Macro Moves: Rare Earths, Shutdown and Market Shocks – Everything That Moves Global Economy and Your Portfolio

“Uptober”, a term born in the crypto market to capture October optimism, has gradually expanded to capture sentiment across broader financial markets. This year, however, that optimism never materialized.

The month began with a U.S. government shutdown, disrupting key economic data releases and forcing investors to rely on alternative sources for labor and market indicators. Shortly after, China tightened export controls on rare earth metals, escalating trade tensions between the world’s two largest economies. The market reaction was swift: Bitcoin plunged, gold exhibited volatility more typical of riskier assets, and equities responded sharply to the unfolding shocks.

On the global stage, Argentina advanced its libertarian agenda, with President Javier Milei’s party securing a commanding victory in the midterm elections, while in Italy, the government under Giorgia Meloni sparked debate with its latest budget proposals.

In this edition of Macro Moves, we bring together the key insights and data that drive markets, economies and investor sentiment — covering everything that moves the global economy and shapes your portfolio.

‍China Tightens Grip on Rare Earths Amid U.S. Trade Tensions

As U.S. - China trade tensions re - intensified in early October, Beijing played one of its strongest cards by tightening export controls on rare earths and other critical materials essential to advanced technology manufacturing worldwide – from solar panels and electric vehicles to smartphones and defense systems.

China maintains a dominant position in rare earth production, accounting for nearly two - thirds of global output, giving it substantial leverage in trade negotiations and global supply chains. However, the latest move has also prompted other regions – notably the U.S., Australia and parts of Africa – to accelerate efforts to ramp up their own production and reduce dependence on Chinese supply.

The restrictions have added a new layer of uncertainty to global markets already on edge, underscoring how strategic resources remain central to the evolving geo - economic standoff between the world’s two largest economies.

‍How Bitcoin’s Record High Turned into a Record Crash

October began on a high note for crypto investors, with Bitcoin reaching a new all - time high of around $125,000. However, by October 10, the tide had turned. Escalating U.S.- China trade tensions and broader risk - off sentiment rippled through global markets, prompting investors to pull back from speculative assets.

The result was the largest crypto liquidation in history. Bitcoin plunged 7% in a single day, as heavily leveraged traders – many of whom had borrowed to bet on continued gains – faced margin calls that triggered a cascade of automated liquidations across major exchanges. The sudden drop erased billions in market capitalization within hours, sending shockwaves through the broader digital asset ecosystem.

While extreme volatility is a defining feature of cryptocurrencies, this episode stands out as one of the most striking demonstrations of how leverage can amplify market stress.

The sharp correction also reignited debate over crypto’s maturity as an asset class, as institutional investors weigh the opportunities of blockchain innovation against the persistent risks of market instability.

‍Gold’s Volatility Raises Questions Over Its Safe - Haven Role

On October 21, 2025, gold – long considered a safe - haven asset – experienced a sharp drop of over 5% in a single day, shocking many investors. The sell - off followed a period of strong gains during which gold attracted significant speculative attention, reaching new all - time highs just a day before.

It is no secret that 2025 has become the year of gold, marked by record prices and heightened investor interest. Yet, many analysts have raised concerns about its elevated volatility. Historically, gold’s largest price swings occurred during the 2008 – 2009 global financial crisis, when panic - driven demand for safe - haven assets surged. The current volatility, however, appears driven less by fear and more by speculative flows – raising questions about whether gold can still be regarded as a traditional safe haven.

Such unconventional market behavior highlighted a changing role for gold in global markets. Traditionally seen as a hedge against risk, gold’s price has become increasingly correlated with riskier assets like U.S. equity markets.

Rising optimism over U.S. - China relations helped ease safe - haven demand, adding pressure to gold prices. Following the sell - off, gold slipped below $4,000 per ounce, extending a downward trend after months of rallying. While volatility remains elevated, the episode underscores how gold – once considered a purely defensive asset – is now closely influenced by broader market sentiment and shifts in risk appetite.

‍U.S. Equities Reach Record Valuations Amid AI - Driven Rally

Amid an unprecedented rally and widespread enthusiasm for AI technologies, U.S. equity markets have reached record valuations. The Shiller CAPE, a traditional metric of market value, recently crossed 40 – a level last seen during the dot - com bubble in early 2000s. For many observers, this raises concerns about potential overvaluation and the risk of a market correction.

At the same time, analysts caution that Shiller’s CAPE does not always predict crises accurately. While some argue that the current market reflects genuine innovation and productivity gains from AI adoption, others highlight that high valuations, concentrated investor attention and rapid price increases resemble conditions seen in prior speculative cycles.

The debate highlights the challenges of interpreting market signals in periods of rapid change and high investor enthusiasm. While valuations are historically high, investors and policymakers remain divided over whether the current rally marks a lasting structural shift or a period of elevated risk.

‍Netflix Faces Setback Amid Q3 Earnings and Tax Dispute

Even with the drop, Netflix remains ahead of several competitors, including Amazon and Disney, which have struggled to deliver meaningful returns to investors this year. Paramount, however, has surged ahead, boosted by its merger with Skydance and strategic content acquisitions, including exclusive streaming rights for major franchises. The combined entity – Paramount Skydance – has strengthened its content pipeline, capturing investor attention and driving a late- summer rally.

Netflix, the streaming giant, recently saw its stock decline sharply following the release of its Q3 earnings report. Despite record revenue of $11.5 billion and strong content performance, the company faced significant expenses linked to a tax dispute with Brazilian authorities. The unexpected charge triggered a sell - off, causing the company’s YTD performance to just above 20%.

