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Edition 1,435
This could be a chaotic 7-10 days coming up. Israel has a huge election Tues. to elect all 120 members of the Knesset, and thus a new prime minister, perhaps.
But we know the existing holder of the office, Benjamin Netanyahu, is the ultimate political survivor.
That said, the violence in the West Bank has picked up, Israel has warned the citizenry to be prepared for anything leading up to the vote, while at the same time, Iran is well aware of both the Israeli and U.S. election timetable, the following Tuesday for the latter.
I note below that Iran could do anything, even knowing it would face severe repercussions and further waves of attacks on its infrastructure that would be designed to finally topple the regime. This is who they are.
For starters, expect Iran to do all it can to disrupt shipping traffic in the Strait of Hormuz to help keep the price of oil, and diesel, as high as possible heading into Nov. 3rd.
It was interesting today that oil spiked, to $103 on West Texas Intermediate and $117 (at 3:10 PM ET) on Brent, the latter’s highest level since June 2022.
Saudi Aramco has also reportedly instructed staff to evacuate its Dhahran headquarters and work remotely, the Saudis under constant threat from the Iran-aligned Houthis over the past few weeks.
Meanwhile, we had Trump’s “special envoy,” Steve Witkoff, call Vladimir Putin “a humanitarian” during a visit this week, and Secretary of State Marco Rubio, addressing the issue of a possible summit between Presidents Trump, Putin and Xi Jinping in China next month, and the dangers of such a summit, “People need to grow up when it comes to foreign policy.”
If I had two minutes with Rubio, who I generally respect, I’d ask him, “Do you know what happened in Helsinki in 2018?”
—
Tale of the Tape
Oil / West Texas Intermediate (WTI)
Friday, Feb. 27…$67.30
Friday, Oct. 23…$103.75
Nationwide averages at the Gas Pump [Source: AAA]
Friday, Feb. 27…regular $2.98; diesel $3.75
Friday, Oct. 23…regular $4.29; diesel $6.31
As it went down day-by-day in the Iran War….
—The Houthis attacked a government security forces training camp in Yemen’s Shabwa province, killing 60 and injuring more than 200, the local governor said, as fighting in the impoverished country intensifies.
The Houthis and the internationally recognized government, which is backed by a Saudi-led coalition, have been trading attacks since the group advanced in September towards the Bab el-Mandeb Strait, a shipping chokepoint at the mouth of the Red Sea.
Local authorities said the Houthis had launched three ballistic missiles at security forces during training exercises.
—In a big blow for Saudi Arabia, their Future Investment Initiative, a marquee showcase for foreign investment, has become a casualty of the war. Organizers on Monday decided to postpone the annual gathering of the global financial elite in Riyadh, which was to begin Oct. 26.
Billed as “Davos in the Desert,” the FII had become a centerpiece of Crown Prince Mohammed bin Salman’s Vision 2030 agenda to turn the oil exporter into an international hub for business and tourism.
Wall Street executives were already reconsidering whether to travel to the conference, weighing security concerns against the risk of offending their wealthy hosts.
The kingdom’s travel and tourism industries had been growing above target and faster than the global average before the U.S. and Israel’s war with Iran and now the conflict with the Houthis. The crown prince had seen success in other areas as well. The non-oil side of the economy had grown to more than half the total, millions of women had joined the workforce and domestic spending on tourism and entertainment was up.
The FII is a symbol of Saudi Arabia’s expanding ties with global finance. Bankers and investors have cultivated relationships with the kingdom to secure capital for artificial-intelligence ventures and private equity, while helping Saudi Arabia raise money for the crown prince’s transformation plans.
–The New York Times reported that the U.S. and Israeli militaries have developed specific plans for renewed strikes against Iran after the American midterm elections, according to U.S. officials and other people briefed on the deliberations.
As planning for a short but intensive operation progresses, the U.S. and Israeli militaries have stepped up exercises, flying planes over Iraq to practice their strike maneuvers. Defense Secretary Pet Hegseth met with Prime Minister Netanyahu in Israel this week to discuss new strikes, officials said.
The targets would likely include Iran’s energy infrastructure, nuclear facilities, and missile and drone arsenal. Some believe one more big round of attacks could push Iran’s economy over the brink and force the country to make diplomatic concessions after nearly eight months of conflict.
But why would this succeed after the first massive strikes between February and April didn’t take down the regime?
Wednesday, a Houthi attack on a major Saudi airport, Dammam, killed two and injured eight others.
And two people were killed and two others were wounded when a drone was intercepted over Aramco’s Shaybah oil field, in the Eastern Province. Falling drone fragments sparked a fire in a contractor’s vehicle, killing a Filipino and a Nepali, the Saudi Energy Ministry said.
Back in the Persian Gulf, maritime tracker Kpler reported that at least 18 vessels had come under fire over the previous two weeks.
Iran’s Revolutionary Guard Corps said Wednesday that naval mines had halted three tankers attempting to use routes Tehran considered unauthorized, while the UK Maritime Trade Operations agency reported a vessel had been struck near Oman.
The Wall Street Journal reported today that Iran is sending out the message that if the U.S. and Israel restart their air campaign, Tehran will respond with strikes not only on American bases and warships but on airports, pipelines and other civilian targets in the neighboring countries of the Persian Gulf.
The warnings, issued publicly and in private diplomatic communications, are clearly aimed at deterring any attack with tough talk. But as the Journal points out, “they also signal a real threat. Iran retains significant missile and drone stocks and the ability to use them.
“Analysts estimate Iran has hundreds to thousands of ballistic missiles.”
At the same time, “Raising the ante in any new fight would expose Iran’s infrastructure to attack when its economy is teetering.”
But analysts still believe Tehran would run the risk.
“The consensus in Tehran now believes that deterrence requires imposing immediate, sustained and substantial costs on its adversaries,” said Sina Toossi, an Iran expert at the Center for International Policy, a Washington think tank.
—President Trump on Truth Social, Sunday AM:
“To the Great People of Israel:
“Bibi Netanyahu has been a Great Warrior Prime Minister, and an even greater Partner for Peace in combatting the Islamic Republic of Iran, with its 51 year old chant, ‘Death to Israel, Death to America! We will destroy the Little Satan and the Big Satan.’ What Country can survive when things such as this are allowed to be said, because eventually, they always end up being true? It would have been only a question of time until Iran would have put that ominous phrase into effect, but they have been systematically destroyed, both Militarily and Financially, and unless they change their ways, rapidly, we will soon finish the job. If Israel has the wrong Leader, which would be anyone other than Bibi, America will have to do this work ourselves, and I am not inclined to do so. Bibi Netanyahu has been Strong, Brave, and Brilliant in the face of tremendous opposition, including that coming from even Israel, itself. Despite all of that, he has endured and, in fact, he has thrived! I have watched Bibi under the most trying of times. Normal men or women in such situations would have wilted under the pressure – but Bibi did not wilt, he actually got stronger, and maintains that same Strength today. This is the kind of Partner that the United States of America is demanding of Israel, a Country for which it has done so much. Please let this Letter serve to represent my Complete and Total Endorsement of Bibi Netanyahu in his upcoming Race for Re-Election as Prime Minister of Israel. BIBI NETANYAHU WILL NEVER LET YOU DOWN!”
Meanwhile, masked settlers in the Israeli-occupied West Bank attacked Palestinians, Catholic representatives and Western diplomats and officials, Belgium’s foreign minister said on Saturday.
Maxime Prevot said the Belgian consul general, French and Polish diplomats and a French mayor were among those attacked, while a Belgian vehicle was damaged.
“Harvesting olives, reporting the news or carrying out diplomatic duties should never put anyone at risk of attack,” Prevot said.
Friday, two Israeli soldiers were killed in an attack in the West Bank that also left two suspected gunmen dead, the military said, violence that is likely to heighten political tensions and security concerns ahead of Tuesday’s vote.
The army said it had prevented a “terror attack against Israeli civilians” and that the two suspects, both Palestinians from Hebron, were armed with an M16 rifle and a handgun.
