57 California Dams In Poor Or Unsatisfactory Condition, State Auditor Says

Authored by Naveen Athrappully via The Epoch Times,

A new report from the state auditor says 57 dams in California are in poor or unsatisfactory condition, posing a safety risk to hundreds of thousands of residents.

Out of those 57 dams, 40 have "high or extremely high" hazard classifications as of May, the Oct. 13 report said.

"Failure of just one of these 40 high or extremely high hazard dams could pose harm to as many as hundreds of thousands of people and cause billions of dollars in property damage," the auditor warned, citing the Department of Water Resources' (DWR's) assessment of 1,222 Californian dams.

The most common factors for the poor conditions are old age, the inability to pay for repair costs, and the lack of comprehensive safety standards in effect when the dams were built, the report said.

While the DWR has enforcement authority over dams, it has "only sent notices of violations to dam owners but has not taken further actions, thereby allowing serious deficiencies to persist," the auditor said.

The department stated that limited resources hindered efforts to repair dams before they failed.

Of the 1,222 dams, the auditor found that owners of 60 dams with higher hazard classifications did not comply with California law requiring they submit emergency action plans aimed at protecting life and property in case of structure failure.

Local maintaining agencies (LMAs) were charged with maintenance of levees - structures that help contain or control water flow during floods.

In the report, the auditor wrote that LMAs were lacking when it came to levee maintenance, while the DWR was reluctant to intervene, posing heightened risks to communities.

California Gov. Gavin Newsom proclaimed an emergency last month to prepare the state for El Niño, when southern areas of the state face increased rainfall and flash flooding.

The largest impacts of El Niño typically affect the United States from October through May.

In the emergency declaration, Newsom highlighted the risks posed to dams by El Niño conditions.

In the proclamation, Newsom ordered the DWR to contact dam owners and remind them of their responsibility to repair, maintain, and safely manage dams and other structures.

Meanwhile, the California state auditor's report included a response from the DWR regarding the draft version of the document.

The response criticized the audit report for portraying a "fundamental lack of understanding" of the complexities involved in flood management and dam safety.

The DWR said the audit misrepresents that poor maintenance and lack of action are the sole reasons for dams being in unsatisfactory condition.

"This further demonstrates the lack of technical understanding that the most critical deficiencies are found through DWR's reevaluation program; these are not visible in an inspection and most often occur because design loads (earthquakes and floods) are larger than originally expected," the department said.

"Design standards, engineering methods, and science have changed over time. These dams were not necessarily built poorly."

The DWR's reevaluation program periodically reviews dams deemed to pose a threat to life against current dam safety standards.

The department said that the program is responsible for detecting more than two-thirds of dam deficiencies.

In a Sept. 30 statement, the DWR announced completing a $235 million rehabilitation of California's Oroville Dam, the tallest in the United States.

"This investment in Oroville Dam's infrastructure ensures the reliable and safe operation of the State Water Project's largest flood protection and water supply facility," John Yarbrough, deputy director of the DWR's State Water Project, said in the statement.

Dam safety is a wider national issue as well.

According to a report from the American Society of Civil Engineers, almost 17,000 dams in the United States are considered potentially high hazard.

The report highlighted that the average age of dams in the United States is more than 60 years, with seven out of 10 estimated to be at least 50 years old in 2025.

"Without a more significant commitment to dam safety through increased annual investment in inspection, monitoring, planning, and necessary dam repairs, the cost to bring the nation's dams into a state of good repair will continue to rise," the association said.

"And downstream communities will face a greater risk of danger from potential dam failure."

Tyler Durden Thu, 10/15/2026 - 15:50

Iran War Has Cost Nearly $2,000 Per US Household: Moody's Top Economist

Moody's Analytics chief economist Mark Zandi estimated Oct. 12 that the Iran war has cost the average U.S. household nearly $2,000 since it began, or about $265 billion nationwide. He put roughly $1,100 per household on higher energy and transportation costs, $540 on higher interest rates and $360 on military spending, and said the energy tab is still rising by about $50 per household each week at current fuel prices.

An MH-60R Sea Hawk helicopter, assigned to Helicopter Maritime Strike Squadron 50, takes off from the flight deck of the Arleigh Burke-class guided-missile destroyer USS Thomas Hudner on May 4, 2026. US NAVY/AFP via Getty Images

Zandi wrote on X: "Consider that the war's costs taken together have absorbed about half the average American household's income gain over the past eight months. No wonder the war is so unpopular."

White House Principal Deputy Press Secretary Anna Kelly answered in a statement: "Mark Zandi is a Democrat donor who is frequently wrong - including predicting multiple recessions that never happened." She added: "President Trump is rightfully ensuring that Iran, a country that for 47 years chanted 'Death to America,' can never have a nuclear weapon." U.S. and Israeli strikes on Iran began Feb. 28.

Consider that the war’s costs taken together have absorbed about half the average American household’s income gain over the past eight months. No wonder the war is so unpopular.

— Mark Zandi (@Markzandi) October 12, 2026

Zandi's number is a broad economic estimate, not a federal outlay. Brown University puts consumer costs at $133.3 billion, about $1,018 per household, and Defense Secretary Pete Hegseth has testified to about $37.5 billion in direct military costs, Newsweek reported. ZH has tracked estimates running well above the White House's.

As the Epoch Times notes further, "Higher energy prices are contributing most to the costs," Zandi said. "A gallon of regular goes for $4.37, up from just under $3 before the war. Diesel is above $6, and jet fuel has nearly doubled. As winter approaches, the much higher price of home heating fuel is also adding to the costs."

Zandi said the war's inflation contributed to the Fed's decision last month to raise rates and signal that more rate increases are coming.

"Long-term rates are also up a lot - fixed mortgage rates have climbed from below 6 percent before the war to 7.5 percent. By our reckoning, the higher rates have cost the economy about $540 per household," he said.

In September, the Congressional Budget Office estimated the war cost the U.S. military $38.1 billion through Aug. 1. With fighting expected to continue, the war was estimated to cost between $2 billion and $3 billion each month, depending on its intensity.

On Oct. 5, the Congressional Research Service published a report listing some of the major equipment losses during the war.

The report listed 81 fixed-wing or rotary-wing aircraft, including drones that were lost or damaged during the conflict.

The Congressional Budget Office estimated the cost of equipment losses as of Aug. 1 to be between $1.9 billion and $3.3 billion, depending on the Department of War's plans for replacement.

Democrats have continually pointed to the cost of the war in their criticism of Trump.

In September, 46 Democratic or left-leaning Independent Senators sent a letter to Department of War Secretary Pete Hegseth demanding more information on the costs of the war.

Tyler Durden Thu, 10/15/2026 - 15:35

Time's Up! DOJ To Seek 'Emergency Relief' Against California Over Suspected Non-Citizen Voters

Authored by Tom Gantert via The Epoch Times,

The U.S. Department of Justice on Oct. 13 sent letters to California election officials demanding a review within 48 hours of registered voters it suspects are noncitizens and asking officials to set aside their mail ballots until their citizenship status can be determined.

If the prescribed course of action wasn't followed by Oct. 15 at noon ET, the letter stated the federal government would seek "emergency relief."

"This should not be controversial, as the criminal statute is clear: Only American citizens may vote in federal elections. It is a federal crime for noncitizens to vote in U.S. elections, and the DOJ is asking California to ensure that is not occurring," a DOJ spokesperson said in an email to The Epoch Times.

The DOJ claims there are thousands of potential foreign nationals not eligible to vote that have been identified as registered voters in California.

Dean Logan, registrar for Los Angeles County, posted a copy of the DOJ's letter on the county clerk website.

In the letter to Los Angeles County, the DOJ stated that Department of Homeland Security Secretary Markwayne Mullin informed the California secretary of state that there are "likely numerous noncitizens" registered to vote in the federal election in California.

"Accompanying this letter is a password-protected thumb drive with a list of names of people the Federal Government believes are likely noncitizens who were sent a vote-by-mail ballot from California to participate in the November election," the letter stated.

The letter requested that L.A. County review the list within 48 hours. For any individuals the county could not independently verify as citizens, the letter requested election officials be instructed to "segregate - not cancel" those vote-by-mail ballots until their citizenship status could be determined.

If the county didn't comply with the DOJ request, the letter stated, "the United States will have no choice but to seek emergency relief."

Logan said his office has not accessed the drive because doing so would conflict with "established data privacy and information security protocols." He said his office does not consider the device a secure medium and said the letter does not specify the number of individuals involved or describe the information contained in the records.

"Maintaining accurate voter registration records is a fundamental responsibility of our office," Logan said in a statement. "Federal and state laws are clear on how voter eligibility is established - and any action to remove a voter from eligibility must be based on verifiable information, not assertions of unconfirmed data matching."

Logan said that with the 2026 general election underway, his department is focused on administering a safe, secure, accurate, and transparent election.

"We will continue following established legal requirements and verification procedures while protecting the rights of every eligible voter," Logan stated.

Gov. Gavin Newsom's press office posted Wednesday on X in response to the letter.

"With this letter, the Trump administration is demanding that California election officials voluntarily violate federal law enshrined by Congress. Completely unacceptable and inappropriate for the feds to do - especially with their track record," the statement said, not specifying what federal law would be violated.

The California Secretary of State also criticized the DOJ's letter in a response on X.

"The US DOJ's relentless efforts to unlawfully gain access to states' protected voter data and purge voter rolls serve only to cause chaos and fuel public distrust in our elections," the statement said. "California has robust state law requirements that only U.S. citizens can register to vote and that any non-eligible registrants are removed from the State's voter rolls."

Tyler Durden Thu, 10/15/2026 - 15:20

RFK Jr. Removes 189,000 Improper Health Care Enrollments

Authored by AG News Staff via American Greatness,

Health and Human Services Secretary Robert F. Kennedy Jr. announced Wednesday that the Trump administration has eliminated 189,000 improper government-subsidized health care enrollments, a move expected to save American taxpayers as much as $1.5 billion annually.

The Centers for Medicare and Medicaid Services (CMS) identified duplicate enrollments and coverage associated with deceased individuals across Medicare, Medicaid and the Children's Health Insurance Program (CHIP).

The sweeping cleanup is part of the administration's broader effort to eliminate wasteful government spending and prevent taxpayer dollars from flowing to insurance companies through improper subsidies.

"In 2026, CMS identified 189,000 subsidized enrollments involving duplicate Medicare, Medicaid, or CHIP coverage on record showing the enrollee has died," Kennedy said during a news conference.

"CMS acted to remove improper subsidies in all these cases."

According to Kennedy, the action will save taxpayers approximately $738 million in 2026, with projected annual savings reaching $1.5 billion in subsequent years.

The HHS secretary emphasized that the improper payments benefited insurance companies rather than Americans receiving medical care.

"Each of those figures represents a payment that would otherwise have gone to an insurance company, not to an American citizen," Kennedy said.

To safeguard against wrongful removal, CMS contacted affected enrollees or their estates and provided a 30-day window to correct potential errors before subsidies were terminated.

Tyler Durden Thu, 10/15/2026 - 14:50

New DRAM Demand Source Could Surge 20-Fold By 2030

Last month, Jason Chen, chairman and CEO of Taiwanese PC maker Acer, offered some relief from the memory shortage, saying chip prices could begin falling in the second half of next year. That outlook challenges the memory cartel, pardon, the Big Three's claims that prices will keep rising well beyond 2027.

Meanwhile, Chinese memory-chip manufacturer ChangXin Memory Technologies, better known as CXMT, recently said it had begun mass production of advanced memory chips. Goldman analysts are now looking to Samsung's Oct. 29 earnings report for indications of whether the company expects tight memory-market conditions to persist in 2028.

AI hyperscalers have soaked up the world's high-bandwidth memory (HBM) for the data center buildout, sending prices soaring and pressuring consumer electronics companies such as Apple, which was forced to raise prices for the new iPhone 18 premium lineup and foldable Duo.

But with CXMT's supply coming online and major memory giants still warning of tight conditions through next year, we may soon see whether that narrative holds after Samsung's earnings call. A new source of memory demand could also emerge, this time outside data centers and in physical AI.

Counterpoint Research forecasts that DRAM demand could surge with the coming wave of humanoid robot deliveries, expected to begin next year and continue through the decade.

South Korean newspaper The Chosun Daily first cited Counterpoint's note, which said DRAM demand for humanoid robots could explode to 172,000 terabits in 2030 from roughly 8,300 terabits this year.

Average DRAM capacity per humanoid robot is set to roughly double, from 19 gigabytes to 39 gigabytes, over the same period.

More sophisticated AI models have increasingly larger and larger memory requirements, and we're sure those requirements could rise even further. These complex bots process images, video and sound simultaneously and use "world models" to anticipate changes in the surrounding environment, requiring faster processing and greater memory capacity.

Beyond humanoid robotics, memory demand will likely surge for highly autonomous vehicles, which typically require over 200 GB of memory and several terabytes of storage.

Global memory firms are eyeing the robot market. Sanjay Mehrotra, Micron CEO, recently said, "Level 4 or higher autonomous vehicles typically require over 200 GB of memory and several terabytes of storage. Humanoid robots will likely need similar levels of memory and storage."

On the demand side of humanoid robotics, Eric Sheridan, managing director and internet/e-commerce equity analyst at Goldman, recently raised his base-case forecast to 75,000 humanoid shipments in 2026, 890,000 in 2030, and 6.5 million in 2035, versus previous estimates of 51,000, 256,000, and 1.4 million, respectively.

"We are raising our humanoid robot market forecast. The global market is now projected to reach approximately 890,000 units by 2030 and 6.5 million units by 2035 (representing a $138 billion market opportunity)," Sheridan told clients in late August.

It's not just data centers that will drive memory demand. Physical AI could become the next major source of demand.

