[Posted 4:30 PM ET, Friday]
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Edition 1,438
Having a bad day, week, month? [In my case ‘months.’] You’ve got it good. Consider the following….
From a BBC News report on what children, and their families, are facing in Kyiv amidst the Russian onslaught.
“The lift doesn’t work, the water will stop flowing because electricity is needed to pump it to their flat. So the torches and LED candles come out and Daryna, her son Kyryll and daughter Olena gather for a card game of Uno before an early night….
“Many are choosing to leave the capital, or Ukraine altogether, to avoid months of bitter cold. Daryna, Kyryll and Olena know the winter has barely begun.
“ ‘It’s the worst feeling,’ Kyryll says. ‘When I get home from school, I’m tired. I lay in my bed. Bam! No lights. Bam! A lot of homework. Bam!’
“When the children are in bed Daryna confides her thoughts of moving to somewhere safer, or warmer. She’s torn by the desire to stay at home – close to friends and relatives – and the worry of how unbearable life may become.
“The strain is damaging her mental health, she tells me, and she fears the impact on Kyryll and Olena, who suffers nightmares. Still, Daryna remains defiant despite the darkness.
“ ‘I don’t want to live without light. But actually people in Ukraine say, OK, without light, but without Russians. Yes, we’re scared, we’re scared a lot. But better for us to be without power, but [also] without Russians.’”
—
Congratulations to Mississippi Democratic Sen.-elect Scott Colom who has become the state’s first Black U.S. senator since Reconstruction.
Colom defeated Republican Sen. Cindy Hyde-Smith on Wednesday after a prolonged ballot counting process.
Mississippi has been controlled mostly by white conservatives for generations despite having the largest share of Black residents of any U.S. state. The last time Mississippi chose a new Democratic senator was 1947, John Stennis, who served until his retirement in 1989.
This was a truly remarkable triumph. NAACP President Derrick Johnson issued a statement saying the state’s voters, most notably Black voters, “made history because they refused to be intimidated, discouraged, or counted out” in a state that has seen “some of the nation’s most difficult battles for voting rights.”
Even President Trump credited Collum for his vigorous campaign.
—
I have the whole Jensen Huang saga below. This is going to be playing out for a long time.
But the nationwide average price of gas at the pump is now below $4.00! Par-tay!
—
Tale of the Tape
Oil / West Texas Intermediate (WTI)
Friday, Feb. 27…$67.30
Friday, Nov. 13…$88.87
Nationwide averages at the Gas Pump [Source: AAA]
Friday, Feb. 27…regular $2.98; diesel $3.75
Friday, Nov. 13…regular $3.87; diesel $6.06
As it went down, day by day, in the Iran War….
—President Trump said the U.S. military last Friday carried out new limited strikes on Iran, targeting an Iranian air defense system.
Iranian state media reported the sound of two explosions in the Suza area of Qeshm Island, which is in the crucial waterway for oil shipments.
Trump in an exchange with reporters described the military action as “minor.”
President Trump revealed Sunday it is “highly unlikely” that the U.S. will resume the war in Iran as talks over the Islamic Republic’s nuclear program continue to make progress.
“It depends on whether or not they sign a very strong agreement,” Trump said in a phone interview. “The answer is highly unlikely it’s going to be necessary. They’re a failing nation. It just came out, you saw this year, 301% inflation. Highly unlikely it will be necessary.”
“So it’s highly unlikely I’ll have to,” he went on. “They’re withering away financially. We’ve hit them militarily. We could finish them off.”
Trump previously signaled that he was unlikely to resume the military campaign against Iran until after the midterm elections last Tuesday, but has since conveyed optimism about the progress being made in negotiations.
Still, he has maintained a blockade around Iran to cripple the U.S. adversary economically.
Democrats have vowed to adopt a resolution restricting Trump’s ability to wage war on Iran once they retake control of Congress in January.
—Over the weekend, more than 50 people were killed in Yemen in what appeared to be one of the deadliest stretches since the conflict between the Iran-backed Houthis and the government of Yemen backed by Saudi Arabia reignited in recent months.
Over thirty were killed in Saudi airstrikes on a crowded market in Taiz Province, according to a Houthi-run news agency. The warring parties traded blame for the attack.
Since the war between the Houthis and the Saudi-backed government resumed in August, over 1,800 have been killed and more than 300,000 displaced. Aid agencies have warned that hospitals in Yemen are running short of medical supplies.
—President Trump on Monday told reporters he believes the war in Iran “militarily is effectively over,” suggesting that – at least for now – he’s not prepared to resume the bombardment that has devastated the Islamic Republic and caused reverberations across the global economy.
The president made a surprise visit to the White House briefing room after meeting earlier in the day with Qatar’s prime minister, Sheikh Al Thani.
“Iran militarily is effectively over,” Trump said. “We’re just keeping it in the status quo.”
He added that Iran has been “decapitated” but said he is still looking to make sure there’s a long-term solution to ensuring that Iran’s nuclear program is defanged.
At the same time, Trump reiterated he plans to keep up the Naval blockade in the Strait of Hormuz for now.
“The United States of America is fully locked and loaded with the best equipment ever made, and we don’t think there’s going to be any reason to use it,” Trump said.
It was some of Trump’s most definitive comments about moving away from his threat to resume strikes on Iran after the U.S. midterm elections had passed.
Over the course of the conflict, Trump has repeatedly said he is on the cusp of ordering U.S. forces to escalate attacks if Iran’s leaders don’t quickly agree to U.S. terms to end the war, only to back down. In earlier cycles, he has also edged away with a last-minute declaration, sometimes at the behest of Gulf allies, that he’s going to give diplomacy more time.
In a social media post shortly before speaking to reporters, Trump once again asserted that Middle East allies – Qatar, Saudi Arabia, UAE, Bahrain, Kuwait and others – “would prefer the status quo.” Minutes later, in his exchange with reporters, he sought to assure war-weary Americans that there was “positive momentum” and that he saw a “good chance” that the war “could get ended.”
But Wednesday, Iranian security chief Mohsen Rezaei said in televised remarks that Iran will not allow even a single particle of enriched nuclear material to leave the country and there will be consequences in the event of any new U.S. strikes on the Islamic Republic.
