[Posted 4:30 PM ET, Friday]
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Edition 1,380
Wall Street and the Economy
It’s Day Three of the government shutdown and as I go to post, little real progress, with lawmakers from both parties having informal discussions to craft a deal that could get enough Democrats to support a funding measure for reopening.
One option being discussed is a shorter funding extension through Oct. 31, which Democrats say could keep pressure on Republicans to extend Affordable Care Act (ACA) subsidies before the open enrollment period begins Nov. 1.
How much longer the shutdown lasts depends on how well each side believes it’s faring in the eyes of the public and if the political cost of staying dug in ultimately outweighs acquiescing.
For example, in a Washington Post poll of 1,000 people taken October 1st, when asked ‘Who do you think is mainly responsible for the federal government partially shutting down,’ 47% blame Trump and Republicans in Congress, 30% blame Democrats in Congress, and 23% are not sure. Other surveys have the margin being narrower.
The biggest sticking point heading into the shutdown was whether to include an extension of the ACA premium tax credits as part of a deal to fund the government.
Senate Minority Leader Chuck Schumer at a White House meeting Monday emphasized the financial impact that will be levied on families if the subsidies expire, saying it could add several hundred dollars to monthly bills.
Republicans broadly rejected Democrats’ rationale, alternatingly arguing that the subsidies go to wealthier Americans and that Democrats want to provide health care for immigrants without legal status.
The nonpartisan Congressional Budget Office said earlier this month that fully extending the subsidies would cost up to $350 billion through 2035.
Senate Majority Leader John Thune (R-SD) said in a Sunday interview that the subsidies will require “reforms” to get GOP support, describing them as “waste, fraud and abuse.” Some conservatives have pushed to drop the credits entirely.
White House Budget Director Russell Vought is planning to swiftly dismiss federal workers, Vought telling House lawmakers Wednesday that some federal agencies will move to terminate workers within one to two days.
White House Press Secretary Karolina Leavitt told reporters that layoffs would happen within “two days, imminent, very soon” but declined to give any details about what agencies or positions could be targeted.
President Trump said Tuesday that “a lot” of federal workers may be laid off.
“We can do things during the shutdown that are irreversible, that are bad for them and irreversible by them,” Trump said of Democrats later in the day. “Like cutting vast numbers of people out, cutting things that they like, cutting programs that they like.”
Trump posted on Truth Social Thursday morning:
“I have a meeting today with Russ Vought, he of PROJECT 2025 Fame, to determine which of the many Democrat agencies, most of which are a political SCAM, he recommends to be cut, and whether or not those cuts will be temporary or permanent. I can’t believe the Radical Left Democrats gave me this unprecedented opportunity. They are not stupid people, so maybe this is their way of wanting to, quietly and quickly, MAKE AMERICA GREAT AGAIN! President DJT”
The shutdown gives Republicans an opening to “do some things that we would not otherwise be able to do, because we would never get Democrat votes for them,” Republican House Speaker Mike Johnson told Fox Business on Wednesday.
The White House “gets to decide now what services are essential, what programs and policies should be continued, and which would not be a priority,” he said.
Vice President JD Vance, however, downplayed plans to use the shutdown to slash services, saying Republicans don’t want to “lay anybody off” but said, without explaining his reasoning, that the administration could be forced to dismiss workers to save money during a shutdown. In previous shutdowns, many federal workers were furloughed without mass firings.
Some Democratic lawmakers have quietly expressed worry about the layoffs, with little assurance that seeking to block the move in court will be successful.
Meanwhile, the Supreme Court on Wednesday allowed Federal Reserve Governor Lisa Cook to keep her job for now and scheduled arguments in January to weigh President Trump’s decision to fire her.
The court in a brief order deferred a decision on the Trump administration’s emergency request to remove Cook from the central bank’s independent board while a lawsuit challenging her firing proceeds.
The justices on several occasions have allowed Trump to fire officials at other government agencies, but they also have signaled they believe the Fed is unique and enjoys more protections from presidential intervention. By placing the case on its argument calendar, the court buys itself more time to consider the issue.
It also means that Trump, who appointed three of the current seven board members – governors Michelle Bowman and Christopher Waller, and the recently confirmed Stephen Miran – won’t be able to appoint a fourth for a while, and this could be highly significant.
Beyond the seven board members, a wider group of 12 voting members including five regional bank presidents sets interest rates.
Regional Fed presidents are appointed by the individual banks’ directors, but the Fed board needs to affirm them every five years, and the next decision is in February. Cook remaining appears to eliminate the possibility that a Trump-majority board could reject all of them.
That’s assuming that the Supreme Court doesn’t rule right away. “This might be enough to keep [Cook] on the Board until February, when she could vote to reappoint the Regional Fed Presidents,” University of Michigan economist Justin Wolfers said on X. Cook’s term runs through 2038.
Trump also has to choose his replacement for Jerome Powell, whose chairmanship expires in May but whose board tenure lasts until 2028, unless he steps down. There is little reason for Trump to further delay naming his pick now.
Separately, the White House withdrew the nomination of conservative economist E.J. Antoni to run the Bureau of Labor Statistics.
Trump nominated Antoni, the former chief economist at the Heritage Foundation and a longtime critic of BLS chief Erika McEntarfer on Aug. 1, midway through her term, following a weak jobs report.
It seemed because of his background and lack of extensive research experience (among other things), Antoni was going to lose the support of a number of Republicans in the Senate.
—
In the absence of government data, the payroll numbers for September from ADP garnered the spotlight, and undue influence perhaps, with the figure showing the U.S. shed 32,000 private-sector jobs in September, down from a revised loss of 3,000 in August. Economists polled by the Wall Street Journal expected an increase of 45,000. Normally the ADP report is dismissed as an unreliable precursor to official labor market figures.
But bad news for job seekers is good news for a stock market eager for the Fed to keep cutting interest rates, and the ADP numbers added to the belief the Fed was clearly cutting two more times this year.
We did have some other data points that weren’t government shutdown related. The Chicago PMI on the manufacturing environment in the Chicago region came in at a putrid 40.6 for September (50 the dividing line between growth and contraction). The national ISM manufacturing figure for the month was 49.1, in line with expectations, while the service sector reading was just 50.0, well below expectations of 51.6 and rather worrisome.
Tuesday, we had the Case-Shiller home price index for July, which showed a continuing deterioration in prices, with the 20-city index down 0.1% month-over-month, and up 1.8% year-over-year vs. 2.1% prior.
But no figures on construction spending, factory orders or the jobs’ numbers from the BLS due to the shutdown.
We weren’t supposed to have any market-moving economic data next week, but if the shutdown ended…we might see a slew of it in the catch-up.
The Atlanta Fed’s GDPNow barometer for third-quarter growth is at 3.8%.
Freddie Mac’s 30-year fixed-rate mortgage is 6.34%.
On the tariff front…
President Trump said Monday he is slapping a 100% tariff on films made outside of the U.S., reiterating a threat he made earlier this year against the movie industry.
“Our movie making business has been stolen from the United States of America, by other Countries, just like stealing ‘candy from a baby,’” Trump said on social media.
Trump, who didn’t provide details on the tariffs, has argued that foreign countries have undermined the U.S. film industry by using tax incentives to get Hollywood productions to shoot overseas.
Trump took shots at California Gov. Gavin Newsom, calling him “weak and incompetent” and saying that his state, home to movie capital Hollywood, “has been particularly hard hit.”
“Therefore, in order to solve this long time, never ending problem, I will be imposing a 100% Tariff on any and all movies that are made outside of the United States,” Trump wrote.
Trump had floated the idea of imposing tariffs on films earlier this year. It is unclear how film tariffs would work because movies aren’t physical goods that travel through ports like most products subject to tariffs.
Since most big-budget event films earn most of their revenue overseas, some Hollywood executives have said Trump’s plan could hurt the film industry if other countries responded with reciprocal tariffs.
