[Posted 4:30 PM ET, Friday]
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Edition 1,436
I’ll be brief with my opening remarks this week, knowing they are likely to be lengthy next time.
The midterm elections are finally here, and we’re going to learn a lot, Tuesday, and probably into Wednesday, maybe beyond that, not only as to the future makeup of Congress, but the direction of the country.
The polls say it could be a big night for Democrats, and if this comes to pass, how will President Trump react? We already know the Alaska Senate race could be a bit of a mess.
But in the past week we’ve been handed two more cautionary tales when it comes to the pollsters. As has been proven over the years they can get it very wrong, just as the polls got it wrong in Brazil with that nation’s presidential runoff, and in Israel’s election this past Tuesday.
So, we wait…and we also wait to see what happens with Iran, reports of further attacks on tankers in the Strait of Hormuz today, with another spike in the price of crude.
With today’s wicked market selloff, there is a lot of unease in the air.
Meanwhile, congratulations to the Milwaukee Brewers, World Series Champions! A great story, the franchise’s first title.
—
Tale of the Tape
Oil / West Texas Intermediate (WTI)
Friday, Feb. 27…$67.30
Friday, Oct. 30…$103.00
Nationwide averages at the Gas Pump [Source: AAA]
Friday, Feb. 27…regular $2.98; diesel $3.75
Friday, Oct. 30…regular $4.20; diesel $6.32
As it went down, day by day in the Iran War….
—Going back to late last Friday, the U.S. government put employees on heightened alert across the Middle East and moved to reduce personnel levels at embassies and consulates because of intelligence showing Iran is in the advanced stages of planning attacks against Americans.
In a memo to State Department employees in the Middle East and other regions, Jay Clayton, the director of national intelligence, said that agencies had “received intelligence that Iran has substantially increased efforts to target U.S. personnel. The lethal plotting efforts by the Iranians against U.S. citizens have reached advanced stages in both the Middle East and certain other countries.”
Iranian President Massoud Pezeshkian, in remarks broadcast on state TV Saturday, blamed the United States for the failure of an interim deal with Iran, but said there should be a new attempt at concluding it.
“We were having negotiations, the cowards (Americans) messed everything up…I still think we should go and conclude it,” Pezeshkian said.
Iranian Foreign Minister Abbas Araghchi said on social media, “While our Brave Armed Forces are fully prepared to defend the Homeland, Iran continues to give diplomacy a chance to succeed.”
Vice President JD Vance apparently sent a letter to Iranian hard-liner Mohsen Rezaei, the secretary of Iran’s top security body, the Supreme National Security Council, and previously Iran’s longest-serving commander of the Islamic Revolutionary Guard Corps, to revive peace negotiations after the midterm elections.
The letter was sent at President Trump’s direction. Vance is testing whether Tehran and Washington could find enough common ground to persuade Trump not give a final order for a short, intense attack on Iran in the coming weeks.
The Wall Street Journal reported there were growing indications the U.S. and Israel are readying to launch a new round of heavy combat operations against Iran, risking a major escalation in hopes of degrading Tehran’s strength and pushing it toward negotiations.
The United States has sent an additional Patriot system to Israel to beef up its defenses in the country, and the U.S. has moved troops off bases in the Middle East where they were vulnerable in preparation for an escalation.
Today, Friday, two tankers were reportedly hit in and around the Strait of Hormuz.
—Yemen’s Iran-aligned Houthis said they launched attacks on Saudi oil facilities and airports on Saturday and the Saudi-led coalition fighting the group said it downed two missiles, as clashes between the two sides continued to intensify. The Houthis also fired three ballistic missiles at coast guard sites in the southern Yemeni port city of Aden.
At week’s end, the Houthis claimed further attacks on Saudi Arabia.
—All beaches in the UAE were closed Saturday until further notice, a day after an offshore oil leak prompted beach closures in one region.
The government said efforts were underway to contain oil leaking from a tanker offshore. The Ministry of Climate Change and Environment also urged fishermen and other sea users to avoid affected areas and follow official instructions.
Officials have yet to say what caused the spill.
Since the start of the U.S.-Israeli war with Iran, there have been serious concerns over the conflict’s environmental fallout.
—David Ignatius / Washington Post…on the assumption the Iran war will escalate after both the Israeli election and the U.S. midterms….
“Lack of strategic clarity in the White House has, unfortunately, been a hallmark of this war. At the outset, Netanyahu and his intelligence advisers convinced Trump that by killing Iran’s leaders, they could start a cascade that would topple the regime. That didn’t happen. Instead, the hard-liners were emboldened by their ability to survive the all-out assault….
“Countries such as Saudi Arabia and the United Arab Emirates that spent billions on fancy American weapons must now be asking, ‘Where is the deterrent capability of those forces?’ said Stu Jones, the head of the Middle East Institute. Rather than preventing Iranian attacks, Centcom’s forward bases turned out to be a magnet for them.
“For now, with the bases damaged and vulnerable to drones and missiles, Centcom will have to rely on stand-off forces at sea and distant air bases. That may be a better architecture for the future, too. These forces can be surged into the Middle East when there’s a crisis, and they can spend most of their time in Asia, to which successive administrations have tried to ‘pivot.’
“But H.R. McMaster, a veteran of two decades of war in the Middle East and former national security adviser, cautions that ‘you can’t accomplish political goals with stand-off forces.’ To reassure local partners, Centcom will need layered air defenses and some hardened underground military bases. The Middle East isn’t about to disappear, and the long-term need to contain Iran will probably continue.
“The Iran war is unpopular because it lacks a coherent endgame. Rolling the dice once again on regime change, as Netanyahu urges, isn’t a wise bet. Someday, perhaps with America’s covert assistance, the Iranian people will be able to install a government that answers their yearning for freedom and modern life. But another spasm of violence won’t help anyone.”
—As Israel prepared to go to the polls Tuesday, the Israeli military forced around 1,200 Palestinians to leave their homes in Hebron in the occupied West Bank, a Palestinian official said on Saturday, a day after a Palestinian attack killed two Israeli soldiers.
The military said the operation at the entrance of Hebron was to search for militants and weapons. In a statement, it also said it would carry out demolitions.
The Palestinian Authority criticized the operation as a “collective punishment,” while the head of Hebron’s municipality said around 1,300 faced losing their homes in addition to the 1,200 already displaced. Residents in Hebron told Reuters that the military expelled many people with no connection to the Palestinian attackers.
Then came the Election, and Thursday night the final results were released, with Prime Minister Benjamin Netanyahu surviving yet again (for now), doing better than was widely predicted, with his Likud emerging as the largest single party.
Likud’s bloc is at 53 seats in the 121-seat Knesset, with the opposition bloc, led by former army chief Gadi Eisenkot, at 48. But Arab parties reached a record combined seat total of 19, complicating efforts to form a coalition.
[Likud’s bloc is down from the 64 seats it won in the last election, in 2022.]
So, Netanyahu’s existing bloc with ultra-nationalist and ultra-Orthodox Jewish parties is short of the 61-seat majority, and neither can seemingly get to a majority without parties led by Israel’s Arab minority.
But on the campaign trail, most Jewish opposition parties pledged not to work with Arab-majority lists, citing a lack of shared values. And Netanyahu not only has vowed not to work with them, he claimed the Arab bloc’s vote total was impacted by foreign interference in the election.
Nonetheless, Israel’s Arab-led parties emerge as kingmakers if others were prepared to join forces with them. In this election, Arab-Israelis – who often identify as Palestinian citizens of Israel and represent one-fifth of the population – appeared to turn out in unprecedented numbers.
The prospect of a unity government involving Netanyahu and Eisenkot has appeared unlikely, as Eisenkot has rejected serving under Netanyahu, including in a rotation government.
What happens now? After the final results are presented to Israel’s largely ceremonial president, Isaac Herzog, next week, he will consult all the leaders of elected parties and ask the candidate who appears most likely to form a coalition to do so.
If that candidate is unable to pull together a majority within a maximum of six weeks, then others could be allowed to try.
If, after all the haggling, no one is able to form a governing coalition, a new election will be held in the following months (about six), and the entire process will be repeated.
