Week in Review

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Week in Review

10/26/2024

For the week 10/21-10/25

[Posted 4:30 PM ET, Friday]

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Special thanks to J.N. for her ongoing support.

Edition 1,331

As we continue to await Israel’s response to Iran’s ballistic missile attack, earlier this month, and the potential repercussions....

Early voting has been smashing records.  As of Tuesday, more than 17 million people have already cast their ballots, roughly a tenth of all registered voters, a clear sign that voting habits were forever changed by the pandemic and that early voting has become a permanent feature of the American voting process.

Last Thursday, more than 350,000 ballots were cast in North Carolina, a record for the state, despite it still reeling from Hurricane Helene. Last Friday, nearly 177,000 voters cast a ballot in Louisiana, a record for that state, that will be going heavily for Donald Trump.

As of Tuesday, more than 1.5 million voters had already cast a battle in critical Georgia. [New York Times]

Former President Trump acknowledged Monday in North Carolina that he had seen no signs of cheating, even as he continued to sow doubts about the integrity of the election during a campaign swing of the state.

At a news conference in a storm-damaged part of western N.C., Trump was asked by a reporter whether he had seen any evidence to suggest this year’s election would not be fair.

“Well, I haven’t,” Trump said. He added, referring to Democrats, “Unfortunately, I know the other side, and they are not good. But I have not seen that.”

Nonetheless, a resurgence in conspiracy theories and misinformation about voting is forcing states and local officials to spend their time debunking rumors and explaining how elections are run at the same time they’re overseeing early voting and preparing for Nov. 5.

“Truth is boring, facts are boring, and outrage is really interesting,” says Utah’s Lt. Gov. Deidre Henderson, a Republican who oversees elections in her state.  “It’s like playing whack-a-mole with truth.  But what we try to do is just get as much information out there as possible.”

Republican Rep. Marjorie Taylor Greene (Ga.) has claimed a voting machine had changed a voter’s ballot in her district during early voting, and Elon Musk has been promoting conspiracy theories about voting machines and voter fraud, utilizing his massive X platform.  [Much more on Musk below.]

For his part, Trump has been repeatedly sowing doubts about the election process, going back to 2016, when he claimed he had lost the popular vote because of a flood of illegal votes and he formed a presidential advisory commission to investigate.  The commission disbanded without finding any widespread fraud.

But Donald Trump has one massive winning issue...immigration.  He has dialed up the rhetoric even more, like at a rally Thursday saying of the United States: “We’re a dumping ground.  We’re like a garbage can for the world.  That’s what’s happened.  That’s what’s happened to our...We’re like a garbage can.”

Not exactly Ronald Reagan’s Farewell Address, where he talked of that “Shining City on the hill.”

Or Emma Lazarus: “Give me your tired, your poor, your huddled masses yearning to breathe free...”

The thing is, the Biden administration blew it, and Kamala Harris was exposed yet again during this week’s CNN town hall with Anderson Cooper, who like in the NBC/Lester Holt interview, tried to get Harris to explain why the administration waited so long before cracking down at the border.  The vice president’s performance was beyond pathetic.  She has no excuse...she has no answer to the fundamental question of the campaign.  ‘We’ll give you the first year, 2021, where you tried your policy and it was a massive failure.  So why then didn’t you do something in 2022...2023?’

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David Ignatius / Washington Post

“This is no ‘Russia hoax.’ As Election Day nears, former president Donald Trump bizarrely continues to flatter a Kremlin leader who intelligence officials report is waging an escalating covert campaign against the United States and its European allies.

“The Russians aren’t just pushing disinformation this time. They’re allegedly running a network a saboteurs that seeks to punish supporters of Ukraine by sending exploding packages through DHL couriers, going after targets in half a dozen European countries and even threatening to assassinate the head of a German arms company.

“Yet Trump continues to laud his ‘friendly’ relationship with Vladimir Putin and blame Ukrainian President Volodymyr Zelensky for Russia’s full-scale invasion in 2022.  On the campaign trail, Trump has repeatedly touted the peace deal he claims he would cut with Putin – which looks to me like a surrender pact that would end the war as quickly as you could say ‘Neville Chamberlain.’....

“Jens Stoltenberg, the outgoing secretary general of NATO, told a news conference in July: ‘What I can say is that we have seen a pattern, a Russian campaign, organized by their security services, to conduct hostile actions against NATO allies. ...These are not standalone incidents; these are part of a pattern, part of an ongoing Russian campaign.  And the purpose of this campaign is, of course, to intimidate NATO allies from supporting Ukraine.’....

“The Biden administration, eager to avoid a flare-up during this election season, hasn’t punched back hard at Putin. The White House seems to prefer a twilight battle, using intelligence operations to uncover and disrupt Russian plots.  That’s pretty meek deterrence....

“And where is Trump, as Putin wages what the Economist this month called an ‘Everything Everywhere All at Once” campaign?  Maybe he’s making another phone call to his friend in the Kremlin, adding to the as many as seven times they have spoken since he left the White House, according to Bob Woodward’s new book.

“At a time when nearly every U.S. ally is warning that a covert war against the West is underway, why does Trump seem to be siding with the other guy?”

Final election thoughts from your editor next week, including my ballot reveal.

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Israel-Hamas-Hezbollah-Iran....

--Israeli strikes on homes in the northern Gaza Strip overnight Saturday into Sunday left at least 87 people dead or missing, the territory’s Health Ministry said, as a large-scale operation continued against Hamas where they were said to be regrouping.

The Israeli military (IDF) said the strikes on the town of Beit Lahiya were against Hamas targets, but among the dead were eight children, according to a medic on the scene.

The IDF said it used precise munitions against a Hamas target and that the area is an active war zone.

Doctors Without Borders (MSF, using its French acronym) called on Israeli forces to immediately stop their attacks on hospitals in northern Gaza after the Health Ministry said that Israeli troops had fired on two hospitals over the weekend.

--In Beirut’s southern suburbs, Israeli airstrikes leveled two apartment blocks and killed at least 13 people, including a child, and injured 57 – with more feared missing under the rubble, Lebanon’s Health Ministry said Tuesday.

The IDF said it had hit a “Hezbollah target” near the major public hospital for Beirut – one of 230 militant targets it said it struck across Lebanon and Gaza over the past day.

This was among 13 air strikes that hit south Beirut on Monday evening.  The IDF said it was attacking facilities linked to a financial association, Al-Qard al-Hasan, associated with Hezbollah.  Many of its branches are situated on the ground floors of residential buildings.

An Israeli spokesman had earlier warned people to move away from several locations in southern Beirut, however Rafik Hariri hospital was not among the locations mentioned.

IDF spokesman Rear Admiral Daniel Hagari said the IDF had identified a Hezbollah bunker concealed under a different hospital in southern Beirut, which was then evacuated.  The director of Sahel hospital denied there was a bunker underneath it and called on the Lebanese army to inspect the site.

U.S. Defense Secretary Lloyd Austin has called for Israel to scale back its strikes in and around Beirut, saying on Saturday that the number of civilian casualties was “far too high.”

--Hezbollah fired around 160 rockets or drones from Lebanon into Israel on Sunday, following what the IDF said was around 200 “projectiles” fired by Hezbollah into Israel a day earlier.  One man was killed and another injured in the attacks on Saturday.

--The IDF confirmed Tuesday that Hashem Safieddine, who was believed to be Hezbollah’s next top official, was killed in an Israeli attack.

He was found to have been killed in an Oct. 4 airstrike that targeted Hezbollah’s intelligence division hiding in Beirut, officials said.

The IDF estimates that there were more than 25 intel agents inside the headquarters when it was hit, with the military also confirming the death of the intel chief, Hussein Ali Hazima.

--At least 19 people were killed in an Israeli strike on a house in southern Lebanon on Tuesday, taking out an entire family, not seemingly Hezbollah.

--As of Thursday, 19 Israeli soldiers had been killed thus far in Lebanon, the IDF said.  Estimates of Hezbollah losses range from hundreds of fighters to more than 1,000.

Three more Lebanese soldiers were killed in an Israeli attack on Thursday in the southern part of the country, the second such incident in a week.  The IDF said it was looking into the incident as it “does not intentionally target soldiers of the Lebanese army.”

An Israeli airstrike on a compound housing journalists in southeast Lebanon killed three media staffers early Friday, their networks and Lebanon’s state-run news agency said.  The Israeli army did not issue a warning prior to the strike.