Some of this year’s biggest Hollywood productions, including “Mission: Impossible – The Final Reckoning” and “Jurassic World Rebirth,” were made primarily or entirely outside the U.S. Disney’s Marvel Studios is shooting a pair of coming Avengers sequels in London.
President Trump on Monday night announced tariffs of 10% on softwood timber and lumber alongside a 25% tariff on “certain upholstered wooden products” due to take effect on October 14, according to the White House.
This was the latest set of tariffs to be announced impacting furniture industries after Trump posted to Truth Social about a flurry of tariffs on kitchen cabinets, vanities and other upholstered products on September 26 to take effect on October 1.
Trump said this will help “strengthen supply chains, bolster industrial resilience.” Yet home builders have warned this could deter investments in new homes and renovations. Canada is also set to be hit hard by the order, as it’s the U.S.’s largest wood supplier and already subject to duties of 35.2%.
Trump posted on Truth Social Monday morning:
“In order to make North Carolina, which has completely lost its furniture business to China, and other Countries, GREAT again, I will be imposing substantial Tariffs on any Country that does not make its furniture in the United States. Details to follow!!! President DJT”
Federal Reserve Bank of Chicago President Austan Goolsbee said the most recent round of tariffs may be causing businesses in his district to again pause decision-making in order to see where the levies settle.
“Now, it seems like we’re going into a new wave of tariff announcements,” Goolsbee said Tuesday at an agricultural conference hosted by his bank.
“When I’m out talking to people, it feels like they’re just wary, they’re uncertain and we might be going back into that, everybody-just-put-your-pencils-down kind of a moment, where you just wait until you figure out where it’s going to be,” he added.
While the unemployment rate has increased in the past few months and hiring has slowed, employers haven’t yet made significant layoffs. Goolsbee called the labor market stable, though he noted that the “low hiring, low firing” environment is unusual.
Separately, President Trump posted on Truth Social Wednesday:
“The Soybean Farmers of our Country are being hurt because China is, for ‘negotiating’ reasons only, not buying. We’ve made so much money on Tariffs, that we are going to take a small portion of that money, and help our Farmers. I WILL NEVER LET OUR FARMERS DOWN! Sleepy Joe Biden didn’t enforce our Agreement with China, where they were going to purchase Billions of Dollars of our Farm Product, but Soybeans, in particular. It’s all going to work out very well. I LOVE OUR PATRIOTS, AND EVERY FARMER IS EXACTLY THAT! I’ll be meeting with President Xi, of China, in four weeks, and Soybeans will be a major topic of discussion. MAKE SOYBEANS, AND OTHER ROW CROPS, GREAT AGAIN!”
Four weeks would be the APEC summit in South Korea, but weeks ago, Beijing had said Xi wasn’t attending this, so we’ll see.
But the issue of China and soybeans is a totally self-inflicted wound by Trump, as the Wall Street Journal editorial board sums up:
“Whoever claimed trade wars are easy to win clearly wasn’t an American farmer. Witness the enormous collateral damage America’s soybean producers are suffering amid President Trump’s trade war with China.
“Exports of American soybeans to China have collapsed this year, with no new orders logged in recent months ahead of the prime autumn export season. Before Mr. Trump’s first round of tariffs on China in 2018, China was the largest export market for American soy. It typically bought about 30% of total U.S. soybean production and some 60% of American soybean exports. Those exports were worth $12.8 billion annually, the soybean farmers’ trade association reports.
“Beijing has made a concerted effort to diversity its supply of soybeans and related products since the first Trump Administration. Brazil and, more recently, Argentina have been the big winners.”
Europe and Asia
We had PMI readings for the eurozone for September…manufacturing fell from 50.7 to 49.8, while the services reading was at 51.3 (8-month high). [S&P Global / Hamburg Commercial Bank]
Germany: manufacturing 49.5; services 51.5
France: mfg. 48.2; services 48.5
Italy: mfg. 49.0; services 52.5
Spain: mfg. 51.5; services 54.3
Ireland: mfg. 51.8; services 53.5 (big increase from August’s 50.6)
Netherlands: mfg. 53.7 (38-mo. high)
Greece: mfg. 52.0
UK: mfg. 46.2; services 50.8
Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank:
“Things are running a little bit more smoothly in the service sector. After almost stagnating in August, business activity picked up more strongly in September. This recovery is practically broad-based geographically, with moderately robust growth observed in Germany, Italy, and Spain. The situation is different in France, where the change of government and uncertainty about whether the new prime minister will be able to hold on to power has had a negative impact on service providers. Business activity declined noticeably here.”
Eurostat released a flash estimate of inflation in the euro area in September 2.2%, up from 2.0% in August; ex-food and energy 2.4% vs. 2.3% prior.
Euro area unemployment in August was 6.3%, up from 6.2% in July. [Eurostat]
August industrial producer prices in the EA20 decreased 0.3% compared with July; down 0.6% from a year ago. [Eurostat]
Turning to Asia…China’s official PMIs for September had manufacturing at 49.8, non-manufacturing 50.0. Not great.
But the private RatingDog (formerly Caixin) readings were far better…manufacturing 51.2, services 52.9.
Japan’s September PMI figures were 48.5 for manufacturing, and a solid 53.3 for services.
Separately, August retail sales were -1.1% month-over-month, and the same -1.1% year-over-year. August industrial production was -1.2% M/M, -1.3% Y/Y.
The August unemployment rate was 2.6%, up from 2.3% the prior month.
South Korea’s manufacturing reading for September was 50.7, the strongest in 13 months. Taiwan’s manufacturing figure for the month was 46.8, signaling a solid deterioration in business conditions.
Street Bytes
–As one analyst put it this week, the market is priced for perfection in an imperfect world, which is a good way to sum up the current environment. It also helped this week that the Supreme Court’s decision that Fed governor Lisa Cook can remain in her job until at least January reassures the market about the principle of Fed independence.
Despite the shutdown, the market marched ever higher to new record highs, with only the Nasdaq stumbling a bit after four straight up days for the major indices. The Dow Jones and S&P 500, however, rose five straight and sit at new highs, the Dow up 1.1% to 46758, the S&P also rising 1.1% to 6715. Nasdaq finished the week up 1.3% to 22780.
—U.S. Treasury Yields
6-mo. 3.82% 2-yr. 3.57% 10-yr. 4.12% 30-yr. 4.71%
Yields fell, particularly after the poor ADP report, with the feeling being more rate cuts are now a certainty, even if the economic data stream is highly uneven.
The yield on the 2-year fell 8 basis points on the week to 3.57%, while the key 10-year yield is down to 4.11%. [Though both saw their yields rise today.]
—Crude oil had a poor week, after a very good the week before, as supply concerns weighed on sentiment.
—Berkshire Hathaway said it will buy Occidental Petroleum’s petrochemical business for $9.7 billion in cash. This is Berkshire’s largest deal since 2022.
“This transaction strengthens our financial position and catalyzes a significant resource opportunity we’ve been building in our oil and gas business for the latest decade,” Occidental CEO Vicki Hollub said Thursday.
The OxyChem division generated nearly $5 billion in sales in the 12 months ended in June. Occidental said it plans to use $6.5 billion of the transaction proceeds to pay down debt.
—Drugmaker stocks rose Tuesday after Pfizer appeared to defang the Trump administration’s efforts to cut drug prices and impose big tariffs on pharmaceutical imports.
At a White House press conference, President Trump said that Pfizer will reduce prices for drugs sold into the Medicaid system, and will launch new drugs in the U.S. at lower prices that match those in other wealthy nations through a new federal website, TrumpRx.
The agreement would appear to a best-case outcome for the industry. Pfizer has extracted what seems to be a far better arrangement that will have a manageable effect on the company’s business.
Pfizer CEO Albert Bourla said at the press conference that Trump had agreed to a “three-year grace period” to exempt Pfizer from the long-threatened sector specific tariffs on pharmaceutical imports.
The company committed to selling virtually all of its drugs currently on the market to Medicaid at “most favored nation” prices. Medicaid already pays lower prices than other payers for prescription drugs. For other payers, only newly launched drugs will have “most favored nation” prices.