In the meantime, Netanyahu’s government stays on in a caretaker role but without the authority to enact major policy changes.
Eisenkot warned in his speech Tuesday night that Netanyahu might use security for political ends. “I call on the heads of the security establishment and the civil service: Netanyahu is a caretaker prime minister, without a mandate or the people’s trust,” he said.
“Remember that you serve only the state and the interests of Israel’s citizens. Stand firm in the face of any attempt to challenge you. You have my unequivocal backing. Netanyahu, do not dare use Israel’s security for your political needs.”
In his ‘victory’ speech, Netanyahu said: “Israel faces a singular historical opportunity, together with our partner President Trump, to remove the existential threat of Iran once and for all.”
Wall Street and the Economy
As expected, the Federal Reserve’s Open Market Committee held the line on its benchmark funds rate. In its statement the Fed said:
“Economic activity is expanding at a strong pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.
“Inflation remained elevated. The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee’s 2 percent goal. The Committee will deliver price stability.”
In his press conference after, I thought the key statement from Chair Kevin Warsh was, “The period ahead of us is information rich.”
It’s all about a potential re-escalation in Iran, with consequences we cannot know, today, and Tuesday’s midterm elections. Will President Trump contest them? Forget the timing of the FOMC meeting, stupidly a week before the election, but there is every reason to just wait until the Fed next convenes in December.
The next day, Thursday, we then had the Fed’s preferred inflation barometer, the personal consumption expenditures index (PCE) for September and the numbers were in line with expectations across the board. On headline, up 0.5%, 3.6% year-over-year, while on core, ex-food and energy, the PCE increased 0.3% over August, 3.1% from a year ago. Not exactly the Fed’s targeted 2%.
Separately, personal income rose 0.2%, while consumption increased a strong 0.5%, as the American consumer keeps spending.
We also had a first look at third-quarter GDP, a robust 3.4%, better than consensus of 3.2%. Growth was powered by the ongoing surge in AI-related investment, the building of data centers and such, as well as the aforementioned consumer. We love to buy stuff.
[The Atlanta Fed’s GDPNow final estimate for Q3 was 3.3%, another great job by these good folks.]
In other news…the S&P Case-Shiller home price index for August rose 2.7% year-on-year, marking its strongest annual increase since May 2025, down 0.4% from July.
September new home sales were a bit more than expected, a 676,000 annualized pace. Mortgage rates continue to hurt, ditto rising inflation weighing on affordability.
At least Freddie Mac’s 30-year fixed-rate mortgage fell a second straight week to 7.24%, down from 7.40% two weeks ago.
An early look at October manufacturing, the Chicago PMI, came in at 55.3 (50 the dividing line between growth and contraction).
Next week, aside from the midterm elections, we have a jobs report on Friday.
Europe and Asia
In the EA21, we had a preliminary flash estimate for third-quarter growth, up 0.4% compared with the previous quarter. In Q2, GDP had increased 0.6%. [Eurostat]
Compared with a year ago, seasonally adjusted GDP increased by 1.3% in the euro area.
2026Q3 compared with 2025Q3….
Germany 1.2%, France -0.1%, Italy 0.8%, Spain 2.7%, Netherlands 2.1%.
Eurostat also reported on the eurozone unemployment rate for September, 6.5%, up from September 2025’s 6.3%.
And the ECB left interest rates unchanged in a well-telegraphed move on Thursday but clearly hinted at another hike in December with a warning that high and rising energy costs were fueling inflation risks.
The ECB has raised rates twice this year to prevent an Iran war-induced energy price jump from becoming entrenched and has signaled that more may be needed.
But ECB President Christine Lagarde announced she will be stepping down, vacating one of the continent’s top jobs at a time when debt problems and resurgent inflation are looming over the economy.
Lagarde said in a statement that she would resign in February. Her eight-year term was set to expire in October 2027.
In the past, she has talked about taking over as chair of the World Economic Forum, but the former French finance minister has also linked her early departure to a desire to play a role in next year’s French presidential election, though she has insisted she isn’t a candidate herself.
Lagarde’s decision to step down early means French President Emmanuel Macron has a chance to pick her successor before the leaves office next May.
France: Meanwhile…the country avoided a repeat of large-scale violence and looting last weekend, after the chaos of two weeks ago, as the government, caught flat-footed then, boosted police numbers and was able to contain the marches.
For sure, there were still bouts of violence against police, but nothing like what was seen on Oct. 17.
Czech Republic: Czechs rallied in big numbers in Prague last Sunday to renew protests against a plan by the government led by billionaire Andrej Babis to overhaul funding for public broadcasters that many consider dangerous for their independence.
Babis and his allies have a record of attacks against the public and other mainstream media.
Serbia: The long-serving strongman leader of Serbia, Aleksandar Vucic, conceded defeat on Sunday in an election that pitted him and his right-wing party against a diverse student-led opposition movement that spent two years protesting his government.
It was a seismic political shift in the Balkan country where Vucic, who had been endorsed by Vladimir Putin and who denounced the student movement as a foreign-led attempt to unseat him, led for 14 years.
What happened echoes the recent electoral defeat of a Vucic ally in Hungary, where youth participation helped oust the autocratic Viktor Orban after 16 years and bring in a new pro-European government. It would also likely resonate beyond Serbia as countries across Europe face youth and student protests.
Surprisingly, Vucic gave a gracious concession speech.
But now the students have to govern.
Turning to Asia
China held its Communist Party Fifth Plenum so no economic data releases. President Xi Jinping continued to purge the ranks to ensure total subservience as he plans on sticking around a while.
Japan’s retail sales in September rose 2.3% year-over-year. The September unemployment rate was 2.4%.
The Bank of Japan kept its short-term policy rate unchanged at 1.25% in an 8-1 vote, in line with market expectations. The decision followed two consecutive 25bp hikes in June and September, leaving borrowing costs at their highest level since April 1995.
Policymakers indicated further rate increases ahead.
Street Bytes
—Stocks sold off viciously today to end the month, with the multiple serious issues facing investors covered throughout this column. It doesn’t help when a stock like Intel falls 30% as it did Friday.
On the week the Dow Jones fell 0.9% to 51770, the S&P 500 lost 0.6%, and Nasdaq 2.0%.
—U.S. Treasury Yields
6-mo. 4.24% 2-yr. 4.58% 10-yr. 4.92% 30-yr. 5.31%
This week we had a bit of a flight to safety trade, with the below-mentioned Binance crypto hack spooking investors already worried about the AI selloff. And you have Iran and the midterm elections coming up.
The ‘trade’ picked up pace this afternoon with the selloff in stocks and all the geopolitical concerns.
—Exxon Mobil and Chevron reported mammoth earnings today, which surprises no one with the elevated price of crude and diesel.
Exxon reported third-quarter net income of $15.41 billion. Adjusted earnings of $4.23 beat analysts’ expectations of $3.90. Revenue was $113.16 billion for the quarter, with the Street at $102.98bn.
Chevron reported adjusted earnings of $10.4 billion in Q3, compared to $3.6bn in the prior-year period.
Both Exxon and Chevron’s refineries are running flat-out at 98% of capacity, with soaring refining margins increasing earnings for their fuel-making businesses.
Both have also talked about doing everything they possibly can to grow capacity to increase supply, but this doesn’t happen overnight. Chevron, for example, said it has the opportunity to increase efficiency at its U.S. Gulf refineries and could grow capacity by 7% at its Pascagoula refinery in Mississippi…by the end of the decade!
Both also talked of continuing to reduce debt. “We think in decades, not quarters,” said Chevron CFO Eimear Bonner.
—Cryptocurrency worth more than $6.3 billion has been stolen from a major exchange – with one industry insider telling Sky News it is “the largest bank heist in human history.”
The security exploit targeted Binance, one of the world’s biggest platforms for trading digital assets. It’s just another fresh blow to efforts to push the assets into the mainstream.
Binance said $3 billion of the $6.3 billion was frozen, and that it had suspended all withdrawals as it works with law enforcement and completes a security revamp. Withdrawals are expected to resume by Sunday, the company said in a post on X.