--Secretary of State Antony Blinken met with Prime Minister Netanyahu in Jerusalem on Tuesday.  Blinken “emphasized the need for Israel to take additional steps to increase and sustain the flow of humanitarian assistance into Gaza,” and pushed for a path to ramp down the conflicts in Gaza and Lebanon, State Department spokesman Matthew Miller said.  The U.S. has warned that the continued flow of U.S. weapons to Israel could depend on improved humanitarian conditions in northern Gaza.

Conditions there “are beyond catastrophic,” said Georgios Petropoulos, head of the Gaza office for the UN Office for the Coordination of Humanitarian Affairs.

Negotiators are expected to meet over the weekend in an effort to revive case-fire negotiations between Israel and Hamas, with the head of Israel’s spy agency slated to meet with the CIA chief, Bill Burns, and the prime minister of Qatar.

U.S. officials have said that they were open to the possibility of a shorter cease-fire – lasting roughly a week and a half – to allow more aid into Gaza in exchange for the release of a small number of the dozens of hostages.  But Hamas may not be willing to re-engage after the killing of its leader, Sinwar.

Friday morning, an Israeli strike killed 38 in Khan Younis, Gaza health officials said.

--Hezbollah, in a statement Tuesday, claimed responsibility for a Saturday drone strike targeting Prime Minister Netanyahu’s residence in the Caesarea area.  Netanyahu’s office had reported the attack over the weekend and said neither Netanyahu nor his wife was present at the time, and that no one was hurt.

The Israeli Military Censor on Tuesday allowed Israeli outlets to publish that a UAV directly hit the prime minister’s residence.

At the time, Prime Minister Netanyahu warned that “anyone who tries to harm Israel’s citizens will pay a heavy price.”

“The attempt by Iran’s proxy Hezbollah to assassinate me and my wife today was a grave mistake,” he wrote in a post on X.

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Russia-Ukraine....

--Russian drone attacks on Ukraine “have increased from 350 strikes in July, to 750 in August, to 1,500 in September,” the New York Times reported, citing two Western officials.

Defense Secretary Austin met with President Volodymir Zelensky on an unannounced visit to Kyiv on Monday (arriving by train from Poland) to discuss “Ukraine’s air defense capabilities, preparations for the winter period, and the expansion of long-range weapon use against Russian military targets,” Zelensky wrote on social media, thanking the White House as well as “both parties in the U.S. Congress, and the American people for all their support.”

“We’re going to continue to support Ukraine and its efforts to defend its sovereign territory,” Austin told reporters travelling with him.  The United States has provided Ukraine more than $61 billion in security aid since the start of the war.

Austin also said U.S. officials would help Ukraine train and equip new units it is building.  Reports have surfaced that many Ukrainian units fighting in southern Donetsk and other front-line areas are undermanned.

“They’re working hard to bring more people on board,” Austin said.  “They’ve got to train those people. They have to regenerate combat power.”

Tuesday, at least three people were killed by Russian drone strikes on the city of Sumy.

--Ukrainian officials claim to have assassinated a Russian officer believed to be responsible for a cruise missile attack on a shopping center in the city of Kremenchuk in June 2022, an attack that killed 22 people.  The officer, Col. Dmitry Golenkov, was reportedly “found bludgeoned to death with a hammer...outside the village of Suponevo in the Bryansk region of Russia,” according to the Telegraph, reporting Monday. [Defense One]

--Monday, South Korea summoned the Russian ambassador, seeking the “immediate withdrawal” of North Korean troops which it says are being trained to fight in Ukraine.

About 1,500 North Korean soldiers, later upped to 3,000 by the White House on Wednesday, including those from the special forces, have already arrived in Russia, according to Seoul’s spy agency, with as many as 12,000 expected to be deployed.

Ambassador Georgiy Zinoviev said he would relay the concerns that Seoul has but stressed that the cooperation between Moscow and Pyongyang is “within the framework of international law.”

The ambassador did not confirm allegations that North Korea has sent troops to fight with Russia’s military, not was it clear what cooperation he was referring to.

Later Monday, Kremlin spokesman Dmitry Peskov told reporters the cooperation between the two nations is “not directed against third countries.”

He added it “should not worry anyone,” according to Russian state news agency Tass.

But Wednesday, Defense Secretary Lloyd Austin, talking to reporters at a military base in Italy, confirmed that North Korea had sent troops to Russia to join the fight against Ukraine.  Austin called the North’s presence a “very serious” escalation that would have ramifications in both Europe and Asia.

“What exactly are they doing?  Left to be seen.” 

American intel officials released a trove of intelligence, including satellite photographs, that show troop ships moving from North Korea to training areas in Vladivostok on Russia’s east coast and other territory further to the north.  No troops have yet reached Ukraine, the officials said.

[As for what Kim Jong Un gets out of all this, many experts believe he is seeking to improve the reach of his intercontinental ballistic missiles, and for this Russia can help.  Kim wants the U.S. to understand his nuclear-tipped weapons are capable of hitting American cities.]

South Korean officials said Tuesday they were openly considering arming Ukraine with lethal weapons.  Seoul could also send monitors inside Ukraine to more closely track “the tactics and combat capabilities of North Korean special forces dispatched in support of Russia,” Yonhap news agency reported Tuesday, citing an intelligence source.

From Seoul’s perspective, “North Korea will expect a generous payoff from Moscow in return for its troop contribution,” the country’s Ambassador to the UN Joonkook Hwang said Monday.  “It could be either military or financial assistance.  It could be nuclear weapons-related technology,” he said in New York.

Retired Australian Army Maj. Gen. Mick Ryan wrote in his blog: “If North Koreans have to call for air support and artillery fire, language and procedural differences will be a challenge.  Will they operate fully integrated within Russian formations and be subject to the full command of Russian commanders?  Or will they be under a form of operational command or control with caveats on their employment, such as not being used as meat troops?”

Thursday, during a press conference, Vladimir Putin appeared to obliquely acknowledge the presence of North Korean troops in Russia.  When asked about satellite images distributed by the South Koreans purporting to show the troops traveling to Russia, Putin responded that “images are a serious thing; if there are images, they reflect something,” while neither confirming nor denying the accusation.

Putin then mentioned the Russia-North Korea defense treaty, which was speedily ratified Thursday by Russia’s parliament, Putin saying, “the treaty was ratified today; it has Article 4...”

Article 4 states that if one country is subject to an “armed invasion,” the other country would provide “military and other assistance with all means in its possession.”

Ukraine’s military intelligence agency said Thursday that one group of North Korean soldiers is already in Kursk, where Ukraine launched an incursion in August.

--On the battlefield: “Russian forces continue to systematically perpetrate war crimes, including the continued executions of Ukrainian prisoners of war and use of chemical weapons,” including chloropicrin (a toxic gas), the Washington-based Institute for the Study of War writes in its latest Ukraine assessment published Monday. [Defense One]

--The Russian Foreign Ministry was targeted by a severe cyber-attack on Wednesday, coinciding with the major BRICS summit taking place in the country, spokeswoman Maria Zakharova said.

Earlier Zakharova said that the ministry had been targeted by a large-scale distributed denial-of-service attack.

She noted that the ministry regularly encounters similar attacks, but today’s attack was “unprecedented in scale.”

Speaking of the BRICS summit, this was a big deal, held in Russia’s Kazan Tuesday through Thursday.

Vladimir Putin held meetings with China’s Xi Jinping, India’s Narendra Modi, Turkey’s Recep Tayyip Erdogan and Iran’s Masoud Pezeshkian, defying predictions that the war in Ukraine and an international arrest warrant would turn Putin into a pariah.

The alliance, which aims to counterbalance the Western-led world order, initially included Brazil, Russia, India, China and South Africa but is expanding rapidly.  Iran, Egypt, Ethiopia, the United Arab Emirates and Saudi Arabia joined in January; Turkey, Azerbaijan and Malaysia formally applied, and a number of others expressed a desire to be members.

Russia sees the meeting as a massive success, with more than 20 heads of state.  Putin was also slated to meet Thursday with UN Secretary-General Antonio Guterres, which would be the first visit to Russia in more than two years for Guterres, who has repeatedly criticized Russia’s war in Ukraine.

Analysts say the Kremlin wants the optics of standing shoulder-to-shoulder with its global allies amid continued tensions with the West.

In their face-to-face meeting, the third this year, Presidents Putin and Xi said they were committed to boosting their cooperation for a “fair world order” amid chaotic times.

“Russian-Chinese cooperation in global affairs is one of the main stabilizing factors on the world stage,” Putin said in his opening remarks at the event.  “We intend to further increase coordination at all multilateral platforms in order to ensure global security and a fair world order.”

Xi called for the BRICS nations to lead the “urgent” reform of the international financial architecture to better reflect the global economy.  He told the group it should also drive reform of global governance and cooperate further in innovation and green development.