Rezaei was speaking to Lebanon’s pro-Iranian Al Mayadeen TV after U.S. officials downplayed the need for additional military action against Iran.
Rezaei has said there are currently no negotiations taking place between Tehran and Washington.
“Any new U.S. attacks will also be met with targeting U.S. bases far away,” he said.
Iran’s Supreme Leader has issued a directive that the country’s near-weapons-grade uranium should not be sent abroad, two senior Iranian sources said in May.
The IAEA estimates that Iran had 440.9 kg of uranium enriched to 60% – a level far higher than needed for civilian use – when Israel and the U.S. attacked Iranian nuclear facilities in June 2025. How much of that has survived is unclear.
President Trump on Truth Social, Thursday AM, sneaking in comments on Iran at the end:
“I have asked Vice President Vance to focus his complete and total attention on the Massive Corruption and Crime taking place in Democrat run Cities and States throughout the U.S. The Blue States, such as Minnesota, California, Illinois, and many more, are all poorly run, corrupt disasters. Billions of Dollars is being stolen each and every month. Our Budget could be quickly BALANCED with the correction of this large scale criminal activity. CORRUPTION is in the Democrat Leadership’s blood! We don’t need a deal with Iran. Those days have long since passed. We’ve got their money, Hundreds of Billions of Dollars, and we’ve got their Strait!
—In Israel, Saturday night, Israeli President Isaac Herzog said that he was giving opposition candidate Gadi Eisenkot the first opportunity to form a governing coalition following elections on Oct. 27.
Neither Eisenkot nor Israeli Prime Minister Benjamin Netanyahu won a clear majority. But in marathon discussions with the president last week, representatives from most of Israel’s main parties recommended Eisenkot be tasked with assembling a new government.
The announcement, which had been expected on Sunday, came shortly after Netanyahu called for a “national unity government” in a video statement and warned against “hastily swearing in a government with terrorist supporters” – an apparent reference to the Arab-led parties.
Eisenkot has six weeks to form a government. At a ceremony in Jerusalem, he said he wanted a leadership that people can trust, that will act in the interests of the public and that represents all parts of society.
Eisenkot said the conditions for parties joining his governing coalition are support for Israel as a Jewish and Democratic state, for its declaration of independence, for military or national service, and recognizing the Hamas militant group as a terrorist organization.
Eisenkot has three options: a power-sharing agreement with Netanyahu, support from Arab-led parties – something several members of his bloc do not support – or an agreement with the ultra-Orthodox parties, which demand military exemptions for their community.
Wall Street and the Economy
Influential Federal Reserve Governor Christopher Waller, addressing a group in London, Tuesday, said the Fed ought to raise short-term borrowing costs next month even if government data shows inflation cooled last month, and should consider an upsized half-point rate hike if the inflation picture worsens.
“While I am hoping for an improvement over September, even if this occurs, I would still support a 25-basis point increase in the FOMC’s policy rate at our December meeting,” Waller said.
If core consumer prices rise 0.3% or more from September, “a stronger policy move may be needed,” Waller said. “In that case, I believe a 50-basis point hike in the policy rate should be considered at the December meeting.”
Other Fed governors issued similar analysis, calling for a December hike, which now seems a lock.
Then the CPI data was released and it wasn’t good. On headline, up 0.4%, a tick higher than expected, and on core, ex-food and energy, 0.3%, also a tick higher. No annual inflation rate was published. Due to last year’s federal shutdown, the government has no data on how high prices were 12 months ago, so a precise yearly inflation figure can’t be calculated.
Editorial / Wall Street Journal
“The Labor Department’s consumer price index report for October on Tuesday reinforced why Republicans lost last week: Inflation is still outpacing wage growth for too many Americans.
“The overall CPI rose 0.4% last month, with shelter accounting for about a third of the increase. Energy prices rose 0.7%. But even the core index, which excludes food and energy, rose 0.3%, the same as in August and September.
“Higher energy and commodity prices from the war in Iran may be rippling into the prices of goods and services like food (up 0.5% last month) and airline fares (0.4%). But price increases last month were broad-based, including in motor vehicle repair (0.9%), hospital services (0.8%), hotels and motels (0.7%), streaming services (0.7%) and day care (0.4%)….
“Real average hourly earnings after inflation were flat in October and are roughly the same as in January 2025. This is what has Americans unhappy. They don’t expect prices to return to pre-pandemic levels, yet they are frustrated that they keep increasing, particularly for the things that they spend most of their paychecks on.
“Seventy-nine percent of voters said in exit polls that inflation in the last year is a hardship, and 62% of them backed Democrats. Eighty-eight percent said they were very or somewhat concerned about the cost of goods and groceries.”
Friday, we then had the October producer price numbers, and here they were able to publish year-over-year figures. On headline, 0.3%, a tick lower than forecast, 6.5% year-over-year, and on core, 0.3% and 5.0%, both as expected.
Separately, October existing home sales in the U.S. fell 5.5% to a seasonally adjusted annual rate of 3.75 million units, the lowest level since Aug. 2010 and below expectations of 3.85 million.
National Association of Realtors Chief Economist Lawrence Yun attributed the weakness to elevated mortgage rates, which had reached their highest levels since 2000 (except for a brief period in 2023), before falling a bit the past month. Yun noted that homeowners remain financially secure due to accumulated housing wealth, while lower mortgage rates could unlock significant pent-up demand.
The median home price increased 0.4% from a year earlier to $416,700.
Freddie Mac’s 30-year fixed-rate mortgage fell for a fourth consecutive week to 7.11%, but this calculation was before the big spike in the 10-year Treasury post-CPI and PPI.
The Atlanta Fed’s GDPNow estimate for fourth-quarter growth is 3.5%.
Next week we don’t have much on the economic data front, save for a report on October retail sales.
Europe and Asia
We had a preliminary reading on third-quarter GDP in the eurozone, courtesy of Eurostat, up 0.4% over the prior quarter. Compared with the same quarter of 2025, seasonally adjusted GDP increased by 1.3%.
Turning to Asia….
China’s October inflation rate was unchanged over September, up 0.7% from a year ago. The October PPI was 5.7% Y/Y.
October exports surged another 35.2% year-on-year to $412.33 billion, slightly lower than September’s 36.3% surge.
