FINANCIAL TIMES
-The US is willing to provide up to $20B as part of a G7 loan to Ukraine, which will be repaid with profits generated by Russia's frozen assets. The talks are accelerating as western officials want to provide funding to Kyiv before the end of the year, aware that if Donald Trump wins the US election in November, Washington's aid to Ukraine could be cut off. G7 countries have been locked in negotiations over the structure of the $50B loan agreed in June. US officials indicated that Washington would provide the full original amount, about $20B.
-Israel's tactical successes, including the killing of Hamas leader Yahya Sinwar in Gaza, have sparked anticipation among military experts. This has led to Netanyahu considering a new Middle East, re-engineered by Israeli arms and reflecting the new hegemon's will. Israeli cartographers are asked to provide maps to Netanyahu, showing a flourishing Middle East replacing a tenebrous one, reflecting the UN's lectern.
-Israel has launched a punishing offensive in northern Gaza, killing nearly three dozen people in an air strike on the Jabalia refugee camp. The Israeli offensive continues after the death of Hamas leader Yahya Sinwar. Health authorities reported 33 deaths and dozens injured. Israel's Prime Minister Benjamin Netanyahu announced that the offensive would continue until the 101 hostages held by Hamas are released. The Israeli Defense Forces launched a renewed offensive targeting Hamas' attempts to regroup and launch attacks. Israeli troops also encircled the Indonesian Hospital in Beit Lahia and fired tank shells at the complex, killing one person and injuring several others.
-The gap between corporate bond yields and US Treasuries has narrowed to its lowest in almost 20 years, as investors bet on a "soft landing" for the world's largest economy. The spread for investment-grade companies relative to the US government fell to just 0.83 percentage points, the smallest gap since March 2005. The spread for borrowers in the high-yield or "junk"-rated bond market is now just 2.89 percentage points, the lowest since mid-2007. The narrowing spreads reflect investors' belief that the US Federal Reserve will manage inflation without triggering a recession. However, some fund managers fear the $11T US corporate bond market is too complacent about lingering economic risks or possible turbulence after November's presidential election.
-Elon Musk, the world's richest man, has been placing a bold bet on Donald Trump in the upcoming election. Musk owns a series of businesses that depend heavily on contracts and rules set by the federal government. As the election enters its final stage, Musk's embrace of the Trump campaign is becoming increasingly tighter. He has donated at least $75M to his pro-Trump group, America Pac, which has already spent more than $118m on efforts to support the campaign.
Musk has used X, the social network he owns, to pump out pro-Trump content, including some of the most lurid conspiracy theories that have taken hold on the right. He said the biggest reason for backing Trump was the need for "sensible regulations," claiming that SpaceX can build a giant rocket faster than the license can be processed by the government. He added that if the current trend of strangulation by overregulation is not turned around, we won't get to Mars.
-Moldovan elderly residents in Orhei, a small city, have started receiving an unusual top-up to their monthly pension from a fugitive oligarch living in Moscow, via a Russian state bank subject to western sanctions. The oligarch, Ilan ?or, announced that all Moldovan pensioners could receive this extra cash, provided they voted "No" in a referendum on EU membership taking place on Sunday. Moldovan authorities say the pension top-ups are just one of many methods the Kremlin is using to influence the referendum, which is being held simultaneously with a presidential election. The incumbent, Maia Sandu, is hoping to secure a second term and reaffirm the EU aspirations of her country, which is sandwiched between Romania and Ukraine.
-Shanghai's luxury market has seen a slowdown, with few customers despite the launch of Dior's new spring collection. The global luxury sector experienced an unprecedented boom in recent years, driven by Chinese consumers. However, a deepening slowdown is now impacting major brands. Shares in the industry dropped after Dior owner LVMH reported a fall in third-quarter sales due to weakening Chinese demand. Sales in LVMH's core fashion and leather goods division fell 5%, the first contraction since the Covid-19 pandemic began in 2020 and worse than consensus expectations.
-Chinese artificial intelligence companies are reducing costs to create competitive models, despite US chip restrictions and smaller budgets. Startups like 01.ai and DeepSeek have reduced prices by focusing on smaller data sets and hiring skilled computer engineers. Big tech groups like Alibaba, Baidu, and ByteDance have also engaged in a pricing war to cut "inference" costs by over 90%. Despite Washington's ban on exporting high-end Nvidia AI chips, Chinese companies have managed to build affordable inference engines and let applications proliferate. 01.ai's Yi-Lightning model ranked joint third among LLM companies, alongside x.AI's Grok-2, but behind OpenAI and Google.