Tyler Durden Thu, 10/15/2026 - 14:35

Bitcoin Will Become "Less Volatile" And Larger Than Gold: 'The Bitcoin Standard' Author

Authored by Zoltan Vardai via CoinTelegraph.com,

Saifedean Ammous, the author of the 2018 academic book "The Bitcoin Standard," said that Bitcoin already functions as a medium of exchange and that volatility's effect on that is likely to diminish.

Bitcoin (BTC) can serve as a medium of exchange as it becomes less volatile than gold while surpassing the market capitalization of the largest precious metal, wrote Ammous in a Tuesday X post.

"Holding Bitcoin is using Bitcoin as money, and its lack of widespread use as a method of payment is no evidence against its monetization unfolding," added Ammous.

The remarks come in response to a passage in Professor Lawrence H. White's book, "Better Money: Gold, Fiat, or Bitcoin?," which argued that Bitcoin's fixed supply makes it too volatile to serve as a medium of exchange.

"With no supply response to demand swings, BTC's price is too volatile for people who want a reliable medium of exchange," wrote White in a Monday X post, referencing chapter six of his book.

He added that the lack of supply response was the reason stablecoins have "eaten BTC's lunch transaction volume."

Other industry watchers have also predicted that Bitcoin would eventually surpass gold. In May 2025, Bitwise's head of European research, André Dragosch, told Cointelegraph that their in-house prediction forecasts a $1 million Bitcoin price by 2029, which would make Bitcoin match gold's market capitalization.

However, Bitcoin's current $1.6 trillion market capitalization would need to grow by at least 18-fold to surpass Gold's near $29 trillion market cap to become the leading global asset.

In April 2025, Blockstream CEO Adam Back predicted Bitcoin will start rivaling gold's use cases as a monetary hedge, due to global financial instability and rising fiat inflation.

Tyler Durden Thu, 10/15/2026 - 14:20

Think Rates Are Peaking? Consider Mortgage-Backed Securities

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

Think interest rates are peaking? If so, agency mortgage-backed securities (MBS) deserve a look. Think rates have further to climb? MBS may still earn a place in your fixed-income allocation, potentially offering more yield than Treasuries and essentially no credit risk.

Here is the twist. In 2022 and 2023, MBS investors learned a painful lesson. As rates surged, homeowners stopped refinancing, and MBS durations rose at the worst possible time. Today, that dynamic has largely run its course. With 30-year mortgage rates at 7.25% and nearly 80% of homeowners holding a rate below 6%, refinancing has all but stopped, leaving MBS durations little room to extend further. The feature that hurt MBS investors in 2022 and 2023 has little room for further harm.

MBS are a unique type of bond because mortgagees can prepay part or all of their mortgage at any time without penalty. Thus, MBS investors, who have essentially lent mortgagees money, are, inherently, short a prepayment option. The prepayment option accounts for much of the extra yield MBS offer over Treasuries, as well as their greater interest rate risk. But when the risks are limited, MBS holders are often in an advantageous position.

In this article, we weigh the pros and cons of MBS at current yields, explain what will drive future returns, and share how individual investors can gain exposure.

Setting The Stage

Mortgage rates and Treasury yields have moved sharply higher over the last six months. Per Freddie Mac, the average 30-year fixed mortgage rate was 7.28% as of October 1, the highest since November 2023, and up from 6.34% a year ago.

Source: Freddie Mac Primary Mortgage Market Survey, via Real Investment Advice

The graph above shows that virtually all mortgages originated from the early 2000s have a rate below the current rate. Accordingly, refinancing activity has dried up. To wit, the Mortgage Bankers Association (MBA) reported that its refinance index is over 50% below the same level a year ago. Per Joel Kan of the MBA:

Mortgage rates jumped to their highest level in almost three years, pushing borrowers to the sidelines.

The iShares MBS ETF (MBB), a reasonable proxy for the agency MBS index, holds securities with a weighted average coupon of 3.63%, roughly 3.50% below the current mortgage rate. With most mortgages at least 2% below current rates, very few homeowners have an economic reason to refinance.

In bond terminology, their prepayment option is worth little. To better understand why this matters for MBS investors, let's focus on MBS duration.

Understanding MBS Duration

Duration measures a bond's price sensitivity to changes in interest rates. A bond with a duration of seven years should lose about 7% of its value if yields rise by 1% and gain about 7% if yields fall by 1%. For Treasury, municipal, and corporate bonds, duration is fairly predictable because their interest and principal cash flows are fixed.

MBS investor cash flows depend on when and by how much homeowners pay down their mortgages, which depends largely on interest rates. Therefore, changes in interest rates have a much more profound impact on MBS durations than Treasury and corporate durations.

MBS investors track effective duration, a model-based duration estimate that accounts for how prepayments are expected to change as rates move.

• When rates rise, refinancing slows, cash flows are pushed further into the future, and duration lengthens.
• When rates fall, refinancing accelerates, principal comes back sooner, and duration shortens.

The graph below shows a hypothetical comparison of MBS and Treasury duration for a range of Treasury yield levels. Note how quickly MBS duration changes when rates are between 4% and 6%. At the same time, note the relatively flat, downward-sloping Treasury duration once rates are above 6%. The lower graph shows that refinancing activity is highly sensitive to rate changes when 10-year Treasury yields are in the 4% to 6% range.

Source: Real Investment Advice (illustrative model, not market data)

Coping With Duration Shifts - Negative Convexity

The graph above shows that MBS rate exposure tends to shift in the wrong direction at the wrong time for investors. For instance:

• Duration increases when yields rise, so price losses are greater than they would have been if duration had remained constant.
• Duration declines when falling rates would otherwise produce larger price gains had duration remained constant.

Those negative consequences are called negative convexity.

This all means that the stated duration of an MBS or portfolio of MBS is a snapshot, not a constant. Investors should expect it to change as rates change and watch where current mortgage rates sit relative to the point at which homeowners can profitably refinance.

Extension Risk Is Largely Spent

Extension risk, or rising duration, has been harming MBS investors since rates started rising in late 2021. As rates rise, refinancing slows, the expected life of the mortgage pool lengthens, and duration increases precisely when investors least want more duration. MBS holders acutely felt the negative convexity in 2022 and 2023.

Today, despite the recent rate increase, much of that extension has already occurred. When a mortgage pool is deeply out of the money, or not economically refinanceable, as many are today, prepayments are driven almost entirely by factors unrelated to interest rates such as:

• Home sales.
• Scheduled amortization of principal.
• Defaults, which, for agency MBS, return principal at par.
• Cash-out refinancing, which is limited at current rates.

These and other sources of principal repayment create a floor under prepayment speeds.

Today, prepayments can't slow much more; thus, further rate increases would not extend duration much. Put differently, MBS investors buying today are taking on duration that is relatively capped on the upside. Accordingly, the risk/reward for MBS looks more balanced than it did a few years ago.

The Con: The Double Whammy If Rates Fall

The flip side of limited duration extension risk is the MBS problem when rates decline. If mortgage rates fall meaningfully, higher-coupon pools face two penalties at once:

• Principal earning higher rates returned through prepayments must be reinvested at lower rates.
• Duration shortens. As refinancing accelerates, the expected life of the MBS declines, capping price appreciation relative to a comparable Treasury.

This is the cost of the prepayment option MBS investors essentially sold to homeowners. The extra yield they earn over Treasuries is the premium they are paid for bearing it.

The Silver Lining To The Double Whammy

Within the double whammy, i.e., negative convexity, lies a potential reward in today's market. If mortgage rates fall by almost 2.5% to 5%, over two-thirds of mortgages, as we share below, have no financial incentive to refinance.

Source: Redfin analysis of FHFA National Mortgage Database (Q3 2025); Freddie Mac PMMS, via Real Investment Advice

For most of the MBS market, falling rates in the recent environment are a good thing:

• Because refinancing will be slow to kick in, duration declines should be minimal; investors can capture a large amount of the price benefit of lower yields.
• Faster prepayments become a gain. Lower rates tend to boost home sales, and every sale pays off a loan at par. For MBS trading below par, each dollar returned early is profit pulled forward.

Bear in mind it's not just the low number of high-rate loans that will likely limit prepays when rates fall. Refinancing takes months for borrowers to notice lower rates, shop lenders, and close loans. Furthermore, given the lack of recent refinancing and home sale activity, lender capacity could become a bottleneck if applications surge.

Also, many borrowers never refinance. Some lack the credit score or home equity to qualify, some have balances too small to justify closing costs, and others simply do not act. As a result, investors continue to collect above-market coupons on the loans that remain.

Falling rates can be very beneficial to MBS holders given today's backdrop.

How To Invest In MBS

For institutional investors, the agency MBS market is one of the deepest and most liquid fixed income markets in the world. Owning individual MBS is ideal in theory. It allows investors to choose the coupon, vintage, and prepayment characteristics that best fit their views. However, in practice, it is challenging and impractical for smaller investors for the following reasons:

• Pools factor down. Every month, a portion of principal is returned. A $100,000 position may be $60,000 within a few years, and small, "odd-lot" positions trade at meaningful discounts to larger pools.
• Monthly principal must be reinvested. Small, irregular cash flows are difficult to put back to work efficiently.
• Prepayment analysis requires data and models most individual investors do not have.
• Dealer access and pricing transparency for small trades are limited.

For these reasons, an ETF or mutual fund may be a more practical option for smaller investors. Funds handle reinvestment, maintain diversification across coupons and vintages, and benefit from professional management, institutional models, and lower trading costs.

Passive ETFs such as MBB offer broad index exposure at low cost; its expense ratio is 0.04%. Actively managed MBS funds, such as JMBS, can shift their holdings toward coupons and specified pools that managers believe offer better convexity profiles, albeit at higher fees.

Investors should review a fund's coupon distribution, effective duration, and use of leverage or derivatives. Two funds with similar durations can behave differently.

The graphic below compares the most popular passive MBS ETF, MBB, to the largest active ETF, JMBS.

Source: iShares, Janus Henderson fund pages (as of Oct 5, 2026), via Real Investment Advice

Summary- Investment Thesis

A bullish thesis rests on two key points. First, interest rates stabilize and start to fall.

Second, even if rates rise, the duration shift is largely capped, as the graph below shows. Accordingly, assuming MBS-to-Treasury spreads do not change, the price change between an MBS and a similar-maturity Treasury will not be that indifferent.

Three years ago, extension risk was the reason to avoid MBS. Today, it is one reason to own them. With most mortgages far below market rates, MBS duration has little room left to extend or refinance. Investors are left with an asset class that offers high yields, minimal credit risk, and stable duration.

Tyler Durden Thu, 10/15/2026 - 13:50

Lisa Cook's Attorney Challenges Fairness Of White House Probe

Authored by Matthew Vadum via The Epoch Times,

Federal Reserve board member Lisa Cook's attorney called into question the fairness and objectivity of a White House probe after President Donald Trump announced a new committee to investigate whether Cook made false statements.

In an Oct. 13 letter to White House counsel William Scharf obtained by The Epoch Times, lawyer Abbe Lowell wrote that one proposed member of the committee that will review the allegations against Cook, White House economic policy adviser Kevin Hassett, had previously pressed Cook to go on leave from her office and said Trump had "cause" to fire her.

A year ago, Hassett said Cook's refusal to step aside was "a partisan stance contrary to the independence of the Fed." Lowell said this comment suggests that he has prejudged the case.

The White House has proposed a Nov. 5 in-person hearing with Cook.

"A hearing with demonstrably biased members, unspecified additional allegations, and an unclear schedule for the disclosure of any additional evidence - with no explanation for why it was not previously produced - is not a process that respects the appearance or history of independence" of the Fed, Lowell wrote.

These are some of the issues that would have to be addressed before a hearing could take place, he said.

The Oct. 13 letter from Lowell comes days after Trump unveiled the new committee to investigate whether Cook made false statements.

The committee will probe allegations that Cook provided false information in connection with at least one mortgage instrument, Trump said in a presidential memorandum establishing the panel.

Trump later told reporters he would fire Cook if the committee were to recommend it. Cook's attorneys have said a fair hearing would demonstrate that the president has no legal basis for firing her.

Lowell said Cook will not be able to appear at the November hearing because she will be in Europe attending financial and monetary policy meetings. The earliest she is available is after the Fed's policy meeting set for Dec. 8 and Dec. 9, he said.

On June 29, the Supreme Court blocked the firing, rejecting Trump's arguments that he could avoid judicial review. The 5-4 decision said Cook was "entitled to notice and some opportunity to respond before her termination."

The ruling outlined a path for possibly removing Cook if she were given a chance to review the evidence and afforded an opportunity to refute it, which appears to be the path the White House is pursuing.

Trump said he followed the provisions of the Federal Reserve Act, which he said permits presidents to remove board members "for cause."

White House spokesperson Matthew Middleton defended the process, saying the Constitution requires the president to ensure that laws are followed and that the conduct of Fed governors "is above reproach."

"The President is going beyond what the Supreme Court required by offering Lisa Cook an in-person hearing that will be conducted in a fair and open process," he told The Epoch Times.

A White House official said the committee will consist of a senior economist and expert on the Federal Reserve, an employment law expert, and an expert in government ethics. Cook's hearing will be on the record, and she will be allowed to be represented by an attorney. She will be given the evidence in advance and will have an opportunity to present her own written evidence, as well as written witness statements, the official said.

President Joe Biden appointed Cook as one of the Federal Reserve's board members in 2022 and reappointed her in 2023. Both times, Cook was confirmed by the U.S. Senate.

Zachary Stieber and Sam Dorman contributed to this report.

