Six-Chart Sunday – The Latest on China, Midterms, Iran & More

6 Infographics + 1 Video (Country music star Eric Church with the greatest commencement address since Admiral McRaven's "Make Your Bed"... AMAZING)

Over the past six months we’ve written about the midterm elections, U.S.-China policy, the Iran War, market bubbles, Trump 2.0 and the impact of AI on jobs. Today’s post updates each.

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1. China: The meeting was the message

Presidents Trump and Xi met in Beijing this week, the first in a series of bilateral dialogues as Trump shifts from 2025’s accelerated decoupling strategy to 2026’s constructive engagement. The vibe was positive & constructive, if not specific. While many question the apparent lack of concrete outcomes, we believe the meeting was the message. As noted in The China Theory of Everything, decoupling remains the long-term objective. But right now Trump wants Xi’s help maintaining market momentum (markets hate unpredictable trade wars), reducing U.S. inflation (extending the tariff truce), convincing Iran to reopen the Strait of Hormuz, buying key U.S. exports (esp. farm products) and selling critical inputs needed for AI & manufacturing (specifically minerals and magnets monopolized by China).

2. Elections: The empire struck back

While Democrats remain favored to regain the House majority as we reported last month, Republicans have been on a redistricting roll. Prediction markets reduced Democrats’ odds of victory from a peak of 86% on April 3^rd to 74% today. Cook Political Report publisher Amy Walter suggests a ~10 seat swing in favor of the GOP as a result of redistricting… Six weeks ago Democrats held 217 safe, lean or likely seats and needed only 1 of 16 toss-up seats… now they hold 207 safe/lean/likely seats and need to win 11 of 18 toss-up races.

3. Iran War: New realities of a multi-polar world

Without predicting how or when the Iran War would end, we wrote that business leaders are now operating in a transformed geopolitical landscape and need to plan for yet rising debt (raising pressure for offsetting taxes & more expensive borrowing), hardening borders (bringing both risks & opportunities), higher inflation and increased nationalism (as countries aim for more resilience and leverage (see “After Iran”)). While Wednesday’s NYT reported on rising short-term inflation (“wholesale prices in April rose at their fastest rate in four years”), long-term inflation expectations are also increasing, with the 30-year Treasury yield reaching its highest closing level since June 2007.

4. Bubbles: It’s the end of the world as we know it and my 401k feels fine.

We were “On Bubble Watch” last October, given historically-high market valuations and seemingly impossible AI expectations. So when the S&P 500 fell ~8% during the first 21 trading sessions after the start of hostilities in Iran, we assumed bubbles were bursting. Instead:

“The AI boom has powered a swifter stock market rebound than during a series of previous crises. Publicly listed groups with a market capitalisation of at least $10bn have collectively gained $5.6tn in value in the first 10 weeks of the war. The same basket of companies had lost $2.5tn at the same point in Russia’s full-scale invasion of Ukraine in 2022, according to FT analysis. They shed more than $9tn at the outset of the Covid-19 pandemic.” (FT)

5. Trump 2.0: Dealmaker-in-chief

In Decoding Trump 2.0 we posited that the President is not ideological… rather he’s transactional, looking for the best outcome for his country / party / allies on any issue, unbound by what predecessors have done or successors may do. 2026 reinforces that take, and investors / business leaders / other governments trying to understand, predict and engage this Administration need to surrender old assumptions.

If you thought President Trump was an isolationist, you misunderstood his vision of “America First.” If you believed he was a traditional “free market conservative,” you’re mistaking him for Mike Pence / the post-Reagan GOP. If you assumed he was a China hawk, you were surprised again this week as you were by TikTok machinations or the export control decisions on AI chips. And if you assumed Trump was a skeptical-of-Big-Tech-populist (e.g. Steve Bannon), you’ve likely changed your mind there also. (6CS)

6. Jobs in the Age of AI: If you can’t get a job, it may be your own fault

In Rage Against the Machine, we reviewed the long history of pessimists bemoaning imminent “technological unemployment,” as looms tractors machines computers AI destroy all the jobs. Serial entrepreneur, investor and friend Auren Hoffman wrote a brilliant & provocative new piece suggesting “if you can’t get a job, it’s your fault.” Snippet below, but read the whole thing and share:

“every spring, three million new college grads enter the job market with the playbook their parents and high school counselors gave them. apply to 500 places. tailor the resume. write a cover letter. follow up politely. attend the career fair. join the alumni LinkedIn group. it does not work anymore.

the entry-level job market is not soft. it is mismatched. companies are hiring like crazy. they are paying more than ever. they cannot find candidates who do the thing they said they were going to do.

so what makes you hireable?

you have to show you can add value. that is it. that is the only thing.

the test the smart hiring manager applies in 2026 is simple. can you learn something on your own? can you finish what you started? can you do what you said you would do? these were always the skills that mattered. the difference is they are now the ONLY skills that matter, because the credential stopped doing the screening.

the most valuable thing a 22 year old can do in 2026 is create something. an app. a screenplay. a side business. an internal tool you wrote for a club you were in. a dinner series. a script that automates something annoying. a website. a chrome extension. a sculpture. a dance party. a discord bot. a substack with 32 readers and a real point of view. anything that moved from idea to working.

will the thing make money? probably not. that is not the point.

the point is that you taught yourself something. you finished it. you can describe what you learned, what broke, what you fixed, why you made the calls you made. that story is the new resume.”

VIDEO

Watching this phenomenal commencement address will be your favorite 15 minutes this weekend, money back guarantee.