Unadorned Notes: December 28-31, 2024
Jimmy Carter Dies at 100; Chinese Hackers Breach U.S. Treasury; Global Shift Toward Right-Wing Politics; Dollar Posts Decade-Best Gains; Gold Posts Biggest Gain Since 2010
U.S. Politics and Geopolitics
Jimmy Carter Dies at 100: Jimmy Carter, the 39th U.S. president and renowned humanitarian, died on December 29, 2024, at the age of 100. A state funeral will be held on January 9, 2025, in Washington, D.C., with President Joe Biden declaring it a National Day of Mourning. Carter will lie in state at the U.S. Capitol Rotunda from January 7 to January 9, allowing the public to pay respects. Ceremonies will take place in Georgia and Washington, including a private burial in his hometown of Plains, Georgia. President Biden will deliver the eulogy at the funeral, which will be attended by dignitaries and former presidents.1
Trump Backs Johnson as Speaker Despite Challenges: House Speaker Mike Johnson faces a challenging battle to retain his position, despite receiving Donald Trump’s full endorsement. Johnson must secure 218 votes with virtually no room for Republican defections, but at least one GOP member, Rep. Thomas Massie, has already expressed opposition. Johnson’s allies warn that failing to elect a speaker could disrupt Congress’s ability to certify Trump’s presidential win on January 6, 2025, with no clear alternative in place. Johnson’s leadership has faced criticism from some conservatives over spending negotiations and bipartisan deals, adding to the difficulty of uniting the party. Trump’s endorsement may help Johnson gain support, but divisions within the GOP remain significant.2
Trump Defends H-1B Visa Program: President-elect Donald Trump expressed support for the H-1B visa program, describing it as beneficial for U.S. businesses and economic growth. Trump’s remarks follow defenses of the program by Elon Musk and Vivek Ramaswamy, sparking criticism from anti-immigration factions within his base. The H-1B program allows 85,000 highly skilled workers annually, with Trump properties having previously utilized it sparingly. While Trump restricted H-1B visas during his first term, he has signaled openness to granting legal status to foreign graduates of U.S. universities. Musk, a former H-1B recipient, vowed to advocate strongly for the program, citing its role in American innovation and competitiveness.3
Chinese Hackers Breach U.S. Treasury: Chinese state-sponsored hackers breached the U.S. Treasury Department’s systems in December 2024, gaining access to unclassified documents, according to officials. The attackers exploited a compromised digital key from third-party cybersecurity provider BeyondTrust, overriding security protocols to access Treasury workstations. The Treasury Department attributed the attack to a China-linked Advanced Persistent Threat (APT) group and is collaborating with CISA and the FBI to investigate. BeyondTrust confirmed the breach, stating it had addressed the issue and notified affected clients and authorities. China denied involvement, rejecting U.S. allegations as baseless, while cybersecurity experts noted the breach aligns with known tactics of PRC-linked groups.4
Global Shift Toward Right-Wing Politics: Progressive politics across industrialized nations is giving way to a rightward shift, driven by economic concerns, immigration anxieties, and disillusionment with traditional elites. In Europe, right-wing and populist parties are gaining power, with three-quarters of EU governments leaning conservative or including far-right coalitions. Canada’s Conservatives are poised to unseat Justin Trudeau, while Germany’s center-left government faces plummeting popularity, with far-right parties like AfD surging. However, friction between establishment conservatives and far-right insurgents often limits unified governance, creating potential for political gridlock.5
Economics and Finance
Pending Home Sales Surge Again: Pending home sales in the U.S. rose 2.2% in November 2024, marking the highest level since February 2023, according to the National Association of Realtors (NAR). The Pending Home Sales Index climbed to 79.0, exceeding forecasts of a 0.9% gain, with annual sales up 6.9%. Regional increases were recorded in the Midwest, South, and West, while the Northeast saw a slight decline. The rise aligns with improved housing inventory, up 18% year-over-year, as buyers adjust to persistent mortgage rates above 6%. NAR’s chief economist noted that buyers are increasingly negotiating as the market shifts away from favoring sellers.6
Dollar Posts Decade-Best Gains: The U.S. dollar has its strongest annual performance since 2015, with the Bloomberg Dollar Spot Index up about 7% in 2024. The currency’s strength is driven by robust U.S. economic growth, expectations of limited Federal Reserve rate cuts, and speculation about protectionist trade policies under President-elect Donald Trump. The dollar reached its highest level in over two years, while major currencies like the yen, Norwegian krone, and New Zealand dollar have each fallen more than 10%. The euro has declined 5.5% and could approach parity with the dollar in 2025, according to analysts. Speculative traders have significantly increased bullish bets on the dollar, reflecting optimism about its sustained strength.7
Gold Posts Biggest Gain Since 2010: Gold surged 27% in 2024, its largest annual gain in 14 years, driven by U.S. monetary easing, geopolitical risks, and increased central bank purchases. The metal outperformed most commodities despite a stronger U.S. dollar and rising Treasury yields, reaching record highs before easing slightly late in the year. Base metals saw mixed results, with the LMEX Index posting a modest gain, while iron ore slumped 28% due to China’s construction slowdown. Lithium prices fell sharply for a second consecutive year amid a supply glut and challenges in the electric vehicle market. Investors are now focused on U.S. monetary policy and China’s economic recovery as key drivers for 2025.8
QZ’s Comment: U.S. monetary (and fiscal) policy - yes; China’s economic recovery - less so. Despite massive EV production compared to others, China has had little impact on lithium prices in recent years. Thanks for reading and see you in 2025. Happy New Year!