—
Wall Street and the Economy
We had some dreadful housing data this week, with U.S. housing starts for September falling 5.2% month-on-month to a seasonally adjusted annual rate of 1.221 million, marking a third consecutive monthly decline and the lowest level since May’s six-year low of 1.182 million.
And pending home sales of existing homes fell to a record low in September, with the index of contract signings from the National Association of Realtors tumbling to its lowest reading since records began in 2001.
Elevated mortgage rates continue to weigh on construction activity, prompting builders to adopt a more cautious approach and scale back new-home inventory amid sluggish demand.
Freddie Mac’s 30-year fixed-rate mortgage this week was at 7.32%, finally down a bit from last week’s 7.40%. And with the huge move in interest rates this week it will come down further when next reported (Thursdays).
But now it’s really all about next week’s Federal Reserve Open Market Committee meeting where the betting odds continue to favor ‘no change’ in the benchmark funds rate, but still the expectation the Fed will then move in December. I’ve been adamant all along…no way Chair Kevin Warsh and his compatriots on the FOMC opt to increase rates again, even if warranted, a week from the midterm elections.
We also have key inflation data, the personal consumption expenditures index, or PCE, but that isn’t released until Thursday, a day after the Fed’s rate decision.
The Atlanta Fed’s GDPNow estimate for third-quarter growth is at 3.5%.
Separately, going back to last Friday afternoon’s release from the Treasury Department on the government debt for the fiscal 2026 year, which ended in September, the deficit was just shy of $2 trillion, at $1.992tr. Receipts were $5.403bn, with outlays at $7.396bn.
Net interest costs came to $1.052 trillion, up more than 8% from the $970bn in fiscal 2025.
Interest costs are now one of the top three biggest items on the list of federal outlays, after Social Security ($1.667bn) and Medicare ($1.073bn) and ahead of the Defense Department ($965bn).
The last time the deficit topped $2 trillion was in 2021, when the pandemic prompted Congress to approve a huge stimulus package to help keep the economy afloat. But there is no immediate criss that the nation is tackling today, making this year’s $2 trillion deficit rather disturbing.
“When the next crisis strikes, we will almost certainly be more indebted than ever before when entering a crisis, which will limit our capacity to respond and exacerbate the damage we face,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
Europe and Asia
We had the October flash PMI readings in the eurozone, courtesy of S&P Global, with the composite index at 51.9 (4-month low), 50 the dividing line between growth and contraction. Manufacturing was at 52.4, services 51.7.
Germany: mfg. 55.1, services 51.7.
France: mfg. 48.5, services 48.4.
UK: mfg. 53.1, services 53.1. [Guess what…the composite was 53.1.]
Chris Williamson / Chief Business Economist, S&P Global:
“The eurozone economy starts the fourth quarter with businesses reporting further robust growth, the flash PMI being consistent with GDP growing at a 0.3% quarterly cadence. While that’s below the pace enjoyed in September it is still among some of the best performances seen over the past three years.
“A key dragon growth was a renewed drop in business activity in the French services sector. While some of the weakness in France may be linked to strikes and unrest having disrupted some local economies, growth has also edged lower in the rest of the eurozone, both in terms of manufacturing and services activity. Hiring has meanwhile come close to stalling as new order inflows cooled to show only meagre growth….
“The data meanwhile underscore the difficult situation France faces, with the PMI indicating that the economy is slipping into contraction as business confidence hits the lowest since 2012 if the pandemic is excluded, a time when the promise of ‘whatever it takes’ from the ECB was needed to lift the eurozone out of its debt crisis.”
Separately, Eurostat issued a report on the second quarter government debt levels…gross government debt to GDP ratios. For the euro area (EA21) overall, it stood at 88.8%, a bit higher than the 88.4% level at the end of the first quarter of 2026.
Some representative countries, Q2 2026….
Germany 63.4%, France 119.1%, Italy 139.9%, Spain 101.4%, Netherlands 43.7%, Greece 140.8% (but down from 152% a year earlier).
France: The country is bracing for further violent protests this weekend, with stores being boarded up in all the major cities that saw the violence last weekend, such as Paris. In Limoges the city hall was set ablaze, in Marseille black-clad protesters broke into City Hall and defaced the building with anarchic graffiti and in Lyon protesters torched the city’s tourist office.
Some 550,000 demonstrators took part in marches across France on Saturday, including 110,000 in Paris, Interior Minister Laurent Nunez said. On the fringes, roving groups of “extreme left” activists attacked police stations and other public buildings, joined by “opportunistic” looters, he said.
French Prime Minister Sebastien Lecornu said the government would not be “intimidated” by violence, and blamed the unrest on the “far-left” and criminals just months before a presidential election next year.
“To those who clearly want to use this violence as a ‘warm-up’ before the presidential election, I say clearly: We will not let ourselves be intimidated. No one will impose their political agenda through violence,” he wrote in a post on X.
French President Emmanuel Macron’s government is grappling with a cost-of-living crisis while seeking to contain France’s soaring debt.
Belgium, Portugal and Italy also faced smaller-scale protests last Saturday as living costs rise in Europe, while protesters in Albania again rallied against perceived government corruption, a lack of jobs and poor education standards.
Editorial / Wall Street Journal
“The riots in France turned even uglier on the weekend, spreading across the country and including brazen acts of violence. We’ve explained the underlying fiscal and political woes behind the crisis, but the news this time is the pre-election play by far-left candidate Jean-Luc Melenchon.
“Heretofore Mr. Melenchon, head of the far-left Indomitable France party, had taken a somewhat detached attitude to the protests. But this weekend he participated in protests in Paris. He also blamed police for ‘unleashing’ on protesters, while condemning looting and arson.
“The riots are ostensibly about declining public services, but the presidential election next April figures into the protest calculations. Marine Le Pen of the insurgent right National Rally is leading in current presidential polls. Mr. Melenchon is in a three-way tie with two candidates on the center-left.
“The race now is to see who can emerge from the first round of voting to get to the two candidate runoff, probably against Ms. Le Pen. If the riots help Mr. Melenchon consolidate support on the left, he could be the one….
“France is in a violent democratic funk, and it will probably get worse. Don’t think it can’t happen in the U.S. given the current state of American politics.”
Turning to Asia….
China’s National Bureau of Statistics reported out some key data. Third-quarter GDP grew 4.5% year-over-year, accelerating from Q2’s three-year low of 4.3%. Growth was supported by recent policy easing and resilient exports, particularly of AI-related components, high-tech manufactured goods and electric vehicles.
September industrial production rose 5.5% Y/Y, and retail sales were up 1.1%. But fixed asset investment fell 7.2% year-to-date.
The September unemployment rate was 5.2%.
Japan’s September exports rose 16.7%, fueled by AI-related chips, semiconductors and cars.
September inflation rose 2.1%, 2.4% ex-food and energy.
And the S&P Global flash PMI readings for October had the manufacturing index at 53.3, with the service sector at 52.0.
Street Bytes
—The vast amount of capital needed to fund the AI build-out is forcing tech giants to hunt for ever-larger sums of cash – and this week Wall Street raised a bright red flag, especially as Meta said it could go on a cash-raising spree. So, we had some rough tape action in Nasdaq.
But for the week, stocks finished mixed, the Dow Jones up 0.4% to 52215, while the S&P 500 fell 0.5% and Nasdaq 0.7%.
—U.S. Treasury Yields
6-mo. 4.33% 2-yr. 4.69% 10-yr. 5.00% 30-yr. 5.33%
The flight to safety trade continued, exacerbated by the French debt crisis, where its 10-year bond traded at 5.00% for the first time since 2002.
—SpaceX reported for the third quarter and the shares surged as quarterly sales soared, driven by a fast-growing AI business. Elon Musk also said SpaceX and Tesla were exploring a merger, which everyone has expected and would consolidate his empire.