Bourla said that the company had committed to moving production of U.S. drugs into the country, and will commit an additional $70 billion to capital projects and research and development in the U.S.
Trump said other drugmakers will make similar commitments.
“They’re all coming in over the next week,” the president said. “We’re making deals with all of them.”
It isn’t clear how helpful the changes will be to patients, because insurers won’t help cover the cost of direct-to-consumer drugs, and the copays that insured patients pay at the pharmacy counter are a small fraction of the list prices.
Editorial / Wall Street Journal
“When politicians interfere in private markets and industry, crazy things happen. So it goes with President Trump’s rolling attempt to play Pharmacist in Chief on drug production, government approvals, and consumer access and prices.
“The comedy portion of this show debuted this week with Mr. Trump’s announcement of a new government website dubbed (of course) Trump Rx. The plan is to sell medicines directly to consumers at discount prices. Details are vague, though the business theory is supposedly to bypass insurance ‘middlemen.’
“Someone should have told the President that private businesses already do this. One example is Mark Cuban’s Cost Plus Drug Co., which markets itself as selling ‘safe medicines at the lowest possible price.’ We know Mr. Trump doesn’t like Mr. Cuban, but there are other competitors, and why does the federal government need to become a drug marketer? Doesn’t it already do enough not very well?
“The White House is advertising TrumpRx discounts on the likes of Xeljanz for autoimmune conditions (40% discount)…Eucrisa for dermatitis (80%)… What the White House isn’t saying is that most drugs already cost much less than their list prices.
“Most Americans pay far less out-of-pocket for medicines using their insurance cards at neighborhood pharmacies. A Berkeley Research Group study last year found that drug makers receive only about 50% on a dollar of revenue for every drug they sell in the U.S. Most of the rest goes to pharmacy benefit managers, which use rebates from drug makers to reduce insurance premiums.
“Out-of-pocket spending on prescription drugs accounts for a mere 1% of U.S. healthcare spending….
“Meanwhile, Mr. Trump on Tuesday announced a deal that gives Pfizer a three-year reprieve from his mooted 100% tariffs on imported pharmaceuticals. In return, Pfizer will sell medicines to Medicaid at a price that matches the lowest paid in the developed world – the co-called most-favored nation price.
“This is a good short-term deal for Pfizer since federal law already requires companies to sell drugs to Medicaid at huge discounts…
“It’s hard to begrudge Pfizer CEO Albert Bourla for buying political goodwill from the President to reduce punitive costs for his company. But the deal has caused an uproar in the industry as every CEO must now decide whether to ask Mr. Trump for a similar most-favored-company deal.
“The White House is leaking to the press that any company that refuses such a deal will get hit with punitive tariffs and price controls. This is a form of political extortion akin to what Democrats did with their pharma price controls in the Inflation Reduction Act. The real winners in all this are in China, which is bidding to replace the U.S. as the home of the world’s leading biotech and pharma industry.”
–Appearing on BG2, a podcast hosted by tech investors Brad Gerstner and Bill Gurley, Nvidia CEO Jensen Huang said allowing U.S. companies like Nvidia to compete in China fits the interests of both Beijing and Washington.
Washington should allow its technology industry to compete globally – including in China – to “proliferate the technology around the world” and thereby “maximize America’s economic success and geopolitical influence,” he said.
China is “nanoseconds behind” the U.S., “so we’ve got to go compete,” Huang said, highlighting China’s progress in chipmaking and its manufacturing potential. He pointed to the country’s deep pool of talent, hustling work culture and internal competition across its provinces.
“This is a vibrant, entrepreneurial, hi-tech, modern industry,” Huang said, adding that he hoped and believed China would remain open to outside investment, noting that Beijing has pledged to maintain “an open market.”
“What’s in the best interest of China is for foreign companies to invest in China, compete in China and for them to also have vibrant competition themselves,” he said. “They would also like to come out of China and participate around the world.”
Nvidia’s sales to China have been disrupted by geopolitical tensions.
—Nike shares rose as the company’s turnaround plan bore fruit, beating earnings expectations, though a full recovery remains distant, executives said, warning that “progress won’t be linear” as the company looks to move past several years of sluggish innovation, product missteps, excessive discounting, and a break with wholesale retailers that introduced the Swoosh’s products to new consumers.
Shares of Nike have shed roughly 30% over the past three years, trading at similar levels as in mid-2018 and erasing most of the gains made during the pandemic-era boom in activewear. The company’s new management team, led by CEO Elliott Hill, has been working to rectify the business by cleaning out inventories to stock up on new styles and fixing relationships with wholesale partners.
Nike reported earnings of 49 cents a share for the quarter ended Aug. 31, topping analysts’ estimates for 27 cents a share.
Revenue was better than projected, as well, rising by 1% year over year to $11.7 billion, with the Street at $11 billion, which would have marked a roughly 5% decrease.
Nike expects second-quarter revenue to be down by a low-single digit percentage, in line with Wall Street’s projections for a 3% drop.
Meanwhile, sales in China, one of Nike’s top countries, fell 9% from the year-ago quarter. Foot traffic in stores has been slow, requiring more discounting to drive demand.
Consumers in the U.S. are still cautious about spending, management said, and tariffs have become a bigger thorn in the company’s side in the past 90 days. When Nike last reported earnings, most tariffs on Southeast Asia ranged around 10%. Now they’re set closer to 20%.
—Boeing is working on a design for a new single-aisle aircraft. The plane maker is considering a new jet to replace the 737 MAX, as reported by the Wall Street Journal.
“Our teams continue to be focused on our recovery plan, including delivering on our existing backlog of nearly 6,000 commercial airplanes and certifying the new 737-7, 737-10, and 777-9 models,” said a Boeing spokesperson.
It’s a huge step that potentially commits the company to billions of dollars and multiple years of product development. The payoff is improved market share in key market segments.
Any new single-aisle jet doesn’t have to replace the MAX per se. It is likely to be a little larger than a 737 MAX and capable of carrying anywhere from 200 to 250 passengers.
Separately, Boeing’s 777X is slated to fly commercially for the first time in early 2027 rather than next year, according to reports. Yet another setback for the planemaker and could involve billions of dollars in accounting charges.
—If the government shutdown extends more than a few weeks, expect longer security lines, for starters, as airport screener absenteeism rises.
—TSA checkpoint numbers vs. 2024…no longer available due to shutdown!
10/2…N/A…no available
10/1…N/A
9/30…79
9/29…94
9/28…133
9/27…81
9/26…107
9/25…122
–Last Friday, the Wall Street Journal first reported that videogame producer Electronic Arts was in talks to go private, with the board’s blessing. EA is known for popular video-game titles such as Madden NFL and Battlefield.
In addition to private-equity firm Silver Lake, the buyers group includes Saudi Arabia’s sovereign-wealth fund and Affinity Partners, a firm headed by President Trump’s son-in-law Jared Kushner. The deal would be the largest LBO ever.
The buyers will pay $210 a share in cash, a 25% premium to last Thursday’s closing price.
The Silver Lake group plans to contribute $36 billion of equity, including an existing 10% equity stake now held by the Saudi fund, and borrow $20 billion through JPMorgan Chase.
—Ford Motor’s sales surged in the third quarter, led by its trucks and electrified vehicles. The company reported total sales of 545,522, up 8.2% compared to a year ago. Ford sales of pickups like the F-Series, Ranger, and Maverick, combined with its vans, jumped 7.4% to 313,654 units sold, with F-Series trucks up nearly 13% year to date.
Not surprisingly, Ford had its best EV sales ever for the quarter as buyers rushed to purchase electric Mustang Mach-E SUVs and F-150 Lightning pickups ahead of the expiration of the federal EV tax credit this week.
Ford EV sales hit a record 30,612 in the quarter, up 30.2%, led by the Mac-E hitting 20,177 units sold, up a robust 50.7%. Ford said the F-150 Lightning hit a Q3 record 10,005 pickups sold, up nearly 40% and making it the bestselling EV pickup in the U.S., ahead of Rivian’s R1S and Tesla’s Cybertruck.
