[Posted 4:30 PM ET, Friday]
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Edition 1,381
Congratulations to President Trump for brokering the peace plan for Gaza. We’ll see how things develop over the coming days and weeks, but thus far, all good. Only the president could have pulled this off.
We should also be hoping for an emotional week in Israel, which would signal the hostages’ return. And no one deserves to take a victory lap more than Donald Trump. I get into all the specifics down below, as well as some opinion.
But then late this morning, the president posted the following on Truth Social:
“Some very strange things are happening in China! They are becoming very hostile, and sending letters to Countries throughout the World, that they want to impose Export Controls on each and every element of production having to do with Rare Earths, and virtually anything else they can think of, even if it’s not manufactured in China. Nobody has ever seen anything like this but, essentially, it would ‘clog’ the Markets, and make life difficult for virtually every Country in the World, especially for China. We have been contacted by other Countries who are extremely angry at this great Trade hostility, which came out of nowhere. Our relationship with China over the past six months has been a very good one, thereby making this move on Trade an even more surprising one. I have always felt that they’ve been lying in wait, and now, as usual, I have been proven right! There is no way that China should be allowed to hold the World ‘captive,’ but that seems to have been their plan for quite some time, starting with the ‘Magnets’ and, other Elements that they have quietly amassed into somewhat of a Monopoly position, a rather sinister and hostile move, to say the least. But the U.S. has Monopoly positions also, much stronger and more far reaching than China’s. I have just not chosen to use them, there was never a reason for me to do so – UNTIL NOW! The letter they sent is many pages long, and details, with great specificity, each and every Element that they want to withhold from other Nations. Things that were routine are no longer routine at all. I have not spoken to President Xi because there was no reason to do so. This was a real surprise, not only to me, but to all the Leaders of the Free World. I was to meet President Xi in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so. The Chinese letters were especially inappropriate in that this was the Day that, after three thousand years of bedlam and fighting, there is PEACE IN THE MIDDLE EAST. I wonder if that timing was coincidental? Dependent on what China says about the hostile ‘order’ that they have just put out, I will be forced, as President of the United States of America, to financially counter their move. For every Element that they have been able to monopolize, we have two. I never thought it would come to this but perhaps, as with all things, the time has come. Ultimately, though potentially painful, it will be a very good thing, in the end, for the U.S.A. One of the Policies that we are calculating at this moment is a massive increase of Tariffs on Chinese products coming into the United States of America. There are many other countermeasures that are, likewise, under serious consideration. Thank you for your attention to this matter!
“DONALD J. TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA”
The markets swooned with this release. China this week announced new export restrictions on rare earth minerals, which are critical components of products from semiconductors to electric vehicles and jet fighters. China dominates the processing capabilities for rare earths, giving it leverage over the U.S. and other nations.
Beijing had also launched an antitrust investigation into Qualcomm, and it has halted purchases of U.S. soybeans.
But Trump unloading on President Xi was rather explosive.
There are no specifics as yet on what President Trump is contemplating in terms of retaliation, and the meeting with Xi has not been formally canceled.
Then early this afternoon, the White House budget office announced that mass firings of federal workers have started in an attempt to exert more pressure on Democratic lawmakers amid the shutdown.
Russ Vought, the director of the Office of Management and Budget, wrote on X that the “RIFs have begun,” referring to reduction-in-force plans aimed at reducing the size of the federal government.
A spokesperson for the budget office, said the reductions are “substantial” but did not offer more immediate details.
The White House previewed that it would pursue the aggressive layoff tactic shortly before the government shutdown began on Oct. 1, telling all federal agencies to submit their reduction-in-force plans to the budget office for its review. It said reduction-in-force could apply for federal programs whose funding would lapse in a government shutdown, are otherwise not funded and are “not consistent with the President’s priorities.”
This goes far beyond what usually happens in a government shutdown, which is that federal workers are furloughed but restored to their jobs once the shutdown ends.
—
The Venezuelan opposition leader Maria Corina Machado was awarded the Nobel Peace Prize on Friday. The Norwegian Nobel Committee praised “her tireless work promoting democratic rights for the people of Venezuela and for her struggle to achieve a just and peaceful transition from dictatorship to democracy.”
She backed an opposition candidate against President Nicolas Maduro in last year’s election, Maduro claimed victory, everyone knew it was a rigged vote, and Machado was forced into hiding.
Yes, President Trump perhaps should have been the recipient, but if all goes as planned in Gaza, he’ll be a shoo-in for next year.
That said, Maria Corina Machado posted on X (reposted by Trump):
“This immense recognition of the struggle of all Venezuelans is an impetus to conclude our task: to conquer Freedom.
“We are on the threshold of victory and today more than ever we count on President Trump [emphasis mine], the people of the United States, the peoples of Latin America, and the democratic nations of the world as our main allies to achieve Freedom and democracy.
“Venezuela will be free!”
Is an invasion of Venezuela imminent? The odds of one seem to be growing.
—
Wall Street and the Economy
The aforementioned government shutdown continued all week, the two sides in the Senate at loggerheads, stuck on 55 votes for reopening the government when 60 is needed.
Over the weekend on the Sunday talk shows, economic advisers to President Trump and Speaker Mike Johnson signaled promised layoffs of federal employees are coming. The Speaker said layoffs would be “a regrettable situation that the president does not want,” while Kevin Hassett, director of the White House National Economic Council, said layoffs would start “if the president decides that the negotiations are absolutely going nowhere.”
And then you saw OMB Director Vought’s missive from today.
A big day is next Wednesday, Oct. 15…the next pay day for the military. If the military isn’t getting paid and Congress is…that could change some attitudes in Congress.
We were supposed to have the Treasury Statement for September and fiscal 2025, today, assuming the government reopened, but this wasn’t to be. Through the first 11 months of fiscal 2025, the budget deficit was $1.97 trillion compared to $1.9 trillion through the first 11 months of fiscal 2024.
But with the government shutdown continuing, the only item of note this week was the release of the September minutes from the Federal Reserve’s Open Market Committee meeting.
Most members of the FOMC supported further reductions to its key interest rate this year. A majority felt that the risk unemployment would rise had worsened since their previous meeting in July, while the risk of rising inflation “had either diminished or not increased,” the minutes said.
Still, the minutes underscored the deep division on the 19-person committee between those who feel that the Fed’s short-term rate is too high and weighing on the economy, and those who point to persistent inflation that remains above the central bank’s 2% target as evidence that the Fed needs to be cautious about reducing rates.
The minutes noted that “a few” policymakers said they could have supported keeping rates unchanged, or said that “there was merit” in such a step.
The differences help explain Chair Jerome Powell’s statements during the news conference that followed the meeting: “There are no risk-free paths now. It’s not incredibly obvious what to do.”
Monday, Jeffrey Schmid, president of the Federal Reserve’s Kansas City branch, said in a speech that “inflation is too high” and argued that the Fed should keep rates high enough to cool demand and prevent inflation from worsening.
Earlier, Chicago Fed President Austan Goolsbee had said, “I am a little uneasy with front loading rate cuts, presuming that those upticks in inflation will just go away.”
Today, in an interview with CNBC, Fed Gov. Christopher Waller said he continues to support lowering interest rates but said the central bank needs to be careful amid conflicting economic signals.
“I’m still in the belief we need to cut rates, but we need to kind of be cautious about it,” Waller said.