-Boeing supplier Spirit AeroSystems is set to furlough around 700 workers from the end of October due to a prolonged strike at the company's supply chain. The furloughs will last for 21 days and will affect workers on the 767 and 777 programs. Production of the aircraft has been halted since September 13 due to a strike by Boeing's largest labor union. Spirit has built significant inventory for the aircraft but has no room for additional storage. If the strike continues beyond November, the company would be forced to implement lay-offs and additional furloughs. Boeing is currently buying back Spirit, which it spun off over two decades ago.
-Donald Trump and Kamala Harris are both concerned about the nation's national debt, which has been eroding economic prosperity for decades. The Congressional Budget Office reports that federal debt held by the public averaged 48.3% of GDP for the half century ending in 2023, far above its historic average. The debt is projected to be larger than annual economic output for the first time since the US military build-up in WWII. The CBO projects that the debt will top that amount in 2027 and rise to 122.4% in 2034, with spending rising at a much faster rate. The US has a spending problem, not a revenue problem.
NEW YORK TIMES
-Israeli forces had been closely following Hamas leader Yahya Sinwar for weeks before he was killed in a ruined house in the Gaza Strip. In a video captured by an Israeli drone, Sinwar, the chief of Hamas, was seen alone, badly wounded, and caked in dust amid the ruins of a building in the Gaza Strip. Israeli officials say that Sinwar limply but defiantly hurled a broken piece of wood toward the drone. An Israeli soldier shot him in the head, and a tank shell flattened part of the building. This ended the long hunt for Sinwar, which began hours after the brutal attack on Israel that Sinwar helped orchestrate and concluded amid the destruction of a Rafah neighborhood resembling many parts of Gaza leveled by the Israeli military in the year since. The manhunt involved Israeli commandos, spies, and a special unit established inside the headquarters of Shin Bet and the Central Intelligence Agency.
-Lebanon's caretaker prime minister, Najib Mikati, accused Iran of meddling in the country's affairs, a rare diplomatic spat after Iran's parliament speaker remarked that his country was ready to help negotiate terms to bring about a cease-fire between Israel and Hezbollah. The reported remarks amounted to "blatant interference in Lebanese affairs," said Mikati. He later summoned Tehran's envoy to answer for them, a highly unusual rebuke by a top Lebanese official given the stranglehold that Iran-backed Hezbollah has on the country. The Iranian parliament speaker, Mohammad Baqer Ghalibaf, was quoted as saying that his government was ready to negotiate with France on the implementation of Security Council Resolution 1701, a U.N. agreement that ended the last war between Hezbollah and Israel in 2006. The 2006 agreement called for a withdrawal of Israeli forces from Lebanon and said that only the Lebanese army and U.N. peacekeepers could operate militarily in southern Lebanon.
-Kamala Harris and former President Donald Trump converged in Michigan on Friday to campaign for undecided voters and Arab Americans in the battleground state. Harris aimed to cast herself as a friend to union workers and promised to work with unions to create good-paying jobs, including those that do not require a college degree. Trump, on the other hand, promised to revitalize the auto industry through tax incentives and tariffs. Despite technical difficulties, Trump argued that his proposals would bring an economic boom to Detroit, a city he attacked last week and whose continuing rebound he has been skeptical of. He then suggested that Harris's tax proposals were tantamount to "economic Armageddon for Detroit." Harris was forceful in laying out the stakes of the election and almost gleeful in her efforts to cast Trump as a threat to the state. Both candidates are focusing on the small pool of undecided voters and Arab Americans in Michigan, a battleground state that has shot toward the top of the priority list for both campaigns.
-North Carolina has recorded a record turnout of over 353,000 ballots for the first day of early voting, signaling intense enthusiasm in the battleground state. The state is still recovering from Hurricane Helene's devastation and has 16 presidential electoral votes up for grabs. However, the significance of such high voter turnout remains unclear. Political science professor Christopher A. Cooper and expert Michael Bitzer caution against reading too much into the data, stating that using early voting data as a gauge for the election is "like bringing a fishing pole to a home run derby — it’s just the wrong tool for the job." Early voting data is considered "like bringing a fishing pole to a home run derby — it’s just the wrong tool for the job."