Binance will cover all losses and “user funds are safe,” it said.
Before now, the biggest publicly known crypto hack occurred at exchange Bybit in February 2025, in which attackers made off with almost $1.5 billion of tokens.
Blockchain intelligence firm TRM Labs said North Korea was behind the heist, which it called “the largest crypto theft on record.”
“TRM attributes the attack to TraderTraitor, North Korea’s elite hacking unit, based on robust on and off-chain intelligence,” the firm said. “We make this judgment with high confidence.”
—A top executive at a Singapore-based data center company was under scrutiny for possibly steering advanced Nvidia AI chips to China. And now American officials have concluded that she was a Chinese intelligence asset, funneling information to Beijing, as reported by the New York Times on Thursday.
But more alarmingly, surveillance of the executive, Alice Huang or Huang Le, a Chinese citizen, revealed that she had developed a close relationship with Nvidia’s CEO, Jensen Huang (no known relation).
For years, Washington has worked to deny China the technology needed to match or surpass the United States in the intense global competition for superiority in artificial intelligence. The discovery that Beijing was getting reports from someone with direct access to Mr. Huang, one of the most powerful figures in the A.I. revolution as well as an influential ally of President Trump’s, set off alarms at the White House.
Trump was apparently briefed about the intelligence findings, which have not been previously reported, and chose not to do anything with the information. The president has been wary of disrupting Nvidia’s chip sales, which are helping to drive the economy and the stock market, and of further complicating the trading relationship with China.
American officials suspected that Ms. Huang was helping China evade constraints on its ability to gain access to advanced AI chips, but the revelation that she was feeding information directly to Beijing raised more troubling possibilities, including that Jensen Huang had insights into Trump’s thinking on an issue of vital importance to both nations, one likely to come up when the president visits China next month in Shenzhen. And it left questions about whether she could be gleaning information about Nvidia, which as much as any company accounts for the lead the U.S. has maintained in developing cutting-edge AI models.
Nvidia claims that Megaspeed, the company employing Ms. Huang, was like any other regional customer and that it had previously investigated and debunked claims the Singaporean company was smuggling chips to China.
John Rizzo, a spokesman for Nvidia, said: “Jensen’s interactions with Ms. Huang are not unusual or unexpected. Meetings with customers are part of a CEO’s job; Jensen talks with thousands of customer executives every year.”
Customers like Megaspeed, Rizzo added, “receive ordinary business information – not sensitive Nvidia trade secrets – and zero information relevant to national security.”
The White House, the C.I.A. and the National Security Agency all declined to comment on the Times’ story.
—Alphabet shares plunged more than 10% Thursday, after a rare quarterly earnings miss. SpaceX didn’t help the situation.
Wednesday evening, Alphabet reported operating profit of about $41 billion, up from $31 billion a year ago, on sales of $128 billion, up 25% from a year ago.
Sales were in line with Wall Street estimates. Operating profit missed by about $2 billion. The services business, which includes search, missed by about $1 billion. The cloud business was roughly a $1 billion above estimates.
The bigger miss was net income. Alphabet reported bottom-line profit of $26.2 billion, missing estimates of $37 billion. Included in the miss, however, was an $8.2 billion “other” loss.
“Other” includes pretax mark-to-market losses of about $11 billon in SpaceX stock.
Alphabet owns some 550 million SpaceX shares, and they closed the third quarter at about $151, down $20 from the second quarter close of about $171.
Ex- the mark-to-market loss, earnings would have been closer to $2.80 a share, but still short of the $3 the Street projected, but not as bad as the headline EPS of $2.12 indicated.
But why was the stock down over 10% Thursday? Lower-than-anticipated advertising sales, $82 billion versus expectations of $83.5 billion.
CEO Sundar Pichai made the case on the earnings call that Google’s agentic tools add to the search business, addressing long-standing concerns about AI offerings cannibalizing the company’s core revenue streams.
But revenue fell short, in part because of the surging popularity of “AI mode” searches, which aren’t as profitable as the traditional kind. It also burned through cash at a faster clip than Wall Street expected, reflecting the cost of the AI buildout.
—Microsoft shares rose after the cloud business continued to post accelerating growth in the company’s most recent quarter, contributing to a higher profit and easing jitters over potential returns from the artificial-intelligence infrastructure build-out.
The 48% growth in the Azure cloud business propelled Microsoft’s total revenue to $92.82 billion, up 19%, for its fiscal first quarter. The result beat the Street’s expectations for $90.62 billion in revenue.
The new Agent and Infra segment, which includes revenue from Azure and Microsoft 365 products, contributed $76.8 billion in revenue to that total.
Adjust earnings were $4.89 a share, ahead of the $4.71 analysts were expecting.
Last quarter, Microsoft lowered its calendar-year 2026 capital-expenditure forecast to about $175 billion from roughly $190 billion, after extending the estimated useful life of its data centers and office buildings to 25 years from 15 years.
Data centers of course are a major political issue these days.
“The politics of data centers have become more prominent and unambiguous across the country,” Brad Smith, Microsoft Vice Chair and President, told the Wall Street Journal earlier this year.
But Wednesday, CEO Satya Nadella said that growing demand led the company to add 24 new data centers across five continents.
Separately, Microsoft will offer buyouts to about 60,000 workers, part of the company’s efforts to trim costs and retool its workforce for the artificial intelligence era.
Some personnel in the U.S., Canada, India and the UK at a vice president level and below will be eligible, said a Microsoft spokesperson.
Divisions such as Xbox, Windows, Copilot and finance are fully participating in the offer.
The world’s largest software maker has been shedding tens of thousands of workers in waves of layoffs in recent years. In July, it offered buyouts to retirement-age employees, and more than 30% of the roughly 8,750 eligible people took the offer. Microsoft expects far fewer personnel to accept the latest buyout proposal compared with the voluntary retirement program, the spokesperson said. Focus on that last statement, when you see the ‘breathless’ headlines about 60,000.
Microsoft’s headcount as of the end of June was 223,000.
—Amazon, like Alphabet, saw its shares tumble, 7% on the open Friday, after it reported third quarter results that missed on the top and bottom lines.
For the quarter, Amazon saw earnings per share of $1.89 on revenue of $201.9 billion. Analysts had projected EPS of $1.97 on revenue of $202.25bn.
Amazon says Q4 net sales will come in between $240 billion and $247 billion vs. expectations of $244.5 billion.
AWS revenue came in at $45.9 billion vs. the consensus of $45.68 billion, while online store sales hit $68.47 billion, with the Street at $69.6 billion. AMZN’s advertising business saw sales of $19.6 billion.
CEO Andy Jassy said in two to three years, six to eight AI models will be about as good as each other.
“I think there are going to be six to eight models that are about as good as each other, or at least good enough for 95 plus percent of the workloads,” Jassy said during Amazon’s earnings call.
Jassy noted Amazon has more than a million robots in its fulfillment network.
That, he says, has had an impact on costs, productivity, and safety.
“We’re still so early with respect to both what we have built and deployed, and what we’re working on. And I think that you’ll see we will always have a lot of teammates in our fulfillment centers, but I think a lot of the jobs that we have that are more repetitive that we have humans doing will be done by robots.”
—Intel shares tanked a whopping 30% (worst day since 1974) after the chip maker reported mixed third-quarter earnings, along with a weak outlook for the current quarter following a fatal explosion at one of its facilities.
The earnings report highlighted both the intense demand for artificial-intelligence chips and the setbacks companies can face in supplying them. In Intel’s case, the disappointing fourth-quarter guidance was partly due to an explosion at a plant in Israel earlier this month, which killed two employees and disrupted production.
And while the company’s AI-related segments saw surging revenue, its PC business dragged on overall results.
Intel reported adjusted earnings of 52 cents a share for the third quarter, up from 23 cents a year ago and ahead of Wall Street’s call for 41 cents. Revenue surged 21% year over year to $16.5 billion, just shy of analysts’ expectations.
Demand for Intel’s central processing units, or CPUs, remained strong. Revenue from the company’s data-center and AI segment surged 78% year over year in the third quarter.
But the personal computer market has deteriorated faster than Intel expected, with the company’s client computing and physical AI business, which covers PC products, seeing its revenue shrink 5% from last year.