Tyler Durden Thu, 10/15/2026 - 12:20

Currie Slams 'Vibe' Oil Contracts As Trump Admin Halts SPR Drains, IEA Urges Massive Reserve Release

Oil prices are extending gains again this morning as traders weigh a weaker global demand outlook and signs of recovering Middle East crude supplies against persistent shipping risks around the Strait of Hormuz and escalating/spreading violence between the Houthis and Saudis.

An overnight lull in prices (set with hopes for more reserve releases) was upset as Iran showed more clips of tankers/container ships under attack.

The International Energy Agency said Wednesday that Gulf crude shipments rose by 4.4 million barrels a day to 13.9 million barrels a day in September, reaching more than 75% of prewar levels. Global oil supply increased by 2.5 million barrels a day to 102.3 million barrels a day, driven by Gulf producers.

However, the recovery remains vulnerable to renewed attacks on energy infrastructure and shipping, the agency said.

Given the massive crude draw reported by API (likely impacted by shut-ins from the first Atlantic hurricane of the year in the US Gulf), all eyes are on the (Columbus Day-delayed) official data...

API

• Crude -11.1mm

• Cushing +1.8mm

• Gasoline +1.1mm

• Distillates -1.5mm

DOE

• Crude -8.56mm

• Cushing +1.86mm

• Gasoline +3.52mm

• Distillates -2.52mm

HUGE CAVEAT - the shut-ins in the Gulf make this very noisy: Confirming API's reporting, the official data showed a large crude draw last week (and another sizable draw in distillates inventories) while stocks at Cushing and overall Gasoline inventories saw builds...

For the first time since the Iran war began, the Trump admin did not drain any reserves from the SPR...

US Crude Production tumbled last week (shut-ins in the Gulf, so not comparable)...

Total US Diesel stocks remain at seasonal record lows...

WTI has surged up to $97.50

However, watching futures is misleading as Wall Street veteran Jeff Currie exclaimed this morning that the world’s most important oil benchmark has become little more than a “vibe contract", blunting its usefulness as a tool to manage price volatility.

Brent’s disconnect from physical markets is creating “unpriceable risk,” deterring hedgers from using the contract to protect themselves, Currie said.

“Everything associated with energy is going up but Brent,” Currie said Thursday in an interview on Bloomberg Television.

“It is not connected to the real world anymore.”

A hit to Brent’s integrity undermines the market’s ability to anticipate supply shocks with “profound consequences for the market and the rest of the world,” Currie said.

The disconnect between paper and physical markets has frustrated traders since the Middle East conflict began, when crude struggled to top $100 despite historic supply shortages. In contrast, Dated Brent, the most important physical oil benchmark, has surged to near $130 a barrel. That dissonance has contributed to traders fleeing the market, with Brent open interest earlier this month hitting its lowest since March 2025 even as oil dominates headlines.

Diesel prices are lower this morning...

Finally, Bloomberg reports that US officials attending an International Energy Agency meeting in Paris earlier today informally lobbied allies to commit an additional 100 million barrels from emergency oil inventories to supply global markets. 

"While US officials attending an IEA gathering in Paris on Thursday have yet to table a proposal about what should be done, they have been informally lobbying for an extra commitment of at least 100 million barrels, the people said, asking not to be identified because the matter is not public." (BBG)

The report says US officials believe IEA members have not released enough oil from the coordinated 400 million-barrel oil and fuel release announced in March to cushion the impact of the Gulf conflict.

The Group of Seven nations agreed earlier this month to release up to 100 million barrels after President Trump threatened Europeans with a halt to exports of diesel and other petroleum products.

Today's request follows Trump's deal with Moscow to supply US and global markets with thousands of tons of diesel fuel.

On top of this, a defiant President Volodymyr Zelenskyy told the Financial Times earlier today that his armed forces will attack Russian refineries once again. This comes after the Trump administration requested that Ukraine stop hitting Russian refineries, as those attacks have been one of the drivers of the global refining crisis.

Last month, IEA head Fatih Birol said about one-third of the 400 million-barrel release announced in March had been delivered to global markets. Meanwhile, US SPR inventories have fallen to levels not seen since the early 1980s.

The Trump administration's scramble comes as midterm elections are just three weeks away. The latest credit and debit card data from Bank of America show that US consumers are spending more on fuel at the pump, crowding out other purchases and weighing on consumer sentiment.

Tyler Durden Thu, 10/15/2026 - 12:10

After Jensen Saves The World, Nasdaq Breaks

Nasdaq has been soaring higher for the last hours following supportive statements from Nvidia CEO Jensen Huang:

• HUANG: "COREWEAVE'S STRENGTH IS IMPROVING EVERY DAY"

• HUANG: COREWEAVE'S COST OF CAPITAL IS "ACTUALLY DECREASING"

• HUANG SAYS NVIDIA DOESN'T NEED TO BACKSTOP COREWEAVE

As a reminder, Nvidia helped rescue CoreWeave's downsized IPO and holds a ~$2 billion stake.

Then around 1115ET, Nasdaq broke...

Nasdaq is experiencing a network disruption affecting multiple multicast groups originating from Carteret, according to a market system status message.

Nasdaq warned that customers may experience intermittent data gaps on all US equities markets (Nasdaq, Nasdaq Texas, and Nasdaq PSX) across all feeds (hardware and software)

And the market rolled over...

...maybe Nasdaq should have used a CoreWeave data-center?

Tyler Durden Thu, 10/15/2026 - 11:57

The post AI Neocloud CoreWeave Does the Weave, Inflation Doesn’t appeared first on CEPR.

Trump Admin Floats Unfreezing Russian Assets In Big Move To Restart Talks

President Trump appears to be busy rolling back years of entrenched Ukraine policy. Starting last week he announced the controversial diesel deal with Putin, and this week Ukraine's Zelensky is complaining that intelligence-sharing has been throttled, and possibly even cut off.

The possibility or even likelihood of this heading to another TACO moment aside, what's next? New reporting in the Financial Times gives an idea. The United States has floated a proposal that European countries unfreeze some of Russia's sovereign assets and deposit them in an entity controlled by Washington.

via Associated Press

The FT report cites four people familiar with the matter, who describe that the idea was formally presented by envoys Steve Witkoff and Jared Kushner during a meeting of Western allies and Ukraine in Miami on Oct.10.

"The US suggested several possible methods for unfreezing the assets, including for them to be moved into a new special-purpose financial vehicle overseen by Washington," the sources said.

This US plan would be enacted in the hope of opening up momentum toward a comprehensive Ukraine peace plan. Moscow has of late rejected any 'temporary' proposal, including a 60-day pause in fighting recently offered by Zelensky. It wants a lasting political settlement and not a mere 'pause' along the front lines.

At the Miami meeting were NATO representatives, as well as officials from the US, France, Germany, and the EU.

"Many ideas have been floated as to how Moscow's frozen assets could be used after the war, the US official added," the FT says.

European officials are said to have balked at any initiative to let go of Russian assets. "They were told that this was just simply not going to happen," one source said. For example, Germany has voiced its clear position:

"Those are assets that are frozen ​in Europe and they should remain frozen in Europe. ​This is our business and we are deciding over ⁠it," Merz said in Brussels ahead of an EU ​summit.

At least €260 billion in sovereign assets belonging to Russia's central bank were frozen in 2022 as a result of Russia's full-scale invasion of Ukraine in February of that year. Most of this is held at the Belgian securities depository Euroclear. The vast majority, or over €210 billion of the sum, is held in the EU.

The last couple years of war has seen the EU work out a scheme wherein payments are made to Ukraine utilizing interest gained from Russa's funds.

Washington's sudden willingness to ease off the pressure on Moscow has interesting implications regarding the Iran war...

President Trump said on October 13 that he did not believe Russia was helping Iran. This raises a question: is this information really being withheld from the US president? In 2025, Russia and Iran signed a 20-year strategic treaty. They help each other with weapons, technology, and money to sustain their wars and weaken the United States. Iran attacks shipping to keep oil prices high. According to Reuters on October 14, 2026, two senior Iranian officials directly linked this strategy to the US elections on November 3. They also discussed expanding attacks beyond the Strait of Hormuz. This benefits Russia: its oil becomes more expensive, buyers accept smaller discounts, and demand rises. According to CREA, high prices helped Moscow maintain its revenues at the end of March, even after Ukrainian strikes on Russian export infrastructure. Russia offers the US its diesel and gets sanctions relief. Iran disrupts fuel supplies, while Moscow offers to help and receives concessions in return. Iran gave Russia Shahed-131/136 drones, components, equipment, and technology to manufacture drones in Alabuga. Russia is now returning the favor by supplying Iran with improved drones and sharing its experience in bypassing air defense systems. On March 27, 2026, the Associated Press, citing US and European officials, reported deliveries of such drones to Iran. Additional reports about Russian components and their use emerged in August. Iran provided the original technology; Russia refined it in Ukraine, and those improvements are now helping Iran attack US forces. Russia provides Iran with intelligence on US facilities. In September, CNN linked Russian satellite intelligence to Iran’s March 27 attack on Prince Sultan Air Base in Saudi Arabia. The strike wounded 12 US service members and destroyed an AWACS aircraft. Russia is helping Iran develop engines for supersonic cruise missiles. On September 1, 2026, the Financial Times reported on a secret program known as C430L, which has been operating since 2023. Russian specialists linked to Rosoboronexport and the United Shipbuilding Corporation’s NPO Mashinostroyeniya are involved. The program could allow Iran to manufacture more sophisticated weapons capable of threatening US ships and bases in the region. Iran supplies Russia with ballistic missiles and trains Russian troops to use them. In September 2024, the US officially announced the first delivery of Fath-360 missiles and reported that Iranian instructors were training Russian missile crews. For Moscow, this means additional ammunition for its war against Ukraine. Russia sells Iran air defense systems and combat aircraft. In February 2026, the Financial Times reported a contract worth approximately €495 million for 500 Verba man-portable air defense launchers and 2,500 missiles, scheduled for delivery between 2027 and 2029. Iran has also confirmed purchasing Su-35 fighter jets, while visual evidence of the first Mi-28 helicopter deliveries emerged in January 2026. The exact number of aircraft and helicopters Iran has received remains unclear. Russia is transferring US weapons captured in Ukraine to Iran. In March 2023, CNN reported that Russia had handed over Javelin and Stinger. US sources expected Iran to attempt to dismantle and copy the systems. Even if reverse-engineering fails, Tehran can study how they work and how to counter them. Russia helps the Houthis through Iran’s Islamic Revolutionary Guard Corps (IRGC). According to the Wall Street Journal in October 2024, the Houthis received Russian satellite data through this channel to target commercial shipping. Reuters also reported that Iran had acted as an intermediary in talks over possible Russian deliveries of Yakhont anti-ship missiles. It has not been established whether those deliveries took place. Iranian allies attack maritime routes and facilities belonging to US partners. Following an attack on Aramco’s headquarters, the Houthis vowed on October 14 to continue strikes on Saudi airports and oil facilities. The US and its allies are consequently forced to defend more sites and commit additional resources. Russia’s VTB bank helps Iranian banks process payments in circumvention of sanctions. On September 14, 2026, the US Treasury Department sanctioned VTB over its dealings with sanctioned Iranian banks, settlements in rubles and rials, and attempts to move billions of dollars in frozen Iranian assets. This gives Tehran access to funds that Washington had sought to block. The Russia-linked A7 network helps Iran receive oil revenues and pay for weapons. According to documents released by the US Treasury Department and FinCEN on October 1, its intermediaries also worked with Iran’s central bank and the IRGC. One intermediary and an affiliated company received nearly $140 million from entities involved in evading Iranian sanctions. Financial schemes developed for Russia are also serving Iran’s needs. Russia and Iran transport weapons in both directions across the Caspian Sea. The US Treasury Department identified the vessel Port Olya-3 as having transported Iranian missiles to Russia. In August 2026, NBC, citing a European government document, reported Russian shipments of drone components, ammunition, and explosives to the Iranian port of Amirabad. This route allows the two countries to supply each other directly with military cargo. Russia and Iran are developing the International North–South Transport Corridor together with India. According to the Center for Strategic and International Studies (CSIS), the project accelerated after 2022, partly to reduce dependence on Western routes and exposure to sanctions enforcement. Russia supports Iran’s nuclear energy sector and is preparing gas projects. Moscow helps operate the Bushehr nuclear power plant and build additional reactor units. Following wartime evacuations, Russian engineers began returning in August 2026. The two countries are also discussing gas supplies of up to 55 billion cubic meters annually, although this remains a proposed volume. Russia launches Iranian satellites. In July 2025, Russia launched Iran’s Nahid-2 telecommunications satellite into orbit. Russia and Iran exchange technologies for internet surveillance and communications interception. This cooperation is underpinned by a 2021 agreement and the 2025 strategic treaty. CSIS has also documented Russian assistance to Iran in intercepting telecommunications. Russia and Iran conduct influence operations targeting US elections. The US Treasury Department documented campaigns by both countries during the 2024 elections. Russia shields Iran from international scrutiny. On September 17, 2026, Russia and China blocked the extension of the mandate of a UN expert panel monitoring compliance with sanctions against Tehran. This makes it more difficult to independently document violations and increase pressure on Iran.

— Anton Gerashchenko (@Gerashchenko_en) October 15, 2026

European Commission President Ursula von der Leyen said that Moscow "must pay for the destruction it has caused. And we are using the proceeds from the immobilized Russian assets to make sure it does."

"We are making a further [$1.62] billion of them available to Ukraine. This will support Ukraine's continued resistance against Russia's illegal war," she had announced in August.

Tyler Durden Thu, 10/15/2026 - 09:40

Suspected ISIS Bomber Lived In UK Taxpayer Hotel After Small Boat Arrival

Authored by Steve Watson via Modernity.news,

Reports have emerged of a suspected ISIS operative and alleged rapist being housed in a taxpayer-funded hotel following his illegal arrival in the UK.