—General Motors reported a 7.7% rise in U.S. auto sales in the third quarter, also aided by strong demand for electric vehicles and SUVs.
GM’s overall quarterly sales rose to 710,347 units, compared with 659,601 units a year ago.
EV sales more than doubled for GM, setting a new record with 66,501 deliveries. GM’s total EV sales in the U.S. year to date now stand at 144,668, up 105% from a year earlier.
–Speaking of the expiration of the tax credit, Tesla set a new sales record in the third quarter in a surprise reversal of the steep declines that have plagued the electric-vehicle maker this year.
Global EV deliveries grew 7.4% in the period that ended Sept. 30 as U.S. customers rushed to beat the deadline.
The sales turnaround isn’t likely to last. CEO Elon Musk has laid out his vision for pivoting the company away from human-driven cars toward autonomous vehicles and robots.
Today, conventional EV sales are three-fourths of Tesla’s business. The company’s final quarterly tally of 497,099 Teslas delivered was higher than Wall Street analysts’ estimates of 456,000 deliveries, which would have amounted to a 1.5% decline.
Going forward, it remains to be seen how much demand for EVs there will be when U.S. buyers don’t have the benefit of the special tax break.
Musk has said he expects there to be hundreds of thousands of Teslas driving fully autonomously on roads in the U.S. by the end of 2026, many of which would be personally owned vehicles. I call bulls— on this. He has never been close to right on his forecasts. Tesla shares fell hard Thursday and Friday…it was a classic ‘buy the rumor, sell the fact…’
Tesla will report its full third-quarter earnings on Oct. 22 and expect to hear Musk pooh-pooh EV sales and instead hammer away at the potential for robots and robotaxis.
Rivian Automotive, the second-biggest EV-only automaker in the U.S., reported a 32% increase in third-quarter deliveries to 13,201 while narrowing its full-year guidance. Rivian indicated it expects to deliver about 10,000 EVs in the fourth quarter.
—OpenAI has completed a deal to help employees sell shares in the company at a $500 billion valuation, propelling the ChatGPT owner past Elon Musk’s SpaceX to become the world’s largest startup.
Current and former OpenAI employees sold about $6.6 billion of stock to investors including Thrive Capital, SoftBank Group Corp., Dragoneer Investment Group, Abu Dhabi’s MGX and T. Rowe Price, according to people familiar with the transaction.
—YouTube has agreed to pay $24.5 million to settle a 2021 lawsuit that President Trump brought against the company and its chief executive over its suspension of Trump’s account after that year’s riot at the U.S. Capitol, according to court papers.
The settlement makes YouTube, which is owned by Alphabet’s Google, the final Big Tech company to settle a trio of lawsuits Trump brought against social-media platforms in the months after he left the White House. Meta Platforms agreed in January to pay $25 million, most of it to a fund for Trump’s presidential library, and X agreed to pay $10 million, much of it going directly to Trump, the Wall Street Journal reported.
Google executives were eager to keep their settlement smaller than the one paid by rival Meta, according to people familiar with the matter. Trump’s share of the settlement – $22 million – will go to the nonprofit Trust for the National Mall, earmarked for the construction of a Mar-a-Lago-style ballroom Trump is building at the White House, according to the court documents. The White House has said the ballroom, expected to cost $200 million, would be funded by donations from Trump and “other patriot donors.”
A further $2.5 million will go to the other plaintiffs on the case, a group that includes the American Conservative Union and writer Naomi Wolf. There was no mention of attorney fees.
—CoreWeave, a provider of computing services, saw its shares surge nearly 12% on Tuesday after the company inked a $14.2 billion contract with Meta Platforms to provide the social-media company with artificial-intelligence cloud infrastructure.
Shares have soared since March, when the New Jersey-based company priced its initial public offering at $40 a share, fueled by a series of high-profile contract wins and upbeat earnings reports.
The cloud-computing contract with Meta will go through 2031, with Meta having an option to extend the commitment for an additional year.
“The agreement underscores that behind every AI breakthrough are the partnerships that make it possible,” CoreWeave said, noting that it continues to win customers for its purpose-built AI cloud and technical expertise.
Last week, CoreWeave expanded a previous agreement to supply data-center capacity to OpenAI, bringing the total value of that contract to $22.4 billion. And that deal came on the heels of CoreWeave securing a new order for cloud-computing capacity under a previously undisclosed contract with Nvidia worth up to $6.3 billion.
—Beef prices are at a record high in the wake of a drought that left cattle inventory at the lowest level in 70 years amid strong demand, resulting in price increases for steak and ground beef.
The Bureau of Labor Statistics consumer price index for August showed a surge in beef prices over the past year. Ground beef prices were up 12.8% on a year-over-year basis in August…steak prices were 16.6% higher; both figures well above the 3.2% year-over-year rise in all food categories.
One cattle rancher told Fox Business: “The real issue here is the drought that happened a number of years ago, and Texas, Oklahoma, Kansas, the Southeast lost all their grass, all their foliage. And when that happens, you’ve got to liquidate cows, and that’s what we’ve done. We’ve got the lowest cow inventory since 1951, so that’s the cause of this.”
—Carnival Corp. raised its full-year outlook after posting higher profit and revenue in its latest quarter, buoyed by ongoing travel demand and increased onboard spending.
The Miami-based cruise operator said Monday it expects momentum to sail into next year. Bookings also remain strong, with nearly half of 2026 already sold at higher prices.
“We feel pretty good about next year,” CEO Josh Weinstein said on a call with analysts.
For the year, Carnival now expects adjusted earnings of about $2.93 billion, or $2.14 a share. That is up from a prior outlook of $2.69 billion, or $1.97 a share. The Street was at $2.79bn, or $2.02 a share.
The recent quarter’s upside largely stemmed from Celebration Key, the company’s new private island destination that opened this summer. Early guest feedback on the destination has been “fantastic,” Weinstein said, adding that word-of-mouth is expected to build next year, when 2.8 million guests are set to visit the port.
For its three months ended Aug. 31, Carnival posted a profit of $1.85 billion, or $1.33 a share, up from $1.74bn, or $1.26 a share, a year earlier. Adjusted EPS of $1.43 beat the Street’s $1.32.
Revenue rose 3.3% to $8.15bn, just ahead of consensus.
The shares fell about 4% on the news, despite the improved fiscal third quarter and upbeat outlook, but the stock has surged nearly 60% over the past year.
—A tidbit from Bloomberg research:
“In the U.S., power demand from data centers is set to double by 2035, to almost 9% of all demand. Some predict it will be the biggest surge in U.S. energy demand since air conditioning caught on in the 1960s. That comes as the grid is already struggling to update aging infrastructure and adapt to climate change.”
—President Trump on Truth Social last Friday night:
“Corrupt and Totally Trump Deranged Lisa Monaco (A purported pawn of Legal Lightweight Andrew Weissmann) was a senior National Security aide under Barack Hussein Obama, and a Lawfare and Weaponization obsessed Deputy Attorney General under Crooked Joe Biden and Lisa’s Puppet ‘Boss’ Attorney General Merrick Garland, who were all the architects of the worst ever Deep State Conspiracies against our Country (RUSSIA, RUSSIA, RUSSIA, the January 6th Hoax, the Illegal Raid on Mar-a-Lago, the Biden ‘Autopen’ Scandal, the Documents Witch Hunt, and more!). Monaco has been shockingly hired as the President of Global Affairs for Microsoft, in a very senior role with access to Highly Sensitive information. Monaco’s having that kind of access is unacceptable, and cannot be allowed to stand. She is a menace to U.S. National Security, especially given the major contracts that Microsoft has with the United States Government. Because of Monaco’s many wrongful acts, the U.S. Government recently stripped her of all Security Clearances, took away all of her access to National Security Intelligence, and banned her from all Federal Properties. It is my opinion that Microsoft should immediately terminate the employment of Lisa Monaco. Thank you for your attention to this matter! President DJT”
Rather remarkable that the president is telling Microsoft what to do on this front.