On one hand, he said, the U.S. labor market appears to be losing jobs, potentially signaling a broader economic slowdown. On the other, GDP remains strong (witness the Atlanta Fed’s figure below) and there remain concerns over inflation, which is still running considerably higher than the Fed’s 2% goal.
“Something’s got to give. Either the labor market rebounds to match the GDP growth, or that GDP growth is going to pull back. So whichever way that goes, it’s got to affect what you do with policy,” Waller said. “I want to move towards cutting rates, but you’re not going to do it aggressively and fast, in case you make a big mistake on which way that things go.”
Waller is among five finalists for Chair Powell’s job, per reports on Treasury Secretary Bessent’s search…the others being Fed Gov. Michelle Bowman, Kevin Hassett, Kevin Warsh and BlackRock’s Rick Rieder.
Next week we are supposed to have important consumer and producer price data, as well as retail sales, but it will be crickets if the government is still shut down. Whenever it reopens, we will get a flood of data almost all at once. That will be interesting.
The Atlanta Fed’s GDPNow barometer for the third quarter is at 3.8%, but these folks have said there won’t be another update for a while without new data.
Freddie Mac’s 30-year fixed-rate mortgage is 6.30%.
Europe and Asia
Just one item of note for the euro area…August retail sales in the EA20 rose 0.1% over July, up 1.0% from a year earlier.
France: Caretaker Prime Minister Sebastien Lecornu struck a cautiously optimistic tone on Wednesday, saying a deal on the country’s budget could eventually be reached, making the possibility of a snap election less likely.
“There is a willingness to have a budget for France before December 31 of this year,” Lecornu told reporters after meetings on Tuesday with conservatives and center-right parties, and before meeting the Socialist Party.
“And this willingness creates momentum and convergence, obviously, which reduces the prospects of dissolution (of parliament),” he said.
President Emmanuel Macron has faced repeated opposition calls in recent days to call snap parliamentary elections, or else resign, to end the political crisis, Lecornu resigned Monday after Macron had named a new cabinet, that leaders of all political factions agreed represented no change from the past.
Far-right leader Marine Le Pen, who refused to take part in this round of talks with Lecornu, made clear on Wednesday she would not be part of any deal.
“I’ll censure everything. Enough now – the joke has gone on long enough,” she told reporters, reiterating her demand for snap parliamentary elections, with the polls showing she’d emerge victorious in one.
Macron late Wednesday said he will appoint a new prime minister within the next 48 hours, as he tries to pull the country out of the spiraling crisis.
The announcement ruled out the possibility of imminent snap parliamentary elections.
Turning to Asia…nothing of import from China this week. [The data front, that is, he typed with a smile.]
Japan reported household spending in August rose 0.6% month-over-month, 2.3% year-over-year. Producer prices in September increased 0.3% over August, 2.7% Y/Y.
But the big news in Japan concerned the leadership of the country and Sanae Takaichi, a hard-line conservative lawmaker, who won a critical leadership vote last Saturday, putting her on track to become Japan’s first female prime minister, a milestone in a country where women are vastly underrepresented in politics.
Ms. Takaichi, 64, emerged as the winner of an election by the ruling Liberal Democratic Party after two rounds of voting by lawmakers and rank-and-file members.
But then today, Friday, Takaichi’s bid was thrown into doubt when her ruling party’s junior coalition partner quit. Takaichi must win approval in parliament to become premier later this month with a vote in parliament.
That had been seen as fairly straightforward given her coalition had by far the most seats, though it was short of a majority. But with partner Komeito’s exit and opposition parties seeking to unite behind an alternative candidate, her path has suddenly become less certain.
Street Bytes
–What was going to be a mixed market in terms of the major indices on the week, turned into a down one for all three after the president’s screed. Tech stocks, an easy Chinese target (see Qualcomm) fell hard.
For the week, the Dow Jones lost 2.7% to 45749, the S&P fell 2.4% and Nasdaq 2.5%. The S&P and Nasdaq both hit new record highs on Wednesday.
Next week we have earnings from the big banks.
—U.S. Treasury Yields
6-mo. 3.82% 2-yr. 3.52% 10-yr. 4.05% 30-yr. 4.63%
Yields fell today after Trump’s post…a flight to safety; with the yield on the 10-year down 7 basis points on the week.
—Crude oil was helped a bit early this week after OPEC+ agreed to a modest increase in production, easing market fears of a larger supply boost. The producer group appeared on Sunday to raise production by 137,000 bpd in November, matching October’s increase, with markets seeing it as a cautious move amid persistent worries about oversupply.
But then the price fell after tensions in the Middle East eased.
And then late this morning, crude collapsed to below $60 on the president’s threats to China.
—Gold soared to a fresh record, hitting $4,000 a troy ounce and putting an exclamation point on the headlong rush into alternative assets at a time of concern about the value of the U.S. dollar.
Most actively traded futures have gained roughly 50% over the past 12 months, first topping $3,000 in March and hitting record after record in recent weeks.
Billionaire Ray Dalio, echoed Citadel’s Ken Griffin in saying that gold is “certainly” more of a safe haven than the U.S. dollar and the metal’s record-setting rally echoes the 1970s, when it surged during a time of high inflation and economic instability.
Dalio, who founded the hedge-fund firm Bridgewater Associates – made his remarks at a conference Tuesday, telling a Bloomberg reporter that “Gold is a very excellent diversifier of the portfolio. So if you were to look at just from the strategic asset allocation mix perspective, you would probably have as the optimal mix something like 15% of your portfolio in gold.”
The gold price has been helped by the government shutdown and speculation that the Federal Reserve will keep cutting interest rates even as inflation remains elevated. Meanwhile, the dollar has weakened against every major currency this year after the uncertainty unleashed by President Trump sent it into the biggest slide since the 1970s, not long after the U.S. abandoned the gold standard.
Silver hit a new all-time high this week, $51, breaking a record set way back in 1980 when the Hunt brothers tried to corner the silver market, with disastrous results. I posted their story on my Wall Street History link this week.
But as opposed to 1980, silver’s rally is driven in no small part by booming industrial demand for applications in items such as solar panels and artificial intelligence semiconductors.
Silver could also go up further if the dollar falls in value since it spurs more international buying.
—Bitcoin hit a record high on Sunday at $125,245, and then hit $126,000.
–The market was rather shocked on Monday with the news that broke late Sunday concerning OpenAI and chip-designer Advanced Micro Devices reaching agreement on a multi-billion-dollar partnership to collaborate on AI data centers that will run on AMD processors, one of the most direct challenges yet to industry leader Nvidia.
Under the terms of the deal, OpenAI committed to purchasing 6 gigawatts worth of AMD’s chips, starting with the MI450 chip next year. The ChatGPT maker will buy the chips either directly or through its cloud computing partners. AMD chief Lisa Su said in an interview Sunday that the deal will result in tens of billions of dollars in new revenue for the chip company over the next half-decade.
The two companies didn’t disclose the plan’s expected overall cost, but AMD said it costs tens of billions of dollars per gigawatt of computing capacity.
OpenAI will receive warrants for up to 160 million AMD shares, roughly 10% of the chip company, at 1 cent per share, awarded in phases, if OpenAI hits certain milestones for deployment. AMD’s stock price has to increase for the warrants to be exercised.
The deal is AMD’s biggest win in its quest to disrupt Nvidia’s dominance among AI semiconductor companies. AMD’s processors are widely used for gaming, in personal computers and traditional data center servers, but it hasn’t made as much of a dent in the fast-growing market for the pricier supercomputing chips needed by advanced AI systems.