Buying patterns for PCs have shifted, in part because of the high price of memory chips, and weakness in the PC market is likely to remain a headwind to growth next year, the company said. The segment that contains PCs and other products makes up about half of Intel’s revenue.
And then Intel gave guidance for the fourth quarter of adjusted earnings of 25 cents a share on revenue of $15 to $16 billion. The Street is at 45 cents and $17.3 billion.
Dell shares fell 12% today on the PC news from Intel.
—Anthropic, the maker of the Claude chatbot and a key developer of cutting-edge AI models, painted a picture of future growth propelled by the technology – including advances in science, discovering cures for diseases and bringing about explosive economic growth – as it prepares for what could be the largest ever initial public offering.
“We believe that AI is one of the most consequential technologies in human history,” Dario Amodei, CEO of Anthropic, said in a much-anticipated corporate filing Monday morning that signals its public listing is just weeks away.
Amodei and the other five founders of the San Francisco-based company aimed to “realize” the benefits of AI “while navigating and preventing the risks that come with a technological revolution this fast and this powerful.”
In the filing, Anthropic said its revenue skyrocketed to $16.3 billion in the first half of the year, a 14-fold increase from a year earlier largely from businesses using its AI software, including Claude.
As previously reported, the company lost more than $80.7 billion in the first half of the year, but $72.4bn of that was a one-time charge related to convertible notes.
Anthropic aims to raise more than $100 billion in its public listing, which could value the company at $2 trillion, pushing it past Elon Musk’s SpaceX as the world’s biggest IPO.
It also has cash and short-term investments totaling $130 billion as of June 30. [Add the IPO proceeds to this figure, and yes, it’s a lot. But massive future expenses/obligations.]
Anthropic’s filing was unusual in that it warned its products could bring about disaster, including loss of control of the technology and authoritarian abuses. “To build AI is to harness cognition itself, and anything so powerful can be used for ill as well as good,” Amodei and the other founders wrote.
Earlier, SpaceX announced it was borrowing another $40 billion to accelerate its AI buildout, as raising capital is getting harder, which is a risk to the AI trade.
“SpaceX closed $40 billion of debt for GPUs, but we’re investment grade and have Starlink and launch revenue,” CEO Elon Musk tweeted on Sunday. The deal follows a $25 billion bond offering in June.
“As of the past few weeks, debt markets have almost entirely shut off access to money for any company that doesn’t have substantial revenue independent of AI data centers,” added Musk. “That means the 200-plus [neocloud AI compte companies] are going to see guppy-level death and consolidation. Some will make it through, but not many.”
Meta then said Monday it plans to raise up to $95 billion in equity to fund its costly AI-related expansion of data centers, cloud computing power and other infrastructure.
Meta previously announced capital expenditures were expected to come in between $135 billion and $145 billion this year.
Editorial / Wall Street Journal
“In an understatement of the modern age, Anthropic says ‘we are subject to complex and evolving laws, regulations, and other legal obligations related to privacy and data protection.’ Chinese AI labs face few of these barriers.
“Becoming a public company will increase Anthropic’s legal risks. By now Mr. Amodei must know that anything he says can and will be used against him by regulators and the plaintiff bar. If an Anthropic agent causes damage, the tort and securities bars will pounce.
“On Friday the owners of Elvis Presley’s music sued Anthropic, alleging it trained its models on more than 200 of his songs without permission. They are seeking more than $41 million in damages. ‘Costs of defending against such litigation, regardless of merit, are considerable,’ the prospectus says. Yes they are.
“Given such enormous risks, why is Anthropic going public now? Our guess is it’s trying to take advantage of the AI boom to let employees with stock options and early investors cash out before its edge erodes – or before more risks bite.
“One underplayed hint of potential trouble is Anthropic’s insistence on its ‘public benefit purpose,’ which includes ensuring ‘the hardest problems facing humanity are not left to market forces alone to solve.’ That’s more or less an admission that Anthropic will continue advocating for a bigger government role in controlling AI. Investors and taxpayers, take heed.”
—Boeing shares fell 10% Tuesday after the company posted a bigger third-quarter loss than expected, as supply-chain challenges and production delays in its commercial airplane division overshadowed bigger margins across the rest of Boeing.
The planemaker continued its long turnaround during the quarter following years of crises and controversies, which dented its reputation and left it with staggering debt.
During the quarter, Boeing secured certification for the 737 MAX 7 from U.S. regulators, won the U.S. Navy’s sixth-generation F/A-XX fighter contract and generated free cash flow for another quarter, while certification of the larger MAX 10 followed in October.
“Expectations are rising, and they should. We have a stronger foundation than a year ago, but we also have more work to do to deliver on our backlog, strengthening our culture, and improve how we work every day,” CEO Kelly Ortberg said in a memo to employees after the results.
Boeing reported an adjusted loss of 34 cents per share for the quarter through September, compared with market expectations of 21 cents.
Revenue at Boeing Commercial Airplanes dipped slightly to $10.7 billion, while operating loss stood at $697 million.
The company attributed the performance to less profitable jetliner deliveries and higher production costs, including from its supply chain.
Boeing has struggled to increase 737 output from 42 jets a month to 47, which it hoped to hit during the summer. It has not been able to make wings fast enough, Ortberg said back in September.
—TSA checkpoint numbers vs. 2025
10/29…121 percent of 2025 levels
10/28…113
10/27…75
10/26…91
10/25…133
10/24…76
10/23…98
10/22…122
—Caterpillar shares fell 9% Thursday after narrowly beating third-quarter profit estimates, buoyed by AI-driven demand for power-generation equipment, but its unchanged annual sales forecast raised questions over how long the data-center boom can drive growth.
CAT has benefited from the AI-driven expansion of data centers across the U.S., which boosted demand for construction equipment and generators. However, investor sentiment has weakened amid growing opposition to data centers and calls to slow AI development.
Its order backlog for the third quarter swelled to a record $78.1 billion, up $6 billion from the previous quarter. But the increase was slower than the pace seen earlier this year.
Quarterly revenue rose 17% to $20.7 billion, beating analysts’ forecast of $20.55 billion. The company reported an adjusted profit of $7.20 per share for the quarter through September, compared with $4.95 per share a year earlier and analysts’ average expectation of $7.08.
—Ford Motor announced a third-quarter operating profit of $2.7 billion from sales of $49.5 billion. The Street was looking for an operating profit of $2.4 billion from sales of $48.3 billion.
Management nudged guidance higher. For 2026, Ford expects operating profit of about $10.75 billion from a prior guidance of $10.5 billion.
For the quarter, Ford’s traditional car business earned $1.4 billion, down slightly year-over-year on lower sales. Ford’s commercial business earned $1.7 billion, down from $2 billion in the third quarter of 2025, with commodity costs squeezing margins. Ford’s EV business lost less money, $1.1 billion compared with $1.4 billion in 2025, despite sales dropping 31%.
But investors are looking at prospects in 2027, and the lagging stock price, around $12 a share, shows investors aren’t convinced it is going to be a solid year.
—United Parcel Service delivered more than five billion packages in 2025, and its results offer a look at not only the company, but the U.S. economy. Things are looking solid, with end market demand holding up despite inflationary headwinds.
UPS announced earnings per share of $1.69 from sales of $22.9 billion Tuesday morning. Wall Street was looking for EPS of $1.62 from sales of $22.3 billion. A year ago, UPS reported EPS of $1.74 from sales of $21.4 billion. The shares rose 5% on Tuesday.
“Our third-quarter results demonstrate the continued strengthening of our business fundamentals, driven by premium growth and greater network efficiency,” said CEO Carol Tome in a news release. “As momentum builds, we are entering the holiday shipping season from a position of strength…Given the strength we see in the business, we are raising our full-year financial guidance.”
Now, UPS expects 2026 revenue of $92.6 billion and operating profit of $8.75 billion – up from prior guidance of $91.2 billion and $8.65 billion, respectively.
The third quarter marked the company’s second consecutive quarter of revenue growth. UPS is almost done with its Amazon.com “glide down.” Almost two years ago, the company announced its plan to walk away from low-profit Amazon business. About two million daily packages left its network.