—Shares of pot companies advanced Monday following a social media post by President Trump over the weekend that suggested potential health benefits from the use of cannabidiol.
Trump’s post on Sunday said cannabidiol (CBD) could “revolutionize senior healthcare” by helping reduce disease progression and was shown as an alternative to prescription drugs.
In early August, Trump had said his administration was looking to reclassify the drug, which could also result in potentially easing criminal penalties around the use of marijuana.
Reclassification of the drug would also remove the tax burden under Section 280E, which denies standard business deductions to cannabis companies. If the tax barrier is resolved, it could pave the way for cannabis companies to list on U.S. stock exchanges, further unlocking capital-market access.
Foreign Affairs
Russia/Ukraine: Saturday night, Russia launched another massive aerial bombardment that lasted more than 12 hours, killing at least four people and injuring 70 others across Ukraine, with the deaths occurring in the capital, Kyiv, the victims including a 12-year-old girl.
Russia launched nearly 600 drones and several dozen missiles toward seven regions of Ukraine, its air force said.
President Zelensky warned that Ukraine would retaliate and said the “vile” attack showed Moscow “wants to continue fighting and killing.” Russia said it struck military facilities and industrial enterprises supporting Ukraine’s armed forces.
Zaporizhzhia’s Governor Ivan Fedorov said 31 people had been injured in the region, including three children.
Zelensky reiterated his support of President Trump’s threat of harsher sanctions on Russia, as well as his call for European allies to curb their Russian oil and gas imports.
—Editorial / Wall Street Journal…on Russia’s recent incursions into NATO territory:
“Mr. Putin needs to believe that NATO will shoot down his MiGs the next time they try something in a NATO country. Let’s hope that the Europeans delivered that message to Mr. Putin this week.
“The Russian incursions are a reminder that Mr. Putin’s ambitions don’t stop at Ukraine’s border. He’s building a military to challenge NATO and reclaim as much of the former Soviet Union as he can. A Reuters report this week about Chinese drone experts helping Russia is another illustration. Ukraine is fighting against an anti-Western axis, including North Korean troops and Iranian equipment.
“NATO Secretary General Mark Rutte told West Point cadets this week that adversaries of the West are working together and provoking an ‘age of provocation.’ He is correct, and that is the core reason it’s in the U.S. interest to deny Mr. Putin a victory in Ukraine.”
—Ukraine’s dramatically increased number of attacks launched against Russian oil refineries in recent months has been sparking fuel shortages and price rises in some parts of the country, BBC Verify and BBC Russian have found.
Some 21 of the country’s 38 large refineries – where crude oil is converted into useable fuel like petrol and diesel – have been hit since January, with successful attacks already 48% higher than the whole of 2024.
Ordinary Russians appear to be feeling the impact of the strikes, with verified videos showing long queues at petrol stations. Some stations have suspended operations to “wait out the crisis.”
The U.S. will soon begin helping Ukraine strike deeper inside Russia via a new intelligence-sharing agreement pertaining to “long-range missile strikes on Russia’s energy infrastructure,” the Wall Street Journal reported Wednesday.
Also pending: Possible U.S. delivery of Tomahawk and Barracuda cruise missiles as well as “other American-made ground- and air-launched missiles that have ranges of around 500 miles,” officials told the Journal.
—Ukraine’s neighbor, Moldova, had a key election last weekend, amid reports Russia was trying to steal it and bring pro-Kremlin politicians to power.
In the final rally of supporters for the governing party, PAS, and its pro-European policies before Sunday’s ballot, the loudest chant was “Their weapon is money, your weapon is your vote!”
Moldovan police and prosecutors disclosed evidence of election interference on an unprecedented scale: vote-buying and disinformation that they link directly to Russia. They’ve also uncovered a plot to foment violent unrest, detaining dozens of men who traveled to Serbia for training including in the use of firearms.
Opposition parties dismissed talk of Russian meddling as a “political show.”
Prime Minister Dorin Recean sees these elections as a “final battle” for his country, saying, “There is constant pressure from Russia.”
And then they held the vote…and the pro-European PAS secured 50.2% of the vote, with the Patriotic Electoral Bloc, the Russian-oriented party, at just 24.2%, with President Maia Sandu declaring victory.
Igor Grosu, the leader of Sandu’s Party of Action and Solidarity, said it had been “an extraordinarily difficult battle” and that Russia had thrown “everything it had” at the election.
PAS will not need the support of other parties to secure a majority in parliament.
Congratulations, little Moldova. A huge win.
Israel/Gaza: The White House on Monday released a 20-point peace plan for Gaza, calling on Hamas to release all remaining hostages within 72 hours and leaving open the possibility of Palestinian statehood.
The proposal was released as President Trump and Israeli Prime Minister Benjamin Netanyahu met at the White House. Speaking at a joint press conference, Trump said they were “very close” to achieving a peace deal, though this was up to Hamas.
“I’m hearing that Hamas wants to get this done, too, and that’s a good thing,” Trump said. “If not, as you know, Bibi, you’d have our full backing to do what you would have to do,” Trump said, using the prime minister’s nickname.
The plan does not require people to leave Gaza and calls for the war to end immediately if both sides accept it. It also calls for all remaining hostages to be released within 72 hours.
In addition, the proposal calls for more humanitarian aid for the enclave while a “Trump economic development plan to rebuild and energize Gaza” is completed.
As part of the meeting with Trump, Netanyahu apologized during a phone call to the Qatari prime minister for violating Qatari sovereignty in a strike on Doha earlier this month that targeted a number of Hamas leaders. The Israeli leader expressed regret during the call for the killing of a Qatari security guard.
Meanwhile, Saudi Arabia and Egypt want to see a clear path to a two-state solution and also for the Palestinian Authority (PA) to play a significant governance role in the enclave. Without a clear pathway to a two-state solution, Saudi Arabia is unlikely to fund the plan, Arab officials say.
Editorial / Wall Street Journal
“When will the Gaza war end? The answer remains: As soon as Hamas releases the hostages, lays down its arms and gives up power. Those are the core demands of the deal President Trump put on the table and Israeli Prime Minister Benjamin Netanyahu agreed to on Monday.
“Mr. Trump called Monday ‘potentially one of the great days ever in civilization.’ Quests to solve the Middle East typically end in disappointment, but the Trump deal is better understood as a way to move the region past the Gaza war and shift pressure onto Hamas. After a modest Israeli withdrawal, the deal requires Hamas to free all 48 Israeli hostages, dead or alive, ‘within 72 hours’ of acceptance.
“In exchange, Israel would release 1,700 Gazans detained since the start of the war as well as 250 terrorists serving life sentences for killing Israelis. This isn’t a fair trade for Israel, and it encourages more hostage-taking, but Israelis will accept it.
“Will Hamas? If it does, the war would halt and aid could surge. Israel would gradually withdraw from Gaza in accordance with Hamas’ disarmament. A stabilization force led by Arab states would take over Gaza in phases and a committee of Palestinian technocrats, supervised by a ‘Board of Peace’ chaired by Mr. Trump, would handle civil administration.
“Gaza would undergo a program of deradicalization. All Gazans would be allowed to stay, leave or return later. Hamas members who disarm could be granted amnesty or leave Gaza. Hamas would have no role in governance.
“ ‘I’m hearing that Hamas wants to get this done too,’ Mr. Trump said. But there’s ample reason for skepticism. Hamas needs the hostages to manipulate Israelis. It needs weapons to stay relevant. Even under Qatari pressure, which U.S. officials believe was generated at last by Israel’s Sept. 9 strike in Doha, Hamas is unlikely to surrender all of its leverage up front.
“The deal, then, rests on a hopeful fiction. More relevant is what happens if the fiction is dispelled and Hamas clings to some or all of its hostages and arms….