OpenAI plans to use the AMD chips for inference functions, or the computations that allow AI applications such as chat bots to respond to user queries. As the profusion of large language models and other tools has picked up, demand for inference computing has skyrocketed, OpenAI Chief Executive Sam Altman said in a joint interview with Su.
“It’s hard to overstate how difficult it’s become” to get enough computing power, Altman said. “We want it super fast, but it takes some time.”
Altman said the fate of many companies will increasingly be linked as demand for AI services, along with the computing and infrastructure needs that accompany them, is set to far outstrip supply.
The OpenAI CEO has been on a global fundraising and supply-chain campaign, seeking financing and manufacturing partners.
Since late September, Altman has traveled to Taiwan, South Korea and Japan to accelerate his chip-building capacity, meeting with Taiwan Semiconductor and Foxconn, as well as Samsung and SK Hynix, with Altman pushing these companies, many of which are suppliers of Nvidia, to increase production capacity and give priority to OpenAI’s orders, according to reports.
But back to the OpenAI / AMD venture, it’s the latest ‘circular’ deal mixing investment with commercial relationships to come up in the expensive AI race. Nvidia agreed to invest up to $100 billion in OpenAI as part of a deal announced last month. In a report Monday, Bernstein analyst Stacy Rasgon said AMD’s deal seems “even more roundabout” than Nvidia’s. In the arrangement, Nvidia will get a stake in OpenAI in exchange for investing in its build-out, as well as any revenue from the buildout’s chip sales. AMD, by contrast, “is giving up their equity while receiving nothing beyond the revenue in return,” he noted.
The deal might risk alienating OpenAI’s main supplier at a time when Nvidia has no problem selling every chip it can make. But OpenAI isn’t alone in trying to diversify its supplier base.
For its part, AMD faces even higher stakes in its race to catch up with its rival. The company has billed the MI450 chip as being fully competitive in performance capabilities as Nvidia’s Vera Rubin chips, with both expecting to launch the second half of next year. But Nvidia has said the initial Rubin family will sport 3.3 times the computing performance of the most powerful Blackwell chips Nvidia is currently selling.
—Dell shares surged Tuesday after it announced it was boosting its long-term outlook, thanks in part to growth driven by demand for artificial intelligence.
The company said it believes it is “well positioned with a leading portfolio from data center infrastructure to PCs.”
Dell projected its annual revenue could rise 7% to 9%, up from its prior outlook of 3% to 4%, and earnings-per-share growth of 15% of better, nearly double its previous forecast of 8% or more.
“Customers are hungry for AI and the compute, storage and networking we provide to deploy intelligence at scale. We’re successfully translating that demand into growth and strong cash flow that we’ve largely returned to shareholders,” CEO Michael Dell said in a release.
—Oracle shares stumbled on Tuesday after a report that the software maker’s profit margin in its cloud computing business is lower than many on Wall Street have been estimating.
While Oracle generated roughly $900 million in revenue from the rental of servers powered by Nvidia chips during the three months ended in August, the company only managed about $125 million in gross profit, the Information reported, citing internal corporate documents. Oracle shares cratered 7% when the report hit before finishing down 2 ½%.
The Information said in some cases, Oracle was losing “considerable” amounts of money on its rentals of smaller quantities of Nvidia chips, including both new and old graphics processing units. Oracle declined to comment.
But, as Jensen Huang then pointed out later in the day on CNBC in an interview with Jim Cramer, it’s unusual to see comments such as this because Oracle is in the build-out phase. It just takes time.
The report nonetheless sparked a sell-off, even if a brief one, as it supplied bears in the ‘bubble’ camp with ammunition.
—The longer the shutdown goes on, the more air traffic controllers will call in sick if they aren’t getting paid. Air traffic delays helped spur the 2019 shutdown, the longest in history, to an end.
—TSA checkpoint numbers vs. 2024…no data with the shutdown.
—Delta Air Lines posted strong third quarter results Thursday morning as improving fundamentals in its business are expected to flow through the end of the year.
For the quarter, Delta posted adjusted revenue of $15.197 billion against estimates for $15.08 billion, and up 4.1% compared to a year ago. Adjusted earnings per share came in at $1.71, beating the Street’s $1.56 estimate.
“As you may recall, in the earlier part of the year we had a challenge in our industry following geopolitical events, tariff announcements, all of which had some negative impact on overall consumer confidence – we saw some of our revenue start to slow down, particularly corporate revenues. I’m pleased to say that in the third quarter, things picked right back up again, and we’re on a track that we had hoped to be at this point in the year,” Delta CEO Ed Bastian said in an interview.
Bastian said “significant improvement” in its revenue outlook led Delta to project full-year adjusted EPS of approximately $6, in the upper half of its prior guidance ($5.25 to $6.25) and above analyst estimates of $5.80.
“We’re looking at for the fourth quarter a comparable amount of growth and hopefully the best profit in our Q4 history,” Bastian said.
“Personally, for businesses, I think confidence has been restored,” he added, highlighting more trade deals inked between the U.S. and various trade partners.”
Of note are Delta’s premium and loyalty units. The premium business, meaning customers in its Comfort Plus and Delta One cabins, is up 9% compared to a year ago, with loyalty revenue from the SkyMiles program up 9%.
Bastian believes premium is what separates Delta from its competition, and why its overall business is trending higher.
“Our consumer is a high-end consumer; it’s a premium consumer. They’re financially strong. They’ve got the means, they’ve got the interest to travel,” he said.
—Tesla has long promised a cheaper model and Tuesday, the company unveiled a stripped-down version of its bestselling SUV and sedan, but the new lower prices don’t quite cover the recently expired $7,500 EV tax credit.
Tesla introduced a “standard” Model Y and Model 3 that lack features such as vegan leather seats and power-adjusted steering wheels, hoping to draw in budget-conscious buyers.
The standard Model 3 will cost $36,990 and the standard Model Y $39,990, putting them $5,000 to $6,000 lower than the next-cheapest Model 3 and Model Y.
Both vehicles come with cloth seats, no AM/FM radio, no backrow screen and fewer speakers than more expensive variants, among other changes. Both models also offer slightly less battery performance than pricier versions, but outperform other models in Tesla’s lineup.
The shares fell 4.5% in response.
Tesla for years has said it will release a lower-priced model to spur growth in an increasingly competitive landscape. That strategy shifted last year when CEO Elon Musk canceled plans for a $25,000 “Model 2” to focus instead on the company’s dedicated autonomous vehicle, the Cybercab, which lacks a steering wheel and pedals.
For now the cheaper models could help alleviate some of the pain expected to hit electric vehicle makers in the fourth quarter following the end of the aforementioned tax credit.
But Tesla bull and Wedbush analyst Dan Ives was less enthusiastic. The new models could help put Tesla in better position to reach a 500,000 quarterly deliveries run rate, but he said he was disappointed with this announcement because the prices are only $5,000 lower than prior models.
General Motors, Ford and Hyundai have all said they plan to continue offering incentives for battery-powered car sales to alleviate some of the sticker shock.
Speaking of Ford, its stock fell 6% on Tuesday, with investors reacting to a three-week-old fire at a key supplier of aluminum that is expected to impact Ford’s production.
Many parts and body panels on cars these days are made out of aluminum and not steel. Aluminum is lighter, which helps with fuel economy.
The fire that took place at Novelis’ Oswego plant in New York, and could knock out some production until early 2026, happened three weeks ago, on Sept. 16, with Novelis providing updates on Sept. 30 and Oct. 6.