Higher fuel prices and inflation just haven’t hurt customer activity yet, says CFO Brian Dykes. That’s been a surprise, even to UPS management, but the company projects year-over-year volume growth in the fourth quarter.
—FedEx lifted its full-year outlook after higher shipping rates and volumes boosted revenue in its latest quarter.
The shipping company on Wednesday posted a profit of $290 million (which included a $1.2 billion loss from a spinoff), with adjusted earnings per share of $3.74, compared with estimates of $3.34 a share.
Revenue climbed 12% to $22.86 billion, compared with the Street’s $22.73 billion.
The Memphis, Tenn., company said the third-quarter results were boosted by higher base package yields and package volumes, as well as lower costs from the company’s business-optimization efforts.
For the calendar year, FedEx guided for revenue to grow around 12% year-over-year, up from a prior view of 11%. It expects adjusted earnings per share of $18 to $18.60, up from a previous range of $16.90 to $18.10.
–I have to admit I was upset over a story last weekend in the New York Post that began thusly:
“Google illegally demolished an estimated 250,000 trees in Finland to make way for a data center, leaving behind a lifeless mud wasteland that forced packs of wolves into a nearby town in search of food and infuriating locals….
“The tech super giant – continuing its expansion of the booming artificial intelligence industry – cleared 816 acres of woodlands in Northern Finland, The Guardian reported Thursday.
“Google is accused of removing the trees and clearing the land before it had full approval – as Finnish law requires companies to complete a mandatory Environmental Impact Assessment before large-scale operations.
“Finnish officials, outraged by the mass destruction, suspended all development at two of Google’s data center sites to assess the environmental impact.”
The images are totally devastating. They basically cleared a massive portion of forest, destroying wildlife and forcing wolves to search for food closer to human developments.
The operation took place outside the rural town of Muhos, where one resident told The Guardian: “It has been done in the wrong way. American style. No sense. No sense at all.” It turns out Google previously destroyed a local salmon population in putting up a hydropower project.
No wonder some people hate arrogant Americans. In this case, I don’t blame them.
—We have seen a wave of AI-powered intelligence-powered attacks that has flooded the internet in recent weeks, as hackers increasingly turn to agents and AI hacking tools that make intrusions faster and harder to track than ever before.
Organizations have been scrambling to patch newly uncovered bugs that could allow the takeover of as many as 70% of the world’s websites.
“We’ve been seeing an explosion of these agentic adversaries,” said Adam Meyers, a senior vice president with cybersecurity firm CrowdStrike. “We’ve found advanced adversaries using this; we’ve found very unsophisticated adversaries using this.”
The National Security Agency and Federal Bureau of Investigation have told companies that couldn’t immediately patch the web bugs to simply pull the plug on their websites. Government-run sites in countries such as Canada, Belgium, France, and the Netherlands did just that.
As the Wall Street Journal reported: “The pace and volume of the AI-powered attacks are starting to overwhelm the incident-response firms that respond to cyber breaches. Pundits are referring to the month as “Black October,” and many in the field are predicting more to come.
“We expect that there’s going to be a massive number of compromise disclosures in the coming weeks and months,” said Steven Adair, president of the cybersecurity firm Volexity.
–Earlier this month, Elon Musk announced that Starlink had acquired a batch of mobile-friendly low-band spectrum, sending the share prices of the major U.S. mobile carriers falling by approximately 10%.
But Monday, Verizon CEO Dan Schulman said that while he assumes SpaceX will flawlessly execute its U.S. ambitions – he’s not worried.
In order for Starlink to compete, it will still need a lot of land-based infrastructure.
That building could require SpaceX to spend a half trillion dollars over up to eight years, he said.
Schulman said: “Clearly, the tech and the wireless landscape is rapidly evolving, and we need to rapidly evolve along with that. I also operate under the assumption that everything SpaceX says they will do, they will do, and that they will execute flawlessly.”
But Schulman also said there are significant technical and financial hurdles that Starlink would have to clear to meaningfully compete with established networks like Verizon. But it is possible.
“If they build a terrestrial network, it will basically look and feel like every other network,” he said. “I think we should take it quite seriously.”
Speaking as part of the company’s third-quarter earnings call, Schulman said building a competitive U.S. network, especially for mobile, would require building as many as 80,000 large cell towers on Earth linked with some combination of satellites and fiber optics.
After the call, Musk responded to the forecast with a post on X: “Will take 2 or 3 years.”
—The iPhone Duo, one of Apple Inc.’s biggest new products in years, is drawing a growing number of complaints from customers who say the foldable display cracked after just hours or days of use.
In these cases, customers reported hearing a crunching sound when unfolding the phone, followed by a large crack forming along the center crease. Some users also experienced a white patch or other display malfunction on the right side of the screen.
Apple acknowledged the issue in a statement, and said it would replace the phones, though the company emphasized the issue involved “a small number of iPhone Duo units.”
—Smithfield Foods posted lower third-quarter profit and revenue and said it expects continued macroeconomic pressure in the current period.
For the year, the company said it now expects total sales to be down low-single-digits from fiscal 2025. It cited softer fresh pork and hog commodity markets.
Smithfield, which completed its acquisition for Nathan’s Famous, previously projected sales for the year to be roughly fat.
For the third quarter, Smithfield Foods posted a profit of $91 million, or 23 cents a share, compared with a profit of $252 million, or 63 cents a share, a year earlier.
Sales fell 8.3% to $3.44 billion and came in below Wall Street models for $3.65 billion.
Sales across the company’s packaged meats segment came in at $1.98 billion, down 5.2% from last year.
—Six Flags has announced it will be adding seat belts to some of its rollercoasters after a man fell to his death on the Goliath ride in Georgia earlier this month.
The company’s CEO John Reilly said in a letter to customers that the company is reinforcing safety measures across its parks, including adding seat belts to Goliath and similar rides, which already feature lap bar restraints.
I’m assuming Six Flags has talked to NASCAR, who after the death of Dale Earnhardt at Daytona 25 years ago (2001), stepped up driver safety in a huge way, witness driver Joey Logano walking away from a horrific class last weekend at Talladega.
Foreign Affairs
Russia/Ukraine: Over the weekend, Ukraine’s defense ministry said it had a “stable connection” to Starlink, after its military suffered days of restricted connectivity on the satellite internet network. Ukraine had accused President Trump of telling owner Elon Musk to place limits on it.
Musk then admitted his company SpaceX restricted Starlink internet service, accusing Ukraine of violating its terms of service by using it for military activity – but denied being responsible for a simultaneous issue with its U.S.-run, military-grade counterpart Starshield. Ukrainian presidential adviser Serhii Beskrestnov said Musk’s post was “very strange.”
“Using Starlink, a civilian commercial service, for offensive drone strikes to kill people has never been allowed, nor should it be,” Musk wrote on X on Saturday.
“Ukraine’s military violated Starlink terms of service and used it for offensive drones strikes to kill people. That loophole was closed last week.”
Ukraine’s military uses the network of 10,000 low Earth orbit satellites extensively for military operations, particularly in remote areas on the battlefield.
Ukraine uses both the civilians service Starlink and the more secure Starshield, which Musk said was controlled by the U.S. military when he suggested the Pentagon could be behind the recent issues.
Russia is not authorized to use Starlink, so when Ukraine sends long-range missiles or drones deep into Russia to hit oil refineries, the network does not work.
—A localized ceasefire between Ukraine and Russia took effect early Tuesday ahead of a humanitarian mission brokered by U.S. first lady Melania Trump, as missile attacks resumed in Kyiv.
The local pause in fighting started at 3 a.m. to allow an aid mission into the Russian-occupied town of Oleshky in southern Ukraine later this week.
Up to 2,000 people are stranded in Oleshky with dwindling food and medicine. They are unable to leave because of explosive mines and drone attacks in the area, according to the UN.
The local ceasefire was due to last through Saturday, or longer, but minutes after 3 a.m., multiple ballistic missiles shook Kyiv and air alerts sounded in other parts of the country. In Kharkiv, Ukraine’s second-largest city, authorities said attacks late Monday killed two people.