“The BRICS countries should play a leading role, deepen financial cooperation, promote the interconnection of financial infrastructure, maintain high-level financial security, expand and strengthen the New Development Bank, and promote the international financial system to better reflect changes in the world economic landscape.”

It is absolutely outrageous that UN Sec.-Gen. Guterres attended this summit.  What a bastard.  The White House should be calling it out. 

--Ukraine’s population has fallen by 10 million since Russia invaded in February 2022, with 6.7 million refugees living abroad, a UN official said Tuesday.  Making matters worse, Ukraine now has the lowest birth rate in the world, according to the UN.

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Wall Street and the Economy

The International Monetary Fund lowered its global growth forecast for next year and warned of accelerating risks from wars to trade protectionism, even as it credited central banks for taming inflation without sending nations into recession.

Global output will expand 3.2% in 2025, 0.1 percentage points slower than a July estimate, the IMF said in its update of its World Economic Outlook released on Tuesday.  It left the projection for this year unchanged at 3.2%.  Inflation will slow to 4.3% next year from 5.8% in 2024.

“The risks are building up to the downside, and there is a growing uncertainty in the global economy,” Chief Economist Pierre-Olivier Gourinchas said in a briefing.

“There is geopolitical risk, with the potential for escalation of regional conflicts,” that could affect commodity markets, he said.  “There is a rise of protectionism, protectionist policies, disruptions in trade that could also affect global activity.”

The outlook doesn’t explicitly mention the U.S. election, but as central bankers and finance ministers from more than 200 nations gather at the IMF and World Bank headquarters in Washington, just three blocks from the White House, it will no doubt be front and center.

A Bloomberg Economics analysis earlier this year found that Donald Trump’s vow to impose hefty tariffs on imports from both China and the rest of the world would likely spur inflation and pressure the Federal Reserve to raise interest rates.

Last week, the IMF also flagged global public debt, which is expected to reach $100 trillion, or 93% of world GDP, by the end of the year.  The surge is driven by the U.S. and China.

The IMF is urging governments to make the tough decisions to stabilize borrowing, but of course most won’t.

Forecasted GDP...2024 / 2025

World...3.2% / 3.2%
U.S. ...2.8% / 2.2%
Eurozone...0.8% / 1.2%
Germany...0.0% / 0.8%
UK...1.1% / 1.5%
China...4.8% / 4.5%
Japan...0.3% / 1.1%

In the U.S., traders are rethinking the path of interest rates.  At the Fed’s Open Market Committee meeting in less than two weeks, a second half-point cut is off the table and it will be a quarter-point instead, with the Fed potentially skipping December...at least that’s my opinion.

The job market is strong, the economy is more robust than expected, and while the presidential race is still a coin-toss, a new Trump presidency is seen as inflationary.

Federal Reserve Bank of San Francisco President Mary Daly, a 2024 voting member on the FOMC, said she expected the Fed would continue cutting interest rates to guard against further weakening in the labor market.

“So far, I haven’t seen any information that would suggest we wouldn’t continue to reduce the interest rate,” Daly said Monday at a Wall Street Journal conference out in California.  “This is a very tight interest rate for an economy that already is on a path to 2% inflation, and I don’t want to see the labor market go further.”

But, like I said, the job market is actually pretty strong.  Daly, though, said she came down strongly on the side of a half-point reduction in September.

On the data front, September existing home sales unexpectedly fell in September to their slowest pace since late 2010, a seasonally adjusted annual rate of 3.84 million, down 1% from a revised 3.88m in August (down 3.5% from a year ago) to its lowest monthly level since October 2010, according to National Association of Realtors data released Wednesday.  The median home price of $404,500 was up 3% from a year ago.

Existing home sales this year are on track to match or fall slightly below last year’s figure, which if it does, will be the lowest annual existing home sales since 1995.

New home sales for September were better than forecast, 738,000.  Durable goods in the month fell, -0.8%, but ex-transportation rose 0.4%.

We get our first reading on third-quarter GDP next Wednesday. The Atlanta Fed’s GDPNow barometer for Q3 is at 3.3%.

Freddie Mac’s 30-year fixed-rate mortgage is 6.54%, up from 6.08% Sept. 26.

Aside from the GDP report, next week we also have a jobs report and the Fed’s key inflation barometer, the personal consumption expenditures index.  So more for the Fed to chew on prior to their meeting Nov. 6-7.

Europe and Asia

We had the October flash PMI readings for the eurozone, courtesy of S&P Global and Hamburg Commercial Bank.

The eurozone composite index is at 49.7 vs. September’s 49.6 (50 the dividing line between growth and contraction).  Manufacturing 45.5, services 51.2, an 8-month low.

Germany: mfg. 42.4, services 51.4
France: mfg. 42.5 (9-mo. low), services 48.3 (7-mo. low)

UK: mfg. 50.9 (6-mo. low), services 51.8 (11-mo. low)

Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank:

“The eurozone is stuck in a bit of a rut, with the economy contracting marginally for the second month running. The ongoing slump in manufacturing is being mostly balanced out by small gains in the service sector.  At the country level, it can be noted that the deterioration of the situation in France was met by a slight moderation in the decline in Germany.  For now, it is not clear whether we will see a further deterioration or an improvement in the near future....

“For the European Central Bank, the latest figures come with an unwelcome surprise. Inflation in the services sector seems likely to stay elevated, as costs and selling prices in October rose faster than the previous month... All this backs the idea that the ECB is likely to cut key interest rates by just 25 basis points in December, rather than the 50 basis points some have been talking about.”

Meanwhile, at the end of the second quarter of 2024, the general government gross debt to GDP ratio in the euro area stood at 88.1%, compared with 87.8% at the end of the first quarter of 2024.  Versus a year ago, the figure has fallen from 88.8%.

Debt to GDP

Germany 61.9%, France 110.6%, Italy 137.0%, Spain 106.3%, Netherlands 43.2%.

Turning to Asia...after last week’s data dump, nothing of significance out of China this week in terms of the numbers.  But the People’s Bank of China announced on Monday it had slashed a key reference rate for mortgage loans by a quarter of a percentage point, as the country stepped up efforts to stabilize the property market.  Other Chinese banks then followed.

In Japan, we had the flash PMIs for October, with manufacturing at 49.0, and services at 49.3, a big drop from September’s 53.1, not good.

Street Bytes

--The Dow Jones and S&P 500 finally declined this week after six straight up ones, the Dow down 2.7% to 42114, the S&P down 1.0%.  But Nasdaq extended its winning streak to seven, hitting an intraday high today, but still closing a bit shy, though up 0.2% on the week.

Nvidia shares hit another new high during the week, crossing the $3.5 trillion market cap level at one point.  PwC, one of the “big four” accounting firms, believes artificial intelligence (AI) could add $15 trillion to the global economy annually by 2030, a revolutionary potential that hasn’t been seen since the introduction of the internet.  Nvidia is the most obvious beneficiary.

Next week we have the Big Tech companies reporting...Alphabet/Google, Meta Platforms/Facebook, Microsoft, Apple and Amazon.  Coupled with the economic news and election jitters, it could be volatile.

--U.S. Treasury Yields

6-mo. 4.52%  2-yr. 4.11%  10-yr. 4.24%  30-yr. 4.51%

The yield on the 10-year is at its highest weekly close since July 19, as reflected in rising mortgage rates.

As bond traders rethink the path of rates, famed investor Paul Tudor Jones said on CNBC this week that he wouldn’t touch bonds, particularly the longer end, for a long time to come, his focus being on the exploding deficit. 

--General Motors shares rose 9% on Tuesday after the automaker posted a third quarter profit of $3 billion, slightly less than it made a year ago, with U.S. sales down and a once-reliably profitable joint venture in China losing money.

But GM also reported $48.8 billion in revenue from July through September, 10% more than last year, aided by U.S. average vehicle sale prices that were steady with last quarter at over $49,000.

CFO Paul Jacobson said that while overall sales in the U.S., GM’s most profitable market, fell 2.2% in Q3, much of that drop was from sales to large fleet buyers. Sales to individuals, which are generally more profitable, rose 3%.

While other automakers have gotten stuck with too many high-priced vehicles when many buyers are looking for lower costs, GM has yet to see such a shift, Jacobson told reporters.

“I think that the consumer has held up remarkable well for us,” he said, adding that next year should be consistent with this year as the Federal Reserve continues to reduce rates and lower borrowing costs.  “Nothing that we’ve seen has changed from where we’ve been the last several quarters.”

Adjusted earnings came in at $2.96 per share, way above consensus of $2.38.  The company’s revenue also soundly beat estimates of $44.67bn.

