Greenland, Gold, and Trump’s Next Move

Disclaimer: The following newsletter is for informational and educational purposes only. It is not financial advice. The content reflects the opinions of the author and Stock Region, and should not be construed as a recommendation to buy, sell, or hold any security. All investments carry risk, and you should consult with a qualified financial advisor before making any investment decisions. Stock Region is not liable for any losses or damages arising from the use of this information. Past performance is not indicative of future results.

If you blinked, you missed three different geopolitical crises, a new all-time high for gold, and enough political drama to fuel a prestige television series for a decade. The markets are reacting, re-reacting, and trying to price in a future that seems to change by the minute. Geopolitical chess, domestic policy bombshells, and major corporate shakeups dominated the tape, creating both treacherous pitfalls and incredible opportunities.

Yesterday was a masterclass in market volatility and the undeniable link between Washington, Wall Street, and the world stage. From Greenland to the Federal Reserve, every headline sent ripples through the indices. We saw panic, euphoria, and everything in between. It’s in moments like these that fortunes are made and lost. Our job is to cut through the noise, connect the dots, and find the signal.

Let’s get straight to it. This is a complex tapestry, and we need to unravel it thread by thread.

The Main Event: The Greenland Gambit and a Market on Edge

The big story, the one that had traders glued to their screens, was the rapidly escalating and then de-escalating situation surrounding Greenland. To call it a rollercoaster is an understatement. It was a geopolitical thriller playing out in real-time, with global trade hanging in the balance.

Act I: The Tariff Threat

It all kicked off when President Trump, in his characteristically bold style, threatened the EU with significant tariffs over Greenland. His long-stated interest in the strategically vital, mineral-rich island moved from rhetoric to action. The goal was clear: assert U.S. influence and secure access to its resources, which are critical for everything from EV batteries to advanced defense systems. The market’s initial reaction was swift and negative. The Dow, S&P 500, and Nasdaq all dipped as the specter of another trade war, this time with our closest allies, loomed large. The fear was palpable. Industries reliant on transatlantic trade, such as German automakers (Volkswagen AG - VWAGY, BMW AG - BMWYY) and French luxury goods (LVMH Moët Hennessy Louis Vuitton - LVMUY), saw immediate selling pressure. The uncertainty was toxic.

Act II: The EU Freezes the Deal

The European Union didn’t blink. In a stunning rebuke, EU lawmakers voted to freeze a major U.S. trade deal. This was a direct retaliation, a signal that they would not be strong-armed. The message was unambiguous: Europe is a bloc to be reckoned with, not a collection of states to be bullied. This escalated the situation dramatically. At this point, the markets priced in a prolonged standoff. The CBOE Volatility Index (VIX), often called the “fear gauge,” spiked. Investors fled to safety. U.S. exporters with heavy European exposure, like The Boeing Company (BA) and Caterpillar Inc. (CAT), felt the heat. The consensus was that we were heading for a messy, economically damaging trade dispute that would hamstring global growth.

Act III: The NATO Framework and a Shocking Reversal

Then, just as the market braced for a long winter of trade disputes, came the pivot. President Trump announced a “framework” agreement with NATO, effectively pulling everyone back from the brink. The tariffs on Europe were revoked. The deal, as Trump described it, gives the U.S. and NATO allies shared access to Greenland’s vast mineral wealth and involvement in something cryptically referred to as the “Golden Dome.”

The market breathed a collective sigh of relief, and then it roared. The indices reversed course violently, erasing the day’s losses and rocketing into positive territory. It was a classic “buy the resolution” trade. The speed of the reversal caught many off guard, highlighting the dangers of trading on headlines alone. This deal, if it holds, is a monumental win for the U.S. It secures access to critical rare earth elements, lessening dependence on China, and strengthens the NATO alliance, all without firing a single economic shot in a prolonged trade war.

Volatility is the New Normal, but with an Upward Bias

What does this all mean for the broader market?

First, expect continued volatility. The Greenland saga demonstrates how quickly geopolitical tensions can flare up and resolve under this administration. This creates a whiplash effect that can punish overly cautious and overly aggressive traders alike. The market will remain sensitive to headline risk, especially with ongoing political turmoil in Washington (more on that below).

Second, the resolution is bullish for U.S. and NATO-aligned industries. Securing a stable supply chain for rare earth minerals is a massive long-term tailwind for the tech, defense, and green energy sectors. This removes a significant strategic vulnerability.

Third, the dollar’s strength may be tempered. With the EU trade war averted, the Euro found a firmer footing, which could put some downward pressure on the U.S. Dollar Index (DXY). A slightly weaker dollar is generally good for large-cap U.S. multinationals, as it makes their products cheaper abroad and boosts the value of foreign earnings.