With the extension of the trade truce with the United States through January, exports rose 32.9% to the U.S., while shipments to the EU increased 24.4%.
It’s all about strong demand for chips and AI-related hardware, with exports of integrated circuits soaring 137.1%.
Imports rose 41.6%, the strongest annual growth since May 2021. [Source: General Administration of Customs]
Japan’s producer price index for October was up 0.7% from a month prior, and up 7.1% year-over-year, both much higher than consensus.
September household spending (like our retail sales figure) fell 2.8% month-on-month, far worse than forecast.
Street Bytes
—Stocks finished up on the week…the Dow Jones gaining 2.1% to 52348, the S&P 500 2.5%, and Nasdaq rose 2.3%, breaking a four-week losing streak.
Next week, aside from Nvidia’s earnings, it’s Big Box earnings week…Walmart, Home Depot, Lowe’s….
—U.S. Treasury Yields
6-mo. 4.45% 2-yr. 4.86% 10-yr. 5.15% 30-yr. 5.48%
Treasury yields spiked on the inflation/Fed talk, though the 10-year is still below the early October peak of about 5.36%.
The yield on the 2-year rose 35 basis points on the week; the 10-year 30 bps.
I’ve been holding an extensive piece by Richard Rubin and David Luhnow of the Wall Street Journal that was published two weeks ago (Oct. 30) and finally am getting around to noting a small snippet.
“In the run-up to Tuesday’s midterm elections, Democratic ads hammer at the Iran war, gas prices and alleged corruption. Republicans warn about socialism, transgender athletes and tax hikes. What’s conspicuously absent from both parties’ pitches? America’s soaring deficits and debt.
“During the 2018 midterms, 140 political ads talked about the debt or deficit, according to ad tracking firm AdImpact. This year, just 30 did, ranking 52nd among topics in this year’s campaigns.
“This is not because the debt problem went away. Quite the opposite.
“For the fiscal year that ended Sept. 30, U.S. publicly held federal debt reached 100% of gross domestic product for the first time in 80 years. That’s more than triple its 2001 level, and analysts expect the post-World War II record of 106% to fall in a few years.
“The annual deficit for the year that ended Sept. 30 landed just shy of $2 trillion, or 6.2% of GDP. That’s seven consecutive years above 5%, the longest such streak in at least a century and unprecedented outside wars, recessions or emergencies. Interest on the debt more than doubled in just four years and its cost now exceeds military spending.”
Yes, as Messrs. Rubin and Luhnow say, this problem isn’t going away, and for certain will rear its ugly head from time to time in the markets.
For example, on Thursday, the Treasury Department released the budget deficit numbers for October, the first month of the new fiscal year, and it widened to $404 billion from $284 billion a year earlier, missing forecasts of a $298.6 billion gap. Outlays rose to $773 billion from $689 billion. Net interest expense was $103 billion. Receipts declined to $369 billion from $404 billion.
—Last weekend a bombshell story unfolded. Nvidia boss Jensen Huang, whose company produces the world’s most cutting-edge AI chips, admitted to having an affair – amid reports that Secretary of State Rubio warned months ago that his lover was a Chinese spy.
Alice Huang (no relation), an executive at Megaspeed, which purchased AI chips from Nvidia, was recruited by China’s Ministry of State Security, Beijing’s spy agency, the memo overseen by Rubio concluded, according to a New York Times report.
The Biden administration had limited the sales of high-end Nvidia chips to China amid the AI race, but the Nvidia CEO pushed the Trump administration to ease up on those constraints.
Nvidia’s board announced Sunday it launched a probe into whether Jensen was a “target of a foreign intelligence effort,” but stressed that it still has “confidence in Jensen and his leadership team.”
Jensen Huang issued a memo to employees: “I owe my family and all of you an apology. I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry. …I take full responsibility for what I did and the hurt I caused, and I accept the criticism that comes with it.”
Nvidia’s board in its own statement said it prioritizes U.S. national and economic security, which is “paramount to the interests of Nvidia and its shareholders.”
Although it has said it has “no reason to believe that either national security or Nvidia secrets were compromised, the Board’s inquiry will examine all available information.”
As for the classified Rubio memo from this past spring, the New York Times reported it warned top Trump administration officials that Jensen Huang was in a close relationship with a Chinese spy.
The document was based on classified intelligence from electronic surveillance of Alice Huang, who was investigated for illegally smuggling chips into China. U.S. officials had concluded that Ms. Huang was in a close relationship with the Nvidia CEO, and that she had been recruited to spy by China’s top intelligence agency, the Ministry of State Security.
The Rubio memo, and his involvement, has not been previously reported. It highlights how concerns about the relationship and the spying were known to senior officials even as Mr. Huang, a pivotal figure in the growth of AI, remained an influential voice with President Trump over policy on the issue.
Jensen Huang has opposed calls for more tightly regulating the export of the most advanced AI chips, and has pushed to be able to sell all but the most recently developed technology to China, the main competitor to the United States in the global rush for AI supremacy.
President Trump told reporters Sunday night, “I have not spoken to him about it. I just know he’s a fine person, but you never know what is going on.”
Asked whether he should stay on, Trump said, “I think so. Oh yeah, sure.”
Asked if he plans to take Huang on his trip to Asia later this month, Trump said that he doesn’t know but would take him along.
“I haven’t heard he’s done anything wrong,” Trump said.
Nvidia’s shares fell sharply Monday, to $180, and have been falling since hitting $243 on Oct. 6.
One thing for shareholders to consider is the company has no clear No. 2 or successor. Huang manages a huge swath of the company personally – while increasingly entrusting responsibility to the next generation of his family. Talk about ‘key man insurance.’
China denied on Monday it engaged in an attempt to ensnare Huang, saying the spying allegations were unsubstantiated and a smear campaign against Beijing.
We learned Tuesday, through reporting from Bloomberg, that Nvidia’s general counsel intervened in a U.S. government probe of suspected smuggling of AI chips by Megaspeed, questioning whether the Trump administration played a role in detaining an executive from the firm.
In late summer 2025, Nvidia’s Tim Teter called Commerce Under Secretary Jeffrey Kessler, who oversees U.S. chip export curbs, to ask about the Megaspeed investigation, according to people familiar with the matter.