“It is important that the world sees that Russia is showing nothing but a desire to kill and continue waging war,” President Zelensky wrote in a post afterward.
And then Thursday, a Russian drone strike killed 14 people crowding onto a commuter train at the main station in the city of Dnipro, according to local officials, where no ceasefire was in place.
Also Thursday, Russia said its air defenses intercepted more than 1,200 Ukrainian drones overnight, the highest reported total to date.
Russian forces downed 1,214 drones over 19 regions, the Defense Ministry in Moscow said in a Telegram statement. Some of the drones were intercepted over Moscow region.
Moscow Mayor Sergei Sobyanin said 231 unmanned aerial vehicles were destroyed on approach to the capital.
Ukraine’s Air Force said Russia launched 112 drones overnight, including 40 jet-powered craft, with defenses intercepting 97 of them.
–According to reporting from the Wall Street Journal, Ukraine’s military has paused its strikes against Russian oil refineries, people with knowledge of the operations said, after weeks of pressure from President Trump shook Kyiv’s confidence in U.S. support.
The unofficial pause, which is expected to last until after the midterm elections but potentially deeper into November, began early last week at the height of a crisis in U.S.-Ukrainian relations, the Journal’s sources said.
President Zelensky has said Ukraine wants more protection for its own energy infrastructure – which Russia has been systematically destroying with missile and drone attacks ahead of winter – in exchange for holding off.
But as noted above, Russia is continuing to escalate its missile and drone attacks on Ukraine’s energy infrastructure and its cities, inflicting a mounting civilian death toll.
According to the Journal, U.S. envoy Jared Kushner repeated Trump’s demand to stop hitting Russian refineries at a meeting with Zelensky on Oct. 20 in Oslo. “One official described the conversation as ‘very tough.’
“Kushner, who joined the meeting remotely because of an illness, told Zelensky that he should pause the strikes because he and U.S. envoy Steve Witkoff were dedicating a lot of time, energy, and jet fuel to mediating with Moscow, one of the U.S. officials said. A 30-day pause on refineries would be a way for Ukraine to show gratitude, that U.S. official said.”
But today, there is a report as I go to post that Ukraine hit a Russian refinery.
–According to reports, the Trump administration is exploring a new concession to Russia: lifting sanctions on the country’s flagship government investment fund, long viewed by U.S. officials as one of the Kremlin’s most powerful tools of international influence.
Russian officials have pushed for the move as part of broader talks about the fund’s involvement in shipping Russian diesel fuel to the United States, according to people familiar with the negotiations.
As many say, the consideration of more relief for Russia shows how the Kremlin is using a recent flurry of diplomacy over the war in Ukraine to advance an agenda that appears to have little to do with securing peace.
—The leaders of Finland and Norway phoned Vladimir Putin on Tuesday to urge him to end the war in Ukraine, breaking with a longstanding practice among Western European leaders of shunning direct contact with the Kremlin.
The call by Finnish President Alexander Stubb and Norwegian Prime Minister Jonas Gahr Stoere was an attempt to influence the diplomatic process after President Trump shifted his position in favor of Russia and U.S. ties with Ukraine hit their lowest point in 18 months.
Stoere said he and Stubb had spoken to Putin for about 90 minutes, and then to President Zelensky.
In a joint statement, they linked the initiative to planned peace discussions between Russian, Ukrainian and U.S. officials in Abu Dhabi next month, their first since February.
The Kremlin’s readout of the call did not suggest any softening of Putin’s position.
“It was emphasized that achieving a just and long-term peace is possible only if the legitimate interests of the Russian Federation are fully and unconditionally taken into account,” it said.
“At the same time, attention was drawn to the confrontational policies of EU and NATO countries, which are contributing to the prolongation of the hostilities.”
Russian Foreign Minister Sergei Lavrov said Tuesday’s call had offered nothing new on the Ukraine conflict, with an information war likely to escalate, and that European countries were simply seeking a role in the negotiation process.
Other western European leaders were not happy with Stubb and Stoere’s effort. It was an end-run around normal processes, with the EU preferring to speak as one united voice (as much as that is possible).
North Korea: Leader Kim Jong Un visited China in his first visit to the country in a year, South Korea’s government said Saturday.
Kim’s visit was the latest move in an increasingly assertive foreign policy as he seeks to align Pyongyang with Beijing and Moscow in a united front against the United States under what he portrays as a “new Cold War.”
Kim arrived in the Chinese border city of Dandong after crossing the newly opened bridge linking the two countries, according to South Korean officials.
Experts said the opening of the New Yalu River Bridge this month was a key symbol of strengthening ties between the two countries and reflected their intent to expand trade, as it is expected to accommodate two-way traffic around the clock, including container shipments and heavy cargo trucks.
South Korea’s spy agency told lawmakers last month that it saw a “50%” possibility of a meeting between Trump and Kim on the sidelines of next month’s Asia-Pacific Economic Cooperation, or APEC summit in Shenzhen, China.
Meanwhile, tensions between North Korea and South Korea are running high this week after Pyongyang sent a letter to the UN Security Council, repeating accusations that Seoul fabricated a September landmine incident that injured three South Korean soldiers, and after a North Korean howitzer was spotted close to the border.
A Reuters witness at an observatory in South Korea overlooking the heavily armed border on Monday confirmed the presence of a North Korean artillery piece positioned in clear view near the frontier.
Reuters also observed three North Korean armored vehicles with their gun barrels pointed south, as well as about 20 to 30 North Korean soldiers carrying out fencing work inside the Demilitarized Zone (DMZ).
I’ve been to that observatory, and you can see well into North Korea, but when I was there, I didn’t spot any North Korean troops. The South Korean troops looking at my small group, however, were not very friendly looking.
“It is highly unusual (for North Korea) to expose its self-propelled artillery so conspicuously,” said Lim Eul-Chul, a professor at Kyungnm University in Seoul. “By deliberately displaying it, North Korea is signaling through action, not words, that it intends to enforce its border policy through force rather than dialogue or negotiation.”
Seoul has said its military issues warning broadcasts and fires warning shots to send North Korean soldiers back across the line when they cross the military demarcation line (MDL), which bisects the DMZ.
North Korean troops have been building tactical roads and fences and laying mines near the MDL in recent years.
—Dan Blumenthal, a senior fellow at the American Enterprise Institute, in an op-ed for the Washington Post:
“Americans are broadly aware that the artificial intelligence boom depends on advanced semiconductors manufactured in Taiwan. But less attention is paid to the advanced memory chips crucial to unlocking the benefits of AI, which are largely made in South Korea. Seoul’s chip dominance makes the Korean Peninsula a hidden choke point in the global economy – one facing increasing risk as Washington and Seoul fail to challenge an emboldened Kim Jong Un.
“Korean companies Samsung and SK Hynix supply nearly two-third of the high-end memory chips AI accelerators depend on. South Korea’s biggest memory plants, including the world’s largest chip complex in Pyeongtaek, are within range of a North Korean strike. The data center boom is already causing a shortage of memory chips in peacetime. A kinetic conflict that hits Korean chip producers would create a global economic catastrophe.
“Unfortunately, South Korea’s situation is becoming more precarious – and thus conflict more likely – as Kim’s confidence grows and resolve weakens in Seoul and Washington.
“Moving production off the peninsula is not a practical fix. Cutting-edge fabs can cost tens of billions of dollars and take years to reach full output. Samsung and SK Hynix have decades of institutional know-how and a deep pool of specialized engineers. America’s Micron is building fabs in the United States, but significantly replacing Korea’s output is not realistic.
“Pyongyang, meanwhile, is now stronger than at any time since the Cold War. Kim has sent an estimated 14,000 troops to fight for Russia, and they are returning home with valuable combat experience. In return, Russia has reportedly supplied North Korea with air defenses and electronic warfare capabilities and is considering transferring even more military technology.
“Beijing is also empowering Kim. In June, Chinese leader Xi Jinping visited Pyongyang without publicly mentioning the dictator’s nuclear weapons program. China has tacitly accepted North Korea’s nuclear status, reopened its border with Pyongyang and continued to serve as its economic lifeline. Backed by two great powers, Kim is accelerating his shift to a more aggressive nuclear posture that reserves the right to use nuclear weapons against the most likely U.S. and South Korean conventional responses to his aggression.
