Week in Review

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Week in Review

11/02/2024

For the week 10/28-11/1

[Posted 4:30 PM ET, Friday]

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Edition 1,332

As we head to Tuesday, and with over 67 million having already voted, following is your cheat sheet and the 2020 results in each of the seven battleground states, with the final vote gap....

Arizona: Biden 49.36 percent – 49.06 percent...10,500 votes
Georgia: Biden 49.47 – 49.24...11,800
Michigan: Biden 50.62 – 47.84...155,000
Nevada: Biden 50.06 – 47.67...33,500
North Carolina: Trump 49.93 – 48.59...75,000
Pennsylvania: Biden 49.85 – 48.69...80,000
Wisconsin: Biden 49.45 – 48.82...20,500

Total Vote:

2016...Clinton 65,853,516; Trump 62,984,825

2020...Biden 81,283,501; Trump 74,223,975

I fear Election Night and what Donald Trump will say then even though there is no way a true result will be available until Nov. 6, or 7, or even a few days after that. 

But we know what Trump has said, non-stop, for years now.

“We want a landslide that is too big to rig.”

“We won in 2020...it was a rigged election.”

“Our primary focus is to get out the vote and make sure they don’t cheat...because we have the votes.”

“We are leading in every swing state,” as he lays his predicate for declaring victory, again, on Election Night. 

MAGA media has contributed, promoting ‘rigged election’ conspiracy theories 24/7 for months.

It’s been a fusillade of rhetoric meant to incite information warfare on social media and Russia, China and Iran have been all too willing to help out on this front, especially the Kremlin. 

With fake videos of Kamala Harris spreading, state officials, however, are girding for what they consider a far more dangerous deception heading into Tuesday – deepfake robocalls.

But another possible reality is that Donald Trump wins and there is no doubt as to the result.  I have no idea.  You can claim to be an insider, with internal polling data, whatever that means, but is there a ‘secret’ Harris vote out there, among Republicans and independents, just like there was a secret Trump vote in 2016, and to a certain extent in 2020?  We’ll find out. [I talk about my own ballot down below, put in a drop box locally and recorded...which I know by checking online.  I stopped voting in person decades ago when the local PTAs discontinued holding bake sales!]

But this is what Trump wrote on Truth Social the other day:

“CEASE & DESIST: I, together with many Attorneys and Legal Scholars, am watching the Sanctity of the 2024 Presidential Election very closely because I know, better than most, the rampant Cheating and Skullduggery that has taken place by the Democrats in the 2020 Presidential Election.  It was a Disgrace to our Nation! Therefore, the 2024 Election, where Votes have just started being cast, will be under the closest professional scrutiny and, WHEN I WIN, those people that CHEATED will be prosecuted to the fullest extent of the Law, which will include long term prison sentences so that this Depravity of Justice does not happen again.  We cannot let our Country further devolve into a Third World Nation, AND WE WON’T!  Please beware that this legal exposure extends to Lawyers, Political Operatives, Donors, Illegal Voters, & Corrupt Election Officials. Those involved in unscrupulous behavior will be sought out, caught, and prosecuted at levels, unfortunately, never seen before in our Country.”

He actually issued the exact same post in September as well.

I’m guessing Trump declares victory at 11:15 PM ET on Election Night.

--Editorial / Wall Street Journal

“Donald Trump isn’t the wannabe Hitler Democrats claim he is, but he sure seems to have a soft spot for the world’s dictators. This is one of the former President’s rhetorical habits that raises questions about how he’d conduct foreign policy in a second term, even among many of his supporters.

“This rhetoric was on display again on Friday in Trump’s interview with podcast host Joe Rogan.  Consider this exchange over dealing with Vladimir Putin and Chinese President Xi Jinping:

“Mr. Trump: ‘We’re dealing, Joe, we’re dealing with the smartest people. They hate when I say, you know, when the press, when I called President Xi, they said, ‘He called President Xi brilliant,’’ Trump said.  ‘Well, he’s a brilliant guy.  He controls 1.4 billion people with an iron fist.  I mean, he’s a brilliant guy, whether you like it or not. And they go crazy.’

“Mr. Rogan: ‘Right.  It doesn’t mean he’s not evil, or it doesn’t mean he’s not dangerous.’

“Mr. Trump: ‘Actually, we have evil people in our country. If you have a smart president, he can deal with Russia. He can deal with all of it.’

“The reason freedom-loving people don’t like talk like this is because it flatters Mr. Xi for his success in terrorizing his people ‘with an iron fist.’  Mr. Xi may be a smart guy, but you don’t have to be brilliant to rule when you can arrest or purge anyone at any time.  All you have to be is ruthless and remorseless.

“Mr. Rogan gave Mr. Trump an opening to speak such a truth, but the former President immediately pivoted to talking about his opponents in the U.S.  This fits his pattern of describing his domestic opponents in nastier terms than he does rulers who imprison their people on a whim or start wars that kill tens of thousands of people.

“Mr. Trump probably thinks he’s maintaining negotiating flexibility with Mr. Putin, Mr. Xi and North Korean dictator Kim Jong Un.  He likes to flatter all of them.  It’s as if he thinks his personal charm can win them over to sign some diplomatic or military deal.

“But Mr. Trump tried that with Mr. Kim in the first term as he gave the North Korean the diplomatic endorsement of two face-to-face meetings in the hope of getting him to abandon nuclear weapons. The meetings accomplished nothing, but our sources say Mr. Trump is determined to try again if he’s re-elected....

“(The) world is also different than it was when Mr. Trump left office in 2021. The dictators he says he got along with then are on the march now and they’re working together more than they ever have.  North Korean troops are fighting for Russia against Ukraine, and Russia is shielding North Korea from nuclear sanctions enforcement. China and Iran are also helping Russia.

“The U.S. military’s advantage over adversaries has also declined, a fact that Mr. Trump has done little to acknowledge or warn about in his campaign. It will take more than flattery and unpredictability to reestablish American deterrence, and that will include Western rearmament and reliable alliances.

“Mr. Trump has borrowed Ronald Reagan’s mantra of ‘peace through strength,’ and that’s the right message.  But Reagan also won the Cold War, and spread global freedom, because he told the truth about adversaries even at the risk of offending them.  He called the Soviet Union an ‘evil empire.’

“It would be reassuring if Mr. Trump said, at least once in a while, that these dictators are dangerous and the enemies of liberty.  One place to start would be speaking publicly for the release of publisher Jimmy Lai from unjust imprisonment in Hong Kong.  That would send a message heard ‘round the world.”

Boy, I couldn’t agree on this last point, about Mr. Lai, more...and the rest of the Journal’s closing argument.

But in terms of the election being ‘rigged,’ Trump ratcheted it up further this week ahead of the vote, saying fraud is already take place in Pennsylvania, and there is the issue, which really isn’t one, of noncitizens voting.

It is illegal for noncitizens to vote in federal elections, and studies have concluded that noncitizen voting is essentially nonexistent.

A definitive 2017 analysis from the Brennan Center for Justice, which I have referred to before, showed that election officials in 42 jurisdictions found only about 30 incidents of potential noncitizen voting in the 2016 election – among more than 23.5 million votes cast (in those jurisdictions).  The Cato Institute called claims of widespread noncitizen voting “bogus” this year after reviewing state policies and previous audits.

Brad Raffensperger, Georgia’s Republican secretary of state, announced in October that the state had found only 20 noncitizens among 8.2 million registered voters.  An earlier audit he conducted in 2022, going back 25 years, identified 1,634 people who had tried to register to vote but whose citizenship couldn’t be verified.  None were allowed to cast a ballot.  Georgia has not identified any example of a noncitizen in Georgia who voted in that time.

That said, Wednesday, the Supreme Court cleared the way for Virginia officials to remove about 1,600 voters from the state’s registration rolls less than one week before the election.

Gov. Glenn Youngkin (R) asked the justices to intervene after two lower courts blocked his efforts to cancel the registrations of voters who could be noncitizens – an issue Republican officials have seized on nationally.

Youngkin signed an order in August to expedite the removal of registered voters whose driver’s license applications indicated or suggested that they were not U.S. citizens.  The effort was opposed by the Justice Department and immigrant rights groups, who said eligible voters were being kicked off the rolls because of outdated or erroneous information.

The vote was 6-3, as you’d expect, the three liberal justices lining up against.

Wednesday evening, Trump posted on Truth Social, accusing Pennsylvania election officials of “cheating” after videos of early voting locations cutting off lines for ballots in the state went viral.

“Pennsylvania is cheating, and getting caught, at large scale levels rarely seen before,” Trump said.  “REPORT CHEATING TO AUTHORITIES.  Law Enforcement must act, NOW!”

I’m going to have plenty of beer in the fridge for Election Night...and leftover Halloween candy.

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Israel-Hamas-Hezbollah

--I started out my column last week by musing when Israel’s retaliation for Iran’s Oct. 1 ballistic missile attack was going to take place, and exactly three hours later, early Saturday morning Israel and Iran time, the Israelis struck.

The Israel Defense Forces (IDF) said it “completed precise and targeted strikes against military targets.”  It said fighter jets struck facilities that made missiles used over the last year against Israel, as well as surface-to-air missile arrays.  Numerous explosions were reported around Tehran, and in the city of Shiraz.

The targets hit indicated Israeli Prime Minister Benjamin Netanyahu refrained from attacking Iran’s nuclear facilities and energy infrastructure as President Biden had urged. [More on this below.]

Netanyahu, in his first public comments on the strikes said “we severely harmed Iran’s defense capabilities and its ability to produce missiles that are aimed toward us.”

Iran’s state TV reported the strikes caused “limited damage,” citing a statement from Iran’s Air Defense Headquarters.

The statement condemned the attacks as a “provocative action” and said that Iranian defense systems had successfully intercepted the strikes.

Supreme Leader Ayatollah Ali Khamenei said “it is up to the authorities to determine how to convey the power and will of the Iranian people to the Israel regime and to take actions that serve the interests of this nation and country.” Khamenei will make any final decision on how Iran responds.

Iranian President Masoud Pezeshkian echoed Khamenei’s language, telling a cabinet meeting: “We do not seek war, but we will defend the rights of our nation and country.”

From the White House, National Security Council spokesman Sean Savett said “It is our aim to accelerate diplomacy and de-escalate tensions in the Middle East region. We urge Iran to cease its attacks of Israel so that this cycle of fighting can end without further escalation.”

