My favorite economist, Ed Yardeni, pointed out that China’s GDP deflator has been down for 10 consecutive quarters, which is the worst decline since 1993. Ed pointed out that this “increases the odds that China will share its deflation troubles with a global economy that’s staggering out of 2025 and worried about what 2026 will bring.” In other words, China’s deflationary spiral may envelop much of the world in 2026. This is one reason I am expecting a global interest rate collapse. The other reason is that Asia and Northern Europe are losing households from a demographic decline, so it is very hard to grow when your population is getting older and shrinking.Interestingly, inflation in India declined to 0.25% in October, which is the lowest rate since data collection commenced back in 2012. Economists were anticipating that inflation in India would reach unprecedented lows by citing factors such as falling vegetable prices, plus the continuing impact of goods-and-services tax reforms. The Indian central bank (RBI) has a 4% inflation target, so more key rate cuts are expected as long as inflation remains below the RBI’s target. I should add that India’s birth rates have fallen dramatically and risks following Western nations with an aging demographic trend that might squelch growth in the upcoming years.California Governor Gavin Newsom met with foreign leaders at COP 30 in Brazil. Regarding the goal to get to NetZero, Newsom said, “The United States of America is as dumb as we want to be on this topic, but the state of California is not,” then he added “And so we are going to assert ourselves, and we are going to lean in, and we are going to compete in this space.”At an event hosted by Germany, Newsom said, “California distinguishes itself from the current occupant of the White House in Washington, DC,” then added that “California is a stable and reliable partner.” In his sharpest barbs yet, Newsom said, “Trump is temporary, and I hope folks around the globe remember that,” then concluded by saying, “He will be remembered in years, not in decades. And he’s reckless, he’s chaotic, mercurial, and he’s transactional, but people have to stand up. You stand up to a bully.”Obviously, Gavin Newsom is running for President in 2028, but I am not sure that NetZero climate goals will propel him to victory, since what is the U.S. supposed to do with all the energy-intensive data centers that will be operational by 2028? Technology companies, many based in California, are leading the AI and data center boom. Perhaps Gavin Newsom forgot that California companies are causing energy demand and fossil fuels (mostly natural gas) to soar to power their data centers. Due to California’s expensive electricity, data centers are booming in other states with cheaper electricity.Speaking of AI, despite an impressive short covering rally in AI stocks at the beginning of the week, typically, the stock market likes to “retest” its recent lows. Although a full retest may not occur due to strong seasonality in November, the key is to watch for moderating volume on the downside to make sure that any retest is exhausting itself. As a result, many stocks will be good buys on pullbacks in the upcoming days.