“It’s easy to see how a conflict could erupt. Kim could escalate his provocations, eventually forcing a response from U.S. and South Korean forces. He could also take advantage of a Taiwan crisis: If China were winning a potential conflict, Kim could decide to attack the South, and overstretched U.S. forces would be hard-pressed to defend both allies. If China were losing, Beijing could push Pyongyang to open a second front to stress U.S. forces.
“If Kim believed South Korea and the U.S. would respond together, he would be less likely to strike the South. However, Washington and Seoul are giving him reason to doubt their combined resolve. In March, the Pentagon reportedly began shipping Patriot and THAAD components from South Korea to the Middle East to support the Iran war. In August, just before the largest annual U.S.-South Korean allied exercise began, President Donald Trump scaled it back, saying the drills sent an ‘inappropriate and hostile’ signal….
“Trump hopes to meet Kim this year, possibly in November. That would be a mistake. Given Kim’s improving strategic posture, any move that further raises his stature will make him more dangerous.”
The above is why I sleep with one eye open, so you don’t have to. I always wake up expecting to see a headline from here, more so than anywhere else.
Thursday, North Korea fired around 10 ballistic missiles toward the sea off its east coast, South Korea’s military said. South Korea is strengthening surveillance and maintaining readiness for additional launches, while closely sharing information with the United States and Japan, South Korea’s Joint Chiefs of Staff said.
Brazil: President Luiz Inacio Lula da Silva rather surprisingly clung to power in Sunday’s presidential election runoff over Flavio Bolsonaro, winning an unprecedented fourth term and cementing his place as one of the world’s longest-serving democratically elected leaders.
The leftist leader, just two days away from turning 81, won 51.8% of the vote against 48.2% for Bolsonaro, electoral authorities said with 99% of the votes counted.
Lula’s adversary was the eldest son of Jair Bolonaro, a bitter rival who served as president and was convicted of trying to overturn da Silva’s 2022 victory.
Cheers erupted from apartment windows, and car horns blared across Sao Paulo after a frantic last-minute push by musicians, celebrities and campaigners to mobilize first-round abstainers and secure da Silva’s victory.
Many Brazilians saw a vote for da Silva as a vote to keep the Bolsonaros out and preserve the country’s hard-won democracy.
The surprise victory came after da Silva persuaded millions of Brazilians who had skipped the first round of voting to cast ballots for him in the second round (Bolsonaro received 47% to da Silva’s 45% in the first round), despite heavy rains that pounded much of the country. His Workers’ Party requested that voting be extended Sunday, after reports that some local governments had reduced the number of buses serving poorer voters, who tend to support the president.
That request was granted at the last minute by Supreme Court Justice Cristiano Zanin – a decision that came a minute after voting was supposed to end, prompting chaos at some polling stations.
Meanwhile, at first Bolsonaro refused to accept defeat and said he would ask for the result to be annulled due to the Supreme Court justice’s ruling. But his campaign also asked for an extension due to rains in the conservative-leaning south, making any annulment unlikely, analysts said.
Late Monday Bolsonaro then abandoned plans to challenge the result, while his Liberal Party went a step further and formally conceded defeat to da Silva.
In a statement, the party leader recognized the election result while criticizing the increase of public spending in the run-up to the vote and its potential impact on the race.
According to electoral authorities, just over 34,000 votes were cast after regular voting hours were extended by two hours, a negligible number compared with Lula’s roughly 4.4 million-vote margin of victory.
Bolsonaro then said in a social media post, he would organize the opposition to Lula’s government, pointing to the strength of his Liberal Party in both houses of Congress.
But Tuesday, Bolsonaro fled the country and landed in Miami. He had been banned from leaving the country and ordered to surrender his passport by Brazilian Supreme Court Justice Alexandre de Moraes, as part of a criminal investigation into Bolsonaro’s alleged involvement in a money laundering scheme.
President Trump, addressing reporters early Wednesday, said he approved of Bolsonaro’s coming to the United States. He and his family were granted entry visas.
“I think they’re fine people,” Trump said. “The election was very strange, and I thought it was terrible. It’s gotten bad reviews. You look at what happened to their market.”
He added, “I think it’s so terrible to see it. I didn’t take sides, you know. I know them both. I know Lula. I know Flavio a little bit. I know the father very well.”
Trump was referring to former President Jair Bolsonaro, whom he has previously alleged to have been a victim of judicial persecution in Brazil. Jair is in house custody for health reasons, having been imprisoned for the planned coup.
Wednesday, Flavio declared himself Brazil’s rightful leader, alleging he was the victim of an electoral coup by the country’s Supreme Court and President Lula, yet, again, the margin of victory was over 4 million!
This will go nowhere, Flavio. But he knows President Trump will eat it up.
Venezuela: The nation’s most popular opposition leader, Maria Corina Machado, returned to her country on Sunday after nearly a year in exile, a move that is sure to put increased pressure on the country’s authoritarian government – and its new chief authority, the United States – to move quickly toward a democratic transition.
Machado has called for elections in Venezuela by next July, and has expressed her interest in running for president. She would be an extremely competitive challenger to the interim leader, Delcy Rodriguez, who is part of the repressive government that has run the country for a generation.
Rodriguez is backed by the U.S., which installed her as president following the capture of President Nicolas Maduro in January. President Trump has repeatedly lauded Rodriguez, but has said that Venezuela is not ready for elections as the United States works to extract oil and other natural resources from the country.
Rodriguez has said her country will hold an election, but has yet to set a date.
But Machado’s return adds a level of uncertainty into Venezuela’s already fragile political atmosphere, and into the alliance between the Trump administration and the government of Ms. Rodriguez. The U.S. has already struck an agreement on oil that Machado has criticized.
Tensions have been high between the White House and Machado ever since they elevated Rodriguez to the presidency, despite Machado’s enormous popularity and longtime ties to Washington establishment figures.
On Sunday, after she announced her return, Trump told reporters in Washington: “I don’t know anything about it, but I think she’s a very nice woman. She gave me her Nobel Prize, so how can I say anything else? And I hope she’s safe, she’s a very nice woman. But we’re doing really well in Venezuela.”
David Smolansky, an aide to Machado, said in a statement that Machado’s return was “a major step toward a democratic transition and free, fair, and verifiable presidential elections in the near future.”
He said, “We thank President Donald Trump, Secretary of State Marco Rubio, the U.S. Government, Congress, and allied governments for their continued leadership and support.”
But as the Wall Street Journal editorialized:
“Ms. Machado’s presence in the country also puts the onus on Messrs. Rubio and Trump to ensure her safety. It’s all too easy to imagine her suddenly dying in a car ‘accident’ or from a mysterious illness, while the regime claims it had nothing to do with it. That’s the Cuban way….
“Mr. Trump has stressed the new U.S. stake in exploiting Venezuela’s oil resources. But that new deal won’t be worth much unless Venezuela has a government with democratic legitimacy that protects the property rights of investors, both domestic and foreign. That should start with a date and a credible process for a free and fair democratic election.”
Random Musings
–Presidential approval ratings….
Rasmussen: 41% approve of President Trump’s job performance, 57% disapprove (Oct. 30)
—President Trump on Truth Social, Monday PM:
“Anybody reporting Voter Fraud in the past Elections, or the upcoming 2026 Midterm Election, will be paid $1,000,000 upon the arrest and conviction of those that created the Fraud!”
The president has warned that the country’s electoral systems are vulnerable to foreign meddling. Federal agents are scouring state rolls and federal databases to try to find noncitizen voters. And the homeland security chief has asked the Justice Department to examine whether a commonly used voting machine can be trusted.
Trump’s longstanding attacks on the integrity of voting systems is crystallizing into what many election officials and Democrats fear is an attempt to lay the groundwork to challenge the results next week, such as issuing more than 100 subpoenas demanding records on tens of thousands of voters in 13 states to uncover evidence of unlawful voting by non-citizens.