In its second earnings report as a public company, SpaceX said revenue for the three months that ended Sept. 30 was $4.5 billion, more than 2.5 times as much as the $1.6 billion from a year earlier. Profit totaled $4.4 billion, or 37 cents per share, compared with a net loss of $1.05 billion last year. The numbers surpassed Wall Street projections of $13 billion in revenue and a profit of 16 cents a share.
How much SpaceX is spending on A.I. – which includes its Grok chatbot and data centers – was particularly scrutinized. The company said its capital expenditures had risen to $19.6 billion, nearly three times the $6.9 billion from a year earlier. And SpaceX is likely to spend $35 billion to $40 billion in the current quarter, CFO Bret Johnson told investors on the earnings call, Tuesday.
Still, A.I. has become the largest part of SpaceX’s business, with the technology’s revenue – $7.6 billion – exceeding what the company is generating from space launches and its Starlink satellite internet service.
“I’ve never seen anything grow this fast,” Musk said during the call, referring to Grok Bot, an A.I. agent created by the company that an autonomously complete tasks that users assign to it. Musk, who has often been overambitious in his business goals, said he envisioned that SpaceX’s revenue would continue to accelerate, reaching “between $500 billion and $1 trillion” by the end of 2027.
Regarding a potential merger with Tesla, Musk said the two companies had formed committees to discuss the idea and that he had not participated because of the conflict of interest.
“At the end of the day, the shareholders have to be supportive of this,” Musk said, adding that he thought the idea had “a lot of merit.”
The next day, Wednesday, Tesla reported better-than-expected third quarter earnings, with its free cash flow and capex spending coming in ahead of Wall Street estimates.
Tesla reported Q3 revenue of $28.05 billion with consensus of $28.13 billion. Adjusted earnings of $0.48 per share vs. the $0.44 estimate.
On the earnings call, Tesla updated its full-year capex guidance to $20 billion from $25 billion previously. Tesla CFO Vaibhav Taneja said the savings would come from “managing our capital deployment efficiently, and plan to fund [capex] primary from our cash flows from operations,” he said.
“I think capex is actually ending up being a little lower than we anticipated, but we’ll start to become more meaningful next year. And then noticeable in the tens of billions in ’28,” CEO Musk said on the earnings call.
The money is going to Optimus robot productions lines, AI compute, the Cybercab ramp, and the Terafab chip plant Tesla is building with SpaceX.
Tesla said Optimus started production at its Fremont factory.
On the call Musk told investors that the company’s Robotaxi fleet would soon prove lucrative as usage of the service surges “exponentially.” Damand for its old-fashioned human-owned cars is growing because Tesla’s Full Self-Driving (Supervised) automated driving assistance system, or FSD, is now a key selling point, he said.
Tesla sold 486,532 electric vehicles globally in the third quarter, a 2% dip from the same period last year.
On the Tesla call, Musk said of the potential merger, “I think I said everything that should be said yesterday. Tap dancing through a minefield there.”
—Meta kicked off Big Tech’s earnings season, beating expectations on revenue, but earnings per share took a hit as a result of legal fees related to its teen mental health settlement.
The company also announced a 2-for-1 stock split, giving each owner of Class A shares a non-voting Class C share.
The move will allow Meta to ensure CEO Mark Zuckerberg retains overall control of the company, while allowing it to continue to finance its AI buildout.
Revenue for the quarter was an all-time high of $64 billion, ahead of the Steet’s $63.3 billion estimate. GAAP earnings per share came in at $3.83 vs. expectations of $3.56, but would have been $7.40 without the legal charge.
Meta also narrowed its capital expenditure projections, raising the bottom line from between $130 billion and $145 billion to between $135 billion and $145 billion.
But as alluded to above the Street was spooked when Meta talked about raising a lot of cash soon.
“We are still developing our budget and capacity plans for next year, but we expect to continue investing aggressively to support both our core business and emerging AI initiatives,” said Susan Li, Meta’s chief financial officer in a statement.
The shares fell 7%, Thursday, after the company also reported its free cash flow, which is the money it had on hand after paying for expenses, turned negative for the three months that ended Sept. 30.
As it continues with its build-out for computing power, spending has ballooned and long-term debt totals $80.9 billion, up from $58.7 billion a year earlier.
Meanwhile, a New Mexico judge ordered Meta to pay $25 billion on Wednesday for deceiving users about its data privacy practices, one of the largest penalties levied against a tech giant.
New Mexico sued Meta in 2021 over a scandal involving the political consulting firm Cambridge Analytica, saying the social media company had misled users with its public statements about their data privacy. Last month, after a two-week trial, a jury in the State District Court in Santa Fe ruled against Meta, saying the company had committed 43 million violations of New Mexico’s consumer protection laws. Each violation carried a penalty of up to $5,000.
The order is the biggest blow yet to Meta, as it has racked up court losses over the harms that its social media platforms have caused users.
New Mexico has been leading the charge against Meta, and winning. In August, a New Mexico judge ordered the company to pay $567 million in damages after a jury ruled the company had enabled harm to young users, on top of a $375 million penalty from the same case in March.
The new $25 billion charge will be reduced on appeal.
—Anthropic is generating breakneck revenue growth but faces a long list of risks that include a narrow customer base and uncertain access to much-needed computing power as it prepares for a mega-IPO, according to reporting from the Wall Street Journal.
The company has signaled that it could potentially spend $750 billion in the coming years on obtaining more computing capacity, including deals it is still negotiating.
The disclosures are part of a draft initial public offering prospectus viewed by the Journal that revealed the firm’s financials for the first half of the year. Anthropic declined to comment.
The AI giant said in the draft prospectus it recorded a net loss of more than $80 billion* in the first half of this year, a total that largely reflects an accounting adjustment related to financing agreements.
That compares to a net loss of $13 billion during the same period a year earlier.
*The overwhelming majority of the net loss in the first half of this year, $72 billion, resulted from accounting charges linked to changes in the value of convertible notes and other instruments Anthropic has issued, according to the Journal.
Anthropic laid out a sprawling list of risk factors, including uncertainty over how it will prevent its AI models from causing harm and protect itself from those liabilities, from sophisticated cyberattacks to possible blackmail by uncontrolled models.
The San Franciso company is preparing for a blockbuster IPO that could help it reach a valuation of $2 trillion. The filing reveals a company growing at a red-hot pace that requires hundreds of billions of dollars in capital to acquire computing power for training and serving it AI models.
Anthropic’s revenue growth is closely tied to a few big customers. The firm said around one-fifth of its $16.3 billion in revenue in the first half of 2026 came from just two customers. The company expects a “significant portion” of its revenue will come from a “limited number of customers for the foreseeable future,” according to the draft prospectus.
The company spent nearly $9 billion on computing capacity and infrastructure, up from $2.3 billion spent on infrastructure during the same six months in 2025.
Anthropic is on the hook to pay around $450 billion in cloud computing agreements over the next seven to ten years. The bulk of these deals are noncancelable.
While most of its capacity comes from large cloud providers – including Amazon Web Services, Google and Microsoft – Anthropic is hitting limits. The company said it has sought access to more capacity than “those partners were willing to provide” and they increasingly see it as a competitor, according to the prospectus.
—The creators of PHP, a technology that powers as much as 70% of the world’s websites, disclosed a critical security issue Wednesday that could be leveraged by hackers to take control of any system running its software. That would allow an attacker to steal information or launch a cyberattack on anyone visiting a hacked website.
Security researchers found the vulnerability using AI. Now web administrators are scrambling to protect themselves from the vulnerability, which cutting-edge AI systems could quickly exploit.
Sound scary? It is, sports fans.
Some government and commercial site operators say they preemptively took their sites offline, and reports of attempted cyberattacks began circulating on Wednesday.
The issue, dubbed PHP2Shell, represents a class of problems in the way PHP manages a computer’s memory. It can be exploited in many ways, some requiring just a few seconds, by hackers who could use it to run unauthorized software on any unpatched web server.
It is the most severe security issue that PHP has faced in more than a decade, according to Volker Dusch, a security engineer with the nonprofit foundation that manages the PHP project.