“Israel would have ‘full backing’ from the U.S. to ‘finish the job,’ Mr. Trump said, if Hamas rejects the deal or if the Arab states are unable to disarm Hamas. The key for peace, he recognized, is ending the threat from Iran’s terror proxy.”
Tuesday, President Trump gave Hamas “three or four days” to agree to his peace deal or else the Palestinian terror group will face “a very sad end.”
Hamas has indicated it is open to accepting the peace plan, but is asking for more time to review its conditions, Arab mediators said, as the militant group faces intensifying pressure from Muslim governments to agree to the Israel-backed proposal.
The terrorist group has told mediators it has reservations about some of the terms, including the stipulation that it disarm and destroy its weapons, a demand it has previously rejected. Hamas also says that releasing all 48 hostages within 72 hours, as laid out in the Trump plan, would be difficult because it has lost contact in recent weeks with some other militant groups holding a number of them, the mediators said.
Today, Friday, President Trump gave Hamas until Sunday, Oct. 5, to accept the plan or “all HELL, like no one has ever seen before will break out against Hamas,” the president posted on Truth Social this morning.
Late today, right before I went to post, there were reports Hamas accepted some parts of the plan.
China: From a piece in the Washington Post by Catherine Belton and Christian Shepherd:
“Russia has agreed to equip and train a Chinese airborne battalion and share its expertise in airdropping armored vehicles that analysts say could boost Beijing’s capacity to seize Taiwan, according to newly obtained documents that show the two nations’ deepening military cooperation.
“The agreements allow Beijing to access training and technology in one of the few areas where Russian capabilities still surpass those of the Chinese military: Russia’s more experienced airborne troops, military analysts said….
“The accords are an example of the two militaries moving beyond symbolic joint drills and public statements to develop interoperable systems and shared combat experience in areas that China considers critical for winning a battle over Taiwan….
“ ‘It is a very good example of how the Russians have become an enabler for the Chinese,’ making the security challenges for the two countries almost impossible to separate, said Jack Watling, senior research fellow for Land Warfare at RUSI.
“In a future war over Taiwan, Moscow’s supply of oil, gas and other natural resources – and its large defense industry – could become ‘strategic backup for China,’ added Watling, who co-authored a report published Friday by RUSI on the documents….
“For China, Russia’s airdrop expertise and weaponry is most valuable as part of preparations for a potential invasion of Taiwan, analysts said.
“Chinese planners consider small, well-equipped units delivered by helicopter or aircraft ‘absolutely essential’ in their plans to deliver thousands of troops to Taiwan in the early hours of a conflict, said Lyle Goldstein, an expert on the Chinese and Russian militaries at Brown University….
“ ‘They have studied D-Day backward, forward and upside down [and] realized that it would have failed without an airborne component,’ said Goldstein, who is writing a book on China-Russia military ties.
“That makes Russia’s experience in Ukraine even more valuable for Beijing, and right now, ‘Russia will do more or less anything to keep China happy and cooperative,’ he said.
“(President) Xi, China’s most powerful leader in decades, has repeatedly said that bringing Taiwan under Chinese Communist Party rule is an essential step in the country’s journey to ‘national rejuvenation.’”
As the Wall Street Journal reported, Xi believes he can persuade President Trump to oppose Taiwanese independence as they try to strike a trade deal; for Trump to formally state that the U.S. “opposes” Taiwan’s independence.
For Xi, the difference between not supporting Taiwan’s independence and explicitly opposing it is more than semantics. It would signal a shift in U.S. policy from a neutral position to one that actively aligns with Beijing against Taiwanese sovereignty – a change that could further cement Xi’s hold on power at home.
Meanwhile, the Communist Party of China will hold its annual conclave between October 20 and 23 in Beijing to discuss the next five-year plan, a blueprint that will set out the country’s economic, political and social goals as it grapples with the United States.
And, lastly, President Xi this week called for further enactment of law and regulation, as well as stricter law enforcement for religious affairs in a push to sinicize* religions in the country, state media reported.
*make Chinese in character or form; part of the process of cultural assimilation.
“Governing religious affairs in accordance with the law is the fundamental way to properly handle various contradictions and problems in the religious field,” Xi said, according to Xinhua.
Just great.
Random Musings
—Presidential approval ratings….
Gallup: 40% approve of President Trump’s job performance, while 56% disapprove. 32% of independents approve (Sept. 2-16).
Rasmussen: 46% approve, 52% disapprove (Oct. 3).
A new New York Times/Siena University poll had Trump’s approval at 43%, 54% disapproving.
—New York City Mayor Eric Adams said he would end his re-election campaign Sunday after struggling with the fallout from his dismissed federal bribery case, media speculation surrounding his future and pressure from business leaders to step aside.
President Trump posted Monday morning on Truth Social:
“Self proclaimed New York City Communist, Zohran Mamdani, who is running for Mayor, will prove to be one of the best things to ever happen to our great Republican Party. He is going to have problems with Washington like no Mayor in the history of our once great City. Remember, he needs the money from me, as President, in order to fulfill all of his FAKE Communist promises. He won’t be getting any of it, so what’s the point of voting for him? This ideology has failed, always, for thousands of years. It will fail again, and that’s guaranteed! President DJT”
Editorial / Wall Street Journal
“New York Mayor Eric Adams finally abandoned his campaign for re-election on Sunday, and the shame is he didn’t do it sooner. He’d have given the city a better chance of defeating socialist Zohran Mamdani….
“The former police captain has been a better mayor than his far-left predecessor Bill de Blasio, but that’s like saying the Chicago White Sox had a better season than the Colorado Rockies. Mr. Adams seemed to like New York night life more than running the city.
“He flew close to the sun in his political fund-raising, which gave the Biden Justice Department an opening to indict him for corruption. The Trump Justice Department’s decision to drop the charges in what looked like a deal for cooperation on migrant deportations probably sealed Mr. Adams’ political fate.
“His best decision was appointing Jessica Tisch as police commissioner. She’s attempted to restore ‘broken windows’ policing that doesn’t tolerate minor crimes and focused on high-crime neighborhoods. Had Mr. Adams dropped out in the winter, Ms. Tisch might have had a chance to run as an independent.
“Voters are now left with former Gov. Andrew Cuomo, who is running as an independent, and Republican radio host Curtis Sliwa as alternatives to Mr. Mamdani. Mr. Cuomo has the best chance if he can pick up most Adams voters. Mr. Sliwa will need an act of God to win, and lately the Big Guy has been willing to let New Yorkers endure their bad political choices.
“If Mr. Mamdani wins, more prayer will be in order. The socialist wants higher taxes, a rent freeze, government grocery stores and soft-on-crime policies. His anti-Israel views included sympathy for Hamas before his mayoral campaign, and he is hostile to charter schools.
“The people to watch now are U.S. House Minority Leader Hakeem Jeffries and Democratic Senate leader Chuck Schumer. So far they haven’t followed Gov. Kathy Hochul by endorsing Mr. Mamdani. The know that if Mr. Mamdani takes City Hall, the GOP will make him the symbol of the Democratic Party in the 2026 midterm elections. But the party leaders are under pressure from their left to endorse.
“The cliché is that voters in a democracy get the government they deserve, and if New Yorkers elect Mr. Mamdani they will get it good and hard.”
[The federal government halted payments to two major transportation projects, Gateway Tunnel and 2nd Avenue Subway, until a review is conducted to determine if they violated a new federal discrimination rule. But the corporation overseeing the Hudson Tunnel project said work on the project will not be affected. This is all part of the attempts to pressure Democrats amid the government shutdown.]
–A Fox News survey of the New Jersey governor’s race found Democrat Mikie Sherrill 8 points ahead of Republican Jack Ciattarelli among likely voters in the state, 50% to 42% [48% to 41% among registered voters.]
A poll from conservative-leaning Quantus Insights poll found Sherrill 2 points ahead of Ciattarelli among likely voters, 48% to 46%.
—In the other big gubernatorial race in the U.S. this year, the Washington Post-Schar School poll of Virginia voters, released today, showed Democrat Abigail Spanberger leading Republican Winsome Earle-Sears by a commanding 55% to 43% margin among likely voters.
