Good morning! Today we are taking a look at the upcoming visit of Saudi Arabia Crown Prince Mohammed Bin Salman to Washington, where F-35 and a bilateral security agreement are expected to be discussed.
On top of that we are looking at a possible Elon Musk x Donald Trump reunification, tariff dividend timing and new LLMs from xAI and Google.
Stay ahead of the game with out forward-looking morning brief!
Top Movers
#1 F-35 Roller-Coaster
Odds of Trump agreeing to sell F-35 to Saudi Arabia spiked after Trump's comments, just a day before MBS arrives in the US.
Yesterday Trump suggested that he would approve the sale. However there are some doubts as Trump is known to have flip-floped on such promises before - this is an extremely sensitive issue vis a vis a longstanding policy aiming to maintain Israeli qualitative military advantage in the region.
The market will need a proper deal to resolve to Yes thus we see +EV on the No side here.
#2 US x Saudi Arabia Security Agreement
Along with F-35s, the odds of an overall security agreement between the two countries rose as well.
Trump loves a good deal signing and MBS first visit since 2018 is a great opportunity for a photo-op. While F-35 sale is a touchy issue, it is widely expected that some kind of a bilateral security agreement is in the books for the visit.
#3 Tariff Dividend Timing
After an initial spike, the odds of a tariff dividend materializing by the end of Q1 2026 dropped significantly.
Trump made comments that he plans to make it happen "somewhere mid next year". Our expectation is for it to appear just in time for the midterms so it buys Republicans some goodwill amid constantly rising cost of living.
#4 New LLMs
The end of the year brings several developments in the LLM space.
First big news is Elon Musk announcing Grok 4.1, promising significant improvements across the line. However it is still expected that Google will have the best model as the second big news is a long awaited Gemini 3.0 release. Currently traders believe they identified an insider on the market and are trailing them betting on a launch today:
#5 Musk x Trump Bromance Is Back?
It looks like Trump and Musk are getting closer again as the president invited Musk for dinner with MBS.
Once almost in love, the pair stopped contact after a feud over government spending. However since then the conflict softened and the two even met at the Charlie Kirk memorial, exchanging a few words. It's also not clear what is the reason behind the invitation.
Wrap up
That’s all for today - did you catch any of the moves? See you tomorrow for another Morning Brief!
This is not official investment or life advice. Do your own research. This are only my opinions and I encourage anyone to do their own research before putting any money anywhere.