Given the Trump Administration's severe reaction to Venezuela, all of South and Central America must be feeling nervous, which is almost certainly one of the intended outcomes.
DJT is seeing himself as a complete game-changer. He is clearly wanting to change drug economies into more legitimate economies and he is prepared to usurp governments and have a scorched earth approach. I really hope that he doesn't disenfranchise the poor along the way. But it does send shock waves throughout the whole region and all Australian companies active in that region (yes, even in Brazil) will have an eye on the skies.
While the market will like the war footing, the companies in the affected regions will suffer as the market gets the jitters about them. And the market has shown that it is not the brightest when working through the details (like which country is actually which).
Analysts will run off and shoot from the hip and completely unaffected companies will find themselves affected. Even though they are in no way involved, or even close to, the action.
This will mean a couple of things:
First: I expect the American share market to jump solidly when trade opens on Monday (their time), especially in gold and the resource and critical minerals sectors;
And second: I expect a lot of companies to become casualties of "friendly-fire" and their share prices to drop well below fair value. Astute investors will ignore analysts and do their own research, picking up multiple bargains.
2026 now looks like a stellar year for those who like prospecting the share market. Eyes open, brain in gear, a calm hand. And ignore the noise.
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