Nearly 100 Israeli jets carried out a series of daring airstrikes inside Iran, the strikes conducted in three waves, and “targeted around 20 locations around Tehran and western Iran, including vital air defense assets and facilities tied to the Iranian drone and missile programs,” according to the Washington-based Institute for the Study of War.  The strikes killed four Iranian soldiers, “presumably at the air defense sites that the [Israeli jets] struck,” ISW reports.

One target included a solid-propellant rocket motor plant in Parchin, southeast of Tehran. The facilities were inaugurated just three weeks ago, according to researcher Fabian Hinz of the International Institute of Strategic Studies, based in London.

Hinz wrote: “Targeted buildings appear to be related to propellant mixing and casting,” which suggests “Israel targeted a critical bottleneck in the missile production process (similar to previous campaigns against missile production infrastructure in Syria and Lebanon),” Hinz wrote Saturday.  The Iranians also used Parchin “for high explosives testing in support of its nuclear weapons program,” according to ISW.

Israeli officials told Axios that the sophisticated equipment taken out means Iran cannot produce on its own and must purchase from China, which could take months.  Other targets included a radar installation and an alleged drone factory.

“The IDF struck several locations in Iraq and Syria...likely targeting early warning radars and sensors that would have given Iran advanced notice,” ISW writes.  “Iran has in recent years worked to build an early detection network across Iraq, Syria, and Lebanon in order to better defend against Israeli airstrikes,” the think tank note explained.

And the Israelis destroyed four Russian-made S-300 air defense batteries inside Iran, which are “the most advanced air defense system that Iran operates,” ISW reported.

Singapore-based researcher Ian Storey told the Wall Street Journal: “Russia’s traditional customers have lost faith in the country’s defense industry and are looking for new suppliers.”

--The Wall Street Journal reported that two weeks before Israeli warplanes struck Iran Saturday morning, President Biden and Prime Minister Netanyahu agreed on the parameters of the attack in a half-hour phone call, their first in almost two months.

“After mounting worry that Israel might strike Iran’s oil infrastructure or even nuclear installations, the Israeli leader set his sights on military targets – to the relief of American officials.

“The airstrikes that unfolded met Washington’s expectations while dealing Iran a punishing blow.”

U.S. officials were hoping the severe damage inflicted on the air defenses will discourage Tehran from striking back.

“It looks like [Israel] didn’t hit anything other than military targets,” Biden told reporters Saturday. “I hope that this is the end.”

--At least 60 people were killed in Israeli attacks on Lebanon’s eastern Bekaa Valley on Monday, the Lebanese health ministry said.  The IDF targeted 16 areas in the Baalbek region, which I know from my travels, but understand it is a Hezbollah stronghold.

The number of strikes across Lebanon over the past five+ weeks, targeting Hezbollah operatives, infrastructure and weapons, is in the thousands.

Baalbek governor Bachie Khodr called the attacks the “most violent” in the area since Israel escalated the conflict against Hezbollah last month.

Local authorities told the BBC that the air strikes were like a “ring of fire.”

“It was a very violent night,” said the head of Baalbek’s Civil Defense crews.  “It was like a ring of fire has suddenly surrounded the area.”

Earlier on Monday, Israeli air strikes on the coastal city of Tyre left seven dead and 17 injured, Lebanon’s health ministry said.  Israel issued a warning for people to leave the center of the city.

Hezbollah said it clashed with Israeli troops near Lebanon’s southern border on Monday.

And over the weekend, two Israeli strikes killed eight people in Sidon city in southern Lebanon, with 25 wounded.

The IDF said four soldiers were killed in fighting in southern Lebanon, without providing details.  Five others were severely wounded. An explosive drone fired from Lebanon wounded five people in Israel.

Wednesday, in the Baalbek region, Israeli strikes killed 19 people, in and around the city, five of 20 strikes inside Baalbek itself. 

The IDF said it struck Hezbollah command-and-control centers and infrastructure and targeted Hezbollah fuel depots.

Thursday, rocket barrages from Lebanon into northern Israel killed four foreign workers and three Israelis, the deadliest cross-border strikes in Israel since it invaded Lebanon.  Israel kept up airstrikes it says targeted Hezbollah militants across Lebanon, where health authorities on Thursday reported 24 people killed.

The four foreign workers killed in Israel were Thai workers in an agricultural area, along with an Israeli farmer.  The other two Israelis were killed in a strike on a Haifa suburb.

The Lebanese health ministry says more than 2,700 people have been killed and more than 12,400 wounded over the past year.  [The ministry doesn’t break out how many were Hezbollah fighters.] The government says up to 1.3 million people have now been internally displaced as a result of the conflict.

--Hezbollah announced that Naim Qasem will become its new leader, replacing Hassan Nasrallah, who was assassinated just over a month ago.  Qasem was previously Hezbollah’s deputy chief.  It was last week that Hezbollah confirmed the death in an Israeli airstrike of Hashem Safieddine, a cousin of Nasrallah who was widely viewed as the longstanding leader’s most likely successor.

Qassem said he would follow the agenda of his predecessor and continue its war plan against Israel and that Hezbollah would not “cry out” for a ceasefire.

But Lebanon’s prime minister expressed hope that a ceasefire deal with Israel would be announced within days as Israel’s public broadcaster published what it said was a draft agreement providing for an initial 60-day truce.

--Gaza cease-fire talks held in Qatar last weekend appeared to go nowhere.  Israeli strikes continued all over the territory, scores dead, while in Tel Aviv at a bus stop, a truck rammed into it, killing one person and wounding more than 30.  Israel police said the attacker was an Arab citizen of Israel.  The ramming occurred near the headquarters of Israel’s Mossad spy agency.

Tuesday, an Israeli strike on northern Gaza killed at least 60 people. Earlier, Israel’s parliament voted to ban UNRWA, the UN’s aid agency for Palestinians, from operating inside the country, alleging Hamas militants have infiltrated its staff.  The Strip is in desperate need of aid.  The U.S. urged Israel not to pass the law and several countries have since condemned the move.  The death toll then rose to 93 people dead or missing after the strike on the town of Beit Lahia, the United States calling it “horrifying.”

The IDF said it was “aware of reports that civilians were harmed today in the Beit Lahia area,” adding the details of the incident were being looked into.

[It seems the IDF intended to hit the building, but didn’t plan on it collapsing, which is how many of the deaths occurred.]

--Editorial / Wall Street Journal

“Israel retaliated against Iran on Saturday in what looks like an effective if limited strike. The Iranian regime is more vulnerable than the world and Biden Administration have thought, if Israel and the U.S. are willing to press the advantage....

“Prime Minster Netanyahu thanked the U.S. for its support. But Israel’s target selection suggests Mr. Netanyahu understands this is a window of vulnerability for Iran, even if he may have judged that 10 days before a U.S. election isn’t the time to risk a broader conflict.

“First, Israel took out air defenses in Syria and Iraq, clearing the way to Iran. Second, Israel attacked Iran’s air defenses, allowing it to operate unchallenged.  This includes the Russian S-300 batteries protecting Tehran and the systems protecting critical oil refineries, a large gas field and a major port.  Iran’s oil economy is now defenseless.  Third, Israel struck key nodes in Iran’s ballistic-missile production and hit a military target in Parchin, where Iran has worked on nuclear weaponization.

“Israel operated for hours, striking 20 targets 1,000 miles from home with more than 100 aircraft, and it says without losing a plane.  Iran has produced no evidence to the contrary and its air defenses won’t easily be replaced....

“Israel has demonstrated to the region and Iran’s citizens that Iran’s homeland is vulnerable.  Israel now has proof of concept for a more complex operation, which it has made simpler for next time.

“Iran’s leaders seem to recognize this, as they reacted with caution to the strikes....

“Perhaps the limited strikes will avoid escalation for now... But Israelis know there is now an opening to set back Iran’s nuclear program, perhaps for years.  If Iran gets the bomb, this moment will look like a missed opportunity.  Mr. Biden in particular will bear responsibility.

“The President hopes this Israeli strike is the end, but it could be the beginning.  By devastating Hamas and Hezbollah, Israel has created a new regional reality.

“Now stripped of its air defenses, Iran is playing with an empty net.  The region awaits a U.S. Administration awake to the possibilities.”

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Russia-Ukraine

--Ukraine is planning to draft another 160,000 troops into its military as Russia gains ground in the east.

Russian has been advancing in the eastern Donetsk region and on Tuesday said it had fully captured the mining town of Selydove, as it focuses on the critical strategic hub of Pokrovsk, just 10 miles away.

This came amid reports that a number of North Korean troops have been deployed to Russia.

Ukraine’s military has been under severe pressure of late, in part due to Russia’s greater manpower and deeper resources.

The AFP news agency reports the recruitment will take place over three months.  Literally, officials are scouring the nightclubs, looking for recruits.

The latest mobilization comes after Ukraine’s parliament passed legislation in April to help mobilize troops to fight invading Russian forces.

The law requires every man aged between 25 and 60 to log their details on an electronic database so they can be called up.  Those who don’t want to serve are being pushed into hiding.

But the announcement comes as Ukraine continues to commit personnel for its incursion in the Kursk region of Russia, which started in August. The hope then was that Russia would divert troops from the eastern front to confront the Ukrainians in Kursk, but that hasn’t really happened.  Instead, Russia committed 50,000 troops from its reserves to defend the region.

Now, the Washington-based Institute for the Study of War, estimates, through satellite imagery, that Russia has retaken up to half of the territory in Kursk that Ukraine initially took.

President Putin has asserted that pockets of Ukrainian forces in Kursk are encircled, a statement sharply contested by Oleksandr Syrsky, commander of Ukraine’s armed forces.

“Despite the immense pressure from the enemy on this front, the occupiers are suffering significant losses in personnel and military equipment.”

The Economist, though, had this assessment:

“It has been a rough month for Ukraine.  In October the Russian army captured more Ukrainian territory than in any other single month since the summer of 2022, according to calculations by the Black Bird Group, which tracks the war.  Ukraine has also lost more than half the territory it took in the Russian province of Kursk in August.