-In December, Vice President Kamala Harris visited a climate conference in Dubai to discuss Israel's war against Hamas in the Gaza Strip. The conflict was still weeks old, ignited by a terrorist attack that killed around 1,200 people in Israel and took hundreds hostage. Harris saw a diplomatic opening to be the face of the future, not the current war. She told the assembled leaders, "The phase of fighting will end and we will begin implementing our plans for the day after." This visit established Harris as a more compassionate voice for the administration and has been more empathetic than President Biden about the plight of Palestinians in Gaza. However, U.S. officials and campaign advisers argue that Harris' empathy should not be confused with her willingness to break from American foreign policy toward Israel as a presidential candidate. The war is now over a year old, and the killing of Yahya Sinwar, the Hamas leader, has created an "opportunity" to end the fighting. Harris is returning to the message she embraced last winter, emphasizing that Gazans may someday rebuild if Israelis are assured of their safety and their hostages return.
-Cuba's power grid failed, causing the entire nation to plunge into darkness. The failure occurred at a thermoelectric power plant in Matanzas, east of Havana, after a failure at a thermoelectric power plant. The blackout came less than a day after Prime Minister Manuel Marrero Cruz held a late-night television address discussing the ongoing electricity crisis. The country has lacked fuel to run the power grid, leaving large parts of the nation without electricity for 15-20 hours. When electricity returns, demand surges, further straining the power grid. Officials announced that all schools would be closed until Monday and that cultural and nonessential activities such as dancing would be prohibited. The government has urged people to cut back on usage.
-The US Supreme Court has made three small victories against environmental rules, raising concerns about a shift in the court's stance. On Wednesday, the court declined to block the Environmental Protection Agency from imposing new restrictions on power-plant emissions while the rule is challenged in a lower court. The rule would require many coal- and gas-burning plants to capture up to 90% of greenhouse gas emissions by 2032. The court also declined to act on two other emergency applications challenging E.P.A. rules, focusing on mercury and methane. These decisions mark a significant departure from earlier this year's decision to block the "good neighbor plan," an EPA policy to reduce air pollution that drifts across state lines. Critics argue that the use of the emergency docket, or shadow docket, is inappropriate if overused, especially in cases where emergency intervention isn't necessary.
-Mayor Eric Adams has requested a judge to drop one of five counts against him and discipline prosecutors accused of improperly leaking information to the news media. Adams has pleaded not guilty to five charges, including bribery, and was accused of pressuring the Fire Department in exchange for years of free and discounted travel. Prosecutors with the U.S. attorney’s office for the Southern District of New York in Manhattan asserted that they had clearly demonstrated a pattern by Adams of soliciting and accepting luxury travel. They said that Adams, the first sitting New York City mayor in modern history to be indicted on criminal charges, was mistaken in arguing that his actions were routine for a public official. They added that a jury should decide the issue. The filing is the latest installment in a contentious legal battle between the mayor and federal prosecutors, led by Damian Williams, the U.S. attorney for the Southern District.
NEW YORK POST
-A drone was launched towards Israeli Prime Minister Benjamin Netanyahu's home in Caesarea, causing no casualties. The Israeli military reported that a drone was launched from Lebanon and hit a building, but it was not immediately clear what the building was. Two more drones that crossed into Israeli territory were intercepted. Israeli security forces stood guard on a street leading to Netanyahu's residence in Caesarea. The drone captured Hamas chief Yahya Sinwar's last moments alive as he tried to flee from southern Gaza before being spotted by IDF soldiers conducting a routine strike. The Israeli ambulance service reported no casualties, and explosions were heard in Caesarea, where Netanyahu has a holiday home. The drone attack was not immediately claimed by the Lebanese Iran-backed group Hezbollah, which has been trading fire with Israel since last October.
-Netflix shares reached an all-time high on Friday, driven by investor optimism that its robust content lineup will help maintain subscriber growth despite the decline in the boost from its password-sharing crackdown. The company's stock rose 11% to a record close of $763.89, adding over $28B to its market value of about $295B. Netflix topped quarterly subscriber additions by over 1M and projected higher sign-ups sequentially for the last three months of the year when South Korean drama "Squid Game" returns. The company's profit and revenue also beat estimates, a positive sign for its efforts to shift investor focus away from subscriber growth amid what some analysts see as an inevitable slowdown in sign-ups after the success of its password-sharing curbs. The 5.1M users added in the third quarter were below the 8.76M additions in the year-ago period. Netflix has other areas of opportunity to continue boosting its financial performance, including price increases in Italy and Spain, and some analysts expect a similar move in the US next year.