So why the delayed reaction? The Street seems to have missed the implications until a Wall Street Journal story late Monday.
Ford said it would update investors on its third-quarter earnings conference call on Oct. 23.
—Fifth Third Bancorp said it would acquire Comerica, marking the latest effort by regional leaders to bulk up and compete with behemoths such as JPMorgan Chase and Bank of America.
The all-stock deal would create one of the top 20 largest banks in the U.S., with $288 billion in total assets, according to Federal Reserve data.
Bank executives and dealmakers will watch for signs of whether the acquisition with help usher in a long-anticipated wave of consolidation in the industry, where regional and community banks have struggled to keep up with technology, regulatory and other costs. Some lenders see an opportunity to strike deals under the Trump administration, which has signaled a friendlier stance toward mergers and acquisitions.
Comerica, based in Dallas, has more than 350 branches in Texas, California, Michigan, Arizona and Florida. Fifth Third, based in Cincinnati, operates 1,100 branches in the Midwest and the South. It plans to build on Comerica’s commercial presence and expand deeper into retail.
—Paramount said Monday that it bought the commentary website The Free Press for $150 million. The site’s founder, Bari Weiss, will be installed as the editor-in-chief of CBS News, a newly created position.
The announcement, while anticipated, is a bold move for the venerable television news network initiated by new corporate leader David Ellison. Weiss’ experience is in print journalism, particularly in commentary.
“I am confident her entrepreneurial drive and editorial vision will invigorate CBS News,” Ellison said in a news release. “This move is part of Paramount’s bigger vision to modernize content and the way it connects – directly and passionately – to audiences around the world.”
Some at CBS News have been concerned that the news division is moving in a direction more friendly to President Trump.
After all, this year Paramount agreed to pay Trump $16 million to settle a lawsuit regarding the editing of an interview and then presidential candidate Kamala Harris on “60 Minutes.”
Journalists were infuriated. The company was hoping to put the issue to rest as it sought administration approval for a major merger.
—Ferrari shares plunged 15% after the luxury automaker’s long-term profitability targets missed expectations.
Back in 2022, the company talked about its 2022 to 2026 forecast, implying growth of 10% a year, but this week, in providing guidance through 2030, it said it expects net revenue to grow at 5% a year over the next five years.
Ferrari also scaled back its electric-vehicle ambitions while guiding to a model line up that will include a greater share of combustion engine models compared to previous forecasts.
Around 20% of its model lineup in 2030 will be fully-electric, marking a sharp cut to the 40% it presented in its previous plan.
–Shares of Constellation Brands rose on Monday after the market close as the U.S. distributor of Corona and Modelo beers posted fiscal second-quarter earnings that beat Wall Street’s expectations.
For the three months ending in August, the alcohol and beverage company reported $3.63 in comparable earnings per share, down 16% from a year ago, while sales declined 15% from the year-ago quarter to $2.48 billion.
But this was vs. the Street’s call for EPS of $3.38 and sales of $2.46 billion.
Alcohol is out of vogue. Many beer, wine and spirit companies are having a rough time as consumers – especially Gen Z and younger millennials – cut back on alcohol due to rising prices, health concerns, and the popularity of other recreational options.
In the second quarter, Constellation’s beer sales decreased 7% from a year ago. Sales of wine and spirits were down by 65%, partially because the company divested some mainstream wine brands as it seeks to focus on higher-end brands priced at $15 a bottle and above. Excluding the effects of that move, the decline was 19%.
Constellation again lowered its forecast for reported earnings per share for fiscal 2026, after cutting its calls on both reported earnings and comparable earnings, a separate metric, last month. Reported EPS is now expected to come in between $9.86 and $10.16, down from the previous call for $10.77 to $11.07.
Sales in premium beer were hit particularly hard as consumers purchase less frequently and spend less per trip, CEO Bill Newlands said when the company released its first-quarter results. This was partially due to weaker spending by Hispanic consumers, who account for half of Constellation’s consumer base for beer.
Newlands told investors earlier this year that economic concerns have led to fewer group gatherings and convenience store trips. At the same time, Hispanic communities have been hit hard by the White House’s immigration policies.
Of course, Constellation isn’t alone. Sales volumes at Budweiser maker Anheuser-Busch InBev declined 2% from a year ago, while sales at Molson Coors Beverage also dropped 1.6% in the second quarter. Shares of AB InBev and Molson Coors have declined roughly 20% this year, Constellation’s down some 35%.
Alcohol companies have been expanding their portfolios to include low-alcohol alternatives such as hard seltzers, cocktail mixers, zero-alcohol beers, and nonalcoholic beverages like energy drinks and tonic water. The segment is still small but growing quickly.
—Americans have been heeding the catchphrase to eat more chicken during a spike in beef prices, and poultry producers have raked in profits. But now, chicken prices are falling, with spot chicken prices in the U.S. down 18% since their summer barbecue-season peak as key production indicators suggest supply is finally catching up with booming consumer demand.
Some of the largest global meat producers including JBS NV, Tyson Foods Inc. and Cargill Inc. have leaned on poultry profits to cushion losses at their beef businesses, which have been impacted by the worst U.S. cattle shortage in decades. A turn in chicken’s fortunes could leave the companies more exposed to the prolonged beef slump, which isn’t expected to improve significantly before 2028.
Foreign Affairs
Israel/Gaza: Wednesday evening, President Trump posted on Truth Social:
“I am very proud to announce that Israel and Hamas have both signed off on the first Phase of our Peace Plan. This means that ALL of the Hostages will be released very soon, and Israel will withdraw their Troops to an agreed upon line as the first steps toward a Strong, Durable, and Everlasting Peace. All Parties will be treated fairly! This is a GREAT DAY for the Arab and Muslim World, Israel, all surrounding Nations, and the United States of America, and we thank the mediators from Qatar, Egypt, and Turkey, who worked with us to make this Historic and Unprecedented Event happen. BLESSED ARE THE PEACEMAKERS!
“DONALD J. TRUMP
“PRESIDENT OF THE UNITED STATES OF AMERICA”
The agreement on the initial stage of Trump’s 20-point framework resulted from indirect talks in Egypt, a day after the second anniversary of the Hamas attack on Israel that triggered Israel’s assault on Gaza.
Hamas confirmed it had reached an agreement to end the war, that includes an Israeli withdrawal from Gaza and a hostage-prisoner exchange, but the group called on Trump and guarantor states to ensure Israel fully implements the ceasefire.
But crucial details have yet to be spelled out, including the timing, a post-war administration for the Gaza Strip and the fate of Hamas.
There is no clear indication who will rule Gaza when the war ends. Netanyahu, Trump, Western and Arab states have ruled out a role for Hamas, which has run Gaza since driving out Palestinian rivals in 2007.
Trump’s original plan envisions a role for the Palestinian Authority but only after it has undergone major reforms.
Israeli Prime Minister Benjamin Netanyahu convened his government on Thursday to approve the agreement. It was supposed to be largely procedural, given that Israel had already agreed to it. But some details still need to be worked out. Wednesday, the prime minister called it “A great day for Israel. With God’s help, together we will continue to achieve all of our goals and expand peace with our neighbors.”
Hamas was to release the 20 living hostages together, 72 hours after the ceasefire begins which would mean Sunday or Monday. [President Trump Thursday said, “Monday or Tuesday.”]
The bodies of dead hostages would be released gradually as Israel’s military withdraws. Gal Hirsch, Israel’s hostage coordinator, said an international force would be established to help find any dead hostages whom Hamas cannot locate. Hamas said it would need at least 10 days to locate the bodies, with Israeli officials saying it would take more time.