“Some dude on Twitter could take the (security) patches (being issued) and run AI against it and post some exploit script,” said Thai Dong, the chief executive of Calif, the security company that first discovered the issue. “All hell will break loose.”
Now who wants a beer….
—United Airlines reported third-quarter earnings after the close Tuesday that reversed the stock’s rally.
The airline operator reported a slightly lower-than-expected adjusted profit of $2.54 per share, and a 17.4% increase to $17.9 billion in operating revenue, despite a 62% rise in fuel costs. Wall Street expected adjusted EPS of $2.57 per share on revenue of $17.9 billion.
The sector has had a rough year as skyrocketing jet fuel prices have eaten into profits.
United does expect fourth-quarter operating revenue growth to be even higher than the third quarter, projecting a 20% year-over-year increase to set a new record.
Compared with the year-ago third quarter, United reported “broad-based strength across all revenue streams,” with premium revenue up 17%, basic economy revenue up 16%, loyalty revenue up 17%, and cargo revenue up 23%. Economy cabin revenue increased for the third straight quarter, up 17% year-over-year.
—American Airlines said it is on course for an adjusted loss in the current quarter, as surging fuel prices more than offset continued revenue strength.
The carrier on Thursday said revenue is projected to climb 19.5% to 22.5% in the fourth quarter, during which it is also on track to post an adjusted loss of 50 cents to $1.10 a share. Analysts expected an adjusted loss of 52 cents a share.
For the year, American is now anticipating an adjusted loss of $1 to $1.60 a share for the year. High jet fuel prices stemming from the continuing war in the Middle East have rattled airlines this year, prompting the company to cut its initial full-year outlook several times as it contends with the run up in costs.
“Given today’s elevated fuel prices, we now expect our growth rate in 2027 to decelerate considerably,” CEO Robert Isom said on a call with analysts.
American said Q3 revenue climbed 19% to $16.34 billion. Demand was strong, with improving sales across the carrier’s premium, main cabin, domestic and international seats.
“That’s the strongest quarterly revenue growth of my career,” said Isom, who stepped into the CEO role in 2022. “Unfortunately, the significant increase in fuel prices more than offset that strength.”
Fuel expenses jumped 68% to $4.6 billion in the recent quarter, with the airline paying an average of $3.85 per gallon. For the fourth quarter, American projected an average fuel price of about $4.70 a gallon, nearly double the price paid in the quarter a year earlier.
Overall, American notched a quarterly loss of $269 million, or 41 cents a share, in the latest period, compared with a loss of $114 million, or 17 cents a share, a year ago.
—Southwest Airlines reported better-than-expected quarterly earnings and revenue, and progress across its turnaround efforts, but the carrier again lowered its profit outlook because of rising jet fuel costs.
Investors have been eager to hear how the carrier was progressing on its turnaround, Southwest CEO Bob Jordan said that customers are responding to Southwest’s enhanced offering.
“Demand remained strong as we lapped last year’s bag fee and other commercial initiatives, reinforcing our belief that the earnings power we’ve built is durable, even with significantly higher fuel costs,” Jordan said.
But Southwest’s fourth-quarter forecast for adjusted earnings of 55 cents to 80 cents a share was below the 81 cents a share Wall Street projected. And its full-year guidance for adjusted earnings of $2.60 to $2.85 a share was below the $2.83 a share analysts expected, and less than the $3.25 to $4.25 range it had forecast during second-quarter earnings in July.
For the third quarter, Southwest reported adjusted earnings of 66 cents a share on operating revenue of $8.4 billion, up 21.2%, and a third-quarter company record. The Street was at 57 cents a share on revenue of $8.25 billion.
Southwest said its fuel costs increased to an average of $3.92 a gallon, or $821 million in the quarter.
—TSA checkpoint numbers vs. 2025
10/22…122 percent of 2025 levels
10/21…108
10/20…77
10/19…91
10/18…129
10/17…79
10/16…96
10/15…115
—General Motors’ third-quarter profit rose sharply on the back of strong pickup truck sales, but its shares fell Tuesday after the automaker’s earnings-per-share forecast for the full year fell short of analyst expectations.
The company said adjusted earnings rose 22% to $4.1 billion, or $3.70 per share, topping expectations of $3.63.
GM said it expected to end 2026 with earnings in the range of $14.5 billion to $15.5 billion, narrowed from previous guidance of $14 billion to $16 billion, and it tightened its annual adjusted earnings per share forecast to between $12.75 and $13.75, the midpoint of which is below analysts’ estimates of $13.41.
GM said it remained confident despite inflationary pressures from higher logistics and energy costs, tariffs and other expenses. Commodity inflation, including higher expenses for logistics and computer chips, would total about $2 billion this year, the high end of its previous forecast, it said.
The board approved a multi-year, $20 billion stock buyback program. GM has bought back about $29.5 billion of its own shares since 2023.
In the third quarter, it sold a higher mix of large pickup trucks and fewer electric vehicles, which helped the bottom line. The company has been pulling back on sales of EVs, which historically have lost money, following the Trump administration’s withdrawal of support for them.
Revenue totaled $50 billion, up 2.9% from a year earlier. In North America, the profit margin improved to 8.7%, from 6.2% a year earlier, despite a slight decline in quarterly sales.
GM said “the path forward is more challenging,” but reiterated that it expects next year’s results to be better, assuming continued strong consumer demand and a moderating of cost pressures on commodities and logistics.
—Netflix shares fell to their lowest level in more than two years on Wednesday as analysts cut price targets after the streaming giant’s Q4 revenue outlook and full-year ad revenue forecast missed estimates.
The company forecasts $13.44 billion for its fourth quarter top line, with the Street at $13.51 billion.
Netflix also cut its 2026 ad revenue guidance from $3 billion to $2.7 billion due to a slower-than-expected rollout of certain ad product capabilities.
Wall Street analysts lowered their price targets on the stock following the results.
It’s about “engagement,” and the concern slowing engagement bleeds into the revenue growth numbers.
The company posted revenue of $12.87 billion in its fiscal third quarter, in line with analyst estimates. Earnings per share came in at $0.87, topping consensus of $0.82.
Last week, Netflix said it would cut 6% of its workforce, or about 1,000 employees.
—Procter & Gamble logged higher sales and said it is managing to stay on track despite rising fuel costs.
The consumer goods company, which owns Tide detergent and Crest toothpaste, logged profit of $4.73 billion, or $1.97 a share, compared with $4.75 billion, or $1.95 a share a year earlier. Adjusted earnings were $2 vs. the Street’s $1.98 estimate.
Revenue rose 4% to $23.28 billion in the latest quarter, also beating the Street.
Higher prices gave a small boost to the company’s top line, P&G said. Sales of beauty products, grooming and fabric and home care increased the most.
P&G increased its outlook for all-in sales growth of 2% to 4%, up from its prior guidance range of 1% to 3% growth.
—Barclays said Thursday that it would cut about 5,000 jobs as the British bank and its competitors rely more heavily on AI to increase efficiency and lower costs.
The layoffs, which account for 5 percent of the bank’s workforce, come as investors and economists look for evidence that AI can deliver on its promise to raise profits and productivity. Anxiety is widespread that the technology could lead to job losses in banking, law and similar fields. Britain has a large finance industry and is seen as particularly exposed to disruption by artificial intelligence.
About 60 percent of the job cuts at Barclays will affect employees with support roles, including software developers, the company said.
Foreign Affairs
Russia/Ukraine
Friday evening, hours after I had posted WIR, President Trump did it again…signing an executive order that puts on hold a sweeping new sanctions package targeting the Russian economy, telling Congress the pause was in the national interest, but giving no details.
“I have submitted to the Congress a certification that the issuance of such a waiver at this time is in the national interests of the United States,” Trump said in the order.
Trump personally signed the legislation just last month. Named after late South Carolina Sen. Lindsey Graham, it had sought to clamp down more quickly on the flow of financial resources fueling the war against Ukraine.
Trump’s unexpected move comes a week after he stunningly said the U.S. had agreed to purchase diesel from Russia to try to bring down global energy prices, despite that potentially hurting Ukraine in its war with Russia.
