Economics (Bloomberg Terminal only)

"Artificial-intelligence companies appear set to contribute a greater share of S&P 500 total earnings this year than tech, media, and telecom did in the late 1990s." —Breanne Dougherty and Jessica Lin, Bloomberg Intelligence (Bloomberg Terminal only)

"Apple Inc. is exploring a push into smart glasses with an internal study of products currently on the market, setting the stage for the company to follow Meta Platforms Inc. into an increasingly popular category." —Mark Gurman, Bloomberg News

Move over, GLP-1. Joon Lee, an analyst at Truist Securities, tells Bloomberg "he expects focus going forward to shift from GLP-1 to another gut hormone: amylin." —Madison Muller, Bloomberg News

Wendy's supply-chain group is using Palantir's AI to spot Frosty shortages before they happen. —Daniela Sirtori, Bloomberg News

COP29: More than 100 world leaders and ministers from 200 countries will convene at COP29 this week in Baku, Azerbaijan. The main task is to increase how much money flows from richer economies to poorer ones in service of deploying clean energy and adapting to climate impacts. Success could mean upping the annual sum from $100 billion of annual climate finance reached in 2022 to perhaps as much as $2 trillion — most likely by "mobilizing" finance from development banks and private investors.

What about less likely scenarios to keep an eye on? One wildcard is China, which insists it is still a developing country for the purposes of climate finance. China is unlikely to budge on that front, but what if, this time, it did? Trump has promised to pull the US out of the Paris Agreement, which would create a leadership void that China can fill. The catch: It could demand the world retroactively count some of the hundreds of billions of dollars it has been deploying through the Belt and Road initiative.
—Akshat Rathi, Bloomberg Green

COP29 Daily Reports: Sign up for the Green Daily newsletter for comprehensive coverage of the climate summit right in your inbox.

28%

The chance that Elon Musk is nominated to Trump's Cabinet, as of this writing, according to Kalshi, a US prediction market. Polymarket puts the chance of Musk getting some role in the administration at 75%. For Robert F. Kennedy, Jr. it's 92%.

How Political Polarization Ends

At Bars and Comedy Clubs, Taiwan Processes Trump's Victory

Trump Stranglehold Adds to Growing Doubts at Climate Talks

The Crypto World's Victory Lap Begins

In Cairo, an Art Exhibit Invokes the Past and Glosses Over the Present

Have a great Sunday and a productive week. If you've made it this far, let us know what you think of The Forecast.

—Walter Frick and Kira Bindrim, Weekend Edition; Daniel Flatley, Bloomberg News; Akshat Rathi, Bloomberg Green

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