“The problem is not just territory.  Russia is taking heavy casualties – 57,000 dead in the year to October, according to Ukrainian military intelligence – but it is replenishing them, with 30,000 recruits a month.  Ukraine, by contrast, is struggling to fill out units depleted by heavy Russian drone and glide-bomb attacks.  The concern is that Ukraine could crack sooner than Russia.  America and its allies once hoped that Ukrainian counter-offensives would force the Kremlin to the negotiating table.  Now they talk in starker terms, of how to ensure that Ukraine simply survives.”

--Back to the issue of North Korean troops, the Pentagon estimates around 10,000 have been deployed to train in eastern Russia, with the U.S. believing at week’s end that as many as 8,000 could already be in Kursk today.  A couple thousand more are heading there.

South Korea claims the troops are being trained in various locations, with many wearing Russian uniforms in order to disguise themselves. 

--President Biden said Ukraine should strike North Korean troops if they enter the country to fight alongside Russia.

NATO Secretary General Mark Rutte said troops had already been deployed in Kursk.  Their presence indicates a “dangerous expansion” in the war in Ukraine and a “significant escalation” in North Korea’s involvement in it. It also violates UN Security Council resolutions, he said.

“NATO calls on Russia and the DPRK to cease these actions immediately,” he said in a statement, using the official name of the Democratic People’s Republic of Korea. “The deepening military cooperation between Russia and North Korea is a threat to both the Indo-Pacific and Euro-Atlantic security.”

--Ukrainian officials claim “North Korean shells are poor quality and do not hit their targets or explode at the right time” around the Kharkiv front, where an estimated 60 percent of the artillery ammunition used is from North Korea.

--The Washington Post reported last weekend (confirmed in a report on “60 Minutes” Sunday night) that “Russia can afford to fund its war in Ukraine for several more years...because of massive oil revenue and Western sanctions failures.”

--The Wall Street Journal reported: “Several times over the past three months, swarms of as many as 150 Ukrainian drones flew hundreds of miles into Russia, slamming into missile storage facilities, strategic fuel reservoirs, military airfields and defense plants.

“Once considered exceptional, these deep strikes now barely register in the news.  Yet, Ukrainian officials and some of their Western backers increasingly see the pain that long-range attacks inflict as a game-changer that could force President Putin into negotiating an acceptable peace.”

--Russia’s military says it “practiced launching a massive nuclear strike in response to a nuclear strike by a simulated enemy” on Tuesday.  As part of the drills, the Russians launched a Yars intercontinental ballistic missile from a base near Alaska, submarine-launched ballistic missiles northeast of Norway and north of Japan, and dispatched Tu-95 strategic bombers firing air-launched cruise missiles.

The nuclear tests are “a reliable guarantor of the sovereignty and security of our country” and “solve the problems of strategic deterrence, as well as maintain nuclear parity and the balance of power in the world as objective factors of global stability,” Vladimir Putin said in a statement.

--President Zelensky rejected a visit to Ukraine by UN Secretary General Antonio Guterres over his trip to Russia.

After attending a BRICS summit in the Russia city of Kazan last week, Guterres had wanted to visit Kyiv.

“The president did not confirm his visit,” a source told the BBC.  “After Kazan and after he shook hands with the war’s instigator and spent UN Day on the territory of the aggressor country, it would be somehow strange to host him here.”

During his visit, Guterres called for a “just peace” in Ukraine and reiterated his position to Putin that Russia’s invasion of the country was in “violation of the United Nations Charter and international law.”

In a statement ahead of Guterres’ visit to Kazan, the Ukrainian foreign ministry said: “This is a wrong choice that does not advance the cause of peace.  It only damages the UN’s reputation.”

“The UN secretary general declined Ukraine’s invitation to the first Global Peace Summit in Switzerland.  He did, however, accept the invitation to Kazan from war criminal Putin,” the statement added.

--Lastly, for now, you have the U.S. presidential election, and the differences in support for Ukraine between Vice President Kamala Harris and former president Donald Trump.

Trump wants to cut aid to Ukraine, if not eliminate it altogether (though in his first term, Trump also approved the sale of lethal weapons to Ukraine, something President Obama fell short of doing), while Harris would likely carry on President Biden’s policy of support, albeit with the strict limits on Ukraine’s ability to strike deep inside Russian territory that have frustrated Kyiv’s leaders.

Throughout the war, Kyiv has been captive to American politics that often undermined its battlefield potential.

Ukraine lost territory and manpower as weapons stocks dwindled during the six months it took the U.S. Congress to pass an aid package, and then promised military assistance has failed to arrive on time or in sufficient quantities.

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Wall Street and the Economy

We had a slew of data the Federal Reserve’s Open Market Committee will be reviewing closely ahead of their meeting next week, where it is still expected the Fed will lower its benchmark funds rate another 25 basis points, even if the economy is doing just fine and the inflation data, while not at the Fed’s 2% target on the most important metric, isn’t spiking back up.

Starting with the first look at GDP for the third quarter, the White House (and Kamala Harris) got what they wanted...2.8%.  This was Wednesday.  Tuesday, the Atlanta Fed offered its last estimate for Q3 in its GDPNow barometer and it was...2.8%.  Job well done, guys.

The Biden administration can point to a good streak of growth.

Annualized GDP....

Q3 2024...2.8
Q2 2024...3.0
Q1 2024...1.6
Q4 2023...3.2
Q3 2023...4.4
Q2 2023...2.4
Q1 2023...2.8

On the inflation front, we had the personal consumption expenditures index for September, and it was basically in line with expectations.  Headline: 0.2%, 2.1% last 12 months. Core (ex-food and energy) 0.3%, 2.7%...this last one the key figure for the Fed, a tick higher than forecast.

Separately, the PCE report had September personal income rising 0.3%, and consumption a strong 0.5%.

Well, this set up Friday’s jobs report for October, and the number, just 12,000 vs. consensus of 125,000 (Econoday) was clearly impacted by Hurricanes Helene and Milton, which put thousands out of work across the Southeast, while the Boeing strike took more people off the job.  So the downturn from a revised September figure of 223,000, is likely temporary.  The unemployment rate was 4.1%, unchanged.  Average hourly earnings were up 0.4%, 4.0% year-over-year, in line with expectations.

In other economic news...the ISM manufacturing reading for October was 48.5, a little better than the prior 47.3 number, but below the key 50 line...the difference between growth and contraction.

The Chicago PMI, closely watched, was a putrid 41.6, much worse than consensus of 47.3, and 46.6 prior.

The Case-Shiller home price 20-city index for August rose 0.4%, and 5.2% from a year ago, down from 5.9% prior.

The Atlanta Fed’s first look at fourth quarter growth is 2.3%.

Freddie Mac’s 30-year fixed-rate mortgage is up to 6.72%, from 6.08% on Sept. 26.

Editorial / Wall Street Journal

“The U.S. economy is a remarkable growth machine, and the latest evidence is Wednesday’s Commerce Department report showing GDP grew at a solid 2.8% during the third quarter.

“It’s both good and bad news that consumers and defense spending drove most of the third-quarter growth.  Consumer spending contributed 2.46 percentage points to GDP while defense added 0.51.  Defense investment declined in 2021 and 2022, so the recent boost is especially welcome in an increasingly dangerous world.  Consumers remain in the saddle despite higher interest rates and inflation that have eroded wage gains. Rising asset values seem to be buoying spending by higher earners.

“The big disappointment was business investment, which chipped in only 0.46 points to growth...Most of that came from equipment. Spending on research and development has been flat in the past two quarters.  R&D is usually what businesses cut first to pare costs.

“One culprit could be a decline in R&D by pharmaceutical companies. We reported in the summer that the Inflation Reduction Act’s drug-price controls were causing enormous industry uncertainty and reductions to R&D.  Uncertainty related to the election could also be causing some businesses to hold investment....

“It’s a testament to the U.S. economy’s resilience that it continues to chug along despite the Biden Administration’s regulatory burdens and higher interest rates.  Artificial intelligence and other innovations have lifted investment, and the U.S. remains a more attractive place to invest than nearly anywhere else in the world.

“But it’s also true that monetary conditions aren’t all that tight judging by the surge in prices for Bitcoin, commodities and equities, as well as shrinking junk-bond spreads.  Life has been good if you own assets, but much less so if you rely on shrinking real wages to pay for groceries and gas. Americans still need the Federal Reserve to reduce and contain inflation.”

Europe and Asia

We had a flash reading on third-quarter GDP for the euro area and it was better than expected, 0.4%, compared with the previous quarter, 0.2%.  Compared with Q3 of 2023, seasonally adjusted GDP increased by 0.9%. [Eurostat]

Q3 2024 vs. Q3 2023

Germany -0.2%, France 1.3%, Italy 0.4%, Spain 3.4%.

A flash reading on October inflation for the EA20 is at 2.0%, up from 1.7% in September, according to Eurostat.  Ex-food and energy it came in at 2.7%, unchanged from the prior month.

Flash headline numbers....

Germany 2.4%, France 1.5%, Italy 1.0%, Spain 1.8%, Netherlands 3.3%.

The September unemployment rate in the eurozone was 6.3%, down from 6.6% a year ago, according to Eurostat.

Germany 3.5%, France 7.6%, Italy 6.1%, Spain 11.2%, Netherlands 3.7%, Ireland 4.3%.

For some reason the bulk of the PMI data on manufacturing for October in the EA20 isn’t being released until Monday, so I’ll put it all together next week.

Turning to Asia...China’s National Bureau of Statistics released its October PMI data, with manufacturing at 50.1, and the service sector reading 50.2.  Caixin’s private manufacturing PMI was 50.3.  None of this is exciting...as in not exactly harbingers of a strong recovery.

Meanwhile, a trade war between China and the European Union was set to intensify after Beijing said it had lodged a complaint with the World Trade Organization following a move by the European Union to hike tariffs on Chinese-made vehicles.

China’s commerce ministry on Wednesday said in a statement that it “does not agree with or accept” the EU’s decision to proceed with extra duties on the EVs after the conclusion of an anti-subsidy probe that began last year.

A final ruling published by the European Commission on Tuesday stated that a top rate of 35.3 percent would be applied to EVs from Chinese state-owned company SAIC Motor and its subsidiaries, in addition to a baseline 10 percent duty that applies to all EV imports.