The company’s joint venture in China did lose $137 million, compared with a $192 million profit a year ago.  Jacobson said this was the symptom of tough market conditions there, where domestic brands are turning out well-built products at low costs.

Pretax profits in North America rose 13% to $3.98 billion, while losses narrowed to $435 million at the troubled Cruise autonomous vehicle unit.  Cruise lost its license to run robotaxis in California after a San Francisco crash last year.  The unit has resumed testing with human safety drivers in three markets and driverless testing in Houston.

GM raised the low end of its full-year net income guidance, but it lowered the top end of the range.  The company now expects to make $10.4 billion to $11.1 billion, compared with a range of $10bn to $11.4bn previously.

GM said it sold 32,000 electric vehicles during the quarter, with discounts that were 11 points below the industry average.

--Tesla reported a higher-than-expected profit margin for the third quarter on Wednesday even as it offered lucrative financial incentives to boost demand for its aging electric vehicle lineup.

Tesla said earlier this month that its September-quarter deliveries grew by more than 6% on a year-over-year basis, marking the first quarter of growth after a decline in the January-June period.

Tesla slashed prices last year leading to a sharp decline in profit margins.  This spring, it shifted its strategy to offering cheaper financing options and discounts that analysts have said could slow its margin bleed over the coming quarters.

Prices of raw materials used to make EV batteries have been falling and Tesla has said its costs will reduce as a result this year.

Revenue for the July-September quarter was $25.18 billion, compared with estimates of $25.37 billion.  It reported sales of $23.35 billion in the corresponding quarter of 2023.

Adjusted profit of 72 cents per share beat an average estimate of 58 cents.

The company’s profit margin of 19.8% in Q3 was higher than forecasts of 17.3%.  That compared with 18% in the second quarter. 

The shares soared 22% (the stock’s best day in a decade), as Tesla also issued an upbeat forecast for next year, an ebullient Elon Musk spending a large portion of Wednesday’s earnings call on a monologue that promised to make Tesla the most valuable company in the world, starting with 20% to 30% delivery growth next year.

--Leaders of Boeing’s largest union said on Saturday they had reached a a “negotiated proposal” for a new contract and would put it up for a vote to end the long and costly strike.

In a post on its website on Saturday, the union said that “with the help of Acting U.S. Secretary of Labor Julie Su,” it had reached a deal that “warrants presenting to the members and is worthy of your consideration.”

The strike began on Sept. 13 and has taken an enormous toll on Boeing, which was already in difficult financial straits.  The aircraft manufacturer has been cutting costs, including temporary furloughs for 17,000 white-collar employees.

The proposal would raise wages cumulatively by 35 percent over the four-year life of the contract (39.8% when compounded); a significant increase over the previous proposal (first 25% and then 30%) and close to the amount the union initially sought.  The deal also includes a bonus of $7,000 should workers ratify the deal and enhanced contributions to workers’ 401(k) retirement plans, including a one-time $5,000 contribution plus up to 12% in employer contributions, as well as the reinstatement of performance bonuses that were set to be cut.

The deal does not include a defined-benefits pension, which would guarantee specific monthly benefits upon retirement.

Washington State is home to most of Boeing’s commercial airplane production.  It makes the 737 MAX at a factory in Renton and the 767 and 777 in Everett.  Boeing also produces the 787 Dreamliner at a factory in North Charleston, S.C., but workers there are not represented by a union.

While the shares rose Monday on the news, Boeing is expected to book more than $1 billion in wage-related expenses from its proposed labor contract, analysts said.

The 33,000 workers were to then vote on the contract proposal on Wednesday.

Boeing had announced plans to raise up to $25 billion through stock and debt offerings and a $10 billion credit agreement with major lenders.

But as one analyst put it, it has taken an average of 6-12 months after the conclusion of a strike at Boeing for production to return to pre-strike levels.  And the impact on an already fragile supply chain is unknown.

So then Boeing released third quarter earnings on Wednesday morning, reporting a net loss of $6.17 billion, bringing total losses in 2024 so far to nearly $8 billion. The company reported revenue of about $17.8 billion, down about 1% from the same period last year.  The figures closely matched the preliminary numbers it released last week.

Boeing’s operating cash flow was negative-$1.345 billion, which the company said reflected “lower commercial widebody deliveries, as well as unfavorable working capital timing, including the impact of the IAM work stoppage.”

“This is a big ship that will take some time to turn, but when it does, it has the capacity to be great again,” new CEO Kelly Ortberg said in a message to employees on the results.

Boeing said it had $10.5 billion in cash and securities on hand at the end of the quarter. The company also reported it had a total backlog of $511 billion, which included over 5,400 commercial airplanes.

The cost of the strike so far has been substantial for both Boeing and the workers, with one trade group estimating the total cost is nearing $5 billion.

“First and foremost on everybody’s mind today, is ending the IAM strike.  We have been feverishly working to find a solution that works for the company and meets our employees’ needs,” Ortberg said.  He added, “We need to reset priorities and create a leaner, more focused organization.”

But then Wednesday night, Boeing factory workers rejected the new contract, demanding 40%, not 35%, while workers are still angered by the failure to reinstate their defined-benefit pension plan.

After 64% of the union members rejected the tentative agreement, it’s back to the negotiating table.

The aftereffects of this strike will now linger well into 2025 as Boeing will continue to burn cash.

--Shares in GE Aerospace fell hard even as the company raised its full-year profit forecast for the third time this year on Tuesday, driven by strong demand for after-market services from airlines that are relying on older planes to make up for the shortage of newer aircraft.

But the shares fell on concerns of persistent supply constraints that have made it harder to keep up with customer demand, impacting its revenue.

GE Aerospace said demand for commercial air travel remains robust, but material availability and supplier issues continue to cause disruptions and have impacted production and delivery of equipment and services.

It sold fewer LEAP engines, which power Airbus and Boeing narrowbody aircraft, in the September quarter compared with a year ago.

The company said its efforts to address supply chain constraints have improved material output from a quarter ago, but added it has more work to do.

“We expect the impact of supply chain constraints and inflation will continue,” it said in a regulatory filing.

GE said the strike at Boeing had not had a “significant” impact on its revenues, earnings and cash flows.

The company expects an adjusted profit of $4.20 per share to $4.35, compared with a prior forecast of $3.95 to $4.20.

More than 70% of its commercial engine revenue comes from parts and services.  The lack of new planes has thus led to a surge in demand for its after-market services.

--American Airlines lifted its annual profit forecast on Thursday, on resilient travel demand and improved pricing power as airlines trim capacity.

Excess supply of airline seats in the domestic market during the U.S. summer travel season had forced airlines to offer seats at a discount to fill their planes, denting their earnings.

The company expects an adjusted earnings per share of $1.35 to $1.60, compared with a prior forecast of 70 cents to $1.30.

American is also recovering from a previous sales and distribution strategy debacle. The airline sought to rework its contracts with corporate travel agencies and clients, cutting perks and discounts.

But the strategy backfired, leading to an exodus of corporate travelers that dented revenue, hurt the airlines’ image, and gave its peers an advantage.

But the airline is winning those corporate clients back and is renegotiating contracts with travel agencies.

AAL reported a net loss of $149 million, or 23 cents per share, compared with $54 million, or 83 cents per share, a year ago.

The airline’s operating revenue rose 1.2% to $13.65 billion.

--Southwest Airlines on Thursday reported an adjusted profit of $89 million, or 15 cents per share, compared with analysts’ average estimate of break-even on a per share basis, owing to improved pricing and demand, as well as rebookings from passengers stranded due to the global cyber outage in July.

Southwest expects fourth-quarter revenue per available seat mile, a proxy for pricing power, to be up 3.5% to 5.5%, on a projected capacity reduction of about 4%.

Operating revenue rose 5.3% to $6.87 billion in the third quarter.

The airline has been hit hard by Boeing’s jet delivery delays and is reeling from elevated operating expenses, including high labor and aircraft maintenance costs.

It continues to expect about 20 new jets from Boeing this year.

Separately, Southwest announced an agreement with activist investor Elliott to end a months-long boardroom battle.

As part of the deal, CEO Bob Jordan will retain his job, but Executive Chairman Gary Kelly will accelerate his retirement.  The company will also add six new directors to its board.

--TSA checkpoint numbers vs. 2023

10/24...104 percent of 2023 levels
10/23...101
10/22...101
10/21...106
10/20...106
10/19...104
10/18...105
10/17...104

--Taiwan Semiconductor Manufacturing Co. has suspended shipments to a customer after it discovered that one of its chips supplied to the client ended up in a Huawei product, according to a Taiwan official familiar with the situation.