"Britain is getting the dregs," GB News presenter Patrick Christys urged, reacting to the case of an Iraqi man who crossed the Channel, gave a false name, and lived undetected for weeks before German authorities tipped off the UK National Crime Agency.

Layth Ibrahim Mohammed, 39, is accused of links to Islamic State in Iraq during the 2010s, including making booby-trapped bombs and teaching the children of ISIS fighters at a school run by the group.

'Britain is getting the dregs.'

@PatrickChristys is disgusted after a suspected ISIS fighter and rapist has been found living in a migrant hotel. https://t.co/JTpccqb2Pf

— GB News (@GBNEWS) October 13, 2026

He arrived by small boat from France in August 2025, claimed asylum, and was placed in a Home Office hotel in Oldham, Greater Manchester. NCA officers arrested him there in October 2025, but only after Germany flagged his background.

He is now fighting extradition to face terrorism-related charges and an allegation of raping a German woman. The allegations have not been established in court.

His lawyer, Joanna Curtis, told a Westminster hearing that extradition would be inhumane because "he has significant mental health issues, including severe anxiety, as well as depression." She linked the trauma to a bomb attack in Iraq that killed his son and even laughably cited symptoms of "pins and needles."

This is not an isolated failure. Earlier this year, another ISIS-linked man reached Britain the same way after social media reassured him the UK takes everyone.

Mohammed Yaseen, previously convicted in Germany for ISIS membership, attended beheadings and floggings in Iraq, then crossed after watching TikTok videos claiming Britain "accepts everyone and respects human rights."

He gave false details, was processed, and only later identified by biometrics. Prosecutors described him as high risk.

The pattern is clear: people with documented extremist histories clear the Channel, destroy or withhold documents, and enter the asylum system before any meaningful check occurs.

The scale makes individual cases inevitable. Small-boat arrivals since Labour took office have already surpassed the strength of the British Army.

More than 83,000 crossed between July 2024 and September 2026, exceeding the Army's roughly 83,000 regulars and outnumbering the Navy and RAF combined.

Total arrivals since 2018 top 200,000. The vast majority are military-aged men. Shadow Home Secretary Chris Philp called it "completely bonkers," noting Labour had "let an entire army-sized population cross the Channel illegally."

Reform leader Nigel Farage has repeatedly warned the crossings represent a national security emergency.

At this week's Prime Minister's Questions he pressed Andy Burnham directly: "Every week there are young, unidentified males from Iran coming into this country, some of whom pose a genuine security threat to our nation. Is it not time the Government recognises that what is going on in the English Channel is a national security emergency?"

Burnham replied that crossings were "coming down" and removals were up, while acknowledging more needed to be done. Farage has described the situation as an "out-of-control disaster."

The numbers are not sustainable on any measure. Settlement grants alone have reached one every minute.

Home Office data show 140,000 grants of settlement or citizenship in a single three-month period. Asylum system costs hit £4.3 billion in one year. Fewer than 5 percent of Channel arrivals since 2018 have been removed.

Foreign nationals are disproportionately represented in certain offence categories, including sexual offences. The system continues to grant status and benefits while the backlog of appeals grows.

Much of this rests on claims that officials themselves describe as fraudulent. A Home Office caseworker with years of experience processing thousands of applications stated that "at best 1 per cent of asylum seekers are genuine."

Identical "package claims," recycled stories, and fabricated evidence are routine. Networks coach applicants for thousands of pounds. Staff are instructed to treat claimants as "customers." Modern slavery claims are nearly impossible to disprove and routinely succeed.

The result is a system that rewards illegal entry while genuine refugees and British citizens compete for housing, healthcare, and public resources.

Local authorities have responded to public concern by locking down entire towns rather than stopping the boats. In Gosport, police used multiple public-order powers to restrict residents, ban face coverings, and disperse gatherings so that hundreds of unvetted men arriving on mega-dinghies could be moved in luxury coaches.

Anti-migrant protesters faced arrests; an activist who slashed a dinghy was remanded in custody for months. The contrast with the rapid bail of terrorism suspects elsewhere is stark. Residents are treated as the problem while arrivals with unknown backgrounds are protected and housed.

These cases - ISIS suspects in hotels, arrivals outnumbering the Army, a system insiders call a scam, and towns placed under lockdown to facilitate landings - are not separate scandals. They are the predictable outcome of a policy that prioritises processing over screening, accommodation over removal, and international obligations over the security of the existing population.

Farage has called for the Royal Navy in the Channel and a pause on asylum claims. Successive governments have preferred payments to France and further hotel contracts.

The result is visible on the Kent coast, in Oldham hotels, and in the courtrooms where extradition is contested on mental-health grounds after the individual has already lived at public expense.

Britain cannot indefinitely absorb unvetted military-aged men, some with documented terror links, while maintaining public safety, housing stock, and basic services.

British society rests on a basic social contract: the state collects taxes and enforces laws in return for protecting the people who already live here. That bargain is rapidly fraying in real time.

The patience that has sustained decades of mass illegal entry is not unlimited. Once enough people conclude the state will not prioritise their safety, their housing, or their taxes, the remaining consent that keeps the system functioning quickly erodes. That is the edge the current policy has reached.

Tyler Durden Thu, 10/15/2026 - 09:25

Initial Jobless Claims Hover At 57-Year Lows

For the fifth straight week, the number of Americans filing for jobless benefits for the first time was less than 200k (199k)...

That is the longest streak below that level since 1969! (And remember, the labor force then was a fraction of what it is now).

Interestingly, Ohio, Tennessee, and California saw a rise in unadjusted claims last week...

Continuing claims remains low too - holding around 1.7 million Americans - the lowest level since March 2023...

However, as we noted last week, payrolls tell the other half of the story. September nonfarm payrolls came in at just +29k (with prior months revised down), well below the already modest recent trend. Net employment change is simply hires minus separations. When separations are that low but the net number is mediocre, hiring itself must have slowed substantially.

So the market has cooled mainly through reduced hiring rather than rising firings. That keeps the unemployment rate relatively contained (4.2% in September) even as it becomes harder for job seekers, switchers, and new entrants to land roles. 

Economists (including various Fed research notes) have been describing this as a stable-but-fragile equilibrium for a while: low layoffs prop things up, but the low hiring rate leaves little cushion if demand weakens further or a shock forces companies to start cutting.

It’s also consistent with slower labor-force growth from demographics and reduced immigration - fewer people needing to be absorbed means weaker payroll growth can still leave unemployment from rising sharply.

The bottom line is simple: the 'low-hire, lowest-fire' economy continues to roll along with no obvious signs of AI's productivity surge (or replacement projections).

Tyler Durden Thu, 10/15/2026 - 09:15

States Sue OpenAI, Claiming ChatGPT Gives Young Users Dangerous Advice

Authored by Jill McLaughlin via The Epoch Times,

Eight states filed lawsuits against OpenAI Oct. 14, claiming the company's ChatGPT app harms children, deceives parents, and violates state consumer fraud laws.

The states - Iowa, Kansas, Nebraska, Arkansas, Idaho, Montana, and Arizona - individually filed lawsuits in their states, alleging the chatbot was giving dangerous medical advice, encouraging people to hurt others, and coaching people to commit suicide while pretending to be a friend.

"We will not just accept that any big tech company can make money by hurting Iowa's kids and use them as lab rats in a race to be the first, or the biggest, or have the most users," Iowa Attorney General Brenna Bird told reporters Wednesday during a news conference on the lawsuits.

Chatbots and artificial intelligence (AI) are becoming increasingly popular with teens. Almost two-thirds - 64 percent - of teens ages 13 to 17 reported using chatbots, with about 30 percent using them every day, according to a report published in December 2025 by Pew Research Center.

ChatGPT is by far the most popular among teens and favored by 59 percent of them, the survey found.

The lawsuits filed Wednesday claim ChatGPT is marketed by OpenAI as a safe product but, in reality, it is designed to be dangerous to vulnerable users, like children, and coaches them to commit suicide or to harm other people.

The states are asking the courts to compel OpenAI to comply with state consumer fraud laws, which prohibit deceptive business practices.

OpenAI responded to the filing of lawsuits, saying the company has implemented several safety measures and is continuing to work to build more safeguards.

"We've built industry-leading, age-specific protections into our product that many other AI products lack," OpenAI's spokesman Eric Porterfield told The Epoch Times in an email. "While no system can be perfect, we'll continue to work with experts to inform our work and build additional safeguards, such as the parental controls, break reminders and age-appropriate model protections that exist today."

The company is committed to working with states on advancing pragmatic AI policies that apply to the entire AI industry, according to Porterfield.

OpenAI claims its chatbot is intended for users age 13 and older. Users under 18 need permission from a parent or guardian to use it.

ChatGPT for Teens applies default safeguards for users under 18, OpenAI claims. Teens can manage and delete their chats and history, and control whether their conversations are used by the company to train models.

The company claims 90 percent of its teen ChatGPT users only use it for learning, skill-building, or productivity. Half of the teens who use it for conversations take breaks when they are given a break reminder, according to OpenAI.

Kansas Attorney General Kris Kobach said the states moved ahead with lawsuits instead of waiting for Congress to set federal guidelines.

"We're in a world right now where the AI companies - and in this case OpenAI - are asked to police themselves," said Kansas Attorney General Kris Kobach during Wednesday's press conference. "And as our cases allege, they've done a very poor job of policing themselves and have placed the public in danger."

Florida became the first state to file a lawsuit against OpenAI and its CEO Sam Altman in June, alleging its chatbot concealed serious risks, suppressed internal safety warnings, and deceived Floridians.

Florida Attorney General James Uthmeier launched a criminal investigation into OpenAI in April after ChatGPT gave detailed advice to a suspected shooter who allegedly used it in a deadly campus shooting at Florida State University last year.

Tyler Durden Thu, 10/15/2026 - 09:10

Pump-Pain Spreads: Retail Sales Soar To Record High, Sentiment Sits As Record Low

BofA's omniscient analysts expected a hotter than expected retail sales print this morning (but it came with a warning as they start to see some substitution effects as rising gasoline spend is wearing on discretionary purchases).

Once again, BofA was right, with headline Retail Sales surging 0.8% MoM (+0.3% exp), lifting sales up by 6.3% YoY...

Spending at gasoline stations soared...

Eight out of 13 categories posted increases, led by a 6.4% increase in the value of purchases at gas stations. While consumers pulled back on spending on things like hobbies and building materials, sales at furniture retailers, electronics stores and restaurants increased.

This was not good for GDP as the so-called control-group sales - which feed into the government’s calculation of goods spending for gross domestic product - increased just 0.1% after surging the prior month. The measure excludes food services, auto dealers, building materials stores and gasoline stations.

The figures indicate consumers took a breather as the third quarter drew to a close and price pressures mounted. Faster inflation is taking a bigger toll on Americans’ paychecks and squeezing their budgets.

And BofA's data appears to confirm that spending at the pump is squeezing spending elsewhere...

The AAA national average price of gasoline has stayed above the politically sensitive $ 4-per-gallon level for the last three months. Diesel has been above $5 over the same period and is flirting with a record high amid a global refining crisis. As we've outlined using high-frequency data, high fuel prices affect consumer behavior and spending patterns at convenience stores and gas stations. 

The latest comes from UBS analyst Ritu Solanki, who wrote in a brief note on Wednesday about US bank earnings that delivered an inconvenient message for those hoping for a recession: the economy remains resilient, but inflationary pressures persist.

Solanki said consumer spending, loan growth, and corporate activity remain healthy, while credit performance shows limited evidence of broad deterioration.

Solanki then cited Bank of America spending data for September showing consumers are spending more on fuel with credit and debit cards, up more than 20%. The risk is that rising fuel bills are crowding out other purchases. 

BAC's card data show accelerating fuel spending alongside softening spending across several other major categories, suggesting higher pump costs are pinching household budgets.

Total card spending per household rose about .2% in the month, slowing from 1% in August, on a seasonally adjusted monthly basis. Meanwhile, gas spending jumped 5%, up from 3.1% in August. 

Several categories contracted in September:

• Home improvement: 1.6%
• Department stores: 1.1%
• Clothing: .9%
• Furniture: .5%
• Restaurants: .4%
• Groceries: .2%
• Online spending: .1%

The spending data suggest that fuel bills are squeezing room for other purchases, translating into dismal consumer sentiment ahead of the midterm elections. 

Is it really as bad for the American consumer as it has ever been?

Chief executives at Domino’s Pizza and Albertsons acknowledged in recent earnings calls that many consumers remain in a challenging economic environment. Even so, Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. have also signaled that the consumer remains resilient.

Tyler Durden Thu, 10/15/2026 - 09:00

Muslim Hate Preachers OK, Harry Potter Not OK

Authored by Steve Watson via Modernity.news,

Mayor Sadiq Khan's London is under pressure to cancel Harry Potter-themed Christmas lights on Oxford Street because the woman who created the series refuses to pretend men can become women.

The Good Law Project and thousands of petition signers want the display blocked, arguing it would fund "anti-trans rights" work and make some people feel unwelcome.

At the same time, the same authorities have green-lit advertising featuring Islamic preachers known for inflammatory views on gay people.

??? Meanwhile in LondonThe Deputy Mayor wants to BAN Harry Potter related festivities in LondonWhy?Because of JK Rowling's outspokenness over the fact Men can't become Women would upset the Trans CommunityAt the same time they allow Islamist Imans to preach about murdering Gay people??

— Concerned Citizen (@BGatesIsaPyscho) October 14, 2026

A City Hall Conservatives clip shows Conservative Assembly Member Emma Best questioning Deputy Mayor for Culture and Creative Industries Justine Simons, who appeared disappointed by a Harry Potter section of the lights and was pressed on whether she would go further and ban it.