But in reality, despite calls by EU political leaders to “de-risk” economic ties with China, EU businesses’ greenfield investments – the creation of a new company or establishment of new facilities – surged to record levels in the second quarter of 2024, led by German carmakers, according to Rhodium Group consultancy, some $3.9 billion worth.  Germany’s Volkswagen, BMW and chemicals giant BASF were the biggest corporate investors, along with Sweden’s Ingka Group (i.e., Ikea) and Dutch tech company STMicroelectronics.

Japan’s October manufacturing PMI was 49.2.

Meanwhile, September retail sales rose 0.5% year-over-year, while industrial production fell 2.8% Y/Y.  The September unemployment rate was 2.4%.

Separately, the coalition led by Japan’s ruling Liberal Democratic Party (LDP) has lost its majority in parliament, its worst result in over a decade, after last weekend’s parliamentary elections.

The LDP and its much smaller coalition partner Komeito, took 215 seats together, falling short of the 233-seat majority needed to govern.  The party’s new leader Shigeru Ishiba said there are no plans to expand the coalition at this stage.

Ishiba, who called the election just days before he was sworn in as prime minister, has vowed to stay in office despite the LDP’s loss of a majority.

In a speech on Monday, he said the party has received “severe judgement,” adding they would “humbly” accept this.

“Voters have handed us a harsh verdict and we have to humbly accept this result,” Ishiba told the national broadcaster NHK.

This is the first time the LDP lost its parliamentary majority since 2009.  Since its founding in 1955, the party has ruled the country almost continuously.

But the LDP has suffered from a “cascade” of scandals, widespread voter apathy and record-low approval ratings...like 20% earlier in the year.

“We need to answer to the people’s criticism. That is how I will take responsibility for the loss of the election,” Ishiba said.

The largest opposition party, the Constitutional Democratic Party (CDP), won 148 seats, but the opposition parties have failed to unite, or convince voters they are a viable option to govern. The CDP has just a 6.6% approval rating.  Yikes.

--South Korea’s October manufacturing PMI was 48.3, while Taiwan’s came in at 50.2.

Street Bytes

--This was the biggest earnings week for the reporting period, and the markets finished down a bit; traders with one eye on the earnings, which were mixed, and the other eye on next Tuesday.

The Dow Jones finished down 0.1% to 42052, while the S&P 500 lost 1.4%, and Nasdaq 1.5%, breaking its 7-week winning streak, though it did hit a new record closing high on Tuesday of 18712.

Next week it’s all about the Federal Reserve...and the Election.

--U.S. Treasury Yields

6-mo. 4.45%  2-yr. 4.21%  10-yr. 4.37%  30-yr. 4.56%

The yield on the 10-year spiked this afternoon to the highest weekly close since June, and frankly, I don’t know exactly why, seeing as the labor report, while distorted, won’t prevent the Fed from moving next week.  Sometimes you just have a single big seller that hits the market.

--Crude prices tumbled over 4% to $67 on West Texas Intermediate after Israel’s retaliatory strikes on Iran over the weekend avoided the country’s crude facilities and nuclear infrastructure, easing fears of disruption to energy supplies.  On the demand side, signs of weak economic activity in top consumer China continued to weigh on sentiment as well.  Prices stabilized some mid-week on an unexpected drawdown in U.S. stockpiles, and then we had renewed talk that Iran may respond in some fashion from perhaps Iraq, using its proxies there.

WTI finished the week at $69.48 [3:30 PM ET].

--Exxon Mobil on Friday beat Wall Street’s third quarter profit estimate, boosted by strong oil output in its first full quarter that includes volumes from U.S. shale producer Pioneer Natural Resources.

Oil industry earnings have been squeezed this year by slowing demand and weak margins on gasoline and diesel.  But Exxon’s year-over-year profit fell 5%, a much smaller drop than at rivals BP and TotalEnergies.

Exxon reported income of $8.61 billion, down from $9.07 billion a year ago.  It’s $1.92 per share profit topped Wall Street’s outlook of $1.88, on higher oil and gas production and spending constraints. Revenue came in at $90.02 billion, down about 1% compared to a year ago.

Exxon announced it is increasing its fourth-quarter dividend by 4%, after returning $9.8 billion to shareholders in Q3.

Exxon’s fast-growing oil developments in Guyana and the Permian Basin are producing crude for less than $35 a barrel at a time when oil is at $70.  It’s now the biggest producer in the Permian region after its $60bn acquisition of Pioneer.

--Chevron Corp. reported third-quarter earnings of $4.49 billion Friday.  The San Ramon, California-based company said it had net income of $2.48 per share.  Adjusted earnings came to $2.51 per share, topping consensus of $2.47.

Chevron posted revenue of $50.67 in the period, also exceeding Street forecasts, but down 6% from the prior year.

“We delivered strong financial and operational results, started up key projects in the U.S. Gulf of Mexico and returned record cash to shareholders this quarter,” said CEO Mike Wirth.

--Overseas, Shell reported third-quarter profits of $6 billion that exceeded forecasts by 12% as higher liquefied natural gas sales offset a sharp drop in oil refining and trading results.

The results, together with a drop in debt and strong cash flow, could lift investor confidence in CEO Wael Sawan’s efforts to boost the company’s performance by the end of 2025 as he focuses on the most profitable businesses, primarily in oil, gas and biofuels.

Shell, which operates five refineries, saw a near 70% annual drop in profits for its refining and chemicals division. But that was offset by a 13% rise in profits from its LNG division, the British company’s largest business.

French rival TotalEnergies reported third-quarter profits were at a three-year low of $4.1 billion, hit by collapsing refining margins and upstream outages, missing market forecasts.  BP on Tuesday reported a 30% drop in profits to $2.3 billion, the lowest in almost four years.

--Gold hit further record highs this week, boosted by demand for safe havens ahead of the election, but finished a little off last Friday’s close at $2745.

--Alphabet (Google) topped third-quarter revenue expectations on Tuesday, after the market closed, helped by steady growth in its digital advertising business and an AI-driven jump in demand for its cloud services.  Shares rose 5% Wednesday in response.

CEO Sunday Pichai said investments in AI were “paying off” through use and sales in its Search and Cloud businesses.

YouTube revenue surpassed $50 billion over the past four quarters, ($8.92bn for Q3).  Ad sales for the video streaming service rose 12% to $8.92 billion.

Digital advertising sales – the biggest chunk of Alphabet’s total revenue – rose to $65.85 billion from $59.65 billion.

Revenue from Google’s cloud platform grew to $11.35 billion, beating consensus of $10.86bn, and up 35% from the prior year.

Alphabet reported a profit of $2.12 per share vs. expectations of $1.85, $26.3 billion, a 34% increase from the year ago.

Revenue increased 15% to $88.27bn in the July-September period, with the Street at $86.30bn.

The profit would have been higher if Google wasn’t pouring so much money into building up its AI arsenal in a tech arms race that includes other industry heavyweights Microsoft, Amazon, Apple, Facebook parent Meta Platforms and rising star OpenAI.  The AI investments are the primary reason Google’s capital expenditures in the past quarter soared 62% from the same time last year to $13.1 billion.

But you do have the 4-year-old antitrust case brought by the Department of Justice that has cast a cloud of uncertainty over Google’s future.

U.S. District Judge Amit Mehta ruled Google’s search engine is an illegal monopoly and the DOJ has suggested it might seek to break up Google as part of penalties to be determined.  But these issues can go on for years more. And for now, “The momentum across the company is extraordinary,” CEO Pichai says.

--Microsoft reported first-quarter earnings on Wednesday that beat Wall Street estimates, but the stock was falling in late-hours trading after the company forecast higher expenses related to AI.

Microsoft posted first-quarter earnings of $3.30 per share on revenue of $65.6 billion.  Analysts had forecast earnings of $3.10 a share and revenue of $64.57 billion.  A year ago, Microsoft reported earnings of $2.99 on revenue of $56.5bn.

Azure and Microsoft’s other cloud services revenues grew 33% in the quarter, ahead of analyst estimates for 28.6% growth, and the company is expecting the business will rise 31% to 32% in the current period, but this is down from 35% in the second quarter.

The company reported capital expenditures of $14.92 billion, just ahead of the Street’s forecast of $14.74 billion, which is a jump from the $9.9 billion in the year-ago quarter.

“We are expanding our opportunity and winning new customers as we help them apply our AI platforms and tools to drive new growth and operating leverage,” CEO Satya Nadella said in the earnings release.

Investors have been keeping a close eye on how much money mega-cap tech companies are spending on their generative AI projects, while looking for signs of a return on those investments.

On the company’s conference call, though, CFO Amy Hood said that MSFT expects its second-quarter cloud gross margin percentage to be down from last year, “driven by the impact of scaling our AI infrastructure.”  She added that capex will increase “on a sequential basis given our cloud and AI demand signals.”

And it’s this capex outlook that worries investors and the shares ended up falling 5% on Thursday.

Separately, Microsoft has put about $13.75 billion into the ChatGPT maker, OpenAI, and is their largest shareholder.

--Meta Platforms reported better-than-expected earnings results on Wednesday but forecast rising infrastructure expenses next year, a la Microsoft, and the shares fell 3%.

The Facebook-parent reported third-quarter earnings per share of $6.03, compared to Wall Street’s consensus estimate of $5.22.  Revenue came in at $40.6 billion, also above expectations of $40.2 billion, and up 19% over the prior-year quarter.  Net profit was $15.69 billion for Q3, up about 35% from a year ago.

Meta guided current quarter sales to a range of $45 billion to $48 billion versus the $46.2 billion analysts’ estimate.  The company also updated its full-year 2024 capital expenditures guidance to a range of $38-$40 billion, from its prior range of $37-40 billion.

Meta continues to expect “significant capital expenditures growth in 2025,” adding it will have a “significant acceleration in infrastructure expense growth next year.”

“We had a good quarter driven by AI progress across our apps and business,” CEO Mark Zuckerberg said in the release.  “We also have strong momentum with Meta AI, Llama adoption, and AI-powered glasses.”

In July, Zuckerberg said the company has five years of product innovation ahead, based on just its current AI-model technology.

Wednesday, on the earnings call, Zuckerberg warned investors that Meta will continue to spend significantly on infrastructure and other projects like the Metaverse and AI-powered glasses, efforts he believes are core to the company’s future.  That will be supported by the ads business, which isn’t generating the kind of momentum Wall Street expected.