Overall Stock Market Forecast: Cautiously Optimistic with a Defensive Tilt. The Greenland resolution has averted a major economic crisis, and underlying corporate earnings remain reasonably strong. However, the political environment is a tinderbox, and inflation is a growing concern. I believe the S&P 500 will continue to grind higher, but the path will be choppy. I’m forecasting a target of 5,500 on the S&P 500 by year-end, but I recommend investors maintain exposure to defensive sectors and hard assets. The easy money from the initial post-resolution pop has been made. Now, the focus shifts back to fundamentals.

The Political Powder Keg: 25th Amendment Invoked

As if the international drama wasn’t enough, a massive political storm is brewing at home. House Democrats have formally invoked the 25th Amendment in an attempt to remove President Trump from office. This is an unprecedented and explosive development. While the move is highly unlikely to succeed—it would require the Vice President and a majority of the Cabinet to agree, followed by a two-thirds vote in both houses of Congress if the President contests it—the political chaos it creates cannot be overstated.

This introduces a level of domestic uncertainty that the market absolutely hates. The stability of the U.S. government is the bedrock of the global financial system. Any perceived crack in that foundation sends shockwaves everywhere. We saw a brief, sharp sell-off when the news broke, a knee-jerk reaction to the headline. The market recovered quickly as traders realized the high bar for removal, but the event leaves a scar.

What does this mean for the portfolio?

1. Increased Risk Premium: The political risk premium for U.S. assets has just gone up. Expect higher volatility and a more nervous market until this situation is resolved.

2. Sector Impact: This could create headwinds for sectors that rely on government stability and contracts, such as defense. Conversely, it could be a tailwind for “chaos hedges” like gold and other commodities.

3. A Distraction from Policy: This political battle will consume Washington’s attention, potentially delaying or derailing other legislative priorities.

This is a story that will dominate the news cycle. While the direct market impact may be contained for now, it’s a significant black swan risk that we must monitor closely.

Economic Shockwaves: Policy Bombshells From The White House

Beyond the geopolitical and political drama, the Trump administration dropped two major economic policy announcements that will have far-reaching consequences.

1. The $2,000 Tariff Dividend Checks

President Trump announced his intention to issue $2,000 checks to American citizens, funded by revenue from tariffs, without needing Congressional approval. This is essentially a form of direct stimulus or Universal Basic Income (UBI), funded by trade policy.

From an economic perspective, this is pure rocket fuel for consumer spending. This money will go directly into the pockets of Americans who are most likely to spend it immediately. This is a massive tailwind for consumer discretionary and retail stocks. Think of companies like:

• Walmart Inc. (WMT): The ultimate destination for stimulus dollars.

• Target Corporation (TGT): Will see a significant boost in foot traffic and online sales.

• Amazon.com, Inc. (AMZN): The default online spending platform.

• The Home Depot, Inc. (HD) & Lowe’s Companies, Inc. (LOW): Consumers may use the extra cash for home improvement projects.

However, there’s a flip side. This is also highly inflationary. Pumping this much cash directly into the economy while supply chains are still normalizing will inevitably push prices higher. This brings us to the next point...

2. UK Inflation and the Global Inflationary Ghost

The UK reported that December inflation rose to 3.4%, exceeding expectations. This is not an isolated event. It’s a sign of the persistent, sticky inflation that central banks around the world are struggling to contain. The Bank of England is now under immense pressure to act, likely through further interest rate hikes.

Here in the U.S., the tariff dividend checks will only add to our own inflationary pressures. The Federal Reserve has been trying to walk a tightrope, but this move could force their hand. The market is now pricing in a higher probability of more aggressive rate hikes from the Fed.

This creates a complex environment for investors. While stimulus boosts consumer stocks, the resulting inflation and rate hikes hurt growth stocks, long-duration bonds, and companies with high debt loads. The sectors that tend to perform well in an inflationary, rising-rate environment include:

• Energy: Companies like Exxon Mobil Corporation (XOM) and Chevron Corporation (CVX) benefit from higher commodity prices.

• Materials: Miners and producers of raw materials see their margins expand.

• Financials: Banks like JPMorgan Chase & Co. (JPM) and Bank of America Corp (BAC) benefit from a steeper yield curve and higher net interest margins.

This tug-of-war between stimulus-driven growth and inflation-driven tightening will be a defining theme for the market in the coming months.

Corporate Deep Dive: Movers, Shakers, and Troublemakers

Amidst the macro chaos, these individual companies made headlines that demand our attention.

Berkshire Hathaway Eyes the Exit on Kraft Heinz (KHC)

Warren Buffett’s Berkshire Hathaway (BRK.B) is reportedly considering the sale of its entire $7.7 billion stake in Kraft Heinz (KHC). This is a monumental story and, frankly, an admission of failure from the Oracle of Omaha. The 2015 merger that created KHC, which Buffett championed, has been an unmitigated disaster for shareholders.