The campaign is straightforward. Organisers claim the lights, intended to promote the new HBO series, would generate more money for JK Rowling, who has used her platform and resources to support women's sex-based rights.

A Good Law Project spokesperson asked: "How can Mayor Khan tell trans Londoners that 'this city is yours too', whilst allowing a Christmas lights display to go ahead that will help fund anti-trans rights groups? The mayor must back up his words with action."

City Hall's response was that neither the Mayor nor the Oxford Street Development Corporation arranges the lights.

A spokesperson stated: "The Christmas lights on Oxford Street are not arranged by the Mayor or the Oxford Street Development Corporation, and this is a matter for the New West End Company and local businesses. The Mayor is clear that he will always support and champion all of London's diverse communities, including trans and non-binary Londoners."

In the assembly session, Best challenged Simons on the Harry Potter elements, noting the apparent disappointment and asked whether Simons would ban the fictional wizard franchise outright, in spite of its contribution to London's tourist economy.

Simons responded with hesitation and deflection, prompting Best to reference a London tube ad featuring a cleric who called gay people "filthy" and "worse than animals."

TfL had treated it as compliant before removal. The contrast is explicit: disappointment or pressure over Harry Potter linked to Rowling's views, versus prior tolerance of advertising from a preacher with extreme anti-gay statements.

The Mayor's office has a history of this.

Sadiq Khan faced criticism after ads for the Islamic finance platform Wahed appeared on the London Underground, buses, and platforms featuring preacher Ismail ibn Musa Menk (also known as Mufti Menk) burning US dollar and euro bills under slogans such as "Join the money revolution" and "withdraw from Riba."

Menk has been banned from several countries for inflammatory teachings and has previously described gay people as "filthy" and "worse than animals."

Critics, including Conservative Assembly Member Susan Hall, highlighted the double standard: TfL had banned or forced changes to far milder ads, such as a comedian's hot dog promotion (replaced with a cucumber over "unhealthy eating" rules), Protein World's "beach body ready" bikini ads, and others deemed to promote negative body images or junk food.

Transport for London also allowed ads promoting tourism to Brunei to run on the Underground even as the country had just introduced a law permitting the stoning to death of gay people.

You've banned adverts for junk food and body shaming on all public transport, when will you be removing Brunei tourism ads following the legislation that will see LGBTQ people being stoned to death? We should not be promoting such backward nations @SadiqKhan @TfL https://t.co/zqrGPwLn9C

— Joe (@onlyjoekin_) April 3, 2019

Critics pointed out the inconsistency of permitting promotion of a jurisdiction with extreme anti-gay penalties while restricting commercial imagery considered insufficiently progressive or healthy. TFL was eventually forced to remove the ads.

A number of people have contacted me regarding adverts for Royal Brunei Airlines on TfL's estate, following news that Brunei has introduced a law punishing gay sex by stoning.I've written to @SadiqKhan in his capacity as Chair of TfL asking that they no longer accept these ads https://t.co/rWuISU7IwO

— Tom Copley (@tomcopley) April 3, 2019

Well done @TfL, @tomcopley & @MayorofLondon for removing the Brunei tourism ads on the #tubeIt certainly isn't 'an abode of peace' for #LGBTQ people like me who now face being stoned to death there#BoycottBrunei #Brunei #Gay #LGBT ????

— Oliver Carrington ???? (@olliecarrington) April 3, 2019

Meanwhile, as activists and City Hall figures try to police festive lights, the BBC is preparing a two-part documentary on Rowling as "one of Britain's most polarising public figures."

The series, produced by Rogan Scotland for BBC Factual and BBC Scotland, will air on BBC Two, BBC Scotland and iPlayer. It uses Rowling's life "as a lens through which to explore three decades of profound social, political and technological change."

The production material states she is "admired by supporters as a fearless defender of women's rights, and condemned by critics who call her an opponent of trans equality," and that she "finds herself divided from some of the actors and fans who once championed her work."

I think we can safely guess in what direction it will lean.

Producers say it will draw on rare archive material, Rowling's own words, and interviews with people who have worked with her in the past. Rowling herself has no involvement; a representative confirmed she is aware of the project but has not contributed.

BBC 'is making a JK Rowling documentary on how she became a polarising public figure'... 'without her input' https://t.co/wWFjUcA36b

— Daily Mail (@DailyMail) October 13, 2026

James Rogan, executive producer, added: "J.K. Rowling has achieved extraordinary literary success, with her influence spanning a generation of fans, crossing into cinema and the online world. Rogan Scotland explores her unique story from her early days as a writer to the present moment and how her unflinching personal beliefs have sparked a fraught and divisive dialogue that continues to this day."

This framing arrives after years of Rowling stating a basic biological fact: sex is real and immutable.

She has repeatedly said she supports people living as they wish while opposing the erasure of women's single-sex spaces, sports, and language.

Earlier this year she noted that some former Harry Potter film actors appeared to treat their past association as a licence to criticise her publicly. She observed that people who have never lived ordinary adult life without wealth and fame can remain "ignorant of how ignorant" they are.

         

The wider climate in Britain has made ordinary statements of reality into political flashpoints. The Supreme Court has ruled that a woman is defined by biological sex.

Parents have faced the prospect of prison time for questioning their child's desires to transition.

Meanwhile, we've seen ample stories such as this one about toddlers being removed from nursery after being labelled transphobic.

Rowling's position has remained consistent through all of it: sex is observed, not assigned, and women and girls deserve spaces and language that reflect that reality.

The attempt to turn Christmas lights into a loyalty test, the response from Deputy Mayor Justine Simons when asked about banning Harry Potter, and the decision to commission a documentary that treats basic biology as a source of "polarisation" all point to the same pattern.

Institutions and campaign groups continue to treat disagreement with gender ideology as a problem to be managed or excluded, even while other forms of exclusion and hostility receive different treatment.

Tyler Durden Thu, 10/15/2026 - 08:50

Inflation Is 'Broadening Out' As Producer Prices Soar Most In 4 Years

After yesterday's accelerating CPI scare, this morning analysts expected a concomitant surge in producer prices - the big question remains whether it's all energy... or are price-hikes 'broadening out' making The Fed's job harder.

Headline PPI exploded higher in September, rising 1.3% MoM (more than double the 0.6% expected and biggest monthly jump since March 2022), dragging producer prices up 6.3% YoY (+5.4% exp) - the highest since Dec 2022...

Energy dominated the surge in prices...

Final demand goods: Prices for final demand goods advanced 2.6%, in September, the largest increase since data were first calculated in December 2009. Over 80 percent of the broad-based rise in September is attributable to the index for final demand energy, which jumped 10.8 percent. Prices for final demand foods and for final demand goods less foods and energy advanced 1.2 percent and 0.3 percent, respectively.

Product detail: Half of the September increase in the index for final demand goods can be traced to prices for gasoline, which jumped 20.3%. The indexes for diesel fuel, fresh and dry vegetables, jet fuel, residential electric power, and crude petroleum also rose. In contrast, prices for chicken eggs dropped 39.7 percent. The indexes for thermoplastic resins and materials and for commercial electric power also declined.

Final demand services: Prices for final demand services moved up 0.8% in September, the largest rise since advancing 0.8% in April. Nearly half of the broad-based September increase can be attributed to a 1.4-percent rise in margins for final demand trade services. The indexes for final demand transportation and warehousing services and for final demand services less trade, transportation, and warehousing also advanced, 3.4 percent and 0.3 percent, respectively.

Product detail: Over 20 percent of the September increase in prices for final demand services can be traced to margins for machinery and vehicle wholesaling, which advanced 3.9 percent. The indexes for truck transportation of freight, food and alcohol wholesaling, traveler accommodation services, food retailing, and airline passenger services also rose. Conversely, margins for automotive fuels and lubricants retailing dropped 30.3%. The indexes for securities brokerage, dealing, and investment advice and for chemicals and allied products wholesaling also fell.

The Energy PPI component is now at a record high (clearly tracking diesel prices more than crude)...

Over 80 percent of the broad-based rise in September is attributable to the index for final demand energy, which jumped 10.8 percent

• Half of the September increase in the index for final demand goods can be traced to prices for gasoline, which jumped 20.3 percent.

• The indexes for diesel fuel, fresh and dry vegetables, jet fuel, residential electric power, and crude petroleum also rose.

More problematically, Services costs are soaring too as energy costs spread across the economy...

Portfolio management costs ticked up along with stocks yet again...

Core PPI was just as bad, rising 0.7% (more than double the 0.3% expected) and that pulled core Producer Prices up 5.0% YoY (the hottest since Dec 2022)...

Prices for final demand goods advanced 2.6%, in September, the largest increase since data were first calculated in December 2009' but Services costs are also jumping...

Worse still, the pipeline for future producer prices is ugly with intermediate demand prices surging...

The CPI-PPI spread continues to (broadly speaking) signal increased pressure on corporate margins...

None of this provides any support for doves at The Fed and 2Y Yields and rate-hike odds are rising again, but not like they did post-CPI.

Tyler Durden Thu, 10/15/2026 - 08:43

Futures Slide As AI Unwind Goes Global: Kospi Crashes Into Bear Market, Treasuries Soar

US futures are lower as the AI unwind goes global - Korea's Kospi crashed into a bear market and tripped circuit breakers, CoreWeave bonds sank deeper into distress and Anthropic's still-blistering but slowing growth failed to impress - while yesterday's hot CPI scare has morphed into a growth scare; as a result Treasuries are ripping higher with 10Y yields tumbling 10bps to 5.08%, the lowest since Sept. 23. As of 6:20am ET, S&P futures are 0.3% lower at 7,749 while Nasdaq futures slide 1.1% to 29,857 and Dow futures are up 0.2%; small caps are the odd man out with Russell 2000 futures up 0.3%. Yesterday the S&P 500 fell 1.1% to its worst day since July, the Nasdaq 100 lost 2% and the SOX dropped for a sixth straight session. Premarket, Mag-7 and AI baskets are all lower with Apple the only Mag 7 name in the green; chipmakers, memory, neoclouds and AI infrastructure names are all sliding, with CoreWeave down another 6-7% after imploding 15% yesterday as its bonds traded at distressed levels. The day's driver is AI financing (again): Anthropic's $16.8 billion Q3 revenue implies slowing growth, and a Gartner report that $3,5 trillion of AI infrtastructure spending could be exposed to impairment by 2030 is making the rounds. Bonds rally across the curve in a bull flattener with yields down 7-11bps, as the AI selloff pushes investors into havens and odds of an October Fed hike slide back to around 30% from a post-CPI intraday peak of 58%; bunds and gilts also rally about 10bps, helped by the pullback in energy. The dollar is lower, with the Bloomberg Dollar Spot Index down 0.3%-0.4% and the Swiss franc leading G-10 gains while the Aussie slumps after a weak jobs report. In commodities, Brent drops almost 2% to $104 on the risk-off tone and talk of the US easing shadow fleet sanctions, gold jumps 1.3% to $4,158 and silver is up 2.1%, while copper slides. Bitcoin is down 0.6% near $81,200. US economic data slate includes September retail sales, PPI, October Empire manufacturing and Philly Fed, and weekly jobless claims (all 8:30am) and August business inventories (10am). Fed speaker slate includes Goolsbee (10am), Hammack (4:30pm) and Chair Warsh, who has a fireside chat with the IMF's Georgieva in Bangkok at 11:30pm ET before the blackout. Treasury sells $110 billion of 4-week and $105 billion of 8-week bills at 11:30am.

In premarket trading, Apple (AAPL) outperforms the group during the AI selloff (AAPL +0.8%, Microsoft -0.5%, Alphabet -0.8%, Meta Platforms -1%, Tesla -1.4%, Amazon -1.8%, Nvidia -1.6%)

• Chipmakers and other AI-related firms slide after Anthropic disclosed third-quarter revenue that likely slowed from the previous quarter. Among notable movers: CoreWeave (CRWV) -3%, Dell (DELL) -4%, Micron (MU) -4%, Intel (INTC) -3%, Marvell (MRVL) -4%, AMD (AMD) -3%, Broadcom (AVGO) -2%
• AngloGold Ashanti (AU) rises 3% after Goldman Sachs initiated coverage at buy, citing increased central-bank purchases that should support gold prices. Gold is also higher on Thursday morning.
• Cirrus Logic (CRUS) slips 2% after being downgraded to sector weight at KeyBanc, which sees a weak outlook for the Apple supplier.
• FMC Corp. (FMC) sinks 27% after the agricultural chemicals firm cut its third quarter outlook.
• Fortrea Holdings (FTRE) gains 3% after Deutsche Bank upgraded the health services firm to buy, citing potential for revenue growth and margin expansion.
• Kimberly-Clark (KMB) climbs 3% after the household products company reported preliminary net sales for the third quarter that met the average analyst estimate.
• Penske Automotive Group (PAG) climbs 8% after entering a deal to be taken private for $212 per share in cash by Penske Corp. and Mitsui.
• Quantinuum (QNT) rises 3% as Morgan Stanley upgrades to overweight, saying the stock offers the most attractive valuation among peers.
• Rocket Lab (RKLB) falls 11% after adjusting the target launch timing for its Neutron medium-lift rocket, with the vehicle’s inaugural launch now expected to occur in 2027.
• Walmart (WMT) gains 2.8% after Deutsche Bank upgraded the retailer to buy, citing a favorable setup into 2027.