Specifically, Teter wanted to know whether Kessler’s Bureau of Industry and Security was involved in the Singapore government’s recent detention of Alice Huang, when she was a Megaspeed executive.
An Nvidia spokesperson said that Teter was unaware of the affair at the time he called Kessler about Alice’s detention in Singapore.
There was broad agreement among most senior Trump administration officials that the United States should more aggressively tighten controls on Nvidia’s advanced chips to keep China from using them to catch up in the race to dominate artificial intelligence.
But over the past year, Commerce Secretary Howard Lutnick frequently clashed with top officials over how to regulate sales of advanced technology, particularly Nvidia’s chip sales to Asia. According to reports, this has drawn accusations from others in the administration and in Congress that the Commerce Department has become too cozy with Nvidia and Jensen Huang, and failed to adequately police the firm’s chip sales to China, in particular.
Lutnick is being called to testify before the Senate Banking Committee. “Recent reports raise serious concerns about our national security and the protection of sensitive U.S. technology,” Committee Chairman Tim Scott wrote on X. Scott said he would consider subpoenaing Huang if he did not appear voluntarily.
Appearing on CNBC, Friday, Treasury Secretary Scott Bessent said he was frustrated with the Commerce Department’s delay in implementing controls over the export of certain Nvidia chips to China.
Bessent said that his department, along with the departments of State and Defense and the U.S. Trade Representative, were in favor of adding Megaspeed to an export control list for months but that the Commerce Department was in charge of the matter.
“I am frustrated when President Trump made it very clear Cina should not receive any Nvidia chips above H100s,” he said. Commerce “has the pen, and you will have to ask them about their internal processes.”
Editorial / Wall Street Journal
“Nvidia’s friends in Washington are shrugging off CEO Jensen Huang’s affair with a suspected Chinese spy. Regrettable, they say, but men will be men. Well, not so fast. The imbroglio is a stark warning of how the Chinese are seeking to infiltrate the top levels of American business to dominate artificial intelligence.
“Nvidia shares fell 4.3% Monday after Mr. Huang on Sunday admitted to and apologized for his affair. Investors may worry that the affair, besides being a distracting embarrassment, could invite a government response that limits its chip sales. House Republicans have requested that the CEO appear for a closed-door briefing this month.
“The company’s board has begun an independent investigation in light of reports that Mr. Huang was the target of a Chinese intelligence campaign. As well it should, but this isn’t a substitute for a government investigation. The national-security stakes are larger than one man or company….
“Nvidia officials downplay the risk that the Chinese would use its chips for nefarious purposes. Mr. Huang last year derided the label ‘China hawk’ as a ‘badge of shame.’ In his view, the U.S. should learn to make bonhomie with Beijing. That’s hard to do when Beijing aids America’s enemies, threatens U.S. friends, and steals U.S. military and economic secrets.
“Chinese ‘police stations’ target Chinese dissidents in the U.S. The former mayor of Arcadia, Calif., with a population of 55,000, this spring pleaded guilty to acting as an illegal Chinese agent. Beijing’s Ministry of State Security, for which Ms. Huang allegedly worked, employs hundreds of thousands of spies.
“All of this is another reason for Mr. Trump to be skeptical of commitments by Chinese President Xi Jinping when they meet next week. Easing export controls on Nvidia’s Rubin and Blackwell chips is a top Beijing priority. Giving away Nvidia chips for a promise to buy more soybeans* would be a mega-blunder.
“The Huang affair highlights China’s designs on U.S. chips and holes in U.S. export controls. Closing the holes may be a rare but useful area for bipartisan cooperation.”
*China has never come close to meeting its promises on ag.
Thursday, Jensen Huang resigned, CFO Collette Kress stepping into the role of interim CEO. The board said it would look both inside and outside for a new chief executive.
Nvidia reports earnings next Tuesday.
—CoreWeave shares surged over 20% on Wednesday*, igniting a rally in battered AI cloud stocks, as its hefty spending yielded strong revenue growth and the company signaled a pullback from the borrowing binge that had set off alarms of an AI bubble.
*But fell hard the rest of the week.
The earnings also lifted shares of key CoreWeave backer Nvidia, which owns 9% of CoreWeave’s shares, is a customer, and the neocloud’s most important supplier, after a bruising two-day slide over worries about Jensen Huang’s future.
CoreWeave has leveraged that access into large cloud contracts with heavy-hitters like Microsoft and Meta Platforms, and the once-tiny company has a $133 billion revenue backlog, up from $104 billion at the end of the second quarter.
Shares of so-called “neoclouds” including Nebius and Iren also rallied after facing weeks of turmoil on fears that their debt-fueled data center expansion could backfire if AI demand slows.
CoreWeave’s revenue for the quarter reached $3.66 billion, ahead of Wall Street analysts’ expectations of $3.54 billion, and up 168% on the year. Adjusted operating income was $379 million, rising 75%. Adjusted operating margin dropped from 16% to 10%.
As CoreWeave projected would happen three months ago, interest expenses offset the operating profit and then some, coming in at $846 million, up from $310 million last year.
And CoreWeave’s debt and lease liabilities rose sequentially by $14.6 billion to $66 billion.
The company also raised its annual revenue forecast and said it would not tap unsecured debt markets after a recent spike in borrowing costs and that cash flow from existing contracts would cover both current and future debt repayments.
The risks of mistiming AI investments became evident on Tuesday as SoftBank took a $3.7 billion writedown on non-refundable payments for equipment to power U.S. data centers. That pushed the Japanese tech investor to a second-quarter net loss of $7 billion, its first in nearly two years.
—Anthropic met with key investors this week and is aiming for its shares to start trading Thursday or Friday next week. The company announced it was seeking a valuation of around $1.33 trillion in its IPO.
The maker of the popular Claude AI tool said in a filing Tuesday that it will sell 825 million shares at a range of $70 to $78 a share. At the midpoint price, Anthropic is in line to raise more than $61 billion.
The IPO will be momentous and a litmus test for markets on edge over the AI trade.
A week ago, investors anticipated the company to target a valuation around $1.5 trillion, but after the steep selloff in AI companies last Thursday, some major investors pushed for it to be lower. Anthropic’s targeted valuation is far below the roughly $2 trillion figure that had been floated months ago.