Graham, a close ally and friend of the president, had just returned from Ukraine when he unexpectedly died in July. He had advocated for stricter U.S. sanctions against Russia as a way of pressuring it to end its war in Ukraine.
His colleagues in Congress responded with bipartisan support (the legislation passed the Senate 86-11) after his death and Trump attached his signature to the act – then changed his mind last Friday.
The bill, also drafted by Sen. Richard Blumenthal (D-Conn.), sanctions Russian officials, banks and a shadow fleet of tankers that keeps Russian energy moving.
It also directs Trump to impose up to 100% tariffs on the top five importers of Russian oil or natural gas, with an exception for countries that import less than 15% of Russia’s natural gas exports and have taken significant steps to reduce those imports.
But Trump has been warming toward Moscow while publicly criticizing Ukrainian President Volodymyr Zelensky, including suggesting Kyiv needed a new leader.
And countries such as China and India, which are among the biggest buyers of Russian oil, have raised concerns about the Russia sanctions bill.
Reaction in Congress was swift. Rep. Don Beyer (D-Va.) blasted the president for the waiver, saying he was giving in to Vladimir Putin.
“Trump’s latest surrender to Putin again betrays our Ukrainian partners and defies clear congressional intent of legislation designed to punish Russia for its illegal war of aggression,” Beyer said in a statement.
“Beyond irresponsible,” said Sen. Thom Tillis (R-N.C.), on social media. “What part of enforcing a law passed 86-11 by the Senate does the President and his advisors not understand? It’s unconscionable that this administration is capitulating to a Russian dictator who illegally invaded Ukraine and butchers innocent civilians every single day.”
Tillis said that if Trump wants to actually bring down energy prices, he should resolve the Iran war, which is largely blamed for the spike at the pump, and “not by doing a solid for Vladimir Putin.”
Sen. John Cornyn (R-Tx.) said “Lindsey would be appalled.”
Sen. Democratic leader Chuck Schumer (N.Y.) said in a statement that “by giving the Russian economy life support, Trump’s deal with the devil keeps getting dirtier.”
Rep. Mike Lawler (R-N.Y.), in a tough reelection battle, was critical of Trump’s move. “This war needs to come to an end, but it’s not going to come to an end by putting money in Vladimir Putin’s pocket, no matter how much we want to bring diesel prices down,” he told Fox News Saturday.
Sen. Blumenthal fumed that the waivers “have nothing to do with national security” and even accused the president of “sucking up to Vladimir Putin.”
The deal could be valued at up to $7 billion for Russia, according to the Carnegie Russia Eurasia Center, providing an economic lifeline as the time it faces an array of sanctions meant to end the war.
Editorial / Wall Street Journal
“President Trump’s assistance to Vladimir Putin keeps growing by the day, and in the latest example he’s stuck a shiv in the back of the legacy of the late Sen. Lindsey Graham.
“Mr. Trump waived tariffs for an indefinite period against the top buyers of Russian energy contained in the recent Graham bill passed with big majorities by the House and Senate. The Senate vote was 86-11. His executive order also waives new sanctions on Russian political and military officials, government entities, financial institutions, the energy industry and the shadow fleet Moscow uses for sanctions evasion and other nefarious purposes.
“Mr. Trump offered no explanation beyond a statement that ‘the issuance of such a waiver at this time is in the national interests of the United States.’ The opposite is true, and Mr. Trump is now Mr. Putin’s best friend in the world, after perhaps China’s Xi Jinping.
“Mr. Putin responded Friday night to Mr. Trump’s latest gift with one of the largest attacks on Ukrainian energy infrastructure in the four-and-a-half-year war. The assault included strikes on more than 15 power generation and transmission facilities.
“This comes a week after Mr. Trump declared an ‘energy cease-fire’ in the war. Ukraine honored it until it was clear Russia didn’t. Yet the U.S. President blames Ukraine.
“Amid bipartisan criticism from Members of Congress, Mr. Trump said Saturday that he hasn’t made a final decision on the Graham sanctions, and Secretary of State Marco Rubio said he’ll take 60 days to review the impact.
“On Sunday Mr. Trump said on social media that he is trying to negotiate a peace deal and doesn’t ‘want to do anything that will drive, foolishly, Russia away from the bargaining table.’ But he’s been courting Mr. Putin this way for two years, to no avail.
“Meanwhile, the evidence compounds that Mr. Trump wants Ukraine to surrender on Mr. Putin’s terms….
“Congress is preoccupied with the Nov. 3 election, but Mr. Trump may not appreciate the anger he’s courting if he keeps aiding Mr. Putin. When the election is over there needs to be a bipartisan reckoning for Mr. Trump’s budding alliance with the Kremlin against Ukraine, Europe and American interests.”
The Wall Street Journal then reported on Sunday that Putin has proposed a summit next month with President Trump and Chinese leader Xi Jinping to negotiate an end to the war that would favor Moscow, the Journal citing people familiar with the discussions.
The summit would be on the sidelines of the Asia-Pacific Economic Cooperation gathering in Shenzhen, Nov. 18-19.
President Trump posted on Truth Social, Sunday PM:
“My decision on Russia is a very simple one. I am in the process of negotiating Peace in the war between Russia and Ukraine, and don’t want to do anything that will drive, foolishly, Russia away from the bargaining table. Great progress is being made, and that includes current hostage negotiations! Signing that document at this time will do that, and I can sign it later, or any time that I want! Perhaps more importantly, Russia is doing very little, if anything, to help the Islamic Republic of Iran, compared to what they could be doing, and I want to keep it that way, and will, unless stupid people get in the way. Lastly, Zelenskyy is using Diesel Refineries in Russia as a target, knowing that these attacks are seriously hurting the world diesel markets, including those in the United States. Farmers, ranchers, and businesses of all kinds are suffering greatly from this, but Russia is, nevertheless, sending, at a low price, millions of barrels of diesel to the World. Zelenskyy doesn’t care, and frankly, with all of the money that Europe is famously giving him, and that Crooked Joe Biden gave him in the past, he doesn’t want to end this war, and probably never did. He could have made a better deal two years ago than he can now. His country is in shambles, a large portion of his land is lost, his oceans and seas are gone, and his male population is low, wounded, and/or dead. I WANT THIS WAR [TO] END! Thank you for your attention to this matter.”
Appearing on NBC’s “Meet the Press,” President Zelensky told Kristen Welker that Starlink had been “deblocked.”
“We are very thankful for this,” he said. “Now it works.”
Rep. Mike Turner (R-Ohio) said on CBS’ “Face the Nation” that the administration’s explanation for why Starlink access had been drastically reduced for a time last week was “absolutely not” sufficient.
“This is something where there needs to be” a congressional investigation, he said.
But back to the sanctions’ waiver, Zelensky told Kristen Welker: “If United States will support Putin, I mean, it’s unbelievable, it’s tragedy, it’s historic mistake and big tragedy. That’s why I think that I don’t want to live in illusions, but I think that we have to be pragmatic.”
Sen. Darlene Graham (R-S.C.) broke with the president over the waiver, saying she planned to discuss the matter with the president when he visits South Carolina for a rally this week.
“Personally, I would choose to keep the pressure on Russia…because I don’t trust Putin, and I don’t trust Russia,” she told the Associated Press, stopping short of criticizing Trump directly.
Monday, addressing reporters at the White House, Trump said: “All I want for Russia and Ukraine is for them to stop the stupid war.”
“Zelensky doesn’t know what he’s talking about,” Trump added. “If he would have listened to me, he would have made a much better deal a long time ago, and he’d have a million people living from his side.”
Tuesday, the Washington Post reported the administration has not approved the transfer of interceptor missiles to Ukraine, officials told the Post.
At least some of the transfers of Patriot interceptor missiles are from countries friendly to Ukraine that require Defense Secretary Hegseth to approve the handoff. The United States retains control because the weapons are made by it and are shipped abroad under the agreement that transfers to other countries require U.S. sign-off.