TSMC suspended shipments to the client two weeks ago and began a detailed investigation, the trade and economic official said.  The company notified the U.S. and Taiwanese governments, but the client TSMC had cut off was not identified.

TSMC had alerted U.S. officials after tech research firm TechInsights took apart a Huawei product and found one of TSMC’s chips, in a possible violation of U.S. export restrictions.

The U.S. had curbed the export of advanced artificial intelligence chips to China two years ago, citing the need to limit the Chinese military’s capabilities.

Taiwan’s government, wary of its giant neighbor given its repeated military and other threats, has its own export controls to prevent advanced chips from being made in China.

--IBM shares fell after the company reported mixed quarterly results after markets closed on Wednesday. For its third quarter, IBM reported adjusted earnings per share of $2.30 vs. the Street’s consensus estimate of $2.22, up 5% from the same quarter last year.

Revenue for the quarter was $15.0 billion, just below expectations, up 1% from a year ago, and below the company’s long-term target for mid-single digit growth.

The stock has rallied this year, with investors growing more optimistic about the company’s artificial intelligence efforts.  But the latest results could show its AI efforts are taking time to come together.

“We continue to see great momentum in AI as our models are trusted, fit-for-purpose, and lower cost, with performance leadership,” said chairman and CEO Arvind Krishna.

IBM’s software segment drove results, up 10% on the year.  But IBM’s forecast implied that revenue growth would be 1% to 2% in the fourth quarter and that’s your basic ‘meh.’

--Disney announced it would pick its next CEO in early 2026 in the first timeline the company has publicly given for appointing a successor to current chief Bob Iger.

The media giant at the same time on Monday revealed that current board member and former Morgan Stanley CEO James Gorman will serve as the board’s new chairman, effective Jan. 2, 2025.  He will exit his role as executive chairman at Morgan Stanley on Dec. 31.

“A critical priority before us is to appoint a new CEO, which we now expect to announce in early 2026,” Gorman said in a press release.

--Target is reducing prices on more than 2,000 items ranging from snacks to toys and cold medicine in an effort to attract bargain-hunting shoppers during the holiday season, the retailer said Tuesday.

The price reductions will be across national brands and Target’s own private brands, including food and beverages, everyday essentials and holiday gifts, it said.

Rival Walmart has also been pushing to keep prices on essentials low as many Americans turn to discount shopping amid sticky inflation.

In May, Target lowered prices on at least 5,000 frequently shopped products.  It said on Tuesday that it was on track to lower prices on more than 10,000 items by the end of the holiday season.

In August, Target raised its full-year profit forecast, and the Minneapolis-based retailer has hired about 100,000 seasonal workers ahead of the holiday season.

--UPS shares rose Thursday after the company reported better-than-expected quarterly earnings.

UPS announced third-quarter adjusted earnings per share of $1.76 and operating profit of $2 billion from sales of $22.2 billion.  Wall Street was looking for EPS of $1.63, on profit of $1.9bn from sales of $22.1 billion.

Full-year guidance was adjusted for the sale of Coyote Logistics.  UPS now expects full-year sales of $91.1 billion and operating profit of about $8.7 billion, implying a Q4 profit of around $2.9bn from sales of $25.5 billion, a little down from current consensus on the latter.

Falling volumes and lower pricing have weighed on investor sentiment this year, but U.S. daily package volumes rose 6.5% year over year in the third quarter.

--3M Co. raised the lower end of its full-year adjusted profit forecast on Tuesday, after strong demand for its electronics and industrial products helped the U.S. conglomerate beat quarter profit estimates.  The shares fell a bit after rising earlier.

An uptick in demand for electronics used in vehicles and mobile phones boosted profit for the company, which had been grappling with a slowdown as high inflation led consumers to postpone big-ticket purchases.

The broader industrial sector is also expected to benefit from a boost to consumer spending after the Fed lowered borrowing costs in September.

3M has cut jobs and spun off its healthcare business into a listed company in recent quarters to mitigate the impact from a demand slowdown.

Sales in its transportation and electronics segment, which makes display materials for mobile phones and automobiles, increased by 1.8% from a year earlier.

In its safety and industrial segment, which makes adhesives for industrial use, sales went up by 0.5% from a year ago.

The company reported an adjusted profit of $1.98 per share for the third quarter, compared with $1.68 per share a year earlier.

3M now expects a full-year adjusted profit between $7.20 and $7.30 per share, compared with its previous forecast of $7.00 to $7.30.

--AT&T gained more wireless subscribers than expected in the third quarter, driven by the steady adoption of its higher-tier unlimited plans that come with perks including increased hotspot data, sending its shares up 4%.

The telecom firm said on Wednesday it had added 403,000 net monthly bill-paying wireless phone subscribers in the July-September period, above consensus of 393,430.

Premium plans have helped AT&T stay competitive in the saturated U.S. telecom market where rivals Verizon and T-Mobile are bundling their offerings with streaming services such as Netflix and Max to attract customer.

Revenue of $30.2 billion missed estimates, and AT&T’s fiber business added 226,000 customers, missing expectations of 257,800 additions, but this was mainly driven by a work stoppage that began in August in its southeast region and impacted fiber installations.

--Speaking of Verizon, it added more wireless subscribers than expected in the third quarter as the telecom giant’s promotional offers and plans that bundle 5G with streaming services such as Netflix helped attract customers.

Growing adaptation of the myPlan, a customizable offering that includes steaming perks such as Disney+, Hulu and Max for an extra cost, has helped Verizon stay resilient in the competitive  telecom market.

The company added 239,000 net monthly bill-paying wireless phone subscribers in the September quarter, compared with expectations of 218,100 additions, according to FactSet.  It posted 148,000 additions for the June quarter.

Verizon reported adjusted profit of $1.19 per share, compared with estimates of $1.18, with revenue of $33.3 billion just shy of consensus of $33.43bn.

Net income fell to $3.4 billion from $4.9bn a year ago, hit by severance charges of $1.7bn from a voluntary separation program and other headcount reduction initiatives.

--T-Mobile US shares rose after the company reported better-than-expected third-quarter earnings, net profit, and revenue, and raised its full-year 2024 guidance.

For the three months ending in September, T-Mobile reported earnings of $2.61 a share, up 43%, and net income of $3.1 billion, also up 43%.  Total revenue of $20.2 billion also surpassed expectations.

Analysts had expected earnings of $2.43 a share, and net profit of $2.8 billion, on sales of $20 billion.

Its postpaid churn of 0.86% was the lowest ever for its third quarter.

“At the end of the day, customers vote with their dollars and their feet,” and their low churn rate shows they are actively choosing to stay with T-Mobile, said Mike Katz, president of marketing, adding Apple’s iPhone 16 launch has been good for T-Mobile so far.

The company now expects postpaid net customer additions of 5.6 million to 5.8 million for 2024, up from earlier guidance of 5.4 to 5.7 million.

--McDonald’s shares sank 5% after the Centers for Disease Control and Prevention said the company’s quarter pounder burgers had been linked to an E. coli outbreak in 13 states, with most of the illnesses in Colorado and Nebraska.

“This is a fast-moving outbreak investigation,” the CDC wrote on its website late Tuesday.  “Most sick people are reporting eating Quarter Pounder hamburgers from McDonald’s and investigators are working quickly to confirm which food ingredient is contaminated.”

The CDC said McDonald’s has stopped using fresh slivered onions and quarter-pound beef patties in certain states while a source of the illness is confirmed.

One person has died from the outbreak, the agency said, and at least 22 hospitalizations have been reported, the CDC giving an update today.

McDonald’s said it believed the “slivered onions used in the Quarter Pounder were the culprit and sourced by a single supplier that serves three distribution centers.”

But the CDC is not yet sure that it wasn’t the burger patties themselves.

Yum Brands announced on Thursday it would be removing fresh onions from its meals at certain Taco Bell, Pizza Hut and KFC restaurants out of an “abundance of caution,” following McDonald’s issues.  Burger King followed suit.

--Starbucks reported a raft of bad news in its fiscal fourth-quarter earnings report, perhaps an attempt by new CEO Brian Niccol to “kitchen sink” the update – getting everything negative out of the way in one hit – so future reports are focused on more positive things.

Starbucks reported a profit of 80 cents a share, missing forecasts for $1.03.  This came on sales of $9.1 billion, below estimates for $9.38bn.

Kind of shockingly, same-store sales in the quarter ended Sept. 29 declined a whopping 7%, double what the Street expected and the biggest quarterly drop in four years. with the weakness especially evident in the U.S., where transactions were down 10% from the prior year, and in China, where comparable sales fell 14%.  Starbucks said that a push to launch more products and offer a plethora of promotions failed to bring more customers into its stores.