In other corporate news, the US FTC has subpoenaed Anthropic and OpenAI seeking documentation in relation to safety incidents and privacy policies, Axios reports, just as the AI sector needed one more thing to worry about. IDC said the smartphone market suffered its worst decline on record in the September quarter, with rising memory costs pushing shipments down 22% and "the worst is yet to come." Rocket Lab drops almost 10% after delaying the inaugural Neutron launch to 2027, while IonQ filed to offer about $2 billion in shares and warrants. Barclays analysts said a Tesla-SpaceX merger has become widely expected and an announcement could come before Tesla's annual general meeting. Marsh will shoulder a larger share of the CS-Greensill settlement, the FT reports; EasyJet shareholders are being asked to support an Apollo takeover proposal; VW is pivoting to trucks and rugged SUVs in a quest for US profit; and Iambic Therapeutics raised $150 million in a US IPO priced at the midpoint. Schwab, Marsh McLennan, US Bancorp, PNC, BNY and Prologis report before the open, with Interactive Brokers, Alcoa and JB Hunt after the close.

The global AI unwind is gaining momentum: negative headlines are piling up, from signs of Anthropic's slowing growth to CoreWeave bonds plunging into distress and Gartner's warning that $3.5 trillion of AI infrastructure spending could be at risk of impairment by 2030. Even good results from TSMC - a Q4 revenue guide of $52.3-54.3 billion against a street at about $50 billion - failed to dispel the concerns, and a global selloff in semis dragged South Korea's benchmark down nearly 8% into a bear market, while the SOX is down 12% over the past six sessions, as Goldman warned of a semi "air pocket" last week.

As discussed last night, Anthropic's pre-IPO investor event failed to impress as the revenue growth shared was well below the double digit growth observed earlier in the year. “In any normal world, companies would kill for 45% q/q growth,” said Vital Knowledge founder Adam Crisafulli. “But in the land of AI, where investors are used to parabolic figures, a slowdown in growth undercuts sentiment.”

The market is especially worried about the financing model of neocloud companies, which are borrowing huge amounts at high rates to build data centers. CoreWeave's 5Y CDS closed at 1,118bps yesterday, up a massive 136bps, and its debt due 2032 dropped below 78 cents on the dollar - paper investors bought at par just four months ago! CoreWeave, for its part, said it isn't worried about the market's reaction and wants access to "unlimited" pools of money (what could go wrong). Meanwhile, hyperscaler capex is expected to total more than $3 trillion over the next three years, which is a lot of money to finance with 10Y yields north of 5%.

“AI stocks in EM will be the first to go, given their outperformance this year,” said Vey-Sern Ling, a managing director at Union Bancaire Privee. “Higher rates and USD also hurt EM tech disproportionately.”

“The market is juggling a number of risks at the moment, notably geopolitical, which is fueling oil prices and in turn inflation and monetary policy,” said Roland Kaloyan at Societe Generale. Some investors “are looking to take profits and rotate out of the semiconductor trade. With yields where they are today, bonds are becoming increasingly attractive.”

That said, yesterday's hot CPI hasn't gone away: headline CPI rose 0.65% m/m and core 0.335% vs 0.2% expected, briefly lifting October hike odds above 50% before the AI rout unwound the entire move. Deutsche Bank's Henry Allen thinks the market is too complacent.

“The 50 risk is live,” Henry Allen, macro strategist at Deutsche Bank Research, said in an interview with Bloomberg TV, warning that the more the Fed stays behind the curve, “the risk is they have to play catch up.” Markets are grappling with offsetting forces, “where AI is pushing down the one side, CPI is pushing up on the other, but the risks are definitely on the hawkish side.”

JPM's Market Intel desk under Andrew Tyler stays Tactically Bullish, noting the two big questions yesterday were the reversal in bond yields and how much longer the tech selloff can run. On the former, the team blames a market that clearly overreacted when October hike odds jumped above 50%, a move into quality and safe assets, and "concern about a possible AI-related credit event." On tech, the SOXX fell for a seventh straight day; with JPM's TPM positioning at a neutral ~46th percentile vs ~19th near the late-July lows, the desk sees potential for further de-grossing into key tech catalysts, but says "we remain constructive on the sector and still see a possible opportunity to buy the dip." JPM FX sales' Steve Bruner put it more colorfully: "Have rates finally crossed the AI Rubicon? My instinct is Not Yet."

Goldman's desks spent the night counting casualties. In London, Rich Privorotsky writes that the GS global neocloud basket is down 20% in five sessions, "a roughly 1st pctl move over ten years", adding that "in hindsight, the pain trade was long AI/ short bonds. Now we're watching both sides unwind." His conclusion: "the market is discovering that demand for compute can grow exponentially, but the capital available to finance it cannot." Praneet Shah echoes that "the cost of financing the AI buildout is starting to collide with how much the market can comfortably absorb", while Gen Sales' Dioni Ellinikaki notes that in an increasingly debt-funded capex cycle, "access to credit is becoming the key constraint rather than AI adoption itself." On the damage: GS Prime shows TMT-focused funds lost 2.7% on the day (a -2.6 standard deviation move), and the TMT desk's info-tech sell skew was the highest in more than four weeks. In Asia, Rachel Hu notes the TAIEX saw a record ~$9.3 billion foreign outflow, yet market color "suggested limited capitulation versus the July selloff" — a polite way of saying there may be more to come.

In Europe, French bonds remain in focus: the OAT-bund spread widened 1bp to 142bps, just shy of Monday's closing peak, as France sold €12 billion of bonds at the top of its target range. Former ECB chief Mario Draghi said the ECB is unlikely to step in any time soon with market intervention to help France, setting a high bar for the TPI.

In Europe, the Stoxx 600 is down 0.1% at 637.05, with 225 members down and 369 up, as investors turn to defensive sectors while the global tech selloff gathers pace; telecoms, food & beverage and insurance lead, while tech, basic resources and industrials lag. The FTSE 100 is up 0.5% thanks to its low tech exposure, while the Euro Stoxx 50 drops 0.6% and the DAX is down 0.3%. ASML falls 5.5%, ASM International 9.1% and BE Semi 6.1%; JPM notes Semis, AI Data Centers and Momentum Longs baskets are showing 1-3z moves, while AI Disruptions and Luxury outperform. Here are the biggest European movers:

• Ericsson shares surge as much as 11% after the 5G gear maker reported sales and profits ahead of expectations, driven by its core networks business and projects in Japan and India.
• Pernod Ricard shares gain as much as 4% after analysts broadly welcomed the beverage maker’s first-quarter results, noting improved momentum in the US and China and signs the quarter marked a low-point for the company.
• THG surges as much as 17% after the nutrition and beauty company upgraded its profit guidance, which Peel Hunt says is likely to trigger increases to consensus estimates.
• EQT rises as much as 4.7% after the alternative investment firm reported an increase in assets under management driven by Coller Capital, which the firm acquired earlier this year.
• Dunelm gains as much as 7.6% after analysts said the UK home-furnishings retailer’s first-quarter trading update was better than analysts had expected, driven by a recent sales improvement.
• TotalEnergies shares rise as much as 1.1% after the French energy company published its 3Q trading statement. Analysts tout strong refining margins while oil and gas production and LNG also performed above expectations.
• DocMorris shares rise as much as 9.4% after the online pharmacy delivered “long-awaited” positive adjusted Ebitda in the third quarter and raised its guidance for the full year.
• European semiconductor stocks sink on Thursday as Anthropic’s sales growth failed to impress investors that have grown more anxious about the sustainability of AI spending.
• Entain slides as much as 3.8% after posting softer online net gaming revenue growth due to unfavorable sports results in Italy and a provisional ban on online gambling in Brazil.
• Workspace shares fall as much as 9.8% after the UK flexible-office landlord said its target of an additional £100m+ of disposals is unlikely to be fully achieved by March 2027.
• Alfa Laval drops as much as 4.2% as Nordea downgrades its rating on the Swedish industrial equipment maker to hold from buy on a more balanced risk-reward following recent strength in the shares.
• Kinnevik slides as much as 11% as DNB Carnegie says the Swedish investment company’s third-quarter unlisted net asset value came in “clearly below” expectations.
• Mining stocks fall across Europe, driven by industrial metals amid a global selloff in the artificial-intelligence trade.

Asian stocks slumped as the semiconductor selloff deepened on concerns over AI financing, with the MSCI Asia Pacific Index falling as much as 3.3%, the most since July 28, and its tech subgauge sinking as much as 7.1%; Samsung Electronics, SK Hynix and TSMC were the biggest drags. South Korea's Kospi plunged 7.6%, triggering Level 1 circuit breakers for the first time since July 29 and entering a bear market, as Samsung fell 9.5% and SK Hynix 11.1%, with foreigners net sellers for an 8th straight session. Japan's Nikkei sank 4.9%, its worst day since March, while Taiwan's Taiex fell 3.4% on a record ~$9.3 billion of foreign selling. China's CSI 300 dropped 2% and the Hang Seng lost 1%, while Australia's ASX 200 held up relatively well as financials and defensives offset weakness in tech and miners. India's Nifty bucked the trend, rising 1.9% on rotation and lower crude. Asian central banks stepped in to support their currencies, with Taiwan's state banks selling dollars and the RBI and Bank Indonesia intervening.

In FX, the Bloomberg Dollar Spot Index is down 0.3%-0.4%, giving back the post-CPI spike as US yields fall; the DXY trades in a 101.87-102.39 range after hitting its highest level since May 2025 on Wednesday. The Swiss franc leads G-10 gains, with USD/CHF down 0.6% to 0.8297, while EUR/USD rises 0.5% to 1.1212 and cable is up 0.4% at 1.325, shrugging off a better-than-expected UK August GDP print. The Aussie is the laggard, down 0.6% to 0.6930 after an unexpected contraction in September employment pushed the jobless rate up to 4.7%, prompting traders to scale back RBA hike bets. USD/JPY edges up 0.2% to 158.0.

In rates, Treasuries extend their advance across the curve in a bull flattener as investors seek havens amid the slump in technology stocks, with the 10-year yield down 10bps to 5.08%, the lowest since Sept. 23 - and a far cry from the 5.33% hit right after yesterday's CPI print. The 2-year yield is down about 8bps at 4.72% after having spiked as much as 16-20bps intraday on Wednesday, while the 30-year falls 7bps to 5.45%. If the rally continues, the Sept. 23 session was the last time a sub-5% 10Y was seen (and for the record, we are still some way off the 5.365% early-October peak). Bunds rally, led by the belly, with the German 10Y falling 10bps to 3.37%, the lowest since Sept. 8, as money markets pare ECB hike bets and no longer fully price three increases by end-2027; gilts jump with the UK 10Y down 9bps to 5.33%, ignoring the GDP beat. Spain sold €5.4 billion and France €12 billion of bonds. In the US, Treasury sells $110 billion of 4-week and $105 billion of 8-week bills at 11:30am, with the focus on PPI and retail sales and then Chair Warsh's final word before the blackout.

SMBC Nikko's Makoto Noji thinks the 10-year yield may be topping out: Wednesday's move was a rare return to the "textbook" pattern - stocks fell and the 10-year yield declined as the curve twist-flattened - which may signal long-term yields are close to peaking, as lower stock prices could prompt higher-income households to rein in spending. Not everyone is convinced; Bloomberg's Vassilis Karamanis argues the move is less a haven trade than a rates trade, with Treasuries rallying "because the tightening already embedded in yields starts doing some of the Fed's work."

In commodities, WTI November is down 0.2% at $94.92 (in a $93.58-95.31 range) and Brent December slides 1.9% to $104.06 (in a $103.64-105.83 range), as the equity selloff pushes investors away from risky bets and the Trump administration considers easing sanctions on shadow fleet vessels to bring down record-high freight rates. That is overshadowing escalation risk: CNN reports the US military has drawn up new strike plans that include potentially using the "mother of all bombs" against Iranian energy and nuclear sites, Ukraine's Zelenskyy has ordered strikes on Russian refineries to resume and a drone strike set the Ryazan refinery on fire overnight, while a cargo ship sank in the Strait of Hormuz after a strike. API data showed an 11.1 million barrel crude draw (vs. a 1.9 million build expected); the delayed EIA report is out at noon and WTI November options expire today. Dutch TTF slips toward €85/MWh. Spot gold rises 1.3% to $4,158 on haven demand and the softer dollar, silver gains 2.1% to $56.72, while LME copper trades near the bottom of a $14,320-14,480/t range.

US economic data slate includes September retail sales, PPI final demand, October Empire manufacturing and Philadelphia Fed business outlook, and initial jobless claims (all 8:30am), August business inventories (10am) and the September federal budget balance (2pm). Fed speaker slate includes Goolsbee (10am) and Hammack (4:30pm), with Chair Warsh in a fireside chat with the IMF's Georgieva at 11:30pm ET.

The IMF-World Bank meetings continue in Bangkok, EU leaders meet for a summit in Brussels, and SEMICON West wraps up in San Francisco.