Also Tuesday, the Wall Street Journal reported exclusively that Elon Musk ordered the slowdown of Starlink.
Musk and Trump discussed the Starlink decision in a call soon after the slowdown became public.
Musk then posted on X hours after the slowdown became public, “Any limits on speed or usage are decided by the U.S. military and ultimately POTUS.”
Wednesday, in St. Petersburg, special envoy Steve Witkoff thanked Vladimir Putin for releasing an American held for more than four years on what the State Department called fabricated charges, Stephen Hubbard. But then he praised Putin as a “humanitarian.”
“You talk so much about my president, President Trump, being a humanitarian,” Witkoff told Putin, whom he was meeting to discuss another variant of plans to end the war. “You are a humanitarian also, sir, and I salute that.”
Putin started a war against Ukraine that has led to the deaths of tens of thousands of Ukrainian civilians and soldiers and is wanted as a war criminal by the International Criminal Court.
Witkoff, over repeated visits to Moscow, has been accused of overly solicitous behavior toward Putin. Trump faced similar criticism for welcoming Putin to Alaska with a red carpet in the summer of 2025, ending years of diplomatic isolation for the Russian leader.
Vlad agreed to resume trilateral negotiations with Washington and Kyiv on ending the war, a Kremlin official said, an agreement “in principle” to resume talks after Nov. 10, Putin’s foreign affairs adviser Yuri Ushakov told reporters following the meeting with Witkoff.
The talks will focus on “building a security system for Russia and Ukraine after the conflict ends,” Ushakov said.
At week’s end, the Wall Street Journal reported that President Trump called Elon Musk and asked him to restore Ukraine’s full access to Starshield, but access has not been fully restored, according to President Zelensky.
Thursday, Vladimir Putin said that future talks on a settlement of the war should focus on security guarantees for both countries and an overall framework for security throughout Europe.
Putin restated longstanding Kremlin policy that Russia never wanted to launch a war, but had run into hostile reactions from Ukraine on key issues of concern to Moscow. Talks on a variety of matters could lead to a positive outcome, he said, but Russia remained intent on a solution ending the conflict rather than a short-lived ceasefire.
In his comments, Putin said any discussion on territory in eastern Ukraine had to consider what he said was the fact that the area was “historically Russian land.”
“Firstly, my attitude on this matter is that this is not their territory. It’s the territory of historical Russia,” he said.
—On the battlefront, Russia’s defense ministry said on Saturday it had carried out a large-scale overnight attack on Ukrainian infrastructure targets, including the country’s largest steelworks in the city of Kryvyi Rih.
The plant is owned by steel giant ArcelorMittal, which had suspended the facility’s operations in September after a series of Russian ballistic missile strikes.
Russian forces also hit an electricity substation in the city of Zhytomyr and another steel plant in Zaporizhzhia.
A cargo vessel in the Black Sea was also hit, the Russian defense ministry said, alleging that it was delivering military cargo to Ukraine’s Odesa port.
President Zelensky said on Saturday morning that Russia had targeted his country’s energy sector 76 times since Trump declared his “energy ceasefire.”
Ukraine had paused its strikes on Russian oil facilities – which it says are to limit the main revenue stream for Moscow’s war effort – for three days after the announcement a week ago Sunday, while accusing Russia of continuing its attacks on Ukraine’s energy infrastructure.
Ukrainian Foreign Minister Andrii Sybiha said on Saturday that Russian occupying forces were turning the Ukrainian town of Oleshky into a “death trap” gripped by starvation, and urged international organizations to help evacuate its residents.
Sybiha made his comments on X a day after Putin pledged, in a conversation with Pope Leo, to cooperate in delivering vital supplies into the town in southern Ukraine’s Kherson region. President Zelensky described the situation in Oleshky as “genocide.”
Oleshky had a pre-war population of 24,000 people and is now home to around 1,700 residents, including 47 children, according to Danielle Bell, head of the United Nations Human Rights Monitoring Mission in Ukraine.
[Friday, the White House said first lady Melania Trump brokered an upcoming ceasefire between Russia and Ukraine in Oleshy to allow for humanitarian aid and the evacuation of civilians. Melania then issued a statement saying the truce would start next Thursday. Spokespeople from Ukraine and Russia confirmed Melania’s contribution to the agreement, but the exact date was not yet established.]
A Ukrainian strike on St. Petersburg successfully targeted two of the city’s oil facilities, killing at least one person. Russia’s defense ministry said it had shot down more than 1,000 drones over Russian territory overnight Friday into Sunday.
And then overnight Sunday, Ukraine received no advance warning from its partners of a Russian ballistic missile strike, President Zelensky said on Monday, adding that some vital deliveries from the United States were being delayed.
Moscow launched one of its broadest air assaults in months overnight, cutting power to more than a half a million households and damaging energy infrastructure across Ukraine.
A Russian drone attack killed six people, including two children, in a park near Kharkiv, Ukraine’s second-largest city, according to the regional governor. Zelensky called the strike “an act of absolute barbarity.”
In all, Russia fired 16 ballistic missiles at Kyiv and the surrounding region and more than 200 drones in attacks stretching from Kharkiv and Dnipro in the east to Odesa in the south and Volyn and Rivne in the west.
Two people were killed in Kyiv and two more in Kryvyi Rih, officials said.
Tuesday, Russian drones killed two people near Kharkiv.
Overnight Wednesday, Kyiv then came under a new missile attack, hours after Russia said it was “ready in principle” to resume peace talks and President Trump said the world was “the closest we’ve been” to ending the war.
Six people were injured in the attack.
Ukraine this month has hit three main data centers belonging to tech giant Yandex, one for Russia’s biggest bank, Sberbank, and one for social media platform Vkontakte, the country’s equivalent to Facebook.
Most experts predict repairing the damage could take months, if not years. Some warn that Moscow’s aspirations to become a leader in AI development could be significantly set back.
—Editorial / New York Post
“If President Donald Trump wants a full-on riot within the Republican Party, going along with Vladimir Putin’s idea for a ‘Yalta 2’ summit with Xi Jinping is the way to do it.
“Putin knows that the original Yalta was a triumph for Joseph Stalin, who persuaded an ailing President Franklin Roosevelt to open the door to postwar Soviet domination of Eastern Europe.
“Look: Yalta One was a meeting of allies – this new one would be Trump volunteering to be outnumbered by our determined foes.
“It doesn’t matter how much contempt the prez has for Ukraine’s Volodymyr Zelensky – setting out a plan to resolve the war without him present recalls another conference last century: the Munich Agreement that fed Czechoslovakia to Adolf Hitler.
“That ‘peace in our time’ deal ensured that British Premier Neville Chamberlain would go down in history as one of history’s greatest chumps.
“Yet the biggest problems start long before any sitdown.
“However much Trump thinks he can work with Xi, however charmed he is by Putin, doesn’t matter: Simply announcing he means to do this would instantly prompt all-out rebellion by much of the GOP, further sinking the party’s chances in the midterms….
“For all Trump’s desire to end the carnage in Ukraine, this won’t do it: Putin’s looking to win via diplomacy what he can’t on the battlefield, and would be happy to see it destroy Trump’s presidency as an added bonus.
“You say it nicely, Mr. President, but tell Vlad it’s a flat ‘no.’”
Editorial / Wall Street Journal on the proposed summit….
“Any confab among Messrs. Xi, Putin and Trump that tried to dictate Ukraine’s fate would be a mistake that could plant the seeds for a larger conflict, not unlike the first Yalta that drew lines for the Cold War. All the more so because Messrs. Xi and Putin are working together to undermine America’s interests and influence.
“A new triumvirate that divided the world into spheres of influence would blow up America’s global credibility as a reliable ally. U.S. allies may be punching bags these days, but the U.S. network from NATO to Japan, South Korea and Australia allows America to deter aggression and maintain peace before threats are dire.
“Any coerced peace in Ukraine would divide NATO and broadcast to America’s Pacific allies that the U.S. is a dangerous friend. As a practical matter we doubt even Mr. Trump could force Ukraine into capitulation, and the President would own the ugly scenes of carnage that followed if he pulled intelligence and targeting help.