“We’re seeing AI have a positive impact on nearly all aspects of our work, from our core businesses to new services and computing platforms,” Zuckerberg.  “There are lots of opportunities to use new AI advances to accelerate our core business.”

Meta said its expenses for the year will be $96 billion to $98 billion.

Meta cautioned that losses from Reality Labs, its division focused on artificial intelligence and augmented reality, will continue to widen “meaningfully” this year, adding that the 2025 budget is still being finalized. Reality Labs reported a $4.4 billion operating loss in the quarter.

Overall, Meta forecast revenue in the current quarter will be between $45 billion and $48 billion, with analysts at $46bn.

Meta said it had 3.29 billion daily active people for its apps in the quarter, including for Facebook, Instagram, Messenger and WhatsApp, up 5% from a year earlier and less than 1% from June.

--Amazon.com stock rose 7% after the online retail giant reported third-quarter earnings that beat Wall Street estimates.

For its third quarter, Amazon posted earnings of $1.43 a share, above estimates for $1.14.  Revenue for the quarter of $158.9bn beat expectations of $157.3 billion.

Revenue for Amazon Web Services, the company’s cloud computing platform, increased 19% to $27.5bn.

Meanwhile, online stores revenue of $61.4 billion increased from last year’s $57.3 billion and was above consensus of $59.7 billion.  That was notable because online sales missed estimates last quarter. 

CEO Andy Jassy said in the news release on Thursday that the company “kicked off the holiday season with our biggest-ever Prime Big Deal Days and the launch of an all-new Kindle lineup that is significantly outperforming our expectations, and there’s so much more coming.”

Amazon also said on Thursday that he expects fourth-quarter net sales to be between $181.5 billion and $188.5 billion.  The Street is at $186.3bn.

Capital spending rose significantly in the quarter to $22.6 billion from $12.5 billion last year.  On the earnings call, management said the company expects to spend approximately $75 billion in capex in 2024.

“The majority of this spend is to support the growing need for technology infrastructure.”

--Apple’s AI-enhanced iPhone made a strong start, pushing quarterly sales ahead of Wall Street expectations, but a modest revenue forecast raised questions about whether that momentum will hold over the holiday sales season.

A decline in China sales during the fiscal fourth quarter also concerned some analysts and investors, as the shares fell, despite the surprisingly large overall profit and revenue in the period.

CFO Luca Maestri told analysts during a conference call that Apple expects overall revenue to “grow low- to mid-single digits” during its first quarter, which ends in December.  Analysts had expected revenue growth of 6.6% to $127.53 billion during the fiscal first quarter.

Apple said overall quarterly sales were a record $94.93 billion, ahead of the Street’s target of $94.58bn.  Earnings of $1.64 per share topped expectations of $1.60.

Sales of Apple’s iPhone, the company’s main product, were up 5.5% to $46.22 billion, compared with analyst estimates of $45.47 billion.  Other product lines missed expectations.

Apple’s fiscal fourth quarter ended Sept. 28, meaning it reflects only a few days of sales of its iPhone 16 series that went on sale Sept. 20.  CEO Tim Cook said in an interview that iPhone 16 sales grew faster than iPhone 15 sales did a year earlier in the same number of days.

The rollout of Apple’s artificial-intelligence strategy hinges on how well its new phones sell.

Rather than introduce AI in a standalone app or service, Apple has sprinkled Apple Intelligence throughout its most recent operating systems as new features.

Sales in Apple’s services business, which includes iCloud storage and Apple Music, were $24.97 billion, compared with a Street consensus of $25.28bn.  Mac and iPad sales were $7.74bn and $6.95bn, respectively, compared to estimates of $7.82bn and $7.09bn.

Sales in Apple’s home and wearables business, which includes Apple Watch and AirPods devices, fell to $9.04bn, compared with estimates of $9.2bn.

--Advanced Micro Devices Inc. reported a third-quarter profit of $771 million, net income of 47 cents per share, adjusted, 92 cents, the latter beating estimates of 91 cents by a penny.

The chipmaker posted revenue of $6.82 billion in the period, surpassing the Street’s expectation of $6.71bn.

For the current quarter, AMD said it expects revenue in the range of $7.2 billion to $7.8 billion, or a midpoint of $7.5bn and analysts are at $7.54bn.

So the shares were taken down 9%, fair or not, as supply chain constraints hamper its ability to meet strong demand for AI chips, while the PC market grows more slowly than some investors expected.

Capacity for the production of AI chips will be very tight going into 2025, the world’s largest contract chip manufacturer TSMC said in July, marking a significant hurdle for the supply of these advanced semiconductors.

--Boeing Co. raised around $21 billion in an expanded share sale, one of the largest ever by a public company, shoring up its balance sheet as it seeks to stave off a potential credit rating downgrade to junk.

The U.S. planemaker sold 112.5 million common shares for $143 each, according to a statement, about a 7.7% discount to last Friday’s closing price of $155.  Boeing also sold $5 billion of depositary shares.

Meanwhile, Boeing is exploring a sale of its storied NASA business, including the troubled Starliner space vehicle and operations that support the International Space Station.

The effort, part of new CEO Kelly Ortberg’s strategy to streamline the company and stem its financial losses, is at an early stage and might not result in a deal.

Boeing faces a true crisis.  Its largest labor union has rejected two contract proposals and extended a strike that has halted most of its airplane production.  And Boeing’s space and defense projects have been plagued by delays and cost overruns.

For decades, the company has worked hand-in-glove with NASA programs, including the Apollo astronaut missions and creating the space station.  In recent years, SpaceX has supplanted Boeing’s role as a top agency partner.  And you have the Starliner, with two astronauts needing to wait for months to get a ride back from the ISS on a SpaceX craft.

Boeing is expected to keep its commercial and military satellite businesses and position overseeing the Space Launch System, the SLS a huge rocket NASA is paying the company to build to start future lunar-exploration missions.

But we learned Thursday evening that Boeing and union leaders representing the 33,000 striking workers reached (another) tentative agreement to end the labor dispute.

The company’s latest proposal would boost wages by 38% over four years and give workers a $12,000 signing bonus if it’s approved, the International Association of Machinists and Aerospace Workers said in a statement.

The union urged its members to accept the offer and end the strike, warning they risked losing gains they’ve made after weeks of collective bargaining.  The union plans to hold a vote on the proposal on Nov. 4.

--TSA checkpoint numbers vs. 2023

10/31...89 percent of 2023 levels...Booo!
10/30...100
10/29...117...deceiving, low actual number
10/28...112
10/27...111
10/26...106
10/25...105
10/24...104

--Ford Motor shares fell 8% after the company reported earnings that matched expectations, but the guidance wasn’t good.

The automaker announced a third-quarter operating profit of $2.6 billion from sales of $46.2 billion.  Wall Street was looking for an operating profit of $2.6bn from sales of $45bn.

Ford updated its full-year operating profit guidance to about $10 billion. The range Ford provided in July was between $10 billion and $12 billion.  But the new guidance implies fourth-quarter operating profit of about $1.9bn and the Street was at $2.5bn.

“We have made strategic decisions and taken the tough actions to create advantages for Ford versus the competition in key areas like Ford Pro, international operations, software, and next-generation electric vehicles,” said CEO Jim Farley.  “Importantly, over time, we have significant financial upside as we bend the curve on cost and quality, a key focus of our team.”

One of the tough decisions was taking a $1 billion charge to write down some EV-related manufacturing assets.

Ford’s EV business lost $1.2 billion in the third quarter on sales of about 32,000 vehicles.  It lost $1.1 billion in the second quarter from sales of about 26,000 cars.

Ford’s traditional car business generated an operating profit of $1.6bn, up from $1.2bn generated in the second quarter.

CFO John Lawler said warranty costs, supplier issues, and foreign exchange were all headwinds in the quarter.

Back in the second quarter, Ford also disappointed, missing the Street’s profit forecasts by a wide margin.  When it reported Q2, the shares dropped 18%, the worst one-day drop since 2008.

--Volkswagen plans to shut at least three factories in Germany, lay off tens of thousands of staff and shrink its remaining plants in Europe’s biggest economy as it plots a deeper-than-expected overhaul, the company’s works council head said on Monday.

Europe’s biggest carmaker has been negotiating for weeks with unions over plans to revamp its business and cut costs, including considering plant closures on home soil for the first time, in a blow to Germany’s industrial prowess.

VW reiterated on Monday that restructuring was needed and said it would make concrete proposals on Wednesday.

“Management is absolutely serious about all this.  This is not saber-rattling in the collective bargaining round,” Daniela Cavallo, Volkswagen’s works council head, told employees at the carmaker’s biggest plant, in Wolfsburg, threatening to break off talks.

“This is the plan of Germany’s largest industrial group to start the sell-off in its home country of Germany,” Cavallo added, not specifying which plants would be affected or how many of Volkswagen Group’s roughly 300,000 staff in Germany could be laid off.

Volkswagen also plans to cut salaries by at least 10% and freeze pay in both 2025 and 2026, according to Cavallo.

Wolfsburg is where the company has been headquartered for nearly nine decades.

--Caterpillar said on Wednesday it expects full-year revenue to be slightly lower from its prior forecast as higher borrowing costs and sticky inflation led to a slowdown in machinery demand, sending the company’s shares down 3%.

The company has reaped benefits from President Biden’s 2021 infrastructure law, a $1 trillion enactment aimed at upgrading roads, bridges and other transport infrastructure.

But the initial boom in demand from government infrastructure projects has slowed down.

Concerns about persistent inflation and declining farm incomes have resulted in U.S. machinery makers moderating product stocking as dealers try to cut inventory levels, while rising manufacturing costs have also dented profits.

The company, however, maintained its adjusted operating profit margin and adjusted profit per share expectations for the full year, as price hikes offset some impact from a sales slowdown.

CAT’s adjusted profit per share for the quarter decreased to $5.17 and missed average analyst estimate of $5.34 per share.

Total sales fell 4% to $16.11 billion, slightly beating the Street’s forecast of $16.08 billion.

--Intel stock rose after the chip maker gave a better-than-expected earnings forecast for the December quarter. But CEO Pat Gelsinger said in an interview that the chip maker won’t hit the company’s prior forecast for AI-related chip revenue, and he expressed frustration in delays in U.S. government funding for the Chips Act.