The company also said it would suspend guidance as it begins to chart a new course under Niccol.  In doing so Niccol has an opportunity to assess the business and solidify a turnaround plan.

Niccol came over to Starbucks from a highly successful run at Chipotle, six years in which the stock surged 800%.

But Starbucks has been battling weaker sales for the past few quarters, driven by macroeconomic headwinds as well as operational, branding, and challenges with product development. While the broader economy is out of his control, Niccol is focusing on internal fixes.

--Michael S. Jeffries, the former longtime CEO of Abercrombie & Fitch, was arrested Tuesday in connection with a federal sex-trafficking and interstate prostitution case.

Jeffries, who ran the clothing retailer from 1992 to 2014, faces charges related to sex trafficking, federal prosecutors in Brooklyn said.  The charges come a year after a BBC investigation and a class-action lawsuit accused Jeffries of using the prospect of modeling jobs at Abercrombie to lure young men to events around the world where they were sexually exploited.

Jeffries and his partner, Matthew Smith, were arrested in Florida on Tuesday morning. A third person, James Jacobson, was also arrested Tuesday, in Wisconsin, in connection with the case.

Foreign Affairs, Part II

China: The People’s Liberation Army carried out a live-fire drill in the Taiwan Strait on Tuesday, two days after U.S. and Canadian warships sailed through the contentious waterway following Beijing’s massive military exercise a week earlier.

Separately, the New York Times broke a story this afternoon that “Chinese hackers who are believed to have burrowed deep into American communications networks,” a topic I covered the other week, “targeted data from phones used by former President Trump and his running mate, Senator JD Vance, people familiar with the matter said on Friday.”

While investigators are working to determine what communications data, if any, was taken or observed, as the Times points out, “The type of information on phones used by a presidential candidate and his running mate could be a gold mine for an intelligence agency: Who they called and texted, how often they communicated with certain people, and how long they talked to those people could be highly valuable to an adversary like China.”

Moldova: A slim majority of 50.39% voted “yes” in Moldova’s crunch referendum on European Union accession, preliminary results showed, after President Maia Sandu said that Sunday’s twin votes had been marred by “unprecedented” outside interference.

The 50.4% is far from a resounding endorsement of the pro-EU path that Sandu has pursued over four years at the helm of the small ex-Soviet republic tugged between Russia and the West.

Sandu took 42% of the vote at a presidential election that was held simultaneously, while her main rival, former prosecutor-general Alexandr Stoianoglo, won 26%, a stronger result than polls had predicted.

The result set the scene for a tightly fought run-off between the two on Nov. 3.  Stoianoglo has said that, if elected, he would build a “balanced” foreign policy involving ties with the EU, the United States, Russia and China.

In the run-up to Sunday’s referendum, polls had shown clear majority support for joining the EU.  A “yes” result means a clause will be added to the constitution defining EU accession as a goal.

In the early hours of Monday, Sandu told Moldovans there was “clear evidence” that criminal groups working together with “foreign forces hostile to our national interests” had sought to buy off 300,000 votes.

She said this amounted to “fraud of unprecedented scale” and that Moldova would “respond with firm decisions.”

“Criminal groups...have attacked our country with tens of millions of euros, lies and propaganda, using the most disgraceful means to keep our citizens and our nation trapped in uncertainty and instability,” she said.

The Kremlin denounced the votes in Moldova as “unfree,” while challenging Sandu to “present evidence” of meddling.

The EU leapt to Sandu’s defense, saying Moldova had faced “really unprecedented intimidation and foreign interference by Russia and its proxies ahead of this vote.”

Georgia: The big parliamentary election is Saturday, with the people having to choose between Russia or Europe, as the opposition seeks to end 12 years of rule by the governing Georgian Dream party, whose founder, Bidzina Ivanishvili, doubled down on a pledge to ban opposition parties should his party clinch victory.  GD has been accused of drifting back into Russia’s orbit.

Turkey: Fethullah Gulen, a reclusive U.S.-based Islamic cleric who inspired a global social movement while facing accusations he masterminded a failed 2016 coup in his native Turkey, died the other day at his place of exile, Saylorsburg, Pa.  Gulen was in his eighties and had long been in ill health.

Turkish Foreign Minister Hakan Fidan said the death has been confirmed by Turkish intelligence sources.

“The leader of this dark organization has died,” he said.

Gulen spent the last decades of his life in self-exile, living in a gated compound in Pennsylvania’s Pocono Mountains from where he continued to wield influence among his millions of followers in Turkey and throughout the world.  He espoused a philosophy that blended Sufism – a mystical form of Islam – with staunch advocacy of democracy, education, science and interfaith dialogue.

At one time Gulen was an ally of Turkish leader Erdogan, but then became a foe.  He called Erdogan an authoritarian bent on accumulating power and crushing dissent.  Erdogan cast Gulen as a terrorist, accusing him of orchestrating the attempted military coup on the night of July 15, 2016, when factions within the military used tanks, warplanes and helicopters to try to overthrow Erdogan’s government.

But heeding a call from the president, thousands took to the streets to oppose the takeover attempt.  The live video of this event was disturbing, as coup-plotters fired at crowds and bombed parliament and other government buildings.  A total of 251 people were killed and around 2,200 others were wounded.  Around 35 alleged coup plotters were also killed.

Gulen adamantly denied involvement, and his supporters dismissed the charges as politically motivated.  Turkey put Gulen on its most-wanted list and demanded his extradition, but the U.S. ignored the request, saying it needed more evidence.  Gulen was never charged with a crime in the U.S., and he consistently denounced terrorism.

On a different topic, suspected Kurdish militants set off explosives and opened fire Wednesday at Turkey’s state-run aerospace and defense company TUSAS in Ankara, killing five people and wounding 22, the interior minister said.

The two attackers – a man and a woman – also were killed.

The Kurdistan Workers’ Party, or PKK, is suspected of being behind the attack.  Defense Minster Yasar Guler said: “We give these PKK scoundrels the punishment they deserve every time.  But they never come to their senses.  We will pursue them until the last terrorist is eliminated.”

Turkish jets then struck Kurdistan militant targets in Iraq and Syria, more than 30 said to be “destroyed,” according to the defense ministry in a statement.

Cuba: The electrical grid collapsed again on Sunday, the fourth such failure in 48 hours, raising fresh doubts about a quick fix on an island already suffering from severe shortages of food, fuel and medicine.

The blackout came after weeks of rolling shortages, sparking some protests around the island.

Recovery efforts were then hampered in the eastern part of the country after Hurricane Oscar hit, killing seven people and devastating infrastructure across Guantanamo province.

Random Musings

--Presidential approval ratings....

Gallup: 39% approve of President Biden’s job performance, 56% disapprove; 33% of independents approve (Oct. 1-12).

Rasmussen: 45% approve, 53% disapprove (Oct. 25).  [I was part of this survey again this week.]

--A Washington Post-Schar School poll of more than 5,000 registered voters in the seven battleground states, conducted in the first half of October, finds 47% who say they will definitely or probably support Kamala Harris while 47% say they will definitely or probably support Donald Trump.  Among likely voters, 49% support Harris and 48% back Trump.

Among likely voters....

Arizona: Trump 49...Harris 46
Georgia: Harris 51...Trump 47
Michigan: Harris 49...Trump 47
Nevada: Harris 48...Trump 48
North Carolina: Trump 50...Harris 47
Pennsylvania: Harris 49...Trump 47
Wisconsin: Harris 50...Trump 47

On the gender gap in the seven swing states, Harris leads among female voters by seven points, while Trump leads among all men by the same percentage. The divide is largest among younger voters, with women under age 30 favoring Harris by 20 points while men under 30 favor Trump by 15 points.

Harris leads among registered Black voters by 82-12.  Trump leads among whites by a 55-39 margin.

“Who would do a better job...on Inflation,” Trump leads in these seven states by 49-33. On the Economy, Trump leads 51-36.

On Abortion, Harris leads 51-29.

Trump leads on the Israel-Gaza war by a 45-31 margin, and on Russia-Ukraine, 47-34.

--A Bloomberg News/Morning Consult poll of the battleground states has it tied as well, Harris 49.1%, Trump 48.5% in all swing states.  Individually, among likely voters....