Israel is expected to release about 2,000 Palestinian prisoners, including over 200 who are serving life sentences.
Hamas said on Wednesday it had handed over its lists of the hostages being held and the Palestinian prisoners it wanted freed and exchanged.
Once Israel approved the deal, it was to withdraw to an agreed line within 24 hours, after which the 72-hour clock would begin.
Humanitarian aid entering Gaza was to increase, with Israeli and Palestinian officials saying a minimum of 400 trucks per day would soon start entering Gaza, ramping up to 600.
President Trump was expected to travel to Egypt in the coming days.
The next phase of the peace plan calls for an international body – the “Board of Peace” – to play a role in Gaza’s post-war administration. Under the plan, it would be led by Trump and include former British Prime Minister Tony Blair.
Hamas has so far refused to discuss Israel’s demand that the militant group give up its arms. It was expected Hamas would reject this as long as Israeli troops occupied Palestinian land.
Trump’s announcement marked a breakthrough in what had been eight months of stalled negotiations since he took office, bringing Trump closer to a top foreign-policy goal of ending the war in Gaza. It came together in less than a month after an Israeli strike on Qatar – a U.S. ally that harbors Hamas officials – led to heightened fears the war was spinning out of control and brought new pressure on Israel from Trump and on Hamas from leaders in the Muslim world.
Trump employed some of his most trusted advisers – Steve Witkoff and his son-in-law Jared Kushner – to bridge the gaps leading to Wednesday’s announcement.
Thursday, exiled Hamas chief Khalil Al-Hayya declared that the war in Gaza is over after receiving assurances from the U.S. and other nations about the cease-fire deal brokered by President Trump.
“Today, we announce an agreement to end the war, [see Israel] withdraw from the Strip and carry out a prisoner exchange.”
The Israeli military said on Friday that a cease-fire had gone into effect at noon and that its soldiers were repositioning themselves within Gaza.
In a statement, the military said that soldiers in the Southern Command would “continue to remove any immediate threat.”
The statement came after the Israeli government approved a deal early on Friday between Israel and Hamas.
An Israeli military spokesman said the Israeli military would allow Palestinians in southern Gaza to travel along major roads to the north. But he warned people not to approach several areas across Gaza where Israeli troops would remain active, saying those areas were “extremely dangerous.”
David E. Sanger / New York Times…early Thurs. a.m. ….
“For Mr. Trump, success in this venture is the ultimate test of his self-described goal as a deal maker and a peacemaker – and a pathway to the Nobel Peace Prize he has so openly coveted. By chance, the winner for 2025 is scheduled to be announced just hours before he may be departing to take his victory lap in Egypt and Israel.
“Much could go wrong in coming days, and in the Middle East it often does. The ‘peace’ deal Mr. Trump heralded on Truth Social on Wednesday evening may look more like another temporary pause in a war that started with Israel’s founding in 1948, and has never ended.
“But if Mr. Trump can hold this deal together… that would be an extraordinary step toward the kind of peace plan Mr. Trump, and his predecessor, Joseph R. Biden Jr., have pressed to accomplish, despite many diversions down dark holes. And if Mr. Trump can get Prime Minister Netanyahu to withdraw troops from Gaza City and give up on his plan to take control of the shattered remains of Gaza, if he can stop the carnage that has killed 1,200 people in Israel and more than 60,000 Palestinians, he will have done what many before him tried: outmaneuvered a difficult and now isolated ally.
“ ‘This cease-fire and hostage release, if it happens, only came to fruition because of Trump’s willingness to pressure Prime Minister Netanyahu,’ said Aaron David Miller of the Carnegie Endowment for International Peace, who has often been critical of Mr. Trump’s starts and stops in the Mideast. ‘No president, Republican or Democrat, has ever come down harder on an Israeli prime minister on issues so critically important to his politics or his country’s security interests.’
“Mr. Trump knows that by far, the best international accomplishment of his first term was the Abraham Accords, which normalized relations between Israel and the United Arab Emirates and Bahrain, the first Arab states to recognize Israel in a quarter of a century. Sudan and Morocco joined later. It was the fear that Saudi Arabia, home to many of the holiest sites in the Muslim faith, was on the verge of joining those accords that helped drive Hamas to the horror of the Oct. 7, 2023, attack.
“But in many ways, stopping the carnage of this war – which destroyed Hamas’ leadership, 90 percent of the homes in Gaza, and ultimately tore at Israel’s global standing – is an even bigger accomplishment.
“Israel’s ferocious reaction to the attack, the worst against Jews since the Holocaust, left the country in an unusual place: more powerful than ever, and also more isolated. In recent weeks, Israel’s military campaign in Gaza drove many of its closest allies to call for the creation of a Palestinian state, even if they had no concrete plan about where it would be located or who would run it. And around the world, Israel’s leveling of Gaza, its willingness to kill dozens of Palestinians in order to take out a single Hamas leader, and the talk of driving Palestinians from their refuge did huge moral and political damage to the Israeli state. It may take a generation or more to repair….
“(As Mr. Netanyahu overreached), Mr. Trump and his aides saw their chance to rein him in. The scope of destruction in Gaza repulsed the world community. His decision to bomb the Hamas negotiators in Qatar shocked the Trump White House. Mr. Trump, who never apologizes himself, forced Mr. Netanyahu to do exactly that to Qatar’s leadership, even releasing pictures of the call. And along the way he maneuvered Mr. Netanyahu to agree to a 20-step plan, one the Israeli leader was betting Hamas would reject.
“To the surprise of many, it accepted the opening steps. It had little choice. The scope of the damage, human and physical, undercut Hamas’ dwindling support among the surviving Gazans. The Arab states and Turkey belatedly insisted that it give up….
“But it is far from clear that the conflict is truly ending…Getting to the next stage, where Hamas would have to give up its arms and, even harder, its claim to run Gaza, may prove even more difficult than bringing the living and dead hostages home. Hamas may well balk at the next steps, and so may Mr. Netanyahu, who argues that the job will not be done until every Hamas combatant in the Oct. 7 attacks is hunted down. Any of those could unwind the fragile cease-fire….
‘The history of the region suggests that working out peace accords to end conflicts is a little like cleaning up after volcanic eruptions: There is a certainty it will happen again. It is just hard to know when, or how ferociously.”
Mr. Sanger is too negative, but he’s one of the better observers of the foreign policy scene and just wanted to put in his opinion.
Editorial / Wall Street Journal
“The lessons of Mr. Trump’s method are worth noting. First, sustained U.S. pressure was needed on Hamas, not Israel. The more Mr. Biden restrained Israel or blocked arms shipments, the less reason Hamas had to cut a deal. The terrorists expected Mr. Biden to force Israel to stop if they held out long enough.
“Mr. Trump reversed Hamas’ calculus. Neither protests nor Iranian escalation would cause him to rein in Israel. Instead his threats to Hamas garnered a January hostage deal, after which he encouraged Israel to conquer Gaza. That was nearing completion when Hamas took this new deal.
“Second, there was no substitute for Israeli military pressure. Even a few weeks ago, the conventional wisdom was that the war was no longer accomplishing much, least of all the recent Gaza City offensive. Fighting in this sensitive area was supposed to doom the hostages.
