Markets Buckle on Tariff Fears; UK Clears China’s Mega Embassy; Davos Scams Surface; and a Hedge Fund Record Falls
- Dipo Owolabi
- 5 days ago
- 3 min read
21st January 2025
U.S. stocks wiped out their gains for 2026 in a sharp selloff as fears of an escalating trade war with Europe collided with a global bond rout that pushed Treasury yields higher. In geopolitics, the UK approved China’s controversial plan to build a “mega” embassy in London despite security and espionage concerns, while in Davos, attendees were warned about fake VIP passes circulating around the USA House at the World Economic Forum. And in finance, hedge fund manager Chris Hohn shattered industry records as TCI Fund Management posted $18.9 billion in profits, overtaking Citadel’s previous high and capping a historic year for global markets. All this and more in today’s Read It And Eat!
Major Headlines
US Stocks Erase 2026 Gains on Tariff Fears, Global Bond Rout
U.S. equities suffered a sharp selloff as mounting fears of a renewed trade war with Europe wiped out the market’s year-to-date gains. The S&P 500 fell 2.1% in its steepest one-day decline since October, with the Nasdaq 100 also sliding 2.1%. Investor complacency was jolted as volatility surged and risk appetite evaporated across asset classes.
The selloff was compounded by turmoil in global bond markets, particularly in Japan, where a sharp rise in yields spilled over into U.S. Treasuries. Higher yields tightened financial conditions and pressured equity valuations, especially in growth and technology stocks that had powered earlier gains.
The episode underscores how sensitive markets remain to geopolitical and policy shocks. With tariffs once again emerging as a central tool of economic diplomacy, investors are reassessing assumptions about global trade stability, inflation, and central bank policy heading into the year. Bloomberg
UK approves China’s ‘mega’ embassy in London
The UK government has approved China’s controversial plan to build a large new embassy complex in London, despite strong opposition from lawmakers, security experts, and local residents. Critics have raised concerns over potential espionage risks and the symbolic message of approving such a project amid strained UK–China relations.
Officials argue the decision reflects diplomatic norms and the importance of maintaining functional relations with Beijing, even as political tensions persist. The embassy is expected to be one of China’s largest diplomatic missions in Europe, reinforcing its long-term strategic presence in the UK.
The approval highlights the difficult balance Western governments face between security concerns and diplomatic engagement with China. As competition between Beijing and Western capitals intensifies, infrastructure decisions like this are increasingly viewed through a geopolitical lens rather than a purely administrative one.
Davos attendees are getting scammed by 'fake VIP passes' for the USA House
Attendees at the World Economic Forum in Davos have been warned about fake VIP passes circulating for the USA House, a privately funded American hospitality venue tied to the annual gathering. Organizers issued public alerts urging participants to verify credentials after reports of fraudulent offers surfaced online.
The scam highlights the commercial and reputational value attached to exclusive access at Davos, where informal meetings often carry as much influence as official panels. With high-profile executives, politicians, and investors in attendance, demand for entry to private events creates fertile ground for fraud.
Beyond the immediate scam, the incident underscores broader concerns around security and transparency at elite global forums. As Davos continues to blend public policy discussions with private networking, organizers face growing pressure to safeguard participants and maintain trust. Business Insider
TCI broke Citadel's record with $18.9B hedge fund profits
Hedge fund manager Chris Hohn set a new industry record after TCI Fund Management generated an estimated $18.9 billion in profits last year, surpassing previous highs set by Citadel and legendary investor John Paulson. The gains were fueled by strong equity markets and heightened global volatility, which created lucrative trading opportunities.
The record year reflects a broader boom for the hedge fund industry, which collectively generated an estimated $543 billion in gains — the highest on record. Equity-focused strategies, in particular, benefited from sharp market moves driven by AI optimism, geopolitical tension, and shifting interest-rate expectations.
Hohn’s success reinforces the growing influence of large, activist-style hedge funds in global markets. As capital continues to concentrate among top-performing firms, the gap between elite funds and the rest of the industry is widening, reshaping competition and investor expectations. Bloomberg
Minor Headlines
Commodity Trader Mercuria Paid 0.08% Tax on $1.3 Billion Profit Bloomberg
German investments in US nearly halved in Trump's first year back Reuters
Private Secondaries Deals Surge to Record $226 Billion Bloomberg
Usha Vance Says She Is Expecting Fourth Child Wall Street Journal
World Economic Forum weighs moving flagship event from Davos Financial Times
Honda to introduce new ‘H mark’ for automobile business from 2027 Yahoo Finance
Trump Family’s $6.8 Billion Fortune Is Increasingly Tied to Crypto Bloomberg
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