Arizona: 49.1-48.4 Harris
Georgia: 49.9-48.4 Trump
Michigan: 49.6-46.5 Harris
Nevada: 48.8-48.3 Harris
North Carolina: 49.6-48.5 Trump
Pennsylvania: 50.0-48.2 Harris
Wisconsin: 48.3-48.0 Trump

--In the latest New York Times/Siena College polling data on the battleground states, Trump leads by 2 points in Arizona and Georgia, Harris leads by one point in Wisconsin, and it is even in the other four states.  Amazing.

But at the same time, there has been a slight shift to Trump, generally, in the seven over the last two weeks, Times/Siena found.

And in the nationwide polls, there are been a distinct shift to Trump, such as in the Fox News poll, where Trump leads by two while in their previous survey, Harris led by two.

A Marist national poll is an outlier, showing Harris’ support gaining, to five points, up from two previously.

A new Reuters/Ipsos national poll released Tuesday had Harris with a 46% to 43% lead, no different from a week earlier (45-42).

But in this one, 70% of registered voters said their cost of living was on the wrong track, while 60% said the economy was heading in the wrong direction.

A new Wall Street Journal national survey has Harris leading by two, 47% to 45%, unchanged from an August survey, on a ballot that includes third-party and independent candidates.

But voters recall Trump’s time as president more positively than at any point in this election cycle, with 52% approving and 48% disapproving of his performance in office – a 4-point positive job rating that contrasts with the 12-point negative rating for Harris. 

In the New York Times’ final national poll, conducted with Siena College and released today, Harris and Trump were tied at 48%.  In early October, Harris was at 49% and Trump 46%.

--In an interview with the Wall Street Journal’s editorial board, Donald Trump said that if he returns to the White House China would not dare provoke him because President Xi Jinping knows that Trump is “crazy.”

Trump said he would impose tariffs on China if it sought to blockade Taiwan.

“I would say: If you go into Taiwan, I’m sorry to do this, I’m going to tax you at 150% to 200%,’ he said. 

He told the Journal’s board he would not have to use military force to prevent a blockade of Taiwan, because President Xi “respects me and he knows I’m [expletive] crazy.”

“I had a very strong relationship with him,” Trump said of Xi.  “He was actually a really good, I don’t want to say friend – I don’t want to act foolish, ‘he was my friend’ – but I got along with him great.”

“He’s a very fierce person,” Trump added.

Trump also cast his relationship with Vladimir Putin in a positive light, saying: “I got along with him great.”

He told the Journal that he said to Putin: “I’m going to hit you right in the middle of fricking Moscow.’  I said, ‘We’re friends. I don’t want to do it, but I have no choice.’ He goes, ‘No way.’  I said, ‘Way.’

“I said, ‘You’re going to be hit so hard, and I’m going to take those [expletive] domes right off your head.’  Because, you know, he lives under the domes.” [Total B.S.]

--Arnold Palmer’s resume is unparalleled. While many other golfing greats – like Jack Nicklaus and Tiger Woods – won more tournaments and earned more money on the course, Palmer is acknowledged as the immortal who grew the sport’s popularity in the 1960s and 70s.

With his reckless play, go-for-it-all swing and his charisma, the television cameras loved him – and so did the masses (including my own family), which became known as Arnie’s Army.

But Saturday, at Arnold Palmer Regional Airport in Unity, Pa., outside of Latrobe, Arnie’s home (when he wasn’t at Bay Hill in Florida), Donald Trump, starting off a campaign rally at the airport, wanted everyone to know of the legend of Arnie and his penis.

“Arnold Palmer was all man, and I say that in all due respect to women, and I love women, but this is a guy that was all man,” Trump said.  “This man was strong and tough, and I refuse to say it, but when he took showers with the other pros, they came out of there and they said, ‘Oh, my God, that’s unbelievable.’”

As the crowd laughed, Trump chuckled with them.

“I had to say it,” he said.

What a jerk.

Palmer died before Trump was elected president in 2016, but Palmer’s daughter Peg said that while her father appreciated Trump’s support of golf, he was not a supporter.

“My dad didn’t like people who act like they’re better than other people,” she said.  “He had no patience for people who are dishonest and cheat.

“My dad was disciplined.  He wanted to be a good role model.  He was appalled by Trump’s lack of civility and what he began to see as Trump’s lack of character. ...What would my dad think of Donald Trump today? I think he’d cringe.”

It was just two years ago I had the honor of having dinner at Latrobe Country Club, where a member (married to my cousin), showed me Arnie’s locker and I got to meet Doc Giffin, Palmer’s long-time right-hand man.  I wrote Michael this week and he said he hadn’t heard what Doc’s reaction was to Trump’s musings, Doc getting up there in years.

--In an interview on Sunday with the Rev. Al Sharpton on MSNBC, Kamala Harris responded to Donald Trump’s profanity-laden insult that the former president used about her tenure as vice president, saying he had “not earned the right” to hold office again.

“The American people deserve so much better,” she told Sharpton.  She later added, “Donald Trump should never again stand behind the seal of the president of the United States.  He has not earned the right.  He has not earned the right.  And that’s why he’s going to lose.”

--Billionaire Elon Musk further escalated his direct intervention in the 2024 election in support of Donald Trump, announcing Saturday that he will hand out $1 million daily in a lottery for registered swing-state voters who sign a petition put out by his super PAC’s voter recruitment drive.

Legal experts questioned the legality of the move because it ties a monetary reward to voter registration status, which is expressly prohibited under federal law.

The winner would be chosen at random from those who sign a pro-U.S. Constitution petition by Musk’s campaign group AmericaPAC pledging to uphold the right to free speech and the right to bear arms.

The petition reads: “By signing below, I am pledging my support for the First and Second Amendments.”

Pennsylvania Governor Josh Shapiro, a Democrat who supports Harris (and who should have been Kamala’s running mate), called Musk’s strategy “deeply concerning.”

The Justice Department on Wednesday warned Musk that his $1 million sweepstakes may violate federal law, which bars paying people to register to vote. But to sign the petition, you must be already registered to vote.  No one expects any action to be taken until after the election, if at all, but after the letter, it seems Musk stopped awarding the money.

Musk has given at least $132 million to Donald Trump and other Republicans, including $56 million in the final weeks of the campaign, according to federal filings on Thursday.

And the Wall Street reported today, Friday, that Musk “has been in regular contact with Russian President Vladimir Putin since late 2022.

“The discussions, confirmed by several current and former U.S., European and Russian officials, touch on personal topics, business and geopolitical tensions....

“(The) contacts also raise potential national-security concerns among some in the current administration, given Putin’s role as one of America’s chief adversaries.

“Musk has forged deep business ties with U.S. military and intelligence agencies, giving him unique visibility into some of America’s most sensitive space programs... Musk has a security clearance that allows him access to certain classified information.”

This is exactly what I brought up two months ago with regards to Elon.  Will he always act in America’s best interests?  Doubtful.

--In a series of interviews with the New York Times’ Michael S. Schmidt, John Kelly, the former Marine general who was Donald Trump’s longest-serving chief of staff, said Trump met the dictionary definition of a “fascist.”

“Certainly the former president is in the far-right area, he’s certainly an authoritarian, admires people who are dictators – he has said that.  So he certainly falls into the general definition of fascist, for sure.”

“He certainly prefers the dictator approach to government,” Kelly said.

Trump “never accepted the fact that he wasn’t the most powerful man in the world – and by power, I mean an ability to do anything he wanted, anytime he wanted,” Kelly said.

And there were the Hitler comments that we’ve seen before.

At a roundtable Tuesday with Latino leaders at Trump’s Doral Golf Resort in Florida, Trump, in talking about securing the border, said:

“As president, you have tremendous – it’s called extreme power.  You have extreme power,” he said.  “You can, just by the fact, you say, ‘Close the border,’ and the border’s closed.”

--Joseph Epstein / Wall Street Journal

“A little over two weeks before the presidential election and many independent voters, myself included, still haven’t decided how they will vote.

“I can’t vote for Kamala Harris.  I find many of Donald Trump’s policies – his stand on closing the borders, his economic programs, his unflinching support for Israel – appealing but for one thing: the man who holds them. A friend of mine, also an independent voter, recently told me that on Election Day he thought he would probably hold his nose and vote for Mr. Trump.  For others, even with noses held, the smell remains too strong to do likewise.

“What, precisely, is wrong with Donald Trump?  To start with the obvious, his vanity: his preposterously bleached and elaborately coiffed hairdo, his sprayed-on tan, the lengthy neckties to cover his avoirdupois.  Add to this his propensity for insulting his political enemies.  (He calls Gavin Newsom, governor of California, ‘Gavin Newscum.’)  Then there’s his hyperbole, everywhere adding to his opponents’ misdeeds, building up his own achievements.

