FT : Big Tech’s dash for nuclear power

Big Tech’s dash for nuclear power
The take-off of AI will fuel a surge in demand for electricity

Big Tech is going nuclear. In the past week, Amazon agreed with utilities in Washington state to support development of four next-generation “small modular reactors”, with a similar deal in Virginia, and took a stake in X-energy, an SMR developer. Google agreed to buy power from SMRs to be built by a start-up, Kairos Power. And last month Microsoft agreed a 20-year power purchasing deal that will entail Constellation Energy reopening a unit at the Three Mile Island plant in Pennsylvania that was shuttered in 2019 (not the one closed in 1979 after a partial meltdown).

The tech industry’s dash for nuclear reflects in part the take-off of power-guzzling artificial intelligence; an AI query consumes up to 10 times the energy of a standard Google search. Goldman Sachs reckons power demand from data centres will grow 160 per cent by 2030. In the US, data needs on top of electrification of transport and a manufacturing revival sparked by “reshoring” efforts are forecast to at least double electricity demand growth in the next decade compared with the prior one.

In Europe, Goldman estimates power demand could grow by 40 per cent from 2023 to 2033. The International Energy Agency declared last week that, after the age of coal and age of oil, the world was entering the age of electricity.

Tech companies know that to get data centres built in countries such as the US, they will have to arrange much of their own power. Their net zero pledges require the sources to be green, and they have already invested heavily in wind and solar. Expanding their portfolios to nuclear energy is understandable, but something of a gamble.

Nuclear has a strong claim, in principle, to be part of the climate solution. It is low carbon, delivers lots of power for decades and doesn’t falter when wind or sunlight does. The trouble is large plants are cripplingly costly and time-consuming to build.

SMRs — reactors up to 300 megawatts, compared with 1,000MW for large nuclear plants — claim to offer a cheaper, faster alternative. Largely prefabricated to cookie-cutter designs, their small size in theory means they can be installed close to where power is needed, and on sites such as former coal plants already plugged into the grid.

But they may face similarly hefty costs to larger units to get designs approved by regulators, in a sector where safety is paramount. They might divert critical investment from proven solar, wind and batter power systems. SMRs also remain unproven. Based on the three SMR-style projects in operation and a fourth being built, the Institute for Energy Economics and Financial Analysis calls them “still too expensive, too slow and too risky”.

Bringing in Big Tech’s financial clout and innovative flair may aid SMRs’ development, and accelerate the shift from largely government-led and financed nuclear development to private financing and initiative (look what Elon Musk has done to the economics of space). But finding ways to reopen or extend the life of existing nuclear stations might prove more feasible; as well as Three Mile Island, a plant in Michigan is being recommissioned.

Either way, the surge in AI-driven data demand even before 2030 means Big Tech will probably have to invest still more in wind and solar. Amid the competition for resources, regulators will have to ensure deep-pocketed tech companies do not lock up large parts of the new energy supply. One option might be to insist clean energy projects for data centres are made large enough also to supply the grid or other customers. There is also scope to use AI to improve energy efficiency in factories, offices and