—President Trump and Defense Secretary Pete Hegseth summoned more than 800 of the country’s top brass to a military base in Virginia (Quantico) on Tuesday to voice a familiar litany of culture war talking points and criticize a military that they feel has become distracted by political correctness.
It was unclear why Trump and Hegseth needed to gather the country’s senior military leaders from overseas deployments to tell them face to face that they were straight out of “central casting,” as Trump characterized the gathering.
Hegseth gave a lecture on the “warrior ethos,” telling the generals that U.S. military standards “must be uniform, gender neutral, and high.”
President Trump took the podium after Hegseth, and told the crowd, “I’ve never walked into a room so silent before. Just have a good time. And if you want to applaud, you applaud.”
He added: “If you don’t like what I’m saying, you can leave the room. Of course, there goes your rank. There goes your future. But you just feel nice and loose.”
The president then launched into a speech that wandered among some of his favorite recent topics, including his desire for the Nobel Peace Prize; the Gulf of Mexico; how Democrats are “a lot of bad people”; how “everyone loves my signature”; his desire to make Canada the 51st state, and on and on…seventy-one minutes’ worth.
But he also said the U.S. is being invaded “from within”; how he’s ordered U.S. troops to occupy American cities and how that’s “gonna be a major part for some people in this room”; and relatedly, how he thinks “we should use some of these dangerous [U.S.] cities as training grounds for our military.”
Editorial / Wall Street Journal
“Human ingenuity and command creativity matter in warfare – see Russia’s battlefield floundering in Ukraine. Restoring the public’s trust in the U.S. military is especially crucial for fielding a force entirely of volunteers. Many families that have populated the military over generations soured on the Biden focus on identity.
“Where Mr. Hegseth – and his boss in the White House – are less credible is giving these warriors what they need to win the next war. Mr. Hegseth’s line that he doesn’t want his son or anyone’s son serving in a unit that isn’t properly trained for a fight is a view shared by every American. But that includes not running out of long-range antiship missiles after mere days of fighting in the Taiwan Strait, or flying jets built in the Cold War.
“That will happen if the U.S. doesn’t spend more on defense than Mr. Trump’s apparent target of 3% of GDP. Mr. Trump isn’t telling Americans the truth when he claims to have rebuilt the military. On current trajectory he risks sending warriors into battle without the ships, submarines, bombers, fighters, drones or logistics support they need to prevail.
“That is, unless the U.S. surrenders its strategic interests before a war even starts. News reports and our sources say the Administration is drafting a new defense strategy that elevates the Western hemisphere over threats from China and Russia. The implication is that a shrinking U.S. military won’t be able to meet its Pacific or Atlantic commitments.
“A large tension in Mr. Trump’s second term is his claim to Reagan’s peace-through-strength mantle even as he indulges isolationist advisers and podcasters. If the latter dominate Mr. Trump’s decisions, the U.S. military is courting defeat no matter how many times Mr. Hegseth talks about ‘lethality.’”
From the Washington Post:
“Military leaders have raised serious concerns about the Trump administration’s forthcoming defense strategy, exposing a divide between the Pentagon’s political and uniformed leadership as Defense Secretary Pete Hegseth summons top brass to a highly unusual summit in Virginia on Tuesday, according to eight current and former officials.
“The critiques from multiple top officers, including Gen. Dan Caine, chairman of the Joint Chiefs of Staff, come as Hegseth reorders U.S. military priorities – centering the Pentagon on perceived threats to the homeland, narrowing U.S. competition with China, and downplaying America’s role in Europe and Africa….
“The debate over the National Defense Strategy – the Pentagon’s primary guide for how it prioritizes resources and positions U.S. forces around the world – is the latest challenge for top military officials navigating the Trump administration’s unorthodox approach to the armed forces.
“People familiar with the editing process, who like others spoke on the condition of anonymity to describe sensitive deliberations, described a growing sense of frustration with a plan they consider myopic and potentially irrelevant, given the president’s highly personal and sometimes contradictory approach to foreign policy….
“Caine shared his concerns with top Pentagon leadership in recent weeks, according to two people familiar with the matter.
“ ‘He gave Hegseth very frank feedback,’ one of the two people said, noting that Pentagon policy chief Elbridge Colby was also included in the discussion. ‘I don’t know if Hegseth even understands the magnitude of the NDS, which is why I think Caine tried so hard.’
“The second person said Caine has tried to get the NDS to remain focused on preparing the military to deter and, if necessary, defeat China in a conflict.
“Hegseth and his policy officials have signaled that the Pentagon will withdraw some forces from Europe and consolidate commands in a way that unnerves some U.S. allies, particularly amid Russia’s war with Ukraine and its recent, repeated incursions into NATO airspace. For years, Pentagon strategy has been anchored in the idea that the nation’s best defense was in building and maintaining strong military alliances abroad.”
There’s much more on the topic, but this gives you a taste of the discussions taking place inside the Pentagon and among the generals assembled at Quantico.
Meanwhile, Friday morning, President Trump ordered another lethal military strike on an alleged drug-trafficking boat in the Caribbean, signaling the administration is undeterred by mounting legal questions about the campaign.
Defense Secretary Hegseth announced in a social media post that on Trump’s orders he had directed a “lethal, kinetic strike on a narco-trafficking vessel” in the U.S. Southern Command region, the strike conducted in international waters just off the coast of Venezuela, killing four men aboard, Hegseth wrote.
This is at least the fourth such strike in the administration’s expanding crackdown on what it says are Latin America-based drug gangs. Lawmakers on both sides of the aisle are increasingly concerned about whether the military strikes are legal.
—President Trump on Saturday morning posted on Truth Social:
“At the request of Secretary of Homeland Security, Kristi Noem, I am directing Secretary of War, Pete Hegseth, to provide all necessary Troops to protect War ravaged Portland, and any of our ICE Facilities under siege from attack by Antifa, and other domestic terrorists. I am also authorizing Full Force, if necessary. Thank you for your attention to this matter!”
[National Guard troops are now in Memphis, Tenn., at the request of the governor, but they have yet to be “stood up,” officially, and aren’t expected to be for a few weeks. They have yet to appear in Portland, even though Trump says they are there, ditto Chicago, where the Guard’s appearance does however appear imminent. Admittedly, it is very confusing for an outsider.]
–Last Friday, the Supreme Court allowed the Trump administration to withhold $4 billion in foreign aid that had been appropriated by Congress, in a preliminary test of President Trump’s efforts to wrest the power of the purse from lawmakers.
In its brief order, the court’s conservative majority allowed the president to cut the funding in part because it said his flexibility to engage in foreign affairs outweighed “the potential harm” faced by aid recipients. The justices cautioned that their decision, a temporary one while litigation continues, “should not be read as a final determination on the merits.”
The three liberal justices dissented, saying the issue before the court was too consequential to have been dealt with on an emergency basis.
“The stakes are high: At issue is the allocation of power between the executive and Congress” over how government funds are spent, wrote Justice Elena Kagan, who was joined by Justices Sonia Sotomayor and Ketanji Brown Jackson.
—Four people were killed and several others were injured after a gunman opened fire at a church in central Michigan during Sunday service and set fire to the building.
The suspect was identified as Thomas Jacob Sanford, a 40-year-old from the neighboring city of Burton, according to Grand Blanc Township Police Chief William Renye. Sanford died after exchanging gunfire with responding officers in the church’s parking lot.
Hundreds of people were attending the service at The Church of Jesus Christ of Latter-day Saints in Grand Blanc, a suburb of Flint, Michigan, when the suspect rammed a pickup truck into the church, Renye said at a news conference. He then exited the vehicle and fired “several rounds” at people inside the church with an assault rifle.
Police believe the suspect also “deliberately” set the building on fire. Two people were killed by gunshots, and two more bodies were discovered in the church.
The FBI is investigating the incident “as an act of targeted violence.”