Market Snapshot

Top Overnight News

• Nasdaq futures fell as a plunge in chip stocks deepened the equity selloff and extended the AI trade pullback. South Korea’s Kospi sank almost 8%, entering a bear market. BBG
• TSMC bucked the gloom with an upbeat outlook, yet failed to dispel rising concerns about the sustainability of a global AI buildout. The chipmaker is considering expanding in Texas and confirmed talks with Elon Musk’s Terafab about capacity. BBG
• Anthropic PBC told prospective investors its third-quarter revenue hit $16.8 billion, according to people familiar with the matter, as the artificial intelligence company pushes ahead with plans to go public. BBG
• CoreWeave shares plunged as much as 17% on Wednesday, while its debt due in 2032 dropped to less than 78 cents on the dollar, after investors bought it at par four months ago. BBG
• US FTC has subpoenaed Anthropic and OpenAI, seeking documentation in relation to safety incidents and privacy policies; plans to compel executives to testify: Axios
• Asian central banks stepped in to support their currencies as stocks dropped. State-owned banks in Taiwan sold US dollars and the RBI supplied greenbacks in onshore and offshore markets, traders familiar said. Bank Indonesia intervened to steady the rupiah. BBG
• IDC said that the smartphone market suffered its worst decline on record in the September quarter. Rising memory costs pushed shipments down 22%, and “the worst is yet to come,” the research firm said. BBG
• The Fed’s Mary Daly told Reuters that further rate hikes are probably needed, but there’s no urgency. Her Chicago colleague Austan Goolsbee called Wednesday’s US inflation report “discouraging.” BBG
• Deutsche Bank sees a growing risk that the Federal Reserve will need to raise its benchmark rate by 50 basis points in a single move in coming months if it delays tightening policy while inflation remains elevated and economic growth holds up. BBG
• The US military has developed new strike plans that include potentially using the so-called “mother of all bombs” to target Iranian energy infrastructure and nuclear sites should President Donald Trump give the order to resume combat operations either before or after the midterm elections, according to multiple US officials familiar with the matter. CNN
• The Trump administration is considering easing sanctions on so-called shadow fleet vessels that have transported oil and petroleum products from countries including Russia, Iran and Venezuela, in an effort to reduce record-high global freight rates, a US official said on Wednesday. RTRS
• President Volodymyr Zelenskyy has said Ukraine will restart strikes on Russia’s oil refineries as he expressed anger over a “dangerous” withdrawal of US intelligence and simultaneous weakening of Starlink satellite internet service at a time of intense Russian attacks. FT
• The US has proposed that European countries unfreeze some Russian sovereign assets immobilized after Moscow’s invasion of Ukraine and transfer them to a vehicle overseen by Washington in an attempt to revive peace talks. FT
• The European Central Bank is unlikely to step in any time soon with market intervention to help France, according to its former chief, Mario Draghi. BBG
• Bank of England policymaker Megan Greene says the UK should raise interest rates to lean against the risk of significant second-round effects from high energy prices. BBG
• UBS is mapping out contingency plans to move its HQ from Switzerland if Swiss lawmakers proceed with tougher capital requirements under the country’s too-big-to-fail banking laws: WSJ
• White House Council of Economic Advisers Chair said referring to the inflation report that this is not a good month and that Bureau of Labor Statistics data is reliable.
• Trump administration's investigation into Rep. Omar is aimed at building a case to strip her of her US citizenship and ultimately deport her, according to US officials and other people familiar with the probe: WSJ
• Goldman's global neocloud basket is down 20% in five sessions, "a roughly 1st pctl move over ten years," while hyperscaler IG spreads widened another 7.4bp last week. GS
• JPM's Feroli sees September PPI at +0.5% m/m headline and +0.3% core, and retail sales +0.4% with the control group +0.2%, both on strength in Chase card data. JPM

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were lower across the board as the sell-off rolled over into the region following the losses stateside owing to the tech rout and hot CPI data. ASX 200 was slightly lower but with the downside limited as underperformance in tech and miners was offset by resilience in financials, telecoms and defensive sectors, while disappointing jobs data further lessened the likelihood of the central bank hiking rates again next month. Nikkei 225 slumped by more than 3000 points, with double-digit losses seen in several tech stocks. KOSPI was the worst performer and triggered circuit breakers after dropping as much as 8% owing to its large tech exposure and the ongoing bloodbath in the sector. Hang Seng and Shanghai Comp conformed to the broad-based tech-driven weakness, with recent stronger-than-expected lending data doing little to spur risk sentiment.

Top Asian News

• Chinese Premier Li said regarding New Yalu River Bridge, which connects China and North Korea, said opening of the bridge will strongly promote economic and trade cooperation and further strengthen personnel exchanges.
• South Korea and Japan extend their currency swap agreement, Yonhap reported.

European bourses (STOXX 600 -0.2%) point to a mixed picture, with so-called defensives (FTSE 100 +0.3%, SMI +0.4%) outperforming while cyclical-heavy indices (DAX 40 -0.3%, AEX -0.9%) underperform, primarily driven by the continued selloff in chip and memory names. Sectors have a slight positive tilt. Telecoms lead, with Food, Beverages & Tobacco and Insurance rounding out the sector gainers. Unsurprisingly, Tech is the sector laggard, with Basic Resources and Industrials following behind. US equity futures are mixed, with the NQ and ES being weighed on by tech names. AI funding has returned as a worry for investors, with the Broadcom CEO recently highlighting concerns about AI buildout financing. Additionally, CoreWeave has been pressured, with shares plunging 15% in the prior session (-6% pre-market) as it has been heavily reliant on the high-yield debt markets to finance its build out. TSMC EARNINGS: TSMC earnings failed to result in a rebound in the tech space, despite a better-than-expected revenue outlook. In brief, Q3 net income topped estimates while gross margin printed a tick lower than consensus. The chipmaker projected Q4 sales as much as USD 54.3bln (exp. USD 48.8bln), which should result in a c. +44% rise in 2026 revenue in USD. Following the Q3 release, analysts at Saxo Markets see this as a much-needed vote of confidence in the AI demand story, amid a selloff triggered by growing signs of stress.

Top European News

• UK Chancellor Healey said he will follow IMF advice to stick to deficit reduction plans in October 28th Budget.
• UBS (UBSG SW) is mapping out contingency plans to move its HQ from Switzerland if Swiss lawmakers proceed with tougher capital requirements under the country’s too-big-to-fail banking laws, according to WSJ.

FX

• G10s are mostly firmer against the USD, which is under mild pressure this morning. The Aussie is the clear underperformer following a weak jobs report, whilst the CHF holds at the top of the pile, on narrowing yield differentials and the broader risk-off tone.
• DXY is currently trading with modest losses, giving back some of the strength seen in the prior session; as it stands the index holds within a 101.87 to 102.39 range. Pressure which appears to be a pull back from the prior day’s post-CPI gains, and as US yields falter, amidst the latest tech sell off. Overnight, the likes of SK Hynix and Samsung Electronics sank in excess of 11%, with investors worried about AI spending sustainability, and most recently, default concerns related to CoreWeave.
• The selling pressure also comes in the aftermath of a hot US CPI report, which only further exacerbates credit concerns and expectations of tighter conditions ahead. Money markets currently assign a 27% chance of a hike in October, and 90% by December 2026; a few sell-side banks have also brought forward their calls of a hike by year-end vs previously viewing a hold.
• Aussie (-0.6%) is the clear underperformer this morning, and currently holds at the lower end of a 0.6936 to 0.6980 range. This comes after a very poor regional jobs report, which showed an unexpected contraction in headline Employment Change, which was solely due to part-time work, while the Unemployment Rate rose, although it coincided with a fall in the Participation Rate. A report which saw money market pare back their bets of a hike in November (16%); c. 40% chance of a hike is assigned by year-end.
• CHF (+0.6%) is the outperformer this morning, joined closely by the EUR (+0.5%) and GBP (+0.5%), all benefiting from the broader USD pressure. The Swiss Franc cheers narrowing yield differentials, whilst the GBP counts down the days to the UK Budget (Oct 28th).
• On that note, recent source reports about Chancellor Healey’s plans have been taken in the market’s stride. Most pertinently, he 1) does not intend to equalise income tax and CGT, 2) will fund the package without fresh borrowing. Into the Budget, the August GDP M/M reading saw the UK grow 0.1%, topping expectations of -0.1%, but beneath the prior 0.4%. So whilst Healey will welcome the growth in August, the slight slowdown will no doubt lessen some of the breathing room he would have liked to have. Cable kneejerked higher on the series itself, but then pared back given it has little impact on monetary policy in the near-term. On this subject, a couple of BoE members have spoken today; Greene reiterated that she sees risks of second round effects as “pretty significant”, whilst Breeden questioned whether the energy shock is gone or just delayed. A stark contrast between the two MPC members. GBP/USD currently holds within a 1.3186 to 1.3259 range.

Central Banks

• Fed's Daly (2027 voter) said we are more likely than not to need more rate hikes, but still deliberating on timing, adds not in a posture of urgency and better to be thoughtful and deliberate. Reassuring that after markets' initial 'robust' reaction to CPI data, markets are calmer. Markets understand the Fed's reaction. CPI showed gas prices are driving headline inflation, while core inflation remains sticky, as expected. Feels imprudent to react when there is time to make a good decision. Don't know yet if inflation will come down as shocks abate or worsen if shocks persist. Risks to above-target inflation remain elevated; stable labour market means the Fed can focus on price stability. The Fed has a responsibility to communicate effectively and be accountable, transparent and clear.
• US President Trump said the Fed has interest rates artificially high.
• UBS expects the Fed to hike for a third time in March 2027 (prev. saw hiking cycle to end in December).
• BoJ Board Member Koeda said she believes that the bank should adjust the policy interest rate in a timely manner with an eye on the economic and price situation, while keeping in mind the estimated range of the neutral interest rate. The monetary environment has been accommodative; no pace of hikes in mind, sees neutral rate "significantly" above 1%.
• ECB's Kazaks said that there is no immediate rush on interest rates, inflationary pressure remains strong in the near term.
• ECB's Pereira said yields rise is more related to fiscal issues, adds good news is that inflation is not spreading and if inflation starts broadening, central banks will be forced to act. Growth is surprising on the upside and wouldn't be surprised if it continued in the next few months.
• ECB's Dolenc said don't see second-round effects yet and the labour market isn't so tight anymore, adds must be vigilant on inflation data. Approaching a restrictive policy stance. ECB may not have to do much if markets tighten and have tools including TPI which will be used if needed.
• BoE's Breeden said are looking to whether the energy shock is gone or just delayed; the loosening of the labour market hopefully means that there will not be wage price pressure like in 2022.
• BoE's Greene said the risks of second-round effects are quite significant.
• BoE's chief economist Pill said should not give impression that hike now would be at the start of a series of increases.
• RBNZ Chief Economist Conway said New Zealand is feeling the effects of oil price shock, while he affirm's direction of the OCR is most likely up and the next OCR decision is wide open.
• PBoC Governor Pan attends China-GCC Central Bank Governors' Meeting, while the PBoC and Qatar Central Bank renew FX swap agreement.
• PBoC injected CNY 45bln via 7-day reverse repos with the rate at 1.40%.
• PBoC set USD/CNY mid-point at 6.7253 vs exp. 6.6977 (prev. 6.7249).
• SARB Governor sees upside risks to inflation to remain, adding that he expects CPI to return to the 3% target only in 2028; policy rates are moderately restrictive and consistent with the outlook.

Fixed Income

• In short, the post-CPI rebound continues as the tech/AI selloff extends and a FTQ ensues.
• USTs at a 105-18 peak, firmer by 22 ticks on the day already into PPI, retail sales and Fed speak. Taking USTs to the highest since the 23rd of September, when 106-08+ printed. Amidst this, yields are lower across the curve with the 10yr down by 10bps on the day, at a 5.08% low; if the move continues, it is worth reminding that the referenced 23rd September session was the last time a sub-5% US 10yr yield was seen. For context, we are some way off the 5.365% early-October peak.
• Bunds in-fitting with drivers much the same, and ECB speak and data prints having no real impact on the market thus far. Price action that has lifted Bunds to a 121.92 peak, firmer by 96 ticks at best; though, for what it is worth, the peak hit in APAC trade (in slight contrast to USTs) during the worst of the South Korea selloff.
• Gilts opened higher by just over 50 ticks before extending to gains of exactly a full point on the day, hitting 84.91 and the highest since October 2nd. A move driven by the above FTQ. No real followthrough to the UK’s GDP data, as while better than expected this was essentially due to favourable service revisions in the last two periods, and a stagnate service picture in August, as opposed to any surprise growth. While the better-than-expected print is welcome, it does not change the narrative for policymakers.
• Spain sells EUR 5.436bln vs Exp. 4.5-5.5bln 2.35% 2029, 2.60% 2031 and 3.55% 2033 Bono.
• France sells EUR 12bln vs Exp. EUR 10-12bln 2.70% 2031, 0.00% 2031, 3.25% 2032 and 3.50% 2033 OAT

Commodities

• WTI Nov and Brent Dec futures are softer amid the broader risk-off tone following the global tech sell-off and hotter-than-expected US CPI yesterday, with the complex also pressured by potential supply relief. Recent reports suggested the US is considering easing sanctions on shadow fleet vessels to boost oil flows, while Russian diesel could reach the US ahead of the November midterms. Nonetheless, geopolitics has subsided, with the US reportedly preparing fresh strike options against Iranian energy and nuclear facilities, while Houthi attacks on Saudi Arabia continue. Elsewhere, US private inventories yesterday showed a sizeable 11.1mln bbl draw in crude (exp. 1.9mln bbl build), although this provided little support amid the broader selling.
• WTI resides in a USD 93.58-95.31/bbl range, while Brent declined within a USD 103.64-105.83/bbl range, albeit both off worst levels. Dutch TTF is softer alongside the broader pullback in energy prices, although underlying fundamentals remain bullish ahead of winter. TTF fell to the bottom of a EUR 85.00-87.80/MWh range at the time of writing.
• Precious metals are firmer, with spot gold benefiting from haven demand amid the global tech sell-off, alongside a softer DXY and lower global yields despite yesterday's hotter-than-expected US CPI. Spot gold is firmer within a USD 4,100-4,162/oz range, while spot silver also gains, within a USD 55.49-56.37/oz range.
• Base metals are softer amid the broader risk-off tone, with copper pressured by the sharp sell-off in global equities, particularly Asian tech stocks, with the KOSPI suffering the most, alongside concerns over further Fed tightening following the US CPI report. 3M LME copper trades close to the bottom of a USD 14,320-14,480/t range.
• Chinese State Planner said that domestic gasoline and diesel retail prices will not be adjusted on Oct 15, 2026.
• Chile's state miner CODELCO called a shareholders meeting for November 5th to review production inconsistencies in 2024 and 2025.
• US Weekly Private Inventory Data (bbls): Crude -11.1mln (exp. +1.9mln), Gasoline +1.1mln (exp. -0.8mln), Distillate -1.5mln (exp. -2.0mln), Cushing +1.8mln.
• Russian Deputy PM Novak says that "a number of countries, not just the US, are interested in purchasing Russian diesel fuel"

Trade/Tariffs

• Japanese Trade Minister Akazawa said Japan and US agree on first chip project under USD 550bln investment plan, while he added that chip project has great significance in AI era and they remain strongly committed to last year's trade deal. Latest chip project is to enhance Japan and US ties further. Collaborating on chip supply is key for economic security.