• Kraft Heinz (KHC)

• Market Cap: Approx. $40 Billion

• P/E Ratio (TTM): ~18x

• Dividend Yield: ~5.2%

The company has been crushed by a perfect storm of shifting consumer tastes towards healthier, non-processed foods, crushing debt from the merger, and an inability to innovate its portfolio of tired, legacy brands like Oscar Mayer and Jell-O.

The implications of a Berkshire exit are dire for KHC. It’s the ultimate vote of no confidence. If the greatest investor of all time is waving the white flag, why should any retail investor stick around? The stock was already struggling, and this news will put immense downward pressure on it. The high dividend yield may look tempting, but it’s a classic value trap. A dividend is only as safe as the company’s underlying cash flow, which is under siege.

For Berkshire, this is addition by subtraction. Selling the KHC stake would free up $7.7 billion in capital that can be redeployed into businesses with actual growth prospects, rather than being anchored to a melting ice cube. This is a smart move for Berkshire, but a devastating blow for Kraft Heinz. I would avoid KHC at all costs. There is no catalyst for a turnaround on the horizon.

Luminar (LAZR) Founder Subpoenaed

Luminar Technologies founder Austin Russell has been subpoenaed in a bankruptcy case. The details are murky, but this is a significant headline risk for a high-flying tech company.

• Luminar Technologies, Inc. (LAZR)

• Market Cap: Approx. $6 Billion

• P/E Ratio (TTM): N/A (Not profitable)

• Price/Sales Ratio (TTM): ~65x

Luminar is a leader in LiDAR technology, which is critical for autonomous vehicles. The company is a “story stock,” trading on its massive future potential rather than current earnings. Its valuation is rich, and investors are betting on flawless execution and visionary leadership.

The subpoena introduces a crack in that narrative. Austin Russell is the face of the company, the visionary. Any legal troubles, even if he is only a witness, can become a major distraction for leadership and a source of concern for investors and corporate partners. In the world of growth stocks, perception is reality. A tarnished reputation can be fatal.

The stock will likely be volatile and under pressure until there is more clarity on the situation. If you’re a long-term bull, this could present a buying opportunity if the issue proves to be minor. However, for most investors, the prudent move is to stay on the sidelines. The risk/reward is unfavorable until we know more. There are other ways to play the autonomous vehicle trend with less headline risk.

Snap (SNAP) Settles Addiction Lawsuit

Snap Inc. has settled a lawsuit alleging its platform is addictive. This is a significant development for Snap and the entire social media sector.

• Snap Inc. (SNAP)

• Market Cap: Approx. $18 Billion

• P/E Ratio (TTM): N/A (Not profitable)

• Price/Sales Ratio (TTM): ~3.5x

On one hand, the settlement removes a legal overhang and a source of negative headlines. This is a short-term positive. The market hates uncertainty, and settling the case allows the company to move forward.

On the other hand, it sets a dangerous precedent. This settlement is an implicit admission that these platforms can have harmful effects, opening the door to more lawsuits and, more importantly, increased regulatory scrutiny. The “social media addiction” narrative is gaining traction globally. Politicians are looking for their “Big Tobacco” moment with Big Tech, and this could be it.

This regulatory risk is now a permanent fixture for Snap, Meta Platforms (META), and Pinterest (PINS). While Snap’s user growth and engagement among younger demographics are impressive, the threat of government intervention puts a ceiling on its long-term valuation. The settlement is a tactical win but a strategic loss for the industry.

Thematic Investing Focus: Finding Growth In a Chaotic World

In a market this complex, it pays to focus on powerful, long-term secular trends. Here are the key themes I’m watching right now, along with specific stocks to watch.

Theme 1: The New Space Race & Off-World AI

Elon Musk’s comment that Tesla’s Dojo3 supercomputer will be used for “space-based AI compute” was one of the most underrated but significant news items of the day. This is about the convergence of AI, data, and space exploration. We are at the dawn of a new space economy, and the companies building the infrastructure for it are poised for explosive growth.

This is about satellite communication networks, asteroid mining, space logistics, and in-orbit data processing. The applications are limitless.

Growth Stocks to Watch:

• SpaceX (Private, but watch for Starlink IPO): The undisputed leader. SpaceX is the backbone of the Western world’s space ambitions. Its reusable rocket technology has fundamentally changed the economics of space access. A potential IPO of its Starlink satellite internet division would be the biggest market event of the decade.

• Rocket Lab USA, Inc. (RKLB): The “mini-SpaceX.” Rocket Lab specializes in launching smaller payloads and is rapidly expanding into satellite manufacturing and space systems. They are a critical player for the growing constellation market. The company is showing a clear path to profitability and has a strong launch cadence.