“Curb your enthusiasm about a China alliance as well. Mr. Trump might want China’s promise not to help Iran, but what price would the Communist Party chief exact?
“Mr. Xi wants Taiwan in his strategic soul, and he aspires to subdue the island without having to take the risk of a blockade or military assault. Expect Mr. Xi to exploit any opening with Mr. Trump to push the U.S. out of the Pacific, perhaps including less U.S. support for the 23 million free people across the Taiwan Strait.
“Mr. Trump said a meeting would focus on ‘denuclearization,’ and credit the President for ending arms-control agreements that Russia wasn’t following and China wasn’t signing. By all means, try to get Beijing to own up to its spectacular nuclear buildup. But Beijing doesn’t want to talk about nukes until it’s on equal footing with the U.S.
“As for U.S. politics, Mr. Trump’s advisers may tell him that voters don’t care about the post-1945 ‘global order.’ But the public understands that China and Russia aren’t American friends, and they know looming trouble abroad when they see it. GOP lawmakers are already unhappy with the President’s appeasement of Mr. Putin, especially given that Mr. Trump has so far failed to rebuild the U.S. military.
“Since the Vietnam war, the GOP coalition has included defense hawks and Jacksonians who favor U.S. leadership even if they dislike military adventures. Handing over Europe to Russia, and the Pacific to China, would open a major party division. Mr. Trump may be two weeks from being a lame duck, and maybe some GOP Senators will finally find the courage to speak up.
“It’s true that Congress and the courts can’t stop a determined President on foreign policy, but they can make him pay a political price. A second Yalta is arguably the worst idea of the second Trump term, and the President would be betting far more than his own legacy.”
Editorial / New York Times
“Since President Trump returned to the White House last year, he has vacillated between appeasing President Vladimir Putin of Russia and reluctantly helping Ukraine defend itself against Mr. Putin’s invasion. Over the past two weeks, Mr. Trump has taken a sharp turn toward appeasement. Desperate to reduce gas prices before the midterms, he is now helping Mr. Putin wage war.
“Let us be clear about the scope of Mr. Trump’s cynicism. He is aiding an autocratic leader and dangerous adversary of the United States who is waging a brutal war against a Democratic neighbor….
“The stakes in Ukraine are much larger than the fate of one nation. The war is a test of whether authoritarian expansion can succeed by military force in the 21st century – or whether the West can rally to protect democracy and innocent lives….
“The people of Ukraine have shown inspiring bravery over the past four and a half years. They defied expert predictions and rebuffed Russia’s invasion. More than 125,000 of them have been killed, and another half million have been wounded. Many live with a daily fear and are preparing for a difficult winter. They are fighting a battle that benefits the entire free world. Mr. Trump is fighting only for himself.”
—German Chancellor Friedrich Merz warned against complacency over the dangers posed by Russia, saying that Vladimir Putin is seeking to not only defeat Ukraine, but to also undermine democracy in Europe.
“My biggest concern is the underestimated Russian impact on our societies,” Merz said in an interview with Bloomberg. “Russia is on the way to destabilize the entire political order of our European continent.”
Merz added that many people, including those in Germany, aren’t taking the threat seriously enough.
“They don’t see what the goal of Russia really is,” Merz said. “This is not only territorial gain in Ukraine. They fear democracy. They fear open societies. They fear the success of European integration.”
The head of Germany’s foreign intelligence agency warned earlier this month that the country has become a prime adversary in a shadow war with Russia and that the threat from Moscow has taken on a “new, more dangerous quality” that presents the prospect of Europe’s largest economy becoming involved in a “violent conflict.”
European leaders have been seeking ways to deescalate a week-long conflict in which Donald Trump has effectively sided with Moscow. Washington has demanded that Ukraine stop striking Russia’s oil refineries and Ukrainian President Zelensky accused Trump of trying to pressure Kyiv into surrendering to the Kremlin.
“I’m trying to convince Donald Trump each time I’m meeting him that this should be in his own interest,” Merz said. “A stable Europe, European continent, European Union as a partner in the world is something which is worthwhile for the Americans as well.”
China/Taiwan: Chinese coast guard patrols to the east of Taiwan are “highly destabilizing” and an extension of Beijing’s legal, political and information warfare against Taipei, the chair of a review commission appointed by the U.S. Congress said on Tuesday.
China has stepped up activity off the island’s east coast since June with regular coast guard patrols. China recognizes no claims of sovereignty by Taiwan, including over the seas around the island.
Officials in Taiwan, which rejects Beijing’s territorial claims, say they believe China is practicing for a possible maritime blockade using overlapping military, paramilitary and civilian assets.
Speaking at a forum in Taipei, Randall Schriver, chair of the Congress’ U.S.-China Economic and Security Review Commission, said one of the most troubling recent developments he had seen was the idea of a persistent coast guard patrol east of Taiwan.
While an ostensibly civilian vessel performing law enforcement duties could seem benign, in fact it is an extension of China’s sovereignty claim, he added.
“This is an extension of legal warfare and political and information warfare. This is highly destabilizing if they continue to operationalize this law enforcement role.”
China’s foreign ministry reiterated comments from last week that those waters were Chinese and it was “therefore legitimate, lawful and beyond reproach for China to carry out activities” there.
Speaking at the same event, National Security Council Secretary-General Joseph Wu said China had no legal claim to the waters off the island’s east.
Later on Tuesday, Taiwan’s defense ministry reported China carrying out another “joint combat readiness patrol” near the island with 27 military aircraft, including nuclear-capable H-6 bombers.
President Trump has yet to approve a new $14 billion arms package for Taiwan, saying in May after meeting President Xi in Beijing that such sales were a “very good negotiating chip.”
But with Trump and Xi most likely due to meet twice more this year, at the APEC summit and the G20 in Florida, there would probably only be movement on the new package next year, Schriver, a former U.S. assistant secretary of defense, said.
Random Musings
–Presidential approval ratings….
Rasmussen: 42% approve of President Trump’s job performance, 57% disapprove (Oct. 23).
A New York Times/Siena University poll has Trump’s approval rating at a new low, 36%, while 59% said they disapprove of his performance.
On the generic ballot question, likely voters said that they preferred Democratic candidates over Republicans by 11 percentage points in their congressional districts, 52-41. I’ve pooh-poohed this when the margin is six or eight points, but double-digits is rather telling.
A majority of voters, 69%, disapprove of his handling of the cost of living; 65% disapprove of his handling of the war in Iran and nearly three-quarters disapprove of his handling of gas prices.
But Democrats still face serious challenges, particularly as they seek to win control of the Senate. To do so they are trying to flip seats in Republican-leaning states including Texas, Iowa, Alaska and Ohio, which Trump won by double-digits in 2024.
An ABC News/Washington Post/Ipsos poll has President Trump at just a 33% approval rating among U.S. adults, 66% disapproving, a record low for this survey, with the generic ballot question at eight points, 52-44.
Among likely voters, Trump’s approval is 38%, 62% disapproving.
Among Republicans and independents who lean Republican, 34% believe Trump is enriching himself, up from 22% in September 2025. Democrats and Democratic-leaning independents are already nearly unanimous, at 88% a year ago and 92% now.
—Democrats’ faith in election results is falling but still exceeds that of Republicans, an AP-NORC poll finds.
Registered voters who identify as Democrats have lost faith in America’s election results since the midterm elections four years ago. Their confidence that votes will be counted accurately has dropped from 75% in 2022 to 55% this year.
The overwhelming majority of Democratic voters say the president attempting to influence U.S. elections is a “major problem, a view that is shared by independents but not most Republicans. Meanwhile, Republican voters’ confidence in the results has risen slightly since 2022 – but they’re still less likely to say they have faith in the electoral process than Democrats. Republicans are more concerned about people voting who are not eligible.
A majority of voters from both parties also say that foreign governments trying to influence election outcomes, AI-generated election misinformation and states redrawing legislative districts to intentionally favor one party are “major problems.”