With tight competition and ongoing regulatory pressures, Netflix will need to balance innovation, operational efficiency, and financial discipline to maintain its leadership position and navigate a market where opportunities and risks remain equally elevated.

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‍U.S. Shutdown Forces Investors to Rely on Alternative Data

On October 1, 2025, the U.S. government entered a shutdown after both Republican and Democratic funding bills failed to secure the 60 votes required in the Senate. The shutdown resulted in the furlough of nearly a million federal employees and led to a temporary halt in the release of key economic data, including jobless claims and non - farm payrolls, as many federal statistical agencies paused operations.

In the absence of official data, investors worldwide turned to alternative private sources to track economic activity. Many private firms accelerated data collection and reporting, providing proxies for the labor market indicators that would normally guide investment decisions. While these private measures cannot fully replace official statistics, they still offered useful insights during the shutdown.

With no immediate resolution in sight, such alternative data is expected to be particularly valuable at the beginning of November, when non - farm payrolls are traditionally released on the first Friday of the month, providing critical insight into the U.S. labor market.

Javier Milei Secures Historic Midterm Victory as Argentina Embraces Free - Market Economic Reforms

As December marks the second anniversary of President Javier Milei’s administration in Argentina, his party, La Libertad Avanza, has achieved a major political milestone. In the recent midterm elections on October 26, 2025, the party secured over 40% of the vote, effectively tripling its representation in Congress and consolidating Milei’s influence over the legislative agenda. Milei’s tenure has been defined by a commitment to free market principles and radical economic reforms aimed at cutting public spending and taming inflation. Early results are promising: triple digit inflation, which had been approaching 250%, has slowed significantly, signaling progress in stabilizing the economy.

While critics note ongoing challenges including job losses in the public sector and currency depreciation following the IMF agreement in April 2025, the broader picture reflects a country beginning to benefit from Milei’s market oriented policies, as real wages have finally returned to positive growth. When Milei took office, he inherited an economy plagued not only by hyperinflation but also by a collapse in purchasing power, with real wage growth at one point nearing minus 100%. His administration has since managed to reverse much of that decline, though recent trends raise concerns as the pace of wage recovery appears to be losing momentum.

The midterm elections were widely seen as a referendum on his economic agenda. The results indicate that a substantial portion of the electorate supports Milei’s libertarian approach, demonstrating public confidence in his vision for a freer and more dynamic economy even amid ongoing hardships. While the victory bolsters Milei’s political standing, it also underscores the need for continued reforms and careful management of Argentina’s fragile recovery. The result reinforces his mandate and provides fresh momentum to advance transformative policies aimed at securing long term growth and economic stability.

Giorgia Meloni Pushes Tough Budget Plan for Italy, Targeting Banks and the Wealthy

As Giorgia Meloni’s government nears what may become one of the longest running administrations in recent Italian history, it faces one of its most demanding tests yet: drafting next year’s budget amid persistent structural weaknesses and growing political expectations.

Italy, long viewed as the most vulnerable major economy in the eurozone, has shown tentative signs of fiscal improvement, with public finances gradually returning toward pre COVID deficit levels. But beneath the surface, sluggish growth and record high debt continue to cast long shadows over the country’s outlook.

The draft budget has already raised concerns in both Rome and Brussels. The government plans to collect €5 billion from banks and insurers next year. Officials present the measure as a fair contribution from sectors that benefited from higher interest rates, but critics warn it could tighten credit conditions and dampen investor sentiment.

Another controversial measure involves Italy’s flat tax regime for wealthy foreign residents, which will rise by 50% to €300,000 annually. Originally designed to attract high net worth individuals, the change risks making Italy less competitive compared to other low tax jurisdictions such as Switzerland or Portugal.

Still, Meloni’s political resilience is notable. Nearly three years into her term, she maintains strong approval ratings and controls a stable parliamentary majority, a rare feat in Italy’s volatile political landscape. Whether this stability can translate into sustained economic progress will depend on her ability to balance fiscal restraint, growth incentives, and EU expectations in the months ahead.

China’s Emissions Rise Despite Recent Green Pledges

While much of the world appears to be drifting away from the green transition narrative as ESG topics lose investor attention, China continues to position itself as a global advocate for sustainability. At the recent UN Climate Summit, President Xi Jinping reaffirmed China’s commitment to cut greenhouse gas emissions by 2035, stressing that the country remains focused on long term environmental goals despite waning global enthusiasm.

Yet, China’s dual role as the world’s largest manufacturer and biggest emitter remains a defining challenge. Its total emissions have continued to rise steadily, exceeding 15 billion metric tons in 2024, marking one of the highest readings on record.

This growth contrasts sharply with the intent of the 2015 Paris Agreement, which aimed to bring global emissions onto a declining path. Instead, China’s output, driven by strong industrial activity and energy demand, has expanded faster than in most major economies.

Perhaps even more striking is the changing structure of these emissions. While heavy industry remains a major contributor, the power sector’s share has grown significantly since the Paris Agreement, reflecting both an ongoing reliance on coal fired generation and delays in transitioning to renewables. The chart illustrates how the composition of China’s emissions has tilted toward electricity and heat production, even as overall volumes surged. This paradox, rising emissions amid global climate pledges, underscores the challenge Beijing faces in balancing industrial growth, energy security, and environmental commitments. Despite the government’s renewed pledges, achieving meaningful reductions will require deep structural shifts in how China powers its economy.