Geopolitics, Markets and Economics – Are They Still Connected?

Blain’s Morning Porridge Jan 7th, 2026: Geopolitics, Markets and Economics – Are They Still Connected?“The barometer read “Fair” yesterday, but the Shipping Report says, “Gale Imminent”.Markets have opened strongly in 2026 and seem remarkably sanguine towards rising geopolitical instability and shocks. They’re buying a rosy outlook of rising profits, lower rates and costs, and are blithely unconcerned by the risks of destabilisation from conflict or competition.I got a call from a Morning Porridge reader y’day, demanding to know why I’ve been so fixated on events in Venezuela this year… “What about the markets?” he asked. Very fair question. A succession of record highs in stocks suggest all is well! He thinks Venezuela is nothing more than a distraction, but there appears to be a massive disconnect between the commentariat’s reaction to the Geopolitical Shocks we’re seeing, and the market’s complete and utter lack of concern about them. Take a glance at markets and its looking bright and breezy – fair sailing weather as the barometer would tell us. Stocks are broadly higher anticipating a fine year ahead. Bond yields are generally lower, looking forward to lower rates and declining inflation. Nothing to worry about… Apparently. Yet the news flow is dominated by events in far-off Venezuela, and now Trump’s careless threats to seize Greenland – with military force if necessary – with nary a concern for what that will do for European stability or as a market for American goods and services. The Chinese are licking their lips in anticipation of boom times to follow. Funny how the UK’s weather is set by systems born in the Caribbean and how the North Atlantic Drift and Jetstream over Greenland direct the storms that batter us. The trick to connecting the big picture of geopolitics, macro and micro economic factors that drive markets (and I not claiming to have mastered this yet in my brief 4-decade market career), is catching the signals that matter amidst the tumult of activity:Continued/ go to www.morningporridge.com for access to the full story.If you subscribe to the full Morning Porridge you get the email every morning and links to videos and podcasts…