“Hamas saw it differently. Facing the demolition of its capital, it first agreed to a partial hostage deal that it had resisted for months. When Mr. Netanyahu said this wasn’t enough and demanded all hostages to be freed at once, critics said this meant the Prime Minister wanted no deal. Wrong again. Hamas buckled and Israel is getting back all hostages.
“Third, Hamas’ allies had to feel the heat. Mr. Biden stressed de-escalation, opposing the offensive against Hezbollah and shielding Iran from stronger retaliation. He backed Egypt in blocking Gazan refugees and renewed the U.S. military base in Qatar for nothing in return.
“Mr. Trump backed and then joined Israel’s June campaign against Iran, leaving Hamas’ political strategy in shambles. Iranian escalation could no longer bail out Hamas. The President also leveraged Qatar, Turkey and Egypt to coerce Hamas into a deal. It turns out these U.S. partners had that power all along.
“Qatar seems to have been influenced by Israel’s much-denounced Sept. 9 strike on Hamas leaders in Doha, which endangered the ruling al-Thani family’s lucrative double game. That threat, along with U.S. conciliations that followed, coaxed Qatar to demand its Hamas client sign on the dotted line. The deal now opens the prospect of expanding the Abraham Accords between Israel and the Arab states.
“Mr. Trump’s approach to the Middle East has been the opposite of Obama-Biden’s – and the opposite of his own in Ukraine. Do you pressure the ally, willing and able to fight, or the enemy? If Mr. Trump now reverses his strategy on Russia, next year even the Nobel committee might find it impossible to deny him the peace prize.”
Russia/Ukraine: Tuesday, Vladimir Putin said that Russian forces had captured almost 5,000 sq. km (1,930 square miles) of land in Ukraine in 2025 and that Moscow retained complete strategic initiative on the battlefield.
Russia’s 2025 gains would amount to nearly 1% of Ukraine’s land area, and the country controls nearly 20% in total.
Putin, addressing a meeting with Russian top military commanders on his 73rd birthday, said Ukrainian forces were retreating in all sectors of the front. He said Kyiv was trying to strike deep into Russian territory, but it would not help it to change the situation in the more than 3 ½-year-old war.
“At this time, the Russian armed forces fully hold the strategic initiative,” Putin told the meeting in northwestern Russia near Russia’s second-largest city of St. Petersburg, according to a Kremlin transcript.
“This year, we have liberated nearly 5,000 square km of territory – 4,900 – and 212 localities.”
Ukrainian forces, he said, “are retreating throughout the line of combat contact, despite attempts at fierce resistance.”
Russia’s Defense Ministry on Tuesday reported the capture of two more villages along the front, which Ukraine’s top commander says now extends over 1,250km (775 miles).
Ukraine’s military back in August dismissed Russia’s recent offensives as a failure, with Moscow’s forces failing to capture a single major Ukrainian city this year.
Ukrainian accounts say Kyiv’s troops have made gains in the Donetsk region, particularly around Dobrophillia, a town near the key logistics hub of Pokrovsk. President Zelensky has also said Ukrainian forces have regained ground in the border Sumy region, where Russia has established a foothold.
Russian Army General Valery Gerasimov, chief of the General Staff of Russia’s armed forces, told the meeting of top commanders that Russian forces were “advancing in practically all directions.” Ukrainian forces, he said, were focused on slowing the Russian advance.
Gerasimov, overall commander of Russia’s war effort, said the heaviest fighting was gripping Pokrovsk and areas towards Dnipropetrovsk.
Pokrovsk has always been a key…Russia has been trying to take it for more than a year.
In his remarks to the meeting, Putin said Russia’s objectives remained the same as when he launched its “special military operation” in February 2022, saying it was aimed at “demilitarizing and denazifying” its smaller neighbor.
—Russia launched another massive airstrike at targets across Ukraine overnight Saturday, killing at least five people and wounding several others.
The barrage – from Kharkiv in the northeast to Lviv in the far west and Odesa on the Black Sea coast – was comprised of more than 50 missiles, including the ballistic Kinzhal variety, and about 500 attack drone, President Zelensky said on X.
Four of the deaths came in Lviv, and thousands of people lost power as a result of the strikes.
“Moscow continues to strike homes, schools, and energy facilities – proving that destruction remains its only strategy,” Prime Minister Yulia Svyrydenko said on X.
Neighboring Poland scrambled jets in response to the Russian attack.
The attacks came after an airstrike on Saturday against a railway station in the northern Sumy region killing one and injuring at least 30 people.
Zelensky made a plea for “faster implementation of all defense agreements, especially on air defense, to deprive this aerial terror of any meaning.” The U.S. and Europe “must act” to make Vladimir Putin stop, he added.
Last Friday, Russia fired a total of 381 drones and 35 missiles at Ukraine, in what officials said was an attempt to wreck the Ukrainian power grid ahead of winter and wear down public support for the three-year-old conflict.
—Long-range Ukrainian drones and missiles hit a major Russian ammunition plant, a key oil terminal and an important weapons depot behind the front line, Ukraine said Monday. The oil terminal was in Crimea.
–Early today, Friday, Russian drone and missiles strikes wounded at least 20 people in Kyiv, damaged residential buildings and caused blackouts across swathes of Ukraine early Friday, authorities said. A child was also killed in separate attacks in the southeast of the country.
In the heart of the Ukrainian capital, rescue crews pulled more than 20 people out of a 17-story apartment building as flames engulfed the sixth and seventh floors. Five people were hospitalized.
The Russian strikes had targeted civilian and energy infrastructure as Ukraine prepared for falling winter temperatures, President Zelensky said on social media.
Ukraine’s air force said Friday that the latest Russian barrage included 465 strike and decoy drones, as well as 32 missiles of various types.
—President Trump on Sunday praised a Kremlin proposal to continue the limits on long-range nuclear weapons for one more year, which would preserve a main element of the last major arms-control agreement between the U.S. and Russia.
“Sounds like a good idea to me,” Trump said Sunday when asked about the Russian offer.
President Putin said last month that he was prepared to adhere to the caps in the New START agreement for an additional year after the accord expires in February.
Proponents of the deal say that keeping the weapons ceilings in place will provide a measure of stability when there are sharp tensions between Moscow and the West.
Critics say that keeping the New START treaty, which covers U.S. and Russian strategic forces, will preclude the U.S. from expanding its arsenal to respond to China’s growing nuclear capabilities.
The U.S. withdrew from the treaty with Russia banning intermediate-range American and Russian missiles based on land in 2019 after accusing Moscow of developing an illegal ground-launched cruise missile. Lesser arms-control agreements have also gone by the wayside.
President Biden had extended the New START treaty for five years in one of his first major foreign-policy actions. But then Russia invaded Ukraine.
In 2023, the U.S. accused the Russians of violating the New START agreement by denying on-site inspections, impeding strict monitoring of the treaty. Putin responded by suspending Russia’s participation in the treaty.
Even so, the two sides were careful not to abandon the caps in nuclear forces, which limits each side to no more than 1,550 deployed nuclear warheads. It also sets a limit of 700 on the land-based ballistic missiles, submarine-launched missiles and strategic bombers that carry them.
In his comments Sunday, Trump didn’t say if the U.S. was coupling its acceptance of the Russian idea with proposals of its own or whether it had formally responded to the Kremlin offer.
–In the Czech Republic, billionaire Andrej Babis became another populist leader in Central Europe to stage a political comeback by winning big in parliamentary elections.
The result could steer the country away from supporting Ukraine and toward Hungary and Slovakia, which have taken a pro-Russian path.