“Still, why can’t I live with all this and vote for the man based on the general soundness of his policies?  What I can’t live with, what I can’t vote for, is Mr. Trump’s relentless immodesty.  Perhaps no one who seeks the presidency of the United States qualifies as modest, but Mr. Trump is also altogether devoid of modesty’s first cousin, humility.  No other politician has so thoroughly availed himself of the first-person singular....

“I find his immodesty not only a serious character flaw but a danger to his governing ability. I don’t believe he wishes to abolish the Constitution, undermine our democracy, set himself up as dictator. But such full-court immodesty has to work against one’s perspective, make impossible anything resembling a sense of history, allow for necessary accommodations with reality.  A man who sees no other picture but those with himself in the center is not a man you want to run your nation.

“For the immodest leader, complexity doesn’t exist.  Everything, because he believes it, is simple, is ‘common sense.’  He claims his tariffs are the all-purpose solution to our international economic relations.  He says that once re-elected, he will round up and deport millions of unvetted immigrants.  Such is his immodesty, nearly four years later, that he still can’t bring himself to believe that he lost the 2020 presidential election.  What a shock it would be to this most immodest of men to learn that of Joe Biden’s more than 81 million votes, most were likely not votes for the drab Mr. Biden but rather against Mr. Trump....

“The utter confidence, part and parcel of his immodesty, is what I find so off-putting – even dangerous – about the man. But then, I happen to think that one of the qualifications for president of the United States is that one be decent, honorable, fair-minded.  Here Donald J. Trump, though he may have been the 45th president of the United States, fails to qualify as a suitable candidate for our 47th president.”

--Anne Applebaum / The Atlantic...on Donald Trump’s dangerous language....

“In his 2024 campaign, (the) line has been crossed.  Trump blurs the distinction between illegal immigrants and legal immigrants – the latter including his wife, his late ex-wife, the in-laws of his running mate, and many others. He has said of immigrants, ‘They’re poisoning the blood of our country’ and ‘They’re destroying the blood of our country.’  He has claimed that many have ‘bad genes.’  He has also been more explicit: ‘They’re not humans, they’re animals’; they are ‘cold-blooded killers.’  He refers more broadly to his opponents – American citizens, some of whom are elected officials – as ‘the enemy from within...sick people, radical-left lunatics.’  Not only do they have no rights; they should be ‘handled by,’ he has said, ‘if necessary, National Guard, or if really necessary, by the military.’

“In using this language, Trump knows exactly what he is doing. He understands which era and what kind of politics this language evokes.  ‘I haven’t read Mein Kampf,’ he declared, unprovoked, during one rally – an admission that he knows what Hitler’s manifesto contains, whether or not he has actually read it.  ‘If you don’t use certain rhetoric,’ he told an interviewer, ‘if you don’t use certain words, and maybe they’re not very nice words, nothing will happen.’

“His talk of mass deportation is equally calculating. When he suggests that he would target both legal and illegal immigrants, or use the military arbitrarily against U.S. citizens, he does so knowing that past dictatorships have used public displays of violence to build popular support.  By calling for mass violence, he hints at his admiration for these dictatorships but also demonstrates disdain for the rule of law and prepares his followers to accept the idea that his regime could, like its predecessors, break the law with impunity.

“These are not jokes, and Trump is not laughing.  Nor are the people around him.  Delegates at the Republican National Convention held up prefabricated signs: Mass Deportation Now.  Just this week, when Trump was swaying to the music at a surreal rally, he did so in front of a huge slogan: Trump Was Right About Everything.  This is language borrowed directly from Benito Mussolini, the Italian fascist.  Soon after the rally, the scholar Ruth Ben-Ghiat posted a photograph of a building in Mussolini’s Italy displaying his slogan: Mussolini Is Always Right.

“These phrases have not been put on posters and banners at random in the final weeks of an American election season. With less than three weeks left to go, most candidates would be fighting for the middle ground, for the swing voters.  Trump is doing the exact opposite.  Why?  There can be only one answer: because he and his campaign team believe that by using the tactics of the 1930s, they can win.  The deliberate dehumanization of whole groups of people; the references to police, to violence, to the ‘bloodbath’ that Trump has said will unfold if he doesn’t win; the cultivation of hatred not only against immigrants but also against political opponents – none of this has been used successfully in modern American politics.

“But neither has this rhetoric been tried in modern American politics. Several generations of American politicians have assumed that American voters, most of whom learned to pledge allegiance to the flag in school, grew up with the rule of law, and have never experienced occupation or invasion, would be resistant to this kind of language and imagery. Trump is gambling – knowingly and cynically – that we are not.”

--The Washington Post was prepared to endorse Kamala Harris, but today, the Post announced they would not endorse a candidate for the first time in decades.  The reason? Owner Jeff Bezos squelched it.  In response, editor-at-large Robert Kagan, one of the preeminent foreign policy experts in the country, resigned.  Much more to come on this story.  Newsrooms revolt when the owner gets involved.

--Tim Sheehy, a Republican from Montana, is ahead in the polls for the Senate seat occupied by Democratic incumbent Jon Tester, but an issue has come up, Sheehy’s claim he has a bullet lodged in his forearm, the Navy SEAL suffering the injury in a firefight in Afghanistan.

But two people who had close interactions with Sheehy have come forward to dispute his account. A former SEAL colleague said Sheehy never mentioned the wound, and he remembered no visible evidence of an injury.  A park ranger said he was certain Sheehy shot himself at Glacier National Park in 2015, when the ranger spoke to him at the hospital.

This is an absolutely critical race.

--A Washington Post-University of Maryland poll has Democrat Angela Alsobrooks maintaining a clear lead in Maryland’s closely watched Senate race, with 52% of likely voters supporting Alsobrooks, the Prince George’s County executive, while 40% support former governor Larry Hogan, so an upset is not likely.

At least Hogan is outperforming the top of the ticket, as Maryland voters support Kamala Harris over Trump by a 61-33 margin.

--A federal judge on Tuesday ordered Rudy Giuliani to turn over all his valuable possessions and his Manhattan penthouse apartment to the control of Ruby Freeman and Shaye Moss, the Georgia election workers he defamed and to whom he now owes $150 million.

Judge Lewis Liman of the federal court in Manhattan said Giulian must turn over his interest in the property to the women in seven days, to a receivership they will control.  The judge’s turnover order of the luxury items is swift and simple, but the penthouse apartment will have its control transferred so Freeman and Moss can sell it, potentially for $millions.

--The owner and manager of the cargo ship that caused the Baltimore bridge collapse have agreed to pay more than $100 million to settle a lawsuit brought by the Justice Departments, it was announced Thursday.

The settlement comes a month after the Justice Department sued Dali owner Grace Ocean Private Ltd. and manager Synergy Marine Group, both of Singapore, seeking to recover more than $100 million that the government spent to clear the underwater debris and reopen the city’s port.

--Rescue efforts were ongoing around Roswell, New Mexico, early in the week, with roads leading into the city closed, after flash flooding from historic rainfall Saturday night and Sunday stranded motorists and killed two people, authorities said.

Rainfall totals on Saturday set a new all-time daily record in Roswell – 5.78 inches – and around nine inches of rain in total fell in the city and surrounding regions in southeast New Mexico, according to the National Weather Service.

Nearly 300 people were rescued in the flooding, and 38 taken to local hospitals, the New Mexico National Guard said Sunday morning.

--The death toll for Hurricane Helene has been revised down to 224, with 26 unaccounted for, as North Carolina officials double-counted some victims in the chaos that followed.  So the latest tolls I saw were 96 victims in N.C., 49 in South Carolina, 33 in Georgia, 27 in Florida, 17 in Tennessee, and two in Virginia.

--The New York City area is going to go the entire month of October without any rain for the first time ever.  New Jersey is now in “severe” drought in much of the state.

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Pray for the men and women of our armed forces...and all the fallen.

Pray for Ukraine...and the remaining hostages in Gaza.

God bless America.

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Gold $2754...more record highs this week
Oil $71.83

Bitcoin: $66,833 [4:00 PM ET, Friday]

Regular Gas: $3.14; Diesel: $3.58 [$3.54 - $4.51 yr. ago]

Returns for the week 10/21-10/25

Dow Jones  -2.7%  [42114]
S&P 500  -1.0%  [5808]
S&P MidCap  -2.8%
Russell 2000  -3.0%
Nasdaq  +0.2%

Returns for the period 1/1/24-10/25/24

Dow Jones  +11.7%
S&P 500  +21.8%
S&P MidCap  +11.7%
Russell 2000  +8.9%
Nasdaq  +23.4%

Bulls 58.0
Bears 21.7

Hang in there.

Brian Trumbore

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