🚀 US arms deal with Taiwan

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Market Overview
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Year To Date Performances:

1. In a historic move to solidify regional deterrence, the U.S. has sanctioned a record-shattering $11.15 billion arms sale to Taiwan. The deal is the largest ever recorded, delivering heavy-hitting assets including 82 HIMARS rocket systems, 420 long-range ATACMS missiles, and dozens of self-propelled howitzers. This hardware injection, tied to President Lai Ching-te’s aggressive $40 billion supplementary defense budget, comes as a direct counter-maneuver to escalating Chinese provocations, specifically the recent transit of the Fujian—China’s most advanced aircraft carrier—through the sensitive Taiwan Strait. While Beijing’s foreign ministry warned that Washington would only "harm itself" by crossing this "first red line," analysts view the deal as a hallmark of the Trump administration’s "deterrence through strength" strategy, aimed at fortifying Taiwan’s asymmetric warfare capabilities before a potential 2027 military flashpoint.

2. The battle for the soul of the Edinburgh Worldwide Investment Trust (EWIT) has reached a fever pitch as the board "strongly urges" shareholders to reject a hostile board overhaul by Boaz Weinstein’s Saba Capital. The big is part of an attempt for Saga Capital to replace existing directors with its own nominees at a General Meeting in early 2026. This escalation comes after Saba, which now controls a massive 30% stake, successfully blocked a proposed merger with another Baillie Gifford fund, leading to an acrimonious public spat over the trust's "crown jewel" asset, SpaceX. Weinstein has accused the managers of "process blunders" and selling off a third of their SpaceX holdings at a valuation far below the reported $1.5 trillion IPO target just to facilitate that failed merger; meanwhile, EWIT’s chair, Jonathan Simpson-Dent, has branded Saba an "aggressive U.S. hedge fund" seeking a "power grab on the cheap," defending the trust’s recent 16.2% NAV return and narrowed discounts as proof that the current strategy is working for long-term investors.

3. Oracle's stock fell 5% after reports that Blue Owl Capital withdrew from negotiations to fund a $10 billion, 1-gigawatt data center in Michigan designed for OpenAI. While Oracle and its partner, Related Digital, insist the project remains "on schedule" with a different, unnamed equity partner, the withdrawal of a long-time financier like Blue Owl—reportedly due to concerns over Oracle’s $124 billion debt load and the specific terms of the deal—has triggered a broader sell-off in AI infrastructure stocks. This friction underscores a shift in the market as seasoned investors scrutinize the high-stakes lease commitments and private-equity dependencies that power the current AI boom, especially as Oracle's long-term obligations have ballooned to $248 billion.

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