With the victory, Babis would join the ranks of Hungarian Prime Minister Viktor Organ and PM Robert Fico of Slovakia, whose countries have refused to provide military aid to Ukraine, continue to import Russian oil and oppose European Union sanctions on Russia.
President Petr Pavel met with Babis and other party leaders on Sunday and it’s up to Babis to form a government.
China: On Tuesday, a bipartisan slice of the Senate Armed Services Committee, chaired by Sen. Roger Wicker (R-Miss.), took tuns expressing concerns about the Trump administration’s inward shift in national-security focus and its alienation of key allies and partners in the Asia-Pacific region.
Wicker: “The Chinese Communist Party, along with the nuclear-armed Russia and North Korea, pose a significant threat to the United States. The scale and scope of that threat put a premium on our alliances. In light of that, I’m disappointed with some of the decisions the department has made with respect to our allies in Japan, South Korea, Australia and Taiwan. A few of these choices have left me scratching my head.”
Sen. Mark Kelly, D-Ariz.: “There are some rumors, I guess, circulating that the new national defense strategy is going to shift priority away from the PRC and away from the Indo-Pacific, and instead focus on the Western Hemisphere. We’ll see what happens when that comes out,” Kelly said. “If that’s true…this shift is alarming, because most of what is briefed to this committee focuses on ‘how are we going to deter China.’”
The senators spoke during the confirmation hearing for John Noh, the Trump administration’s pick to be assistant defense secretary for Indo-Pacific security affairs. Noh, who is currently ADS for East Asia, responded that China is “an enormous concern of mine.” But he waffled when Wicker asked about the Trump administration’s decision to cancel $400 million in military aid to Taiwan, and cited President Donald Trump’s stance that the island’s government should up its defense spending to about 10 percent of its GDP.
Wicker worried that “DOD may be using the Ukraine playbook with Taiwan by taking defense items procured with presidential drawdown authority and returning it to the defense stockpile” which misaligns with “congressional intent, and would require Taiwan to purchase these items that have already been authorized as PDA.” [Defense One]
Meanwhile, Beijing hit out at Taiwanese leader William Lai Ching-te’s Double Tenth* speech on Friday, saying it exposed Lai’s stubborn nature as a troublemaker.
*A date that marks the anniversary of the founding of the Republic of China, Taiwan’s official title.
“Lai’s speech distorted right and wrong, peddled fallacies of Taiwan independence and secession, and distorted and challenged historical facts and international consensus, once again exposing his stubborn nature as a troublemaker…and warmaker,” said Guo Jiakun, a mainland foreign ministry spokesman.
The Lai administration’s attempt to pursue independence through force and resist reunification “will only drag Taiwan into a dangerous situation of war,” Guo said.
“Maintaining peace and stability in the Taiwan Strait requires upholding the one-China principle and resolutely opposing Taiwan independence. China’s firm opposition to U.S. arms sales to Taiwan and any military ties between the U.S. and Taiwan is consistent and clear,” Guo said.
The ministry’s comments were in response to Lai’s pledge to boost the island’s defense spending and build a missile shield – dubbed the “T-Dome” – modelled after the U.S.’ proposed Golden Dome system, in a bid to counter growing military pressure from Beijing.
Random Musings
–Presidential approval ratings….
Gallup: 40% approve of President Trump’s job performance, while 56% disapprove. 32% of independents approve (Sept. 2-16).
Rasmussen: 51% approve, 47% disapprove (Oct. 10). This has been more volatile the past few weeks than I can remember.
—We have an October surprise in Virginia as Republicans are ramping up pressure on Virginia Democratic attorney general nominee Jay Jones to drop out of the race following the revelation of texts he made in 2022 in which he openly discussed hoping for violence against a Republican state lawmaker.
Top Republicans including Trump, Vice President Vance and Virginia Gov. Glenn Youngkin have called for Jones to exit the face. The controversy has also sparked an ad from Lt. Gov. Winsome Earle-Sears, the GOP nominee for governor, tying her Democratic opponent, former Rep. Abigail Spanberger, to Jones.
Jones has apologized for the texts but had not given an indication as yet that he might end his bid against incumbent Virginia Attorney General Jason Miyares (R).
The National Review first reported on the messages that Jones sent to House Delegate Carrie Coyner (R) about then-state House Speaker Todd Gilbert (R).
“Gilbert, hitler, and pol pot,” [sic] Jones said. “Gilbert gets two bullets to the head.”
“Spoiler: put Gilbert in the crew with the two worst people you know and he receives both bullets every time,” Jones told Coyner.
Spanberger, who is ahead in the polls, has said she reached out to Jones to express “disgust” with the comments and called on him to “take responsibility” for his words but didn’t expressly call for him to drop out.
–In the New York City mayoral race, a new Quinnipiac University poll has Zohran Mamdani’s lead over Andrew Cuomo shrinking to 46% to 33%, with Republican Curtis Sliwa at 15%.
In a four-way race with Mayor Eric Adams, who then exited, a Quinnipiac survey last month had Mamdani’s lead over Cuomo at 22 points (45%-23%, Sliwa 15%, Adams 12%).
—President Trump’s deployment of National Guard troops in an increasing number of U.S. cities is drawing intense backlash as Democrats turn to the courts to try to stop him.
National Guard troops from Texas headed to Illinois after a federal judge on Monday declined to immediately issue a restraining order against the deployment. The judge, an appointee of former President Biden, set a hearing for Thursday.
Illinois Gov. JB Pritzker (D) has vowed to fight the deployment, which he likens to an “invasion,” and the state of Illinois and city of Chicago ripped Trump’s move in their lawsuit filed Monday.
While the administration was allowed to move ahead for now in Chicago, efforts to deploy 200 troops to Portland, Ore., were blocked by another federal judge over the weekend. That judge, a Trump appointee, called the U.S. a “nation of constitutional law, not martial law.”
“The President’s determination was simply untethered to the facts,” U.S. District Judge Karin Immergut wrote in her ruling Saturday.
Trump responded to the ruling by seeking to send the California National Guard into Portland, enraging California Gov. Gavin Newsom (D). Immergut then granted California, Oregon and Portland’s request for a temporary restraining order to block that deployment.
The president on Monday also argued the situation in Portland amounted to an “insurrection,” telling reporters he would consider invoking the Insurrection Act if necessary.
“Portland is on fire. Portland’s been on fire for years,” Trump said. “And not so much saving it. We have to save something else. Because I think that’s all insurrection. I really think that’s really criminal insurrection.”
Last week, the commander-in-chief told hundreds of generals and admirals at the Pentagon’s meeting at Quantico, Va., that “dangerous” U.S. cities should be used as “training grounds” for the military.
—The Justice Department has secured an indictment against New York Attorney General Letitia James following an investigation into mortgage fraud allegations, an expansion of the administration’s campaign to prosecute the president’s political adversaries.
A federal grand jury on Thursday indicted James on charges of bank fraud.
The case was presented by Lindsey Halligan, Trump’s former personal lawyer who he installed as U.S. attorney in eastern Virginia amid frustration about what he saw as the slow pace of the James investigation.
Halligan earlier secured the indictment of former FBI Director James Comey, and the indictments came over the objections of other federal prosecutors who didn’t see strong enough evidence to bring either case.
—President Trump appointed Frank Bisignano, head of the Social Security Administration, to the additional role of CEO of the Internal Revenue Service, a move that puts two big and complex federal agencies under one man’s purview.