A filing showed that along with the IPO the company plans to raise up to $26 billion from big investors including Google and AMD.
—Microsoft Corp. was struggling to restore access to its flagship software and end an outage that paralyzed government offices, traders and businesses globally.
Disruptions for Outlook, Teams and the Copilot artificial intelligence tool continued into a second day on Friday as Microsoft struggled to restore services. Previous disruptions have rarely lasted more than several hours.
But Friday morning, email was returning, for starters.
—Exxon Mobil said on Monday that it reached a preliminary deal with Venezuela that brings it a step closer to returning to the South American country.
The agreement gives Exxon time to evaluate oil production opportunities, and is not binding – stipulations similar to those in other agreements struck by U.S. oil companies this year as they consider investing in Venezuela.
Nevertheless, it is a symbolic win for President Trump, who has been pressing U.S. oil companies to invest in Venezuela. It also represents a normalization of relations between Exxon and Caracas, which deteriorated after the country’s socialist government in 2007 changed the terms under which foreign oil companies operated there. Exxon left rather than accept the new rules, and has long sought compensation for the assets it relinquished.
Exxon, in a statement about the deal, said that “any future investment would require stable policies, clear regulations, strong investment protections and competitive returns.”
—As for oil production in the Middle East, Iraq’s oil output surged in October and production in the UAE held near the previous month’s high, as Gulf producers increased crude flows despite shipping disruptions caused by the war, the International Energy Agency said.
Iraq, OPEC’s second-largest oil producer, raised production by 540,000 barrels a day to 4.6 million, the highest since September 2019, according to the IEA’s monthly report.
The UAE kept output around 4.4 million barrels a day, near its maximum capacity. Saudi Arabia, the Gulf’s largest crude producer, boosted production by 1.1 million barrels a day to 10 million.
—TSA checkpoint numbers vs. 2025
11/12…124 percent of 2025 levels
11/11…107
11/10…79
11/9…96
11/8…132
11/7…76
11/6…96
11/5…121
–Cleaning up stuff I didn’t have time to cram in last week, I have to note the demise of Tesla’s Cybertruck, having been long part of the chorus saying this was one ugly vehicle.
Elon Musk posted last Friday on his X account:
“Tesla will be winding down production of the Cybertruck at Gigafactory Texas around the middle of next year to make room for increased Cybercab production.”
Musk once boasted that Cybertruck demand was “so far off the hook, you can’t even see the hook,” and the company said it had over 1 million preorders.
But conversion to sales never materialized. Cox Automotive’s Kelley Blue Book estimated overall sales for the controversial pickup only hit around 71,000 since the vehicle went on sale in 2023. Telsa and Musk had built out capacity for Giga Austin to pump out 250K Cybertrucks per year; Tesla was selling about one-tenth that amount.
When the truck was first revealed in late 2019, Musk had promised a sub-$40,000 price tag for the cheapest version, and up to 500 miles of range for the top-end model. None of these things materialized.
—Berkshire Hathaway posted a 28% decline in quarterly net income after investment gains slumped and the conglomerate’s insurance operations reported lower profits.
Berkshire continued to put more of its massive cash trove to work, repurchasing more of its own shares during the quarter.
The company ended its third quarter with around $357 billion in cash and Treasury bills after accounting for a payable for purchasing some of the short-term government debt, a 2.1% decrease from three months earlier and the second-straight sequential drop.
The quarter also marked the end of Warren Buffett’s long run as Berkshire’s chairman. Buffett, 96, ceded the post to his son Howard Buffett in September. Greg Abel succeeded Buffett as CEO in January.
Net income fell to $22.11 billion, from $30.8 billion a year earlier.
Operating earnings, which exclude some investment results, slipped 5.8% to $12.71 billion from $13.49 billion. Profits from Berkshire’s insurance-underwriting business fell sharply from a year ago, when the company benefited from a mild hurricane season and a turnaround from its auto insurer, Geico.
—France’s foreign minister blamed Iran for a cyberattack on European supermarket refrigerators.
Jean-Noel Barrot told reporters that Iran would face retribution for the hack that caused tens of millions of dollars of damage in spoiled food and equipment. U.S. officials confirmed that probes into the campaign show the hallmarks of Iranian cyber methods, though an investigation is ongoing. The attack and others like it show the risk of connecting everything to the internet.
—California voters rejected a proposed billionaire tax, ending a heated and expensive fight over what could have been the nation’s first modern tax on wealth.
The Associated Press called the race Monday as the ballot initiative, Proposition 40, was trailing after last week’s election. With 83% of the vote in, the No vote was 53%, Yes 47%.
—An independent film distributor has thrashed Hollywood’s oldest movie studios, at least when it comes to box office results.
Last weekend, Godzilla Minus Zero, reviews for which that I’ve seen are excellent, exceeded expectations for its theatrical debut, with an estimated $31.6 million in North America tickets sales, and another $31.4 million overseas, including $21.3 million from global IMAX screens.
The film beat out Warner Bros.’ animated The Cat in the Hat, which came in a disappointing second-place with an estimated $20.5 million in ticket sales.
Foreign Affairs
Russia/Ukraine: Ahead of trilateral talks in Abu Dhabi aimed at ending the war in Ukraine – Russia, Ukraine and the United States – Moscow and Kyiv were reportedly showing “a little bit of flexibility” on the issue of who would control Ukraine’s eastern regions in a postwar scenario.
Jared Kushner said the talks would be focused on addressing the “postwar security concerns” of both Russia and Ukraine.
“An important part of this process is encouraging all parties to begin thinking seriously about what comes after the war,” Kushner wrote on X.
Ahead of the meeting, Kushner and fellow envoy Steve Witkoff met Ukrainian and European and NATO officials in Abu Dhabi, and French Foreign Minister Jean-Noel Barrot was adamant that France, the UK and Germany “will indeed be in the meeting room.”
European officials are wary of Russia trying to secure a deal with the U.S. on future “collective security” without them, and Moscow and Kyiv’s positions on ending the conflict are still far apart.
Moscow has demanded Ukraine relinquish the parts of Donetsk which it still holds, while Kyiv wants to freeze the contact line to maintain control over those sections, which it says are crucial to its future security.