So far, the president has been stymied in his efforts to directly assert federal control over elections, which under the Constitution are administered by the states.
Senator Mark Warner of Virginia, the top Democrat on the Senate Intelligence Committee, said he had grown increasingly worried that Trump may claim foreign interference in the election as a reason to seize voting machines.
“President Trump will use any tool, legal or not, to try and make sure he gets the results he wants this year,” Warner said in an interview, adding that he had reached out to business leaders, former military leaders and veteran federal law enforcement officials to ask them to stand up to Trump if he contests the results.
–The one national race I personally care about more than any other next Tues. is Abdul El-Sayed vs. former Republican congressman Mike Rogers for the Michigan senate seat. I was a big Rogers supporter when he was in the House, as he’s a true foreign policy expert, which is what we need more than ever these days.
But El-Sayed’s attempts to block questions about the Muslim Brotherhood are deeply disturbing, including the 2012 letter to the leader of the extremist group in Egypt that was signed by El-Sayed.
The 2012 letter, signed by El-Sayed and more than 30 others, urged Mohamed Morsi, the then-newly crowned president of Egypt and a leader in the Muslim Brotherhood, to “purge” the media and police, the Washington Free Beacon first reported last month.
The letter was published on Egyptian news site Al-Ahram Gate and was followed by a cruel crackdown on journalists in Egypt by Morsi’s government.
El-Sayed has accused his opponent of making his Muslim faith a campaign issue, which Rogers has denied.
“It is not how he prays, it’s how he thinks,” Rogers said in an interview with Fox News’ Bret Baier.
El-Sayed is not a good guy.
–The New York Times reported on Wednesday that members of Alaska Democratic Senate candidate Mary Peltola’s campaign were involved in a push to find a “spoiler” candidate for the race against incumbent Republican Senator Dan Sullivan. Of course, that candidate proved to be Dan J. Sullivan Jr.
Sen. Dan S. Sullivan’s campaign said in a statement that Peltola and her campaign “colluded” with the Democratic Senatorial Campaign Committee and other operatives “to recruit a candidate to deliberately deceive and confuse voters, and then repeatedly lied about it.”
The Peltola campaign denied it had any involvement with either Dan Sullivans’ campaigns, but the Times story is heavily sourced.
Alaska’s Republican governor, Mike Dunleavy, then said Wednesday night that he was ordering an investigation into whether Peltola’s campaign should face criminal charges or civil penalties over its role in recruiting candidates to draw votes from the incumbent.
Earlier in the day, President Trump demanded that Peltola be removed from the ballot and prosecuted.
Proving that a crime was committed is likely to be difficult. The Alaska Supreme Court previously ruled that nothing in state law nor the U.S. Constitution allowed it to rule on the motives of a candidate.
Many Democrats defended the plan by pointing out how commonplace such actions are. Republicans have employed them in a variety of states, including Alaska.
So, add this to Tuesday night’s coming s—show.
—A new poll shows New Jersey Governor Mikie Sherrill’s approval ratings have fallen 10 months into her tenure.
The Fairleigh Dickinson University survey released Wednesday found 48% of New Jersey voters say they approve of the job Sherrill is doing, while 32% disapprove. That’s still positive territory but down from the 58% who gave her performance a thumbs-up in March, after being elected in a landslide last fall.
This is important because it’s an obvious gauge of sentiment heading into next week’s midterms and in New Jersey, and nationally, frankly, all eyes are on my congressional district, District 7, Republican incumbent Tom Kean Jr. vs. Democrat Rebecca Bennett. It’s going to be close, I think. It would help Bennett if Sherrill’s numbers were a little higher.
On the other hand, President Trump’s approval rating in New Jersey is under 30%.
—Donald Trump on Truth Social, Tues. PM:
“When will The Wall Street Journal start calling Artificial Intelligence (AI), a very bad and inaccurate name, SI (Super Intelligence), the name which virtually everyone else is using, or soon will be. In short order, we will be officially BANNING the term, ‘AI/Artificial Intelligence,’ in all relevant documents, and everything else, due to its inaccuracy. Thank you for your attention to this matter.”
This is comical. Stay strong, Journal.
—Former President Obama and President Trump have been going at each other in their respective rallies to energize their bases. But at this point, I’m tired of it all, from both sides. Like all of you, I just want everything to go off Tuesday with minimal disruptions.
I will just say that Democrats have been highlighting allegations of corruption in the closing weeks of the campaign and that seems to be resonating.
And I liked what President Obama said in assailing Vivek Ramaswamy over his campaign ad featuring his Democratic opponent for the Ohio governor’s race, Amy Acton’s mother, who Acton has said she hasn’t spoken to since she was 12.
“There’s a decency that we should expect out of our public officials,” Obama said at a rally for Acton. “And I don’t know what’s happened where the standards of behavior have gotten so low that somebody can run an ad like that.”
—The Archdiocese of New York and plaintiffs’ lawyers reached an agreement on a proposed settlement in which the church would pay more than $800 million to settle claims from 1,300 people who said they had been sexually abused by its clergy members and lay leaders.
The plaintiffs’ lawyers said late last Friday that they had finalized the settlement with the archdiocese and that all of the plaintiffs had signed off on it. Archbishop Ronald A. Hicks then confirmed an agreement had been reached to settle the claims on Saturday. It will be formally signed by all parties early November.
“We are on the verge of being able to, please God, bring some measure of healing and reconciliation to all victim-survivors,” Hicks said in his message, adding that the agreement “will also allow the archdiocese to turn its full attention once again to its mission of preaching the Gospel, healing the sick, caring for the poor and needy, welcoming the stranger, and educating our children.”
The agreement with the New York Archdiocese also requires it to publish on its website the names of the clergy members and lay leaders who were credibly accused of sexual abuse, and to keep that list updated with any future substantiated claims of abuse.
—At least 69 people were killed, over 50 injured (many seriously) in a horrific Spanish high-speed train collision with another train south of the capital Madrid on Wednesday.
This makes it the country’s worst rail disaster since 2013, but it comes after a deadly collision involving the same carriers on a southern line in January, which killed 46.
Spain is once again in shock, creating deep doubts about the security of its once-vaunted rail system.
Authorities say the crash was caused by an “inexplicable” order from a central command center for Spain’s trains after a security system had failed.
—We have had a beautiful stretch of Fall weather in the Northeast and much of the rest of the country (two weeks without rain where I live), but the King Tides have been wreaking havoc on the east coast of Florida, particularly the Miami-Ft. Lauderdale area, and parts of Southern California like Long Beach, with parts of the Pacific Coast Highway in Sunset Beach flooded.
The tides in the Pacific this week were unusual for several reasons, including the fact that this year’s strong El Nino has warmed the Pacific Ocean to record temperatures, and water volume expands as it warms. Even without big swells from storms, the tides alone are nearly 2 feet higher than they would otherwise be. And you have the impact of the Kelvin Waves from the super El Nino, which can add up to another foot, which doesn’t sound like much, until you live close to it.
But with El Nino conditions expected to last at least until February, residents of low-lying communities up and down the California coast are in for a long winter, with, as the Los Angeles Times put it, “regular reminders of the painful truth known to mariners, and boat builders for centuries: The sea is relentless, it finds every weakness.”
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Pray for the men and women of our armed forces…and all the fallen.
Slava Ukraini!
God bless America.
—
Gold $3880 (lowest since 10/25)…Silver $49.25 (lowest since 11/25)
Oil (WTI) $103.00…Brent $112.50
Regular Gas: $4.20; Diesel: $6.32 [$3.03 – $3.68 yr. ago]
Bitcoin: $76,833 [4:00 PM ET, Friday…awful day after the Binance hack…]
Returns for the week 10/26-10/30
Dow Jones -0.9% [51770]
S&P 500 -0.6% [7580]
S&P MidCap +1.3%
Russell 2000 +1.3%
Nasdaq -2.0% [25437]
Returns for the period 1/1/26-10/30/26
Dow Jones +7.7%
S&P 500 +10.7%
S&P MidCap +10.8%
Russell 2000 +13.3%
Nasdaq +9.4%
Hang in there.
Brian Trumbore