Monday, Treasury Secretary Scott Bessent announced the new position for Bisignano, noting that he will be “managing the organization and overseeing all day-to-day IRS operations while also continuing to serve in his role as the Commissioner of the Social Security Administration.” Bisignano will report to Bessent, who also serves as Acting Commissioner of the IRS.
Organizations that represent older Americans were quick to condemn the appointment. “Every American who has paid into Social Security should be outraged,” said Richard Fiesta, executive director of the Alliance for Retired Americans. “Running the Social Security Administration is a full-time job. Treating the job as a side gag insults every worker and retiree who depends on their earned benefits.”
A Social Security spokesperson told Barron’s, “Secretary Bessent’s selection of Commissioner Bisignano to also lead the day-to-day operations at IRS speaks to the incredible customer service turnaround that is happening at SSA.” Bisignano will continue to lead the SSA while supported by the “incredibly talented executive leadership team” he has assembled since his confirmation, the spokesperson added.
The Social Security Administration has touted customer service improvements under Bisignano. In a July release, the agency said its national 1-800 number was handling 70% more calls than it did in the same week last fiscal year, with an 80% reduction in response times.
In his statement, Bessent praised Bisignano as a “proven leader with more than four decades of experience guiding some of the world’s largest financial institutions and technology companies through transformation and growth.”
—The Supreme Court on Monday declined to hear an appeal of the criminal conviction of Ghislaine Maxwell, the longtime associate of Jeffrey Epstein.
The court’s action ends Ms. Maxwell’s attempts to overturn her conviction, meaning her only chance of an early release from prison is likely to be clemency from President Trump, with whom she used to socialize in the Florida and New York party scenes.
Federal prosecutors have opposed her release. The justices considered her appeal at their so-called long conference, a meeting before the start of the new court where they discuss which new cases they might add to their docket.
Maxwell filed a petition to the Supreme Court in April, asking the justices to overturn her conviction. She argued that her criminal prosecution was barred by a now infamous deal between Mr. Epstein and prosecutors in Florida.
—Justin Jouvenal / Washington Post
“The Supreme Court and President Donald Trump are headed for a reckoning.
“After months of terse emergency rulings that largely avoided major confrontations with the new administration, the justices will open their new term Monday faced with the need to render full, final verdicts on policies at the core of Trump’s presidency.
“ ‘It really is going to be a showdown,’ said Jennifer Nou, a law professor at the University of Chicago. ‘So many of the president’s big-ticket constitutional issues and policy initiatives are quickly coming up before the court. All of this is coming to a head.’
“Already on the docket is a case challenging the legality of most of the tariffs at the heart of Trump’s economic policy and another dealing with his aggressive push to exert greater control over independent agencies.
“Though it is an emergency appeal, the justices are treating a case over whether Trump can fire Federal Reserve governor Lisa Cook like one on the regular docket. It will determine the independence of the central bank and could have major implications for the U.S. economy, businesses and consumers.
“The justices could also be called upon in the coming months to issue up-or-down decisions on Trump’s bid to end birthright citizenship, his use of a wartime law to swiftly deport alleged gang members and his effort to strip 300,000 Venezuelan migrants of deportation protections.”
Yup, gonna be a busy, busy time.
—Peggy Noonan / Wall Street Journal
“A lot of people in the Trump administration think this is their moment and America’s last chance. They know what time it is, you don’t, it’s later in the game than you think, the damage is great and right now is the final hope of constructive national change. A sense of urgency is their central driving force.
“But when people get into a ‘last chance’ mindset, they become insensitive to, less mindful of and careful about, what they come to think of as ‘constitutional niceties.’ When it is constitutional niceties – respecting the other branches’ authority, knowing the limits on your own, knowing what’s your lane and what the traffic will bear – that have kept us going since 1789, when the new government began functioning.
“You can lose a republic while trying to save a republic. No matter what your level of idiocy, you don’t want that, you can’t want it, so you have to be careful. And serious.
“When you are driven by a sense of urgency you must still try to act like a normal person – normal in your comportment, which means sober, judicious. Not like some pumped-up drama queen who makes everything more jarring and fevered, and who comes across as the living answer to the question, ‘What would it look like if Captain Queeg took Adderall?’”
Peggy Noonan’s target was Defense Secretary Pete Hegseth and his performance in front of the hundreds of generals and admirals at Quantico Marine Base.
“It was, as a former general said by phone, ‘just flat-out bizarre.’ It was embarrassing to watch. He made everyone in the audience look smaller, which made their profession look smaller. How does that help America?”
And this….
“The retired general later sighed on the phone and said: ‘I would like you to note that his hero, Norman Schwarzkopf, was fat. And George Patton wasn’t exactly a gazelle.’ Sound military leadership has little to do with some physical fitness and everything to do with strategic judgment.”
—President Trump said last Friday, after I had posted, that he has personally reversed $187 million in funding cuts made by his administration for New York’s law enforcement and counterterrorism operations, following bipartisan outcry from New York officials.
The cut would have slashed federal counterterrorism funding for the NYPD from $90 million to nearly $10 million, according to Commissioner Jessica Tisch, who on Wednesday called it “a devastating blow.” She called the city “the No. 1 terrorist target in the world.”
Republican U.S. Rep. Nicole Malliotakis, the only Republican representing New York City in Congress, said she had spoken with Trump about the cuts, which she called a “terrible idea.”
“New York remains the nation’s top terror target, and cutting this funding was never acceptable,” she said in a statement.
—An arrest has been made in connection with the devastating Palisades Fire that swept through Los Angeles County last January, one of two deadly wind-driven blazes that erupted Jan. 7, claiming at least 30 lives and destroying over 16,000 structures.
Jonathan Rinderknecht, 29, of Melbourne, FL, was charged with destruction of property by means of fire, according to the U.S. Attorney’s Office, Central District of California. Rinderknecht is a former Pacific Palisades resident.
–In an unfolding drama over many days, hundreds of trekkers were stranded by a blizzard near the eastern face of Mount Everest in Tibet and most were guided to safety by rescuers, Chinese state media reported last Sunday, as unusually heavy snow and rainfall pummeled the Himalayas.
“The weather this year is not normal. The guide said he had never encountered such weather in October. And it happened all too suddenly,” said Chen Geshuang, who was part of an 18-strong trekking team made it to the relative safety of Qudang.
Thirty-five people died in separate landslides in the eastern Ilam district bordering India. Nine were reported missing after being swept away by floodwaters and three others were killed in lightning strikes.
–The East Coast is bracing for a rather troublesome-looking coastal storm Sunday and Monday (at least the forecast of one). Hopefully it isn’t worthy of mention next WIR.
—
Pray for the men and women of our armed forces…and all the fallen.
Slava Ukraini.
God bless America.
—
Gold $4021…another record weekly close
Oil $58.91…lowest weekly close since April 2021…in my cursory look at my files
Bitcoin: $116,760 [4:00 PM ET, Friday…had hit a new high of $126,000 on Monday]
Regular Gas: $3.10; Diesel: $3.67 [$3.21 – $3.61 yr. ago]
Returns for the week 10/6-10/10
Dow Jones -2.7% [45749]
S&P 500 -2.4% [6552]
S&P MidCap -3.9%
Russell 2000 -3.3%
Nasdaq -2.5% [22204]
Returns for the period 1/1/25-10/10/25
Dow Jones +6.9%
S&P 500 +11.4%
S&P MidCap +1.3%
Russell 2000 +7.4%
Nasdaq +15.0%
Bulls 57.7
Bears 15.4
Hang in there. RIP, Josh P.
Brian Trumbore