But U.S. officials seemed to believe Moscow and Kyiv had shown some flexibility. However, “They will not solve the Donetsk issue and the territorial issue until they know what the security architecture is going to be after the war,” one official said. “And keep in mind, we’re not going to be able to finalize one without the other.”
For Ukraine, a post-war “security architecture” may include reassurances that allies will come to its aid if it’s attacked again. For Russia, that could be its longstanding ambition to see NATO roll back from eastern Europe – which would be alarming to Europeans.
Putin for years demanded restrictions on Western military deployments in Europe and on countries’ freedom to choose their own alliances. In late 2021, shortly before launching the full-scale invasion of Ukraine, the Kremlin demanded an effective rollback of the North Atlantic Treaty Organization in countries that were formerly Soviet satellites or part of the Soviet Union, such as Poland and the Baltic states.
Moscow also demanded a ban on admitting any new members to NATO and the removal of U.S. nuclear weapons from Europe. Washington and NATO rejected those demands. Putin has said no peace deal can be reached without addressing what he calls the conflict’s ‘root causes,’ including NATO’s expansion.
Wednesday, Russia and Ukraine said the sides had agreed to a large exchange of prisoners of war.
But hopes were low for any major breakthrough.
Kushner and Witkoff then traveled to Moscow on Thursday to meet with Vladimir Putin, and Dublin to update President Zelensky.
During the Kremlin talks, Kushner told Putin he had detected what he called “a big change” on the European side and was confident that expanding peace talks to include the Europeans would not hinder progress.
Putin said Moscow had always been open to talking to the EU about Ukraine, but signaled serious outstanding differences. He then warned that the European idea of sending Western troops into Ukraine once a peace deal was concluded would trigger a resumption of the war because Russia would see that as a threat to its own security
“We would very much like you, gentlemen, and the U.S. administration as a whole, to work with your European allies so that they can finally make up their minds as to what they want: peace or war in Ukraine,” said Vlad.
Zelensky’s meeting with Kushner and Witkoff was brief, and he welcomed news that Europeans would be present at the next round of peace talks and expressed hope that the agenda would include steps towards a ceasefire and de-escalating the conflict.
At the end of the week, Russia’s chief negotiator, Medinsky, told Russian state TV he thought a peace deal was closer after the talks but added that much depended on Ukraine and the U.S. stance.
David Ignatius / Washington Post
“As Trump deals with Russia and Ukraine, he must reckon with postelection reality: His ability to deliver a peace deal that’s favorable to Putin is waning – and the possibility of greater American support for Ukraine is increasing. The new Congress probably will have large bipartisan pro-Ukraine majorities in both houses.
“In January, Democrats will have the votes for stronger sanctions against the Kremlin and more weapons for Kyiv. And with support from Republicans who will be less intimidated by Trump, these majorities may even be veto-proof. A to-do list: Congress could reimpose the new Russia sanctions that Trump waived last month. It could halt purchases of diesel oil from Russia. It could authorize new arms sales to Ukraine for offensive strikes against Russia targets and defense against Russian missiles.
“As talks in Abu Dhabi begin, Democrats and Republicans could give Ukraine some leverage by offering new protection for its cities this winter. The best way would be to press Elon Musk’s Starlink to expand its coverage into Russia so that Ukrainian drones could use the technology to target Russia’s mobile ballistic missile launchers. With supplies of Patriot missiles nearly exhausted, Ukraine has no other way to defeat the missiles. In exchange for this new power to protect civilians, Kyiv might agree to stop hitting Russian refineries, as Trump has demanded….
“Elections have consequences abroad as well as at home. Ukraine gained some leverage with the Trump wipeout; so did the rest of Europe; Iran probably did, too. Russia lost some ground, while China held steady. But a wounded U.S. presidency also means a weaker America on the world stage, at least for the next two years.
“Like most lame-duck presidents, Trump will probably spend more time on foreign policy, where his power is less constrained. If he wants to be remembered as a peacemaker, the tasks ahead are clearly labeled – Iran and Ukraine. Democrats should push him to do the right things.”
—On the battlefront, going back to last Friday night, Russia continued to pound Kyiv, killing at least one, while the state-run oil and gas company Naftogaz said a facility in central Ukraine had been struck three times overnight. “The attack damaged equipment, and a large-scale fire broke out,” Naftogaz said in a statement on Telegram.
“The capital is facing serious difficulties with its electricity, water, and heat supplies,” President Zelensky said on X, adding that substations in five other regions were also hit.
He said Russia had launched 36 ballistic missiles, only four of which were intercepted, according to Ukraine’s air force. It added that air defenses had downed 149 out of 172 drones.
“Russia is preparing for trilateral talks by launching ballistic missiles at Ukraine’s critical infrastructure,” Zelensky said on X.
Referring to the results of the U.S. election, Zelensky added: “We are counting on the U.S. Congress to give more attention to Ukraine, because Russia keeps increasing the number of its attacks.”
Zelensky and Kyiv Mayor Vitali Klitschko have not been getting along, for some time now, and last Friday they traded accusations of failing to prepare the capital for new Russia strikes that have plunged the city into unprecedented power and water outages.
As noted in a Reuters report: “The rumble of generators has returned to torch-lit streets, with temperatures nearing freezing and residents still waiting for centralized heating to return. City-wide water outages last hours, and are more frequent than in previous years.”
“Kyiv’s bridges across the sweeping Dnipro River have also come under attack for the first time in Russia’s nearly five-year war, snarling traffic. Outages have also frequently halted metro services.”
For his part, Mayor Klitschko accused the government of “cynically” dragging its feet in approving a resilience plan for the city, and described Zelensky’s criticism of Kyiv as “constant manipulations.”
“Because in its attempts to get rid of Klitschko in any way possible, in creating constant obstacles and not helping the capital, the central government is effectively destroying Kyiv,” he said.
Klitschko, like his younger brother, Wladimir, a former heavyweight boxing champion, has served as mayor since 2014.
Separately, Ukraine struck the Saratov oil refinery in the Volga region of southwestern Russia. This is a facility that has been repeatedly targeted and has halted operations several times after previous strikes.
Thursday, Russia’s military said it had carried out a massive overnight strike on military factories across Ukraine, including Kyiv, where Klitschko said an apartment building was hit, killing one and injuring five.