For the third quarter, Intel reported an adjusted earnings per share loss of 46 cents, compared with Wall Street’s consensus estimate for a 2 cent loss.  But revenue came in at $13.3 billion, above consensus of $13.02 billion.

Guidance was solid.  Intel provided a revenue forecast range of $13.3 billion to $14.3 billion for the current quarter, vs. consensus of $13.66 billion.  The company projects adjusted EPS of 12 cents for the December quarter, compared with a Street estimate of 6 cents.

But orders for Intel’s AI accelerator chip, Gaudi, have been weaker than projected and they won’t now reach the company’s $500 million revenue target this year, Gelsinger said on the earnings call.  [By contrast, AMD increased its forecast for a similar product to $5 billion, while Nvidia is on course to have revenue of more than $100 billion from its AI chip unit this year.]

Intel updated its headcount reduction to 16,500, as it slashes spending and suspends investor payouts.

--Eli Lilly & Co. has been a Wall Street darling this year, the shares up 50%, that is until Wednesday, when the company lowered its full-year guidance after sales of its blockbuster weight-loss drug fell short of expectations, which the company blamed on inventory issues.

The Indianapolis-based drugmaker now expects full-year sales of $45.4 to $46 billion, lowering the top end of earlier guidance from $46.6 billion.  Lilly had raised its full-year guidance twice this year.

Adjusted earnings were $1.18 a share in the third quarter, missing estimates of $1.51 a share, and the shares fell 8%.

Zepbound sales were $1.26 billion in the quarter, Lilly said in a statement, shy of the $1.63bn expected by analysts. Revenue from all products was $11.4bn, short of the Street’s $12.2 billion.

Lilly said wholesalers had higher inventory of Zepbound and Mounjaro in the last quarter, which dragged on sales.

Obesity is one of the largest and fastest-growing areas for the pharmaceutical industry, and analysts estimate the market for weight-loss treatments will reach $130 billion by 2030.  Lilly’s success in the category has made it the most valuable drug company in the world.

It competes with Danish rival Novo Nordisk A/S, the maker of Ozempic and Wegovy.  Both have struggled to produce enough shots to satisfy what seems to be an ever-growing market, and both have invested billions to boost manufacturing capacity.

In Lilly’s case, it maintains its not losing sales to copycat weight-loss drug versions sold by telehealth firms.

--With Bristol-Myers Squibb across the street from moi, I always take interest in their earnings, and Thursday they reported better than expected EPS and revenue than expected for the third quarter; adjusted earnings coming in at $1.80 a share on revenue of $11.9 billion, topping estimates of $1.49 and $11.3bn.

Revenue increased 8% compared with the same period last year, largely driven by established blood thinner Eliquis, but partially offset by generic erosion of cancer drug Sprycel due to the loss of exclusivity, BMY said.

The shares rose 3% in response, as employees walking across the street to my Dunkin’ Donuts appeared to have a bounce in their steps.

--McDonald’s announced on Sunday that tests in Colorado had ruled out its Quarter Pounder beef patties as the source of a deadly E. coli outbreak and said it would be back on the menu at thousands of locations in a dozen states.

But in 900 locations, Quarter Pounders would not be topped with raw slivered onions – which regulators have identified as the likely culprit in the outbreak.

Colorado’s Agriculture Department tested “dozens of subsamples...and all samples were found to be negative for E. coli,” the state having the most cases.

The onions were from the Colorado Springs site of its major regional supplier Taylor Farms, a multistate producer of vegetables and fruits.

On the earnings front, McDonald’s beat expectations for the third quarter.  On Tuesday morning, the company posted revenue of $6.87 billion, up 3% year over year and higher than the $6.81bn the Street expected.  Adjusted earnings grew 1% to $3.23 a share, compared with estimates of $3.20.

“Value and affordability will remain at the forefront of our conversations with markets around the world as we continue to monitor the environment and listen to our customers,” CEO Chris Kempczinski said on the earnings call.

He acknowledged that quick-service restaurants were under pressure in Q3 with “industry traffic declines” in several of its markets, led by low-income customers eating at home more.  The company is trying to improve its value proposition with “urgency,” he said.

Same-store sales grew 0.3% in the U.S., partially driven by a $5 meal deal bundle.  CFO Ian Borden said the deal drew in customers, maintained an average check north of $10, and was profitable for franchisees.  McDonald’s plans to introduce a more holistic U.S. value menu in Q1 of 2025, taking key lessons from the $5 deal.

The launch of limited-edition collector’s cups also increased spending during a two-week run before selling out. But McDonald’s U.S. same-store sales decreased 0.7% in the second quarter, the first decline in U.S. same-store sales in 16 quarters.

The international markets segment was a drag on Q3 results, with same-store sales down 1.5% year over year.  Franchised operations reported sales decreases of 3.5% due to the negative trends in China and the ongoing impact of the war in the Middle East.

International-owned operations saw a 2.1% drop in same-store sales, with sales declines across a number of markets, primarily in France and the UK.

--Super Micro Computer stock cratered Wednesday morning, falling over 30% after a filing revealed accounting firm Ernst & Young has resigned from its relationship with the tech company.

In the resignation letter, EY said: “We are resigning  due to information that has recently come to our attention which has led to us to no longer be able to rely on management’s and the Audit Committee’s representatives and to be unwilling to be associated with the financial statements prepared by management, and after concluding we can no longer provide the Audit Services in accordance with applicable law or professional obligations.”

EY quit while conducting the audit for Super Micro’s fiscal year that ended on June 30, 2024, in Wednesday’s 8-K SEC filing.  Super Micro said in a statement that it “disagrees” with EY’s decision and is “working diligently to select new auditors.”

Super Micro said it didn’t expect EY’s action “will result in any restatements of its quarterly financial results for the fiscal year ended June 30, 2024, or for prior fiscal years.”

The company reports fiscal first quarter earnings next Tuesday, Nov. 5.

--Elon Musk’s xAI is in talks with investors for a funding round that would value it around $40 billion, according to reports, escalating the tech industry’s race to build advance generative AI technology.

The startup was last valued at $24 billion just a few months ago, when it raised $6 billion in the spring.

OpenAI raised $6.6 billion at a $157 billion valuation.  Perplexity, an AI search startup, is in talks to raise new funding that would double its valuation to $8 billion.

They are competing not just with each other, but with huge public companies – like Google parent Alphabet and Meta Platforms – that are pouring profits from their existing businesses into AI.

XAI has built what it says is the world’s largest data center in Memphis, Tenn., where it is training new versions of Grok, its AI models.

--Norwegian Cruise Line Holdings on Thursday raised its annual profit forecast for a fourth time this year, encouraged by record third-quarter revenue and advance ticket sales.

Cruise operators marked robust demand this quarter for their vacation experiences as consumer spending in the U.S. increased at its fastest pace in 1 ½ years and inflation slowed sharply.

Norwegian Cruise’s quarterly revenue increased 11% year-over-year to a record $2.81 billion.

The Oceania Cruises operator said its advance ticket sales balance ended the third quarter at $3.3 billion, a quarterly record high and about 6% higher than the same period in 2023.

It now expects an adjusted profit of $1.65 per share for fiscal 2024, compared with a prior forecast of $1.53.

Rival Royal Caribbean also lifted its annual profit forecast on Tuesday for the fourth time this year, benefiting from robust demand.

--Shares in Trump Media & Technology Group (Truth Social) have been booming since plunging to record lows last month.  The comeback has added billions in paper wealth for Trump, who owns nearly 57% of the company.

The reason for the rally is investors are betting on Trump retaking the White House, but also the stock is rife with short-term speculators.

So the stock closed at $51 on Tuesday, up from a closing low of $12 on Sept. 26, and then $31 today!  Goodness gracious.  [See paragraph above.]

Foreign Affairs, Part II

North Korea: South Korea’s military said Wednesday the North was on the brink of conducting its seventh nuclear weapons test, though it’s unclear if it will occur before or after Election Day in the U.S.

“It appears that preparations are nearly compete for an ICBM-class long-range missile, including a space launch vehicle,” South Korea’s Defense Intelligence Agency said, according to Yonhap.  “Preparations for a transporter erector launcher are complete, and it has been deployed to a certain area,” but no missile has been loaded yet, two lawmakers said.

Well, less than 12 hours after this announcement, North Korea test-fired an intercontinental ballistic missile for the first time in almost a year, Thursday, demonstrating a potential advancement in its ability to launch long-range nuclear attacks on the mainland U.S.

The launch was clearly meant to grab American attention ahead of the election and respond to condemnation over the North’s troop dispatch to Russia to support its war against Ukraine.  Some experts speculated Russia might have provided technological assistance to Pyongyang over the launch.

Kim Jong Un observed the launch, calling it “an appropriate military action” to show North Korea’s resolve to respond to its enemies’ moves that have threatened the North’s safety, according to state media.

Kim said the enemies’ “various adventuristic military maneuvers” highlighted the importance of North Korea’s nuclear capability. He reaffirmed that the North will never abandon its policy of bolstering its nuclear forces.

South Korea’s Joint Chiefs of Staff said Pyongyang could have tested a new, solid-fueled long-range ballistic missile on a steep angle, an attempt to avoid neighboring countries.  Missiles with built-in solid propellants are easier to move and hide and can be launched quicker than liquid-propellant weapons.

Japanese Defense Minister Gen. Nakatani told reporters the missile’s flight duration of 86 minutes and its maximum altitude of more than 7,000 kilometers (4,350 miles) exceeded corresponding data from previous North Korean missile tests.  It eventually landed in the Sea of Japan, about 1,000km from its launch point near Pyongyang.  Officials in Seoul reported the identical distance estimates, and said the 86-minute flight was also a new record.

Jung Chang Wook, head of the Korea Defense Study Forum think tank in Seoul, said it’s fair to say the missile could carry North Korea’s biggest and most destructive warhead.

While North Korea has made strides in its missile technology, many experts question if the country has yet to acquire a functioning nuclear-armed missile that can strike the U.S. mainland.  But the North likely has short-range missiles that can deliver nuclear strikes across all of South Korea.

South Korea: As South Korea reportedly contemplates sending military observers to Ukraine because of the presence of North Korean troops in Russia, a political reckoning is brewing back in Seoul. Critics accuse the conservative government of using the conflict to sidestep mounting domestic challenges, raising questions about the implications of such a move on national security and public trust.