–With the above in mind, no wonder attitudes have deteriorated. The administration filed a lawsuit to block Alaska’s certification of the U.S. Senate race in Alaska if Republicans lose, based on confusion about the incumbent’s name.
Sen. Dan S. Sullivan (R) is defending his seat against Democratic former state Rep. Mary Peltola. But Sullivan has trailed the challenger with another candidate in the race, retired schoolteacher Daniel J. Sullivan.
The Justice Department asked a federal court to declare that “any result that may be impacted by voter confusion” would violate the senator’s duties under the National Voting Rights Act’s aim to “protect the integrity of the electoral process.”
The lawsuit asks the court to prevent the state of Alaska from certifying election results “pending an investigation to determine whether votes cast for Daniel J. Sullivan were meant to be cast for Senator Sullivan.”
President Trump then admitted this afternoon that he was the one who told the DOJ to get this done.
So more than ever, we see that it is Donald Trump’s Justice Department and he is again ignoring the Constitution…the States run elections, not the federal government.
—Republican Vivek Ramaswamy’s team confirmed late Tuesday that it produced a controversial advertisement featuring the estranged mother of his Democratic opponent for the Ohio Governor’s race, Amy Acton. The campaign said it will spend $4 million to promote it despite facing bipartisan rebuke for dredging up Acton’s painful childhood.
The advertisement features Acton’s birth mother, Donna Arthur, calling her “a liar” and insinuating she has mental health issues. Acton, Ohio’s former public health director, has made no secret of facing homelessness and abuse as a child. Arthur lost custody of her children after her stepfather was indicted for raping Acton. Democrats said Ramaswamy’s team was growing desperate at a moment when more than 676,000 people have already cast ballots in Ohio.
Acton’s brother vigorously defended his sister.
But Vice President JD Vance backed the ad in a campaign stop in Cincinnati, saying he was “disgusted” that some Republicans seemed to be “whining” more about the ad than what “Democrats want to do to the United States of America.”
And then Trump endorsed the ad, posting in part on Truth Social, Thurs. PM:
“Our RINO Governor of Ohio, Mike DeWine, who I unfortunately helped get elected years ago, when he was losing by 16 points prior to my doing a Rally for him was, as usual, disloyal to the Republican Party. He strongly suggested that Vivek should, ‘take down the Ad.’ He probably wants a Dumocrat to win, and certainly doesn’t want someone who will do a much better job than he is capable of doing. I suggested, on the other hand, that Vivek should keep it up, and let everyone listen to the mother of a defective, dishonest, and incapable Candidate, explain how the daughter is a DISASTER who, uncontrollably, lies, cheats, and steals! I only wish the mothers of my opponents would be so brave as to come forward and explain that their son or daughter is a liar, and much worse…The Press is trying to convince everyone that this Ad is bad, because it’s so good! Who wouldn’t use such an Ad? I would, it’s called, ‘hitting pay dirt.’ …I know the real Vivek, he is a brilliant and outstanding person….”
I’m long on record about Vivek, going back to his many appearances on CNBC years ago. He is a sleazy, slimy, snake. And as Nikki Haley commented the other day, just a “bad guy.”
—Editorial / Wall Street Journal
“You can tell the election campaign isn’t going well for Republicans because President Trump is already blaming others if things go as badly for the GOP on Nov. 3 as most expect. His latest excuse is that a pair of Texas Republicans, Sen. John Cornyn and Karl Rove, are responsible if GOP nominee Ken Paxton loses his Senate race in Texas.
“ ‘If Ken Paxton loses, it will be because of WEAK and INEFFECTIVE Political Hacks like John Cornyn and Karl Rove, who have ineffectively opposed me for my entire political career,’ Mr. Trump wrote on his Truth Social website Thursday. He says they’re ‘doing everything possible to make it hard for Ken Paxton,’ albeit without any evidence.
“This is like blaming Ukraine for Russia’s invasion. Mr. Trump helped Mr. Paxton defeat Mr. Cornyn in the GOP primary with a last minute endorsement of the Texas Attorney General. Senate GOP leaders, including GOP campaign Chair Tim Scott, warned Mr. Trump for months that siding with Mr. Paxton would put the seat in jeopardy. And so it has….
“The bottom line is that if Mr. Paxton loses, Mr. Trump will own the defeat.
“The President has already been trying out other election excuses. He blames Senate Majority Leader John Thune for not killing the filibuster to pass the SAVE America Act on voting rules. But Mr. Trump knows there aren’t 50 Senate votes to do that. He is also now blaming Ukraine’s bombing of Russian energy sites for high diesel fuel prices, though the main reason is the war in the Middle East.
“Perhaps the election will turn out better for the GOP than the polls suggest. But if it’s a Democratic rout, man up, Mr. President, and take political responsibility.”
—President Trump on Truth Social, Monday PM:
“New Mexico should immediately change its name to New America. We are not Mexico, we are the United States of America! The name would add great value and prestige to the State! Home Values and Incomes would rise, and you would be even prouder while saluting our beautiful American Flag! Maybe even the Crooked Elections, that New Mexico is known for, would become honest again!”
—It was a big week in Alberta, Canada, but it started out with a tragedy late Saturday when four Canadian service members were killed and dozens more seriously injured in a fire at a military base in Alberta, which Prime Minister Mark Carney described as one of the worst peacetime tragedies for Canada’s military on domestic soil.
It wasn’t totally clear, but initially it was thought a live-fire training exercise hit a gas pipeline, causing a massive fire that then spread beyond the base.
But then we learned it was a grass fire, within the confines of the vast base, that literally exploded within about 30 seconds into where the soldiers were training. They were overwhelmed in less than a minute.
Hospitals in the area, which is remote, were overwhelmed.
A few days later, residents of Alberta voted overwhelmingly to remain part of Canada, rejecting a campaign to try to separate the oil-rich western province from the rest of the country and further bolstering Mark Carney’s efforts to advance a united Canada.
The latest vote count was 75.5% to remain part of Canada, 24.5% seeking another vote on the issue, this first vote a procedural matter.
—The super El Nino is fueling the destructive storms that have been hitting the California coast, doing a major number on coastal communities and severely eroding beaches, which some experts worry are now changed forever, endangering not just housing and other physical structures, but as you’ve seen in the videos, the critical Pacific Coast Highway and a major rail line.
And now the area is likely to see a number of stronger atmospheric rivers than normal. It’s not the frequency that will be different, but a super El Nino just intensifies the storms.
I wouldn’t be too optimistic as a golf fan about the West Coast swing on the PGA Tour, for example, come late January and February. [But we want to see heavy snow in the Sierras.]
–And, finally, we were happy to see that Pope Leo XIV will need no further treatment after his surgery for lung cancer, his doctors announced on Wednesday.
The pope’s personal doctor and the surgeon who removed a lower lobe of the pope’s right lung at Gemelli Hospital in Rome on Oct. 13 said in a statement that follow-up tests confirmed that the cancer was localized.
“A subsequent oncology evaluation confirmed that no further treatment is necessary,” the doctors wrote.
Pope Leo has said he hopes to still make his scheduled trip to South America, starting Nov. 6.
—
Pray for the men and women of our armed forces…and all the fallen.
Slava Ukraini!
God bless America.
—
Gold $4000…Silver $54.00…lowest since Nov. 2025….
Oil (WTI) $103.75…Brent $117.25
Regular Gas: $4.29; Diesel: $6.31 [$3.07 – $3.63 yr. ago]
Bitcoin: $81,211 [4:00 PM ET, Friday]
Returns for the week 10/19-10/23
Dow Jones +0.4% [52215]
S&P 500 -0.5% [7623]
S&P MidCap +0.02%
Russell 2000 +2.0%
Nasdaq -0.7% [25995]
Returns for the period 1/1/26-10/23/26
Dow Jones +8.6%
S&P 500 +11.4%
S&P MidCap +9.4%
Russell 2000 +11.9%
Nasdaq +11.7%
Hang in there. Please support StocksandNews.
Brian Trumbore
