Are asset markets on the precipice of a “Santa Trump” rally?

Happy Tuesday out there, Team 42. It's your skipper here, Darius Daldop, is on our Macro Minute for Tuesday, September 22nd, 2026. As always, we'll start with the executive summary from today's lead-off morning note, so let's dive right in. Today's key macro question is, are asset markets on the precipice of a Santa Trump rally? The short answer is increasingly so, as the risk of this right-tail outcome is rising from a possibility to a probability, according to our Bayesian inference process. The key supporting evidence is investors await this week's summit between President Trump and Chinese President Xi Jinping. Both sides concluded a second day of New York talks Monday ahead of Xi's New York U.S. visit. In a sign that talks are progressing well, China opened a data security probe into DeepSeek and Moonshot AI after anthropic alleged data routing through cloud models. Cyberspace Administration of China officials interviewed executives and staff on-site to gauge breach severity. Beijing fears routing queries through U.S.-owned LLMs exposed Chinese military, police, and corporate data in breach of security laws. Elsewhere, Kyoto News Agency reported Iran offered to reopen the straightover moves within seven days if the U.S. lifts its blockade. An Islamic Revolutionary Guard spokesman said negotiation is warranted when in the national interest. This comes amid reporting that President Trump will address the United Nations General Assembly in New York later today. Secretary of State Mark Rubio said no meeting with Iran on the sidelines was planned at the current juncture. Asset markets will perform well, if this changes. So what does this all mean for your portfolio? Recall that reflation is the current market regime, according to our global macro risk matrix. Reflation is a risk-on regime in which investors are generally rewarded for increasing risk because policymakers are supporting or unlikely restrain nominal economic growth that is perceived to be accelerating and or persistently higher than expectations. The positioning cycle is supportive of the continuation of the current risk-on-market regime condition, according to our positioning model. Specifically, our positioning model currently signals low risk of a correction in risk assets over the short to medium term. Moreover, the six key macro cycles, growth, inflation, monetary policy, fiscal policy, liquidity, and positioning are supportive of a continuation of the current risk-on-market regime condition, according to our global macro weather model, which is currently generating a bullish outlook for stocks, gold, Bitcoin, and commodities, and a bearish outlook for bonds in the U.S. dollar. Our macro weather model currently signals a high probability of sustaining a risk-on-market regime over the short to medium term. Additionally, Goldilocks, which is real GDP growth accelerating on a trend basis and core PC deflator decelerating on a trend basis, is the consensus modal outcome for the U.S. economy over the medium term, according to our grid model. The loan medium to long-term bear signals from our systematic toolkit stem from our positioning model and global liquidity model. The former currently signals reasonable risk of a crash in risk assets over the medium to long term. The latter is currently forecasting that the uptrend in global liquidity is likely to inflect into a meaningful downtrend over the medium term. If POTUS, President Trump, develops the humility, in all caps, required to acknowledge defeat in Iran and reopen the Strait of Hormuz, the current headwinds to global dollar recycling flows that are driving up neutral rates and R-star in key economies around the world will dissipate and prevent global liquidity from breaking down. This would also reverse the hawkish medium-term outlooks priced into most major economy central banks truncate the Fed's, Bank of Japan's and European Central Bank's tightening cycles and abort the Bank of England and Swiss National Bank's tightening cycles before they begin. Refer to our September 19th Around the Horn webcast for more details. So, as always, to wrap up with a question from our community, this one's titled Besson threatens to remove countries from the dollar system. It says about 12 minutes into this interview yesterday, Besson threatens to remove any country supporting Iranian airlines from the dollar system. I'm sure that weaponizing the U.S. dollar is the best way to preserve its status as the global dollar system. I'm sure that Besson threatens to remove any country supporting Iranian airlines from the dollar system. As the global reserve currency in key countries buying U.S. treasuries, hashtag forth turning. And then there's a follow up comment that says when the U.S. initially sanctioned Russia, that was a clear signal to foreigners to begin diversifying away from the U.S. dollar. I see this as affirmation for nations who begin to drift away from the dollar system where possible, much in the same way why an ex validates a breakup after a split. So, yeah, of course, they're quadrupling down on failed Biden policies by kicking folks off the dollar system and weaponizing the dollar system itself, which ultimately over long periods of time will reduce demand for dollar denominated assets. It will force a narrowing of our current account deficit in ways that will exacerbate the K-shaped economy crisis to the state. We do not see adequate fiscal retrenchment in the U.S., which is highly unlikely from either party at this point. And so ultimately, this is a very bad thing. Weaponizing the dollar system is a very, very bad thing for the media in America. It's great if you're you know, you lack humility and you just want to beat your chest and sound tough, you know, at the U.N. General Assembly. But it's not it's not a wise it's not a wise choice, Scott. So I'll wrap it up there. Darius here presenting our macro minute for Tuesday, September 22nd, 2026. Best of luck out there today. We'll catch you back here tomorrow. Cheers. If you enjoyed this content, please remember to like and subscribe. Thank you. This content is for information. All purposes only and does not constitute an offer or a solicitation. Reliance upon the information in this material is at the sole discretion of the viewer or listener. Investing involves risks. Any reference to a company, issuer or investment strategy is for instructive purposes only and does not constitute investment advice. For full disclosures, visit 42 macro dot com backslash disclaimer.