At a press briefing on Monday, a defense ministry spokesman refrained from confirming the deployment, reported by Yonhap, stating only: “The government will carry out necessary studies and measures.”

South Korea’s National Intelligence Service has similarly declined to comment on unconfirmed reports that it might dispatch agents to Ukraine for the interrogation of North Korean prisoners of war.

Georgia: The ruling Georgian Dream party of billionaire businessman Bidzina Ivanishvili claimed outright victory in Saturday’s parliamentary elections and the central election commission said it had won 54% of the vote based on more than 99% of districts counted. Election-monitoring groups reported wide-scale violations of electoral law.

The results were dramatically different from exit polls conducted by Western pollsters.

Salome Zourabichvili, Georgia’s president, called for people to protest over the results.  Ms. Zourabichvili, who supports the opposition, described the vote as a “total rigging.” 

Tens of thousands of Georgians then massed outside parliament Monday night, demanding the annulment of the election.

The rally underlined tensions in the country which lies between Russia and Turkey and where the governing Dream Party has become increasingly authoritarian and tilted toward Moscow.  However, the protest ended peacefully after several hours and there were no clear plans for further actions.

“You did not lose the election,” President Zourabichvili told the demonstrators who waved Georgian and European Union flags.  “They stole your vote and tried to steal your future, but no one has the right to do that and you will not let anyone do that!”

Zourabichvili, a mostly ceremonial president, told the crowd that she would defend the country’s path toward Europe against actions by Georgian Dream.

“We have no alternative and nothing else we want to leave this country for the next generations,” she said.

Giorgi Vashadze, leader of Unity National Movement coalition, said the opposition won’t take part in any talks with the government and will push for a new vote under international supervision.

Zourabichvili told the crowd “A complete picture must be drawn of how this massive, systematic theft of votes took place,” adding that it was an “unprecedented and planned operation that robbed us of our votes, our parliament, and our constitution.”  She did not provide details or present evidence of Russia’ involvement in vote theft.

Another opposition leader, Nika Gvaramia, said Georgian Dream had mounted a “constitutional coup,” while analysts said its increased vote share from four years ago was scarcely credible.

The opposition has described the high stakes vote as a choice between Europe or Russia.  It was the most crucial vote since Georgians backed independence from the Soviet Union in 1991.  The crisis will push Georgia further away from the West.  On Sunday, shortly after the results were announced, European observers condemned the conduct of the election.

Critical violations included violence against opposition members, voter intimidation, smear campaigns targeting observers, and extensive misuse of administrative resources, said Zlatko Vujovic, the head of the observation mission of the European Network of Election Monitoring Organizations.

Ten Western countries, led by Germany, say they are not recognizing the results.

Hungary’s Viktor Orban, no surprise, congratulated Georgia’s prime minister, Irakli Kobakhidze, saying “The people of Georgia know what is best for their country, and made their voice heard today!”

Orban’s statement, praising Georgia for taking what many feel is a step away from the European Union, came despite Hungary currently holding the six-month rotating EU presidency.

Russian lawmakers and officials also commended the result.

Editorial / Wall Street Journal

“Vladimir Putin wants to pull neighboring countries back into Russia’s orbit, and he’ll be pleased by this weekend’s news in the Black Sea nation of Georgia.  The Kremlin’s political allies declared victory in a legislative election marred by widespread reports of voter intimidation....

“In August Georgian Dream vowed to ban political rivals if it could secure a 113-seat constitutional majority in parliament.  Georgian Dream fell short of that goal with some 89 seats [Ed. out of 150], but voters have reason to fear political retribution.

“Georgia gained European Union candidate status last December.  But free and fair parliamentary elections are a requirement for accession talks to begin.  Mr. Putin doesn’t want Georgia in the EU. Georgian Dream hurt the country’s European aspirations in May when it passed a Russian-style law governing civic institutions despite widespread public opposition.

“Mr. Putin wants to coalesce a sphere of Russian authoritarian power, as he has in Belarus and is attempting in Ukraine and Moldova.  Georgia is the latest setback for global freedom.”

Random Musings

--Presidential approval ratings....

Gallup: New numbers...41% approve of President Biden’s job performance, 56% disapprove; 38% of independents approve (Oct. 14-27).  The prior split was 39-56, 33.

Rasmussen: 45% approve, 53% disapprove (Nov. 1).

--Final polls...I’ve documented them all in this space during this election cycle, as I have for over 25 years.

Last weekend, an ABC News/Ipsos national poll had Kamala Harris leading Donald Trump among registered voters, 49%-47%.  Among likely voters, it’s Harris 51%-47%.

--A final CNN/SSRS poll of the battleground states among likely voters had....

Pennsylvania: Tied
Michigan: Harris up 5
Wisconsin: Harris up 6
Georgia: Trump up 1
North Carolina: Harris up 1

The Michigan and Wisconsin figures would appear to be outliers vs. all the other polls in those two.

--A New York Times/Siena poll found nearly half of the voters polled nationwide said American democracy DOES a good job representing the people (49%), but 45% said it DOES NOT DO a good job representing the people.

And 76% said American democracy IS currently under threat, 20% said it IS NOT currently under threat.

Sixty-two percent believe the country is plagued by corruption and that the government is mostly working to benefit itself and elites rather than the common good.

--Sen. JD Vance was all over the airwaves Sunday defending Donald Trump’s vow to use the U.S. military against certain Americans, a group Trump has repeatedly labeled “the enemy from within.”

In a contentious exchange with CNN’s Jake Tapper, Vance said he would support the deployment of troops against what he and Trump have described as “left-wing lunatics,” which he argued is what Trump meant by “the enemy from within.”

In a separate interview on “Meet the Press,” Vance said he agreed with Trump’s remark to podcaster Joe Rogan that people like Adam Schiff and Nancy Pelosi pose a greater threat to the United States than Russia or China do.

“What he said – and I do agree with this – what he said is that the biggest threat we have in our country, it’s not a foreign adversary, because we can handle these guys,” Vance said.

Former Rep. Liz Cheney, appearing on CNN Sunday, said Vance is going through “unbelievable contortions to try to find a way to defend” Trump.

--The Trump rally at Madison Square Garden Sunday evening was quite a show...he wrote with dripping sarcasm.

Comic Tony Hinchcliffe kicked things off by dismissing Puerto Rico as a “floating island of garbage,” then mocked Hispanics as failing to use birth control, Jews as cheap and said Palestinians are rock-throwers, while calling out a Black man in the audience with a reference to watermelon.

Grant Cardone, a businessman, said Vice President Harris and “her pimp handlers will destroy our country,” a metaphor that casts her as a prostitute.

David Rem, a childhood friend of Trump, called Harris “the devil” and “the Antichrist.”

Former Fox News host Tucker Carlson mocked Harris – the daughter of an Indian mother and a Jamaican father – with a made-up ethnicity, saying she was vying to become “the first Samoan-Malaysian, low IQ former California prosecutor ever to be elected president.”

This was supposed to be Trump’s closing message of his campaign.

“We must defeat Kamala Harris and stop the radical left agenda with a landslide that is too big to rig,” Trump said.

The nearly six-hour show featured roughly two dozen speakers, from Hulk Hogan to Elon Musk to House Speaker Mike Johnson.

Musk predicted he could find $2 trillion in cuts in a Trump administration.

“Your money is being wasted,” said Musk, the final speaker aside from Trump and his wife Melania in a rare appearance during the campaign.  “We’re going to get the government off your back and out of your pocketbook.”

But the rally overall contained a ton of hateful content (including from the vile, despicable Sid Rosenberg) that is not likely to sway the few still undecided or independent voters who Republicans are allegedly seeking.

Rep. Maria Elvia Salazar, a Republican congresswoman from Florida, denounced Hinchcliffe’s comments as “racist” and said on social media that she was “disgusted.”

“This rhetoric does not reflect GOP values,” wrote Salazar, who spent part of her childhood in Puerto Rico.

The Trump campaign appeared wary of the political fallout from the “island of garbage” remark and other comments.  A senior adviser, Danielle Alvarez, said in a statement, “This joke does not reflect the views of President Trump or the campaign.”

Harris supporters took note that Puerto Rican pop stars Bad Bunny, Jennifer Lopez and Ricky Martin shared a Harris video on their Instagram accounts on Sunday detailing the vice president’s plans for the territory.  The three artists have more than 314 million Instagram followers among them.

Trump later called the rally an “absolute lovefest.”  “The love in that room.  It was breathtaking,” he added, and that it was “an honor to be involved,” though he distanced himself from Hinchcliffe.

“I don’t know him, someone put him up there. I don’t know who he is,” Trump said, the usual lies, any time he is confronted on an individual that some say went over the top or acted inappropriately (see North Carolina gubernatorial candidate Mark Robinson).

But then President Biden, being an old fool at this point, during a Zoom call Voto Latino, an organization encouraging Latino and Hispanic youth to become politically engaged, said the “only garbage floating out there” were supporters, with the White House releasing a transcript hours later that attempted to purport the president was only talking about Hinchcliffe.  He wasn’t.

Once again, the president stepped on his vice president’s message.  It was an awful gaffe.

Harris Wednesday morning disavowed any such sentiment, telling reporters that while Biden had “clarified his comments... Let me be clear: I strongly disagree with any criticism of people based on who they vote for.”

But wait...there’s more!  Then Trump took his frequent habit of describing himself as a “protector” of women a bit too far at a rally in Wisconsin Wednesday night, declaring he would protect them “whether the women like it or not” if he wins a second term.

“I said, ‘Well, I’m going to do it, whether the women like it or not,’” Trump said. “I’m going to protect them.”

Needless to say the Harris camp pounced on this as an issue of reproductive rights and broader concerns about gender roles and autonomy under a possible Trump administration.

“Donald Trump thinks he should get to make decisions about what you do with your body,” Harris said in a social media post.  “Whether you like it or not.”

Yup, shades of the 2016 campaign and the release of the now infamous 2005 Access Hollywood tape; Trump telling cohost Billy Bush how it was easy for him to grope women.

“And when you’re a star, they let you do it.  You can do anything. Grab ‘em by the pussy.  You can do anything.”

A giggling Bush saw his career spiral into the wilderness for years after.  But Trump survived it.