The church was a total loss due to the fire and there was the fear more bodies would be found, but we learned Monday that all those initially reported missing had been accounted for.
We also learned Monday that Sanford had prior arrests for burglary and operating a vehicle while intoxicated.
He was a former Marine sergeant who served from 2004 to 2008, with a year spent deployed to Iraq, according to the Detroit News.
In North Carolina, another 40-year-old former Marine veteran was charged in connection with a mass shooting that killed three people and left at least eight others injured at a riverside bar on Saturday. The suspect, who was arrested shortly thereafter, used an assault rifle from his boat, opening fire at a dockside bar in Southport, south of Wilmington.
The shooting appears to have been indiscriminate, and “Sadly, a lot of the victims in this case appear to be not members of our community, but people who are here on vacation,” district attorney Jon David told the New York Times.
—An assailant drove a car into people outside a synagogue Thursday in Manchester, England, and then began stabbing them, killing two and seriously wounding four in a terrorist attack on the holiest day of the Jewish year, police said.
Officers shot and killed the suspect, though it took authorities some time to confirm he was dead because of concerns he had an explosive.
The Metropolitan Police in London, who lead counter-terrorism policing operations, declared the assault a terrorist attack.
Authorities said two other suspects were arrested.
Antisemitic incidents in the UK have soared following Hamas’ Oct. 7, 2023, attack on Israel and Israel’s ensuing military campaign in Gaza.
—According to a new Gallup poll, Americans’ confidence in the mass media has edged down to a new low, with just 28% expressing a “great deal” or “fair amount” of trust in newspapers, television and radio to report the news fully, accurately and fairly. This is down from 31% last year and 40% five years ago.
Meanwhile, seven in 10 U.S. adults now say they have “not very much” confidence (36%) or “none at all” (34%).
When Gallup began measuring trust in the news media in the 1970s, between 68% and 72% of Americans expressed confidence in reporting. However, by the next reading in 1997, public confidence had fallen to 53%. Media trust remained just above 50% until it dropped to 44% in 2004, and it has not risen to the majority level since. The highest reading in the past decade was 45% in 2018.
Republicans’ confidence, which hasn’t risen above 21% since 2015, has dropped to single digits (8%) for the first time in the trend. Amazing.
–In a truly pathetic move, Defense Secretary Hegseth last week said that Medals of Honor for soldiers who took part in an 1890 massacre of Native Americans would not be revoked. I didn’t learn of this act until Friday night.
More than 300 Lakota Sioux men, women and children were killed by U.S. Army soldiers on Dec. 29, 1890 in one of the deadliest attacks on Native Americans by the United States military. The Lakota people had gathered to resist government control in an area of South Dakota that is now part of the Pine Ridge Indian Reservation.
In 2019, Democratic lawmakers, led by Senator Elizabeth Warren (Mass.), introduced legislation to revoke the medals from the 20 soldiers involved in the massacre at Wounded Knee after a yearslong pressure campaign by members of the Lakota tribe.
Medals of Honor were given to 20 soldiers from the 7th Cavalry Regiment, and their awards cite a range of actions including bravery, efforts to rescue fellow troops and actions to “dislodge Sioux Indians” who were concealed in a ravine.
Congress has rescinded more than 900 Medals of Honor since a law passed in 1916 created a board of retired military officers to review previous awards. In 1990, Congress apologized to the descendants of the Native Americans killed and injured at Wounded Knee.
In July 2024, then defensive secretary Lloyd Austin convened a panel to review the actions of each soldier at Wounded Knee, but did not revoke the medals.
In a video posted on social media, Sec. Hegseth said the panel recommended to Austin in October that the soldiers should keep their medals. Austin did not make a final decision on the medals, which Hegseth described as “careless inaction.”
“Under my direction, we’re making it clear without hesitation that the soldiers who fought in the Battle of Wounded Knee in 1890 will keep their medals, and we’re making it clear that they deserved those medals,” Hegseth said in the video.
Deb Haaland, a candidate for governor in New Mexico and the first Native American to serve as interior secretary, under President Biden, said that Hegseth’s decision was “cruelty, not justice.”
“Reaffirming them today only deepens the injustice,” she wrote on social media on Friday.
I have been to Wounded Knee. It was an interesting day, about 20 years ago, and I must say, driving alone through the Pine Ridge Reservation can be unsettling, but I had to get to the scene, where an individual, ‘Larry,’ confronted me, but I was prepared and defused the situation with cash. Nonetheless, you see there is still a lot of hurt in the area.
I totally agree that this was a “cruel” act to restore the medals.
–This is depressing…Switzerland’s glaciers have faced “enormous” melting this with a 3% drop in total volume – the fourth-largest annual drop on record – due to the effects of global warming, top Swiss glaciologists reported Wednesday.
The shrinkage this year means that ice mass in Switzerland – home to the most glaciers in Europe – has declined by one-quarter over the last decade, the Swiss glacier monitoring group GLAMOS and the Swiss Academy of Sciences said in their report.
–We note the passing of conservationist Jane Goodall, 91. What an incredible life she lived, and what amazing contributions she made to the world.
The Jane Goodall Institute, in a statement announcing she died of natural causes while in California on a U.S. speaking tour, said her discoveries “revolutionized science, and she was a tireless advocate for the protection and restoration of our natural world.”
While living among chimpanzees in Africa decades ago, Goodall documented the animals using tools and doing other activities previously believed to be exclusive to humans, and also noted their distinct personalities. Her observations and subsequent magazine and documentary appearances in the 1960s transformed how the world perceived not only humans’ closest living biological relatives but also the emotional and social complexity of all animals, while propelling her into the public consciousness.
“Out there in nature by myself, when you’re alone, you can become part of nature and your humanity doesn’t get in the way,” she told the Associated Press in 2021. “It’s almost like an out-of-body experience when suddenly you hear different sounds and you smell different smells and you’re actually part of this amazing tapestry of life.”
As a child in the 60s, I used to love pouring through her stories in National Geographic and watching her documentaries.
Goodall ended up having a strong social media presence, posting to millions of followers about the need to end factory farming or offering tips on avoiding being paralyzed by the climate crisis.
Her advice: “Focus on the present and make choices today whose impact will build over time.”
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Pray for the men and women of our armed forces…and all the fallen.
Slava Ukraini.
God bless America.
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Gold $3913…another record high
Oil $60.84…awful week, down nearly $5
Bitcoin: $122,720 [4:00 PM ET, Friday…huge week, up $13,000+]
Regular Gas: $3.15; Diesel: $3.70 [$3.19 – $3.57 yr. ago]
Returns for the week 9/29-10/3
Dow Jones +1.1% [46758]
S&P 500 +1.1% [6715]
S&P MidCap +0.6%
Russell 2000 +1.7%
Nasdaq +1.3% [22780]
Returns for the period 1/1/25-10/3/25
Dow Jones +9.9%
S&P 500 +14.2%
S&P MidCap +5.4%
Russell 2000 +11.0%
Nasdaq +18.0%
Bulls 53.7…down from 58.5
Bears 16.7
And finally, it was 25 years ago that I was running radio commercials in the San Diego area for the site. I actually did radio spots extensively in the early years, New York, mostly, but tested a few other markets.
And one day I received an email from a guy in the San Diego area, whose name I don’t want to divulge, after hearing the spot, got to his office and checked out the site and he was hooked ever since. My new friend used to send me some great data and insight on Southern California real estate, which I shared with you all, and we stayed in touch over the years.
Over time he became a big supporter of StocksandNews, and in the past year, we reached an agreement on his partial ownership of the site. He was a very senior Wall Street executive.
Thursday morning, I learned that he had suddenly died at the age of 51. I am shocked and my heartfelt condolences go out to his family, his wife and kids, his friends and all his colleagues at this large financial institution. You’ll eventually figure out who it is.
But this is a massive blow to my company and its future. I desperately need your support. I’m not talking about those who have donated in the past year, because I am forever grateful to you. But if you never have, or haven’t in years, please consider donating now.
Have a good week, friends.
Brian Trumbore