Geopolitics: Middle East

• US is considering using "mother of all bombs" against Iran, according to source cited by CNN.
• US President Trump reiterated that the war with Iran will end soon and fuel prices will drop shortly, adds Iran issue will be resolved quickly.
• US President Trump said we have complete control of the Strait of Hormuz and are extracting more oil from it than ever before, while he stated that Iran was two weeks away from acquiring a nuclear weapon before we struck their sites. This matter in Iran will end very soon, and when it ends, gasoline prices will drop to levels even lower than they were before the start of military operations.
• US is reportedly discussing lifting some sanctions on shadow fleet vessels in attempt to lower global freight rates and boost oil flows in the Middle East, according to an official.
• IRGC Spokesperson said attack on violating ships was a response to America's third breach of promise.
• Saudi-led coalition says that a cruise missile has been intercepted in the Medina region, Al Hadath reports; Yemeni Army Spokesperson says Forces did not target Saudi's Medina, and these claims is a great falsehood.
• Houthis are developing their own advanced ballistic missiles that could reach Saudi Arabia and Israel using Chinese delivered parts, according to New York Post.
• Houthi media official called on Taiz residents to stay inside their homes.
• Yemen's air defences downed a Saudi Typhoon warplane in the skies over Saada in Yemen, according to Fars.
• Arab sources report hearing several explosions in Yemen's capital, according to Tasnim.
• Saudi-led coalition said it intercepted and destroyed a drone in the kingdom's eastern region.

Geopolitics: Ukraine

• Ukrainian President Zelensky's top advisors spoke with White House counterparts on Wednesday and asked whether there'd be a decision to shut down Starlink services and what could be done to fix the situation, according to sources cited by Axios's Ravid. "A senior U.S. official said the Trump administration had nothing to do with the alleged Starlink service constraints. But Ukrainian officials remain suspicious".
• US proposed European countries unfreeze some Russian sovereign assets in an effort to revive peace talks during discussions in Miami last week between Trump's peace negotiators and officials from Ukraine, France, Germany, UK, EU and NATO, according to FT. European delegates rebuffed the plan.
• Ukraine President Zelensky said Ukraine will resume strikes on Russian refineries and expresses anger at a dangerous withdrawal of US intelligence sharing and weakening of Starlink satellite internet service, according to FT.
• Dutch PM said that "we need to step up our game and make sure Ukraine wins the war".
• Russia's Ryazan refinery was reportedly attacked overnight by drone.
• Russia hits Ukraine's Izmail port and cargo vessels.
• Japanese PM Takaichi said there is no such fact when asked whether Japan is conducting espionage in Russia.
• UK Chancellor Healey called on other nations to stay the path regarding Russia sanctions and said tighter ban on Russia-linked shipping services is needed.

Crypto

• Bitcoin (-3%) and Ethereum (-5%) slip alongside the broader risk tone.

US Event Calendar

• 8:30am: Sep Retail Sales Advance MoM, est. 0.3%, prior 1.2%, revised 1.13%
• 8:30am: Sep Retail Sales Ex Auto MoM, est. 0.5%, prior 1.4%, revised 1.28%
• 8:30am: Oct Empire Manufacturing, est. 12, prior 7.6
• 8:30am: Oct Philadelphia Fed Business Outlook, est. 28, prior 37.8
• 8:30am: Oct 10 Initial Jobless Claims, est. 200k, prior 197k
• 8:30am: Oct 3 Continuing Claims, est. 1709k, prior 1716k
• 8:30am: Sep PPI Final Demand MoM, est. 0.6%, prior 0.4%
• 8:30am: Sep PPI Ex Food and Energy MoM, est. 0.3%, prior 0.2%
• 8:30am: Sep PPI Final Demand YoY, est. 5.4%, prior 5.4%
• 8:30am: Sep PPI Ex Food and Energy YoY, est. 4.4%, prior 4.6%
• 10:00am: Aug Business Inventories
• 11:30am: US to sell $110 billion 4-week bills and $105 billion 8-week bills
• 2:00pm: Sep Federal Budget Balance, est. -$30.0b, prior $197.9b

Central Bank Speakers

• 10:00am: Fed’s Goolsbee Speaks in Kyla’s Newsletter Podcast Interview
• 4:30pm: Fed’s Hammack Participates in a Moderated Discussion
• 11:30pm: Fed’s Warsh in Fireside Chat with IMF’s Georgieva

DB's Jim Reid concludes the overnight wrap

Markets have just had an incredibly tumultuous 24 hours, as a strong US CPI print was then followed up with mounting fears around the AI trade. Indeed, you can see the story of the day from the huge turnaround in bond yields, with the 10yr Treasury yield initially surging to 5.33% after the CPI print, before paring that all back to close at 5.19%, and this morning it’s now down another -8.4bps to 5.10%. Meanwhile for equities, the developments pushed the S&P 500 (-1.11%) to its worst performance since July, and futures on the index are down another -0.50% this morning. Moreover, there’s been a huge selloff in Asia overnight, with the KOSPI (-7.04%) and the Nikkei (-5.08%) both slumping, and the KOSPI even saw a circuit breaker triggered earlier given the scale of the declines.

In terms of the catalysts, several names most exposed to AI have already been under mounting pressure in recent days. For instance, we mentioned in yesterday’s edition how CoreWeave’s 5yr CDS contract went over 1000bps intraday on Tuesday, highlighting how nervous some credit investors were about the company’s leverage profile. But yesterday, their CDS was then up another +136bps, closing at 1118bps, and the company’s share price fell -15.46% on the day. Moreover, this pressure started to be noted more widely, particularly among those firms that have been heavily scrutinised by credit investors given their large capex needs. So this led to big losses elsewhere, with Oracle (-8.83%) posting its largest decline since June, whilst the Philly semiconductor index (-4.30%) posted a 6th consecutive decline for the first time in over a year. In fact, that now leaves the index down -11.6% over those 6 sessions.

Those trends have shown no sign of letting up overnight, with significant moves in Asia this morning. That’s been most obvious for the KOSPI (-7.04%) and the Nikkei (-5.08%), but we’ve also seen sharp losses for the CSI 300 (-2.00%), the Shanghai Comp (-1.98%) and the Hang Seng (-1.47%) as well. Some of the individual names have seen even bigger losses, including SK Hynix (-11.28%) and Samsung (-9.91%). And looking forward, there’s no sign of the moves stabilising in the US and Europe, with futures on the NASDAQ 100 down another -1.08% this morning.

All that was exacerbated by a strong US CPI print yesterday, which led to mounting expectations about Fed rate hikes, adding to the pressure on some of these names. To be fair, the print was already expected to be a strong one given the recent rise in energy prices. But when it came out, headline CPI was at +0.649% on the month (vs. +0.6% expected), meaning it was just a whisker away from rounding up to +0.7%, and it pushed the year-on-year number to +3.7% as well. Moreover, the details didn’t look promising either, as core CPI was at +0.335% on the month (vs. +0.2% expected), taking the year-on-year number to +2.6% (vs. +2.5% expected). So this wasn’t just an energy surge driving prices higher, as there were broad-based moves across the consumer basket.

For markets, the clearest impact was on Fed pricing, as it immediately drove fresh speculation about an October rate hike. Beforehand, that had been priced at only a 22% chance, partly because multiple Fed speakers had steered away from it in the last couple of weeks. But after the CPI print came out, that then surged to an intraday peak of 58%, and it spent around half an hour above the 50% mark. Nevertheless, the AI fears and the broader risk-off tone have seen that move almost entirely unwind since, with futures now pricing in just a 27% chance of an October hike this morning, not much higher than before the CPI print even came out. So it just shows how much AI is dominating market attention right now, as fears over a broader tightening in credit conditions led to growing doubts about whether the Fed would actually move, despite the strong print. Indeed, US HY spreads (+11bps) ended yesterday’s session at 324bps, their widest since March.

With all that happening, US Treasuries saw some huge moves in the aftermath, with very large intraday ranges. For instance, the 2yr yield was initially up +16.1bps on the day, before paring that back to close only +0.8bps higher at 4.80%, and this morning it’s seen a sharp -7.8bps decline to 4.72%. Similarly, the 10yr yield initially surged to 5.33% after the CPI print but ultimately fell -2.3bps on the day to 5.19%, and has since fallen another -8.4bps overnight to 5.10%. And for the 30yr yield, there was initially a move up to 5.63%, before ending the day down -3.4bps at 5.52%, and this morning it’s down -7.2bps at 5.45%. The impact cascaded across other asset classes too, as there was initially a sharp appreciation of the US Dollar, but that’s also unwound entirely since, with the Euro strengthening +0.53% against the US Dollar this morning to $1.1215. More broadly, US equities were under pressure from both the inflation and the AI stories, but the small-cap Russell 2000 (-1.93%) took a particular hit, with the index entering correction territory yesterday, having now shed over -10% from its August peak.

Otherwise yesterday, oil prices rose slightly, with Brent crude (+0.35%) up to $106.06/bbl by the close. That came amidst no signs of progress in the US-Iran conflict, and the moves added to the inflationary concerns that had already mounted after the CPI print. However, the risk-off tone has dominated overnight, with Brent crude since down -1.75% to $104.20/bbl. Moreover, that’s despite Ukrainian President Zelenskyy saying to the FT that Ukraine would resume its strikes on Russian refineries.

Earlier in Europe, the continent’s assets put in a relatively better performance yesterday, albeit with a strong divergence across the board. For equities, there was strength in aggregate, with the STOXX 600 (+0.43%) up to a two-week high. However, there were gains for some like the FTSE 100 (+0.70%) and the CAC 40 (+0.58%), whereas Italy’s FTSE MIB was down -0.61%. Then for bonds, 10yr bund yields (-0.3bps) fell back slightly to 3.47%. But sovereign bond spreads widened, with the 10yr Franco-German spread up +4.1bps by the close to 141.5bps, just shy of its recent closing peak on Monday, at 142.3bps. And looking forward, equity futures are also pointing lower today, with those on the DAX down -0.49%.

Looking at the day ahead now, US data releases include PPI inflation and retail sales for September, the Empire State manufacturing survey for October and the weekly initial jobless claims. In Europe, we’ll also get UK GDP and Euro Area industrial production for August. Central bank speakers include the Fed’s Goolsbee and Hammack, along with the BoE’s Greene and Breeden. Finally, EU leaders will meet for a summit in Brussels.

Tyler Durden Thu, 10/15/2026 - 08:28

Bulgarian PM Stuns EU With Full-Throated Backing Of Trump-Putin Diesel Deal

Bulgaria has just broken ranks amid widespread European criticism over the Trump-Putin diesel deal announced last week, with the NATO country's Prime Minister Rumen Radev stunning Brussels in fresh remarks.

"You know what is our problem right now in Europe? High fuel prices," Radev said in English as he attended a two-day summit of leaders.

via The Associated Press

Reuters described of the top level meeting in Brussels, "the European Union began a packed summit on Thursday that quickly underscored wrangles over how ​to tame soaring energy prices, design a budget to keep the bloc competitive and curb surging exports from China that are blamed for job losses."

Prime Minister Radev told the summit "Any step in reducing fuel prices and to guarantee our competitiveness, we appreciate" - in a clear reference to the US-Russia diesel agreement.

And even as most continue to vocally support Ukrainian President Zelensky in his ongoing standoff with Trump and defiance of US wishes, Radev criticized Ukraine's strikes against Russia's oil refineries, again siding with the White House.

"I don't support strikes on any refineries," Radev said, at a moment Trump is strongly warning that Kiev better halt this tactic.

"I don't support strikes on any energy power plants, like Russian attacks on energy power plants in Ukraine, because this hits us back," he added. "The prices in Europe are (skyrocketing)."

Fellow European leaders voiced wide disagreement, with EU foreign policy chief Kaja Kallas echoing Zelensky's words that the diesel deal was a "gift" to Vladimir Putin.

"The question is: what has he (Putin) given in return? What we see is that he's actually increasing the attacks on civilians and civilian infrastructure. The ceasefire that was also announced is not really working on the Russian side," Kallas said.

The recently installed Radev, whose Progressive Bulgaria party won the April election, has been busy rolling back the NATO 'eastern flank' country's prior policy on Ukraine, including related to arms shipments.

The new government has made clear it has a new peace agenda, and its position is that nothing will be resolved by just pouring more heavy arms into the conflict, now in its fifth year. It was given a new mandate.

This was also notable amid the AfD's continued rise in Germany...

German AfD Leader Alice Weidel: While you attempt to finance the proxy war against the nuclear power Russia practically single-handedly, our European partners are already discreetly holding back. And while you approve one sanctions package after another, thereby ruining our own economy and public finances, the U.S. and Russia are negotiating diesel deliveries and other agreements for their mutual benefit.

— Clash Report (@clashreport) October 15, 2026

He has repeatedly criticized EU overreach on green-energy mandates, sanctions policies and what he describes as moral posturing in a "world without rules."

While analysts have lately noted he is unlikely to ultimately jeopardize the flow of EU funds that sustain Bulgaria’s economy, the result installs a distinctly Russia-friendly government at the heart of the EU's southeastern flank - a shift that has been drawing close scrutiny in Brussels, Washington and Kiev.

Tyler Durden Thu, 10/15/2026 - 08:20