• Viasat, Inc. (VSAT): A legacy satellite communications player that is making a major pivot. With its acquisition of Inmarsat, Viasat now has a powerful multi-orbit satellite network that can compete directly with Starlink in key markets like aviation and maritime connectivity. It’s a turnaround story with significant potential if management executes.

Theme 2: The American Housing Fortress

President Trump’s executive order to block Wall Street firms from buying single-family homes is a tectonic shift in the U.S. housing market. For years, institutional buyers like Blackstone (BX) and Invitation Homes (INVH) have been crowding out individual buyers, driving up prices and turning the American dream of homeownership into a rental nightmare for many.

This order, if it proves effective, is a massive boon for individual homebuyers and the companies that serve them. It could cool price appreciation in the hottest markets but ultimately create a healthier, more stable housing ecosystem.

Growth Stocks to Watch:

• U.S. Homebuilders (Various): The primary beneficiaries. With institutional competition removed, builders can market their homes directly to families. This should firm up demand and margins. Key names to watch include D.R. Horton, Inc. (DHI), the nation’s largest builder, and Lennar Corporation (LEN). Both are well-managed companies trading at reasonable valuations.

• Rocket Companies, Inc. (RKT): As the largest mortgage originator in the U.S., Rocket is a direct play on housing market activity. If this executive order unlocks a wave of first-time homebuyers who were previously shut out, Rocket’s loan origination volume could see a significant surge. The stock has been beaten down by rising rates, and this policy change could be the catalyst it needs to turn around.

• Zillow Group, Inc. (Z, ZG): Zillow is the front door to the real estate market. Increased activity from individual buyers means more traffic, more leads for agents, and more revenue for Zillow’s core business. The company has moved away from its disastrous iBuying venture and is refocusing on its high-margin software and services business.

Theme 3: The Golden Age of Hard Assets

Gold just smashed through to a new record high of $4,850 per ounce. This is not a drill. The $260 surge in two days is a massive signal that smart money is terrified.

• Geopolitical Instability: The Greenland crisis, even though resolved, showed how fragile the global order is.

• Political Chaos: The 25th Amendment threat in the U.S. undermines faith in fiat currency’s ultimate backstop—a stable government.

• Runaway Stimulus: The $2,000 dividend checks are overtly inflationary money printing.

• Persistent Inflation: Data from the UK and elsewhere shows that inflation is not under control.

Gold is the ultimate chaos hedge. It is an asset that exists outside the traditional financial system and cannot be debased by a central bank or a government decree. The current environment is the most bullish for gold in a generation.

Growth Stocks to Watch:

• Barrick Gold Corporation (GOLD): One of the world’s largest and best-run gold miners. Barrick has top-tier assets in stable jurisdictions, a strong balance sheet, and a management team focused on shareholder returns. As the price of gold rises, Barrick’s cash flow explodes. It offers direct, leveraged exposure to the gold price.

• Franco-Nevada Corporation (FNV): Franco-Nevada is a royalty and streaming company. They don’t operate mines; they finance them in exchange for a percentage of the future revenue or a right to buy gold at a fixed, low price. This business model is incredibly high-margin and avoids the operational risks of mining (labor strikes, equipment failures, etc.). It’s a “picks and shovels” play on the gold rush.

• SPDR Gold Shares (GLD): For those who want direct exposure to the price of gold without owning miners. GLD is an ETF that holds physical gold bullion. It’s a simple, liquid way to add gold to the portfolio. While it doesn’t offer the leverage of a miner, it also doesn’t carry the company-specific risk.

Yesterday was one for the history books. It served as a stark reminder that we are investing in a world that is more interconnected and volatile than ever before. The lines between politics, geopolitics, and economics have been completely erased.

The Greenland resolution has given the market a bullish catalyst, but the underlying tensions have not disappeared. The political situation in the United States is a ticking time bomb, and the inflationary pressures from new stimulus measures are very real.

Acknowledge the bullish tailwinds from the averted trade war and the housing policy shift, but respect the bearish risks from political instability and inflation. This is not a market for complacency. It’s a market for active, informed investors. It’s a market for those who can see the big picture and position themselves for the powerful themes that will shape the next decade: the commercialization of space, the re-democratization of housing, and the return of hard assets.

Stay vigilant, stay informed, and as always, thank you for being a part of the Stock Region community.

Disclaimer: This newsletter contains forward-looking statements and opinions that are subject to change without notice. The information provided is for general informational purposes only and is not intended to be personal financial advice. Investing in the stock market involves risk, including the potential loss of principal. You should not invest money that you cannot afford to lose. Before making any investment, you should do your own research and consult with a licensed financial professional to determine if it is right for your own personal circumstances. Stock Region and its writers may or may not hold positions in the securities mentioned. All performance figures are historical and are not a guarantee of future results.