The Russian Defense Ministry said in a statement it had hit a rocket factory in Kyiv and a drone assembly workshop and missile fuel factory in the wider Kyiv region, as well as electricity substations in the western Zhytomyr region.
Ukraine launched a drone attack on Moscow and elsewhere across Russia overnight, injuries and damage not known.
Four people were killed and two injured in a Ukrainian drone attack on an industrial zone in Russia’s southern city of Volgograd (formerly Stalingrad), home to a large oil refinery run by Lukoil, which reportedly was on fire.
And President Zelensky said his country’s military was again facing “systematic” restrictions to Starlink’s military-grade service, meaning Kyiv was struggling to intercept Russian jet-powered drones.
Ukraine was “trying to clear up all circumstances with the American side,” Zelensky said.
Editorial / Wall Street Journal
“By our deadline the White House, Pentagon and State Department hadn’t answered our inquiries about SpaceX services in Ukraine, and Elon Musk hadn’t addressed Mr. Zelensky’s latest claims of throttling. No one wanted to claim responsibility last month either. But Starlink and Starshield shenanigans are a prime investigative target next year for Democrats, who may use this as a justification to impose more government control over SpaceX.
“Restrictions on Starshield harm Ukrainian defenses and help the Russians, and it’s hard to believe the timing is a coincidence. Mr. Trump keeps pressuring Ukraine to make peace, though Kyiv has repeatedly offered to accept cease-fires. Mr. Putin routinely rejects them, yet Mr. Trump keeps offering him sanctions relief and other concessions and getting nothing in return. The result is more bloodshed, not peace.”
—Russia seized control of four factories belonging to Japan Tobacco, escalating a pressure campaign against Tokyo and the West over their support for Ukraine.
Late last week, Vladimir Putin ordered the Russian assets of the company be placed under the temporary management of a local company, according to Russian state media.
Japan Tobacco, which is partly owned by the Japanese government, said in a statement Friday it was aware of the presidential decree and was considering its options. The shares closed down 19% in Tokyo the day after the news broke.
The company was previously a state-owned monopoly, but at the end of 2025, Tokyo owned just under 38% of the company’s shares.
Japan Tobacco, whose brands include Winston and Camel, is among the largest tobacco firms in Russia, with a market share of nearly 40%. Russia generates a quarter of the group’s profit.
Relations between Russia and Japan are at their worst in years. Last month, Russia detained a Japanese journalist on espionage charges that Tokyo says are false. Putin in August visited the southern Kuril Islands in Russia’s far east, an archipelago Japan claims as part of its territory. Weeks later, Russia held live-fire drills nearby.
—Staying in the region, a Polish man with far-right views drove into a busy central square in Krakow on Saturday and opened fire, killing six people and injuring 15 others before police shot and wounded him (he later died in hospital).
The attack was in the heart of Krakow’s Old Town and is a major tourist hub in the country’s second-largest city.
The 25-year-old attacker drove to multiple spots in the square and opened fire at each stop with an automatic weapon. Interior Minister Marcin Kierwinski said the man holds “very radical” and “ultranationalistic” views.
“Everything indicates that he was fascinated by far-right ideologies,” Kierwinski said.
Hours after the attack, Prime Minister Donald Tusk said authorities found the bodies of three of the suspect’s close family members – two women and a man – inside of his home in a city about 150km (93 miles) northeast of Krakow.
China/Taiwan: In a speech on the 160th birthday of revolutionary hero Sun Yat-sen who helped lead a 1911 revolt that ended centuries of rule by emperors and empresses and ushered in the Republic of China, Chinese President Xi Jinping said the tide of history cannot be stopped.
Xi said Thursday he urged complete “reunification” of Taiwan with the motherland and pledged to do so peacefully, making no mention of the use of force.
Resolving the Taiwan question is an “unwavering historical mission” of China’s Communist Party, Xi said in the speech in Beijing’s Great Hall of the People.
“The tide of history cannot be stopped,” Xi added. “The complete reunification of the motherland must be realized, and it will certainly be realized.”
Taiwan’s government dismissed the remarks as nothing new.
Ransom Musings
–Presidential approval ratings….
Rasmussen: 40% approve of President Trump’s job performance, 59% disapprove (Nov.13).
The 40% approval ties the low for Trump’s second term, and this is supposed to be a Trump-leaning poll.
–As of early this afternoon, the Democrats had a 55-44 advantage in the Senate, with Alaska to be decided. Democratic challenger Mary Peltola leads by less than 6,000 votes over Republican incumbent Sen. Dan Sullivan, with an estimated 50,000 votes still to be counted. And then it still might not be over…but we’ll save that for next week.
The House stands 257-169, Democrats, with nine seats yet to be decided.
—GOP Rep. Thomas Massie introduced articles of impeachment against Defense Secretary Pete Hegseth, Monday. The longtime Trump administration antagonist, who is set to leave the House in January, alleged that Hegseth unlawfully initiated the Iran war and ignored a congressional resolution to remove troops from the conflict. The move by Massie paved the way for a vote that could make Hegseth the first Pentagon chief to be impeached in the House in 150 years. Hegseth has dismissed the looming impeachment and vowed to stay at his Pentagon post for the rest of the Trump administration.
Tuesday, Sec. Hegseth then held his first press conference in over 180 days. He took few questions and none were particularly adversarial. Instead, he dug in for the fight against his potential impeachment.
GOP leaders then forced a procedural vote to block quick consideration of the impeachment measure. The step, which sends the measure to the Judiciary Committee where it’s expected to die, passed 211-204.
A number of Democrats didn’t vote, and it turns out some of them had an excuse. There was a big traffic jam on Pennsylvania Ave. caused by an accident. But that’s really not an excuse. Democratic leaders were not happy.
–Meanwhile, also Tuesday, House Republicans elected Rep. Jim Jordan (Ohio) as minority leader for the next Congress, in which the party’s ranks will be severely diminished after last week’s midterm elections.
Jordan defeated a longtime rival, House Majority Leader Steve Scalise (La.), 106-73 on a secret ballot in the closed-door vote, while Majority Whip Tom Emmer (Minn.) secured a tally of 103-76, according to several lawmakers and aides.