--William McRaven (ret. U.S. Navy Admiral...and the leader of the operation that killed Osama bin Laden) / Wall Street Journal

“When George Washington was 12, he began copying by hand ‘Rules of Civility & Decent Behavior in Company and Conversation.’  The first rule states: ‘Every action done in company ought to be with some sign of respect to those that are present.’  Rule No. 65 says: ‘Speak not injurious words, neither in jest nor earnest; scoff at none though they give occasion.’

“A 1949 U.S. Army pamphlet, ‘Personal Conduct for the Soldier,’ offers similar prescriptions.  In the foreword, Gen. Omar Bradley noted that good conduct was as applicable to the civilian as the soldier.  Under the section titled ‘Self Control’: ‘You make a fool of yourself every time you let the old mind and body get out of control....If you lose self-control, you’re like a ship without a rudder.’  The section on ‘The Courteous Leader’: ‘Most great leaders are kind and courteous...The leader who treats his men badly will find that his men behave badly....A courteous attitude toward all races, nationalities, and religious faiths helps a man get along with people.’

“Those of us who have spent time in the military know that these maxims aren’t mere words.  These qualities define good leaders and reflect their followers. Character, honesty, integrity, honor and a sense of duty all matter.  These aren’t just platitudes but tangible qualities that make a difference in every organization from the neighborhood coffee shop to the White House.

“The White House is the home of American leadership, where Republican leaders like Thomas Jefferson, Abraham Lincoln, Ulysses S. Grant, Teddy Roosevelt, Ronald Reagan and George W. Bush resided.  While each of these leaders had his shortcomings and foibles, none of them consistently violated every principle of good leadership like Donald Trump does.  Mr. Trump has no self-control. He lashes out at immigrants, religious groups and military heroes.  He lies with reckless abandon. In August, in what was outlandish even by Mr. Trump’s standards, he reposted on Truth Social a picture of Kamala Harris and Hillary Clinton above a crude sexual joke.  Just last week he was regaling a crowd about Arnold Palmer’s anatomy.  These are things a disturbed 15-year-old boy would do, not the commander in chief, not the man who holds the nuclear codes, not the leader of the free world.

“More recently, Mr. Trump called Ms. Harris ‘mentally impaired’ and a ‘s--- vice president.’  This is a former president of the United States, a man who might represent the nation again.  And for those of you who dismiss this kind of language or, worse, defend it, if Mr. Trump is re-elected you shouldn’t be surprised if this kind of aberrant behavior continues.  And everything about it will affect the future of the nation.

“Being a person of good character matters. Doing what is right matters because when a leader exhibits honor, integrity and decency, it instills those qualities in the culture of the institution and in the next generation of leaders. What will the culture of America look like if Donald Trump is re-elected?  What will the next generation of leaders look like if they are followers of Donald Trump?

“You will, no doubt, ask the same question about Ms. Harris, but you will get a different answer.  You may not like her policies, her followers or her vision for America, but Ms. Harris won’t threaten the press, demean immigrants, mock those who have died for the country, break with our allies, or undermine the Constitution. And in four years, if we are past the era of Trump, the Republican Party can rise again and provide the kind of principled leadership and followership that this nation needs.

“I am pro life. I believe in a small government, big business, a strong military and a secure border, and I always stand for the American flag. I am a conservative, and I would love to be part of a Republican Party I can be proud of, one that stands for the values, the decency, the sense of duty and honor and country which so many previous Republican presidents strived for.

“Washington’s final rule of decent behavior says: ‘Labor to keep alive in your breast that little celestial fire called conscience.’  My little celestial fire won’t allow me to vote for Donald Trump. I think George Washington and Omar Bradley would agree.”

There are more than a few of us Republicans who wanted Admiral McRaven to run a third-party candidacy this year.  He would have shaken things up for sure.

But speaking of good character, or lack thereof, Donald Trump said former Rep. Liz Cheney is a “war hawk” who should be fired upon, as he raged against one of his most prominent intra-party critics while campaigning Thursday night in Arizona.

“She’s a radical war hawk.  Let’s put her with a rifle standing there with nine barrels shooting at her, OK?’ the former president said at a campaign event with Tucker Carlson. “Let’s see how she feels about it, you know, when the guns are trained on her face.”

Liz Cheney responded on X: “This is how dictators destroy free nations. They threaten those who speak against them with death.  We cannot entrust our country and our freedom to a petty, vindictive, cruel, unstable man who wants to be a tyrant.”

And so, it’s here I’ll tell you how I voted, though I don’t have to.  I have said the last few years I stayed a registered Republican.  I wanted to be able to vote in primaries, and we have a biggie in my state next year for governor, with two Republican candidates I really like.

So I voted a straight line for the GOP on my ballot...except...I wrote in Nikki Haley.

--Kamala Harris got a boost from Michelle Obama at an event over the weekend in Kalamazoo, Michigan, her first appearance with Harris.

“Can someone tell me once again why we are holding Kamala to a higher standard,” Obama asked the crowd of supporters. “Let’s not forget the incompetence and the corruption, the chaos, that was the cornerstone of his entire four years in office,” she said of Trump, citing the numerous members of his administration who aren’t backing his current run.

“I’ve got to ask myself why on Earth is this race even close,” Obama said.  “It’s too close for my liking.”

--Washington Post CEO William Lewis said he pulled the plug on the paper’s endorsement of Vice President Harris – amid fierce backlash that owner Jeff Bezos was responsible for the controversial decision.

Lewis rejected claims the Amazon billionaire killed the already planned endorsement – breaking 36 years of tradition at the paper – just 11 days before the election, stressing that he himself is against presidential endorsements.

Lewis, in a statement, said Bezos “was not sent, did not read and did not opine on any draft. As Publisher, I do not believe in presidential endorsements.  We are an independent newspaper and should support our readers’ ability to make up their own minds.”

But Bezos wrote his own op-ed in the paper, defending the Post’s decision, insisting political endorsements “create a perception of bias.”  He said the ending of his paper’s practice of endorsing a candidate is a “principled decision and it’s the right one.”

“Presidential endorsements do nothing to tip the scales of an election.  No undecided voters in Pennsylvania are going to say, ‘I’m going with Newspaper A’s endorsement.’  None,” he wrote.

“What presidential endorsements actually do is create a perception of bias.  A perception of non-independence.”

More than 250,000 Washington Post readers have ended their digital subscriptions following the controversial decision, according to various reports.  I have kept mine.

The issue is the timing, as much as anything, and Bezos is scared of Donald Trump...period.

--Back to my state of New Jersey, we have a Senate race this year to replace the disgraced Democrat, Bob Menendez, and Rep. Andy Kim (D) is up 18-points in a Fairleigh Dickinson University poll over Republican challenger Curtis Bashaw.

While I voted for Bashaw, I have seen one commercial for him...one, the entire year.  Well, when you are down 18 points, and you understand Democrats have won every Senate race in the state since 1972, why spend a single dollar?

Kamala Harris has a 20-point lead – 55% to 35% - in the Garden State over Trump.  New Jersey hasn’t favored a Republican presidential candidate since 1988, when the state went for George H.W. Bush.

According to Oct. 1 data from the Secretary of State, registered Democrats outweigh Republicans in the state, 2,528,917 to 1,611,688.  Independents number 2,440,927.

But New Jerseyans received some bad news, Wednesday.  The Star-Ledger, the only statewide paper remaining that is a major publication, is ceasing its print edition in February.

I subscribe to the online version, with its excellent sports coverage, and weather alerts, but I know that if my father were still alive, he would be very upset.  Particularly retirees love to read a good newspaper with comics...the actual hard copy.  So this sucks.

But the people I really feel sorry for are the delivery drivers, who needed this extra income.  My father’s delivery guy would take the time to get out of his car and deliver the paper onto the stoop because he knew it wasn’t easy for my dad to walk out onto the driveway to retrieve it in his final years. 

When Dad died, I wrote the man, gave him some extra (final) money, and I imagine he cried.  That’s who I am thinking of today.  God love these good people.

--And God help the people of Spain get through their worst natural disaster in memory, and one of the worst in all of Europe in 50 years, another of those rain events we have become all too familiar with, this one dumping a year’s worth of rain in southeastern Spain, the Valencia region, in just eight hours, with more on the way.

At least 205 have died, as I go to post, with a number still missing.  The footage out of the region is horrific. The devastation in the small villages, whose streets turned into raging rivers, carrying cars (and people) downstream until they all collapsed into a heap at the end of the road, is catastrophic.

This will be a test for Spain’s fragile government.

--Back in New Jersey, statewide, we went the entire month of New Jersey with 0.1 inches of rain, zero rain in Newark and where I live, the driest of any month of any year on record.  The previous low record for October was 0.25 inches in 1963.

But September and October combined saw a statewide estimate of just 0.84 inches, “well below the previous record low of 1.35 inches in December 1980 to January 1981,” the state climatologist, David Robinson, said.

Newark, NJ, set a new record for Halloween of 84 degrees.  It was 83 in my town of Summit.

Meanwhile, the combined damage estimate for both Hurricanes Helene and Milton is over $170 billion, with North Carolina’s own estimate of damage in the state from Milton at $53 billion and rising.  Staggering, but not surprising given the scope of what we all have seen.  That’s a total figure, and the numbers are all over the board. Actual insured losses are much less.  Prayers to the uninsured.

---

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

Pray for Ukraine...and the remaining hostages in Gaza, and the innocent attempting to stay alive there.

God bless America...especially this coming week.

---

Gold $2745
Oil $69.48

Bitcoin: $69,200 [4:00 PM ET, Friday...hit $72,000 earlier]

Regular Gas: $3.12; Diesel: $3.56 [$3.46 - $4.45 yr. ago]

Returns for the week 10/28-11/1

Dow Jones  -0.15%  [42052]
S&P 500  -1.4%  [5728]
S&P MidCap  -0.1%
Russell 2000  +0.0%
Nasdaq  -1.5%  [18239]

Returns for the period 1/1/24-11/1/24

Dow Jones  +11.6%
S&P 500  +20.1%
S&P MidCap  +11.5%
Russell 2000  +9.0%
Nasdaq  +21.5%

Bulls 57.6
Bears 21.7

Hang in there.  If you haven’t already done so...VOTE Tuesday.  The Senate and Congressional races are just as critical for our nation’s future.

Brian Trumbore

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