Trail 225 — One Ring to Hedge Them All

Markets Update by Aashish Singh Business Update by Sylvia Lo

Financial markets are fascinating. They are constantly evolving, they follow no predetermined path and much like humans, their behaviour at times is completely irrational. Every day their movements are thoroughly analysed, yet their next steps are a complete mystery. They follow a random walk and therein lies their beauty. Each week I briefly recap a few stories that captured my interest.

An eventful week — once again headlined by Trump — on the escalation of the unrest in Iran against the existing regime. Threats of US military interventions and subsequent de-escalation kept markets on edge. There has been significant loss of life but with the Rial collapsing, it is likely to evolve into a much bigger humanitarian one. The ripple effects will be felt through the global system with demand for gold and crypto further intensifying. Trump’s public indecisiveness on pick of the next Fed chair further impacted risk sentiment as odds grew for ex Fed governor Kevin Warsh while Trump loyalist Kevin Hassett dipped. To close it off, Trump announced Saturday that he would impose new tariffs on several European nations and NATO allies (including Britain where he has a trade pact) in response to their opposition to his efforts to obtain Greenland as part of the United States.

Gold and Silver continued their upward march this week. Bitcoin ETFs saw inflows return amidst speculations on the tensions in Iran. S&P 500 slipped from trading within a whisker of 7k to end the week flat. Cross asset vols remained muted. Oil gave up mid week gains as Iran tensions de-escalated.

Credit markets remain extraordinarily tight with some measures now at 2007 complacency levels. Vols are subdued and equities near record highs. Given the level of escalating risks, which investors continue to ignore, the trend in gold and silver will continue as it becomes the single trusted hedge against elevated valuations across the board.

Gold Dips

Gold slipped the most in more than two weeks after US President Donald Trump expressed reluctance about nominating Kevin Hassett as Federal Reserve chair, casting further doubt over his search for the next head of the central bank.

Hot on Credit

Global credit markets are running at their hottest in two decades, prompting some of the world’s biggest money managers, including Aberdeen Investments and Pimco, to warn against complacency about the risks. Yield premiums on corporate debt have fallen to just over one percentage point, the least since June 2007, amid confidence about the economic outlook, a Bloomberg index of bonds across currencies and ratings shows.

Strong Start for Bitcoin

Crypto investors are kicking off the new year with an old habit: ploughing money into Bitcoin ETFs. The dozen or so exchange-traded Funds holding the largest digital token took in roughly $760 million on Tuesday, the biggest single-day haul since October, according to data compiled by Bloomberg. A Bitcoin fund from Fidelity, trading under the ticker FBTC, made up the bulk of the draw, absorbing $351 million.

In the World of Business

This week, Apple and Google’s new AI partnership puts Google’s Gemini at the center of Apple’s ecosystem, strengthening Google’s AI momentum and creating a strategic setback for OpenAI.

Singapore’s new SGX–NASDAQ dual‑listing bridge aims to revive its underperforming stock exchange by giving firms simultaneous access to U.S. capital and Asian investor reach.

OpenAI will begin testing ads in ChatGPT for free and low‑cost users, marking a major shift toward advertising‑supported AI as the company seeks new revenue amid massive compute costs.

Apple Chose Google

Google emerges as the clear winner in a surprise alliance with Apple, gaining both validation and unprecedented distribution. After a turbulent early generative‑AI phase, Google has rebounded with its Gemini 3 models and renewed investor confidence. Apple publicly declaring Gemini as “the most capable foundation” for its AI features signals a decisive endorsement — particularly because Apple had previously leaned on OpenAI. Financially, Google is positioned to secure direct revenue from licensing its technology, but the bigger prize is strategic: a potential reach into the 1.5 billion iPhone user base. With Gemini powering a revamped Siri and potentially gaining deeper integration into iOS, Google strengthens its platform presence and fortifies its long‑term AI monetization beyond search.

For Apple, the deal buys time but also reveals a critical weakness: its flagship AI models are still not ready for mainstream deployment. Meanwhile, the partnership is a blow to OpenAI, fuelling a narrative that Google’s models have overtaken ChatGPT in performance and reliability.

Dual‑Listing

Singapore’s SGX–NASDAQ dual‑listing bridge is designed to bolster the SGX’s long‑standing struggle with low liquidity and low IPO activity by allowing qualifying firms to list in both markets through a streamlined process. The arrangement is expected to appeal to large Southeast Asian companies seeking the deep funding pools of the U.S. while maintaining regional visibility and brand presence and could also attract U.S. issuers. For investors, the bridge widens diversification opportunities amid global geopolitical uncertainty, aligning with Singapore’s strategy to enhance its role as a regional financial hub. Early indicators — such as rising SGX turnover and a strong 2025 IPO pipeline — suggest the exchange is regaining momentum, though still far behind giants like HKEX in deal size and trading volume.

However, structural constraints limit how transformative the bridge can be. Singapore lacks the massive, risk‑seeking retail investor base that fuels high turnover in Hong Kong and mainland China, and without meaningful U.S. trading participation during Asian hours, SGX’s liquidity challenges may persist. The high eligibility threshold — SGD 2 billion market capitalization — means only a small pool of Southeast Asian firms qualify. Meanwhile, rival exchanges such as HKEX maintain significantly lower barriers for secondary listings, preserving their competitive advantage.

ChatGPT Enters the Ad Era

OpenAI announced it will begin testing ads within ChatGPT for U.S. users on the free tier and the new $8‑per‑month ChatGPT Go plan, adding a long‑anticipated revenue stream to support the company’s steep infrastructure spending and push toward profitability. Ads will appear at the bottom of responses, be clearly labelled, and remain separate from answer generation. OpenAI emphasized that it will not sell user conversations or allow ads to influence outputs. This shift parallels broader monetization trends across the AI industry, where the cost of running advanced models continues to soar, and comes as OpenAI targets annualized revenue in the “low billions.”

Introducing advertising diversifies OpenAI’s revenue model at a critical moment, especially as competitors like Google integrate ads into AI‑enhanced search experiences and OpenAI faces multi‑billion‑dollar annual operating losses. While higher‑priced tiers such as Plus, Pro, and Enterprise remain ad‑free the move positions OpenAI to monetize its massive user base while potentially nudging ad‑averse users toward paid plans.

Until next week.