Senate Republicans opted to stick with Senate Majority Leader John Thune (S.D.), who did not face a challenger and will become minority leader in January.
—Sen. Chris Van Hollen (D., Md.) said he would challenge current Senate Minority Leader Chuck Schumer (D., N.Y.) to lead Senate Democrats in the majority next year, setting up a fight over the party’s direction following the historic victory.
In an appearance on MS Now, Van Hollen, 67, characterized the election result as a call to “reject the status quo, and to reject business as usual. And to do that, I think we need new leadership.”
Schumer, 75, responded in a statement, saying, “I welcome any discussion about the future of our caucus and the important work ahead.” He pointed to Senate Democrats’ big midterm wins and said he believes he has the votes to continue serving as leader.
Schumer gets credit for recruiting candidates who won competitive races and for massive fundraising efforts that helped the party expand the electoral map into the Midwest and South this cycle.
But he has faced criticism from party progressives and incoming Democratic senators calling for generational change and for leadership to be more aggressive in confronting the Trump administration.
The party’s left flank has rallied behind Van Hollen for his outspokenness against Trump immigration enforcement efforts and Israel’s military campaign in Gaza.
—President Trump on Truth Social, Monday AM:
“Does anybody really believe that this ‘Election’ was honest. How could the Polls be so wrong??? Some early voting ‘dumps’ were so large that it was impossible to win, no matter how many people went to vote. It’s all about the machines, which are far more important than the voters!”
Ah, Mr. President, the polls got it very right! But who is feeding you this garbage?
—During President Trump’s “60 Minutes” interview Sunday with Ross Douthat (who was excellent), Douthat pressed the president on the increase in his net worth since he returned to the White House. “I devote almost no time to my net worth. I don’t care,” Trump said, lying as always.
Douthat pointed to the Trump family’s co-ownership of World Liberty Financial, a cryptocurrency company that counts an Abu Dhabi royal as a major shareholder.
“I think if I told you that story and it was about the Biden family, if I said Joe Biden is the part-owner of a company and it has all of these investments from the Middle East, you would say, ‘That sounds corrupt,’ right?” Douthat asked.
Trump responded that he knows nothing about his family’s investments, adding that he made a large amount of money before becoming president. When asked why he wouldn’t walk away from companies with foreign investments and avoid allegations of corruption, Trump replied that his sons run the company and that “It’s hard to say to them, ‘Don’t do anything anymore for four years because I’m president.’”
Trump also said in the interview his deportation “might have been too tough” and added he thinks he can work with Democrats in the new Congress on some kind of immigration deal.
Trump said his deportation policy was part of the reason Republicans lost. He didn’t give specifics about what a deal with the new Democratic majority would look like, and then shortly after taping the interview, Trump named the key architect of his hardline immigration agenda, Stephen Miller, as his new chief of staff.
This week he was walking back his comments that the immigration policy might have been too tough.
Or as Emily Litella would have said, “Never mind….”
—Congo’s Ebola outbreak has topped 11,000 cases, the government said Wednesday, a stark figure that underscores the severity of the situation as the country deals with the relentless spread of the disease.
According to the health ministry data, 11,042 people have been infected with the virus that has now killed 5,387 – nearly half of those infected in what has been Congo’s deadliest outbreak; and this since mid-May
The Bundibugyo virus responsible for this outbreak has no known vaccine or treatment and has spread to eight of the country’s 26 provinces.
A big issue is the resurgence of violence in the two major hotspots in Ituri and North Kivu provinces. Health authorities are calling for a halt to the fighting to allow health workers unhindered access to the sick.
–According to the National Oceanic and Atmospheric Administration’s Climate Prediction Center, the nation is forecast to see one of the warmest Novembers on record, thanks mainly to the warming impacts of El Nino, forecasters said.
No part of the U.S. is forecast to see below-average temperatures this month.
—Recent flooding across the Southwest is providing rare relief to thirsty reservoirs that had fallen to record lows amid a yearslong megadrought.
Storms in late October and early November sent torrents of water through normally small or dry creeks that overflowed their banks and flooded local communities.
Hundreds of people were told to evacuate, and the flooding cut off access to some areas. Yet most of that water will end up feeding depleted lakes and underground aquifers, said Martin Hoerling, a climate scientist and hydrologist at the University of Colorado, Boulder.
“That’s somewhat of an unexpected boost from Mother Nature,” Hoerling said.
After last winter’s lackluster snowfall, El Nino struck.
Lake Powell, the second-largest reservoir in the U.S., rose more than 20 feet from its mid-September low – dwarfing its gains from this year’s snowmelt, Hoerling said. Still, the lake remained just over a quarter full, and 15 of its 17 boat launches remained unusable as of Friday.
The floodwaters and additional rain could raise the lake along the Arizona-Utah border further, for a total of over 1.2 million acre-feet – enough to support around 4 million average families for a year, Hoerling estimated.
–Finally, Pope Leo XIV seems to be holding up well as his extensive South American pilgrimage winds down in his self-described “homeland,” Peru, where he spent 20 years and is known affectionately as “Padre Roberto” in his beloved former diocese of Chiclayo. The pope was very emotional yesterday when he saw the huge throngs.
When he arrived in Peru, he was greeted by an estimated 3 million people along the route from the airport.
Church organizers said they expected as many as one million people for Leo’s first big Mass, Friday morning on a massive field outside Chiclayo.
Note to Donald Trump. Now those are some crowds.
—
Pray for the men and women of our armed forces…and all the fallen.
Slava Ukraini!
God bless America.
—
Gold $3875…Silver $48.85
Oil (WTI) $88.87…Brent $96.05
Regular Gas: $3.87; Diesel: $6.06 [$3.07 – $3.76 yr. ago]
Bitcoin: $68,870 [4:00 PM ET, Friday]
Returns for the week 11/9-11/13
Dow Jones +2.1% [52347]
S&P 500 +2.5% [7561]
S&P MidCap +2.2%
Russell 2000 +1.3%
Nasdaq +2.3% [25136]
Returns for the period 1/1/26-11/13/26
Dow Jones +8.9%
S&P 500 +10.5%
S&P MidCap +11.4%
Russell 2000 +12.4%
Nasdaq +8.2%
Hang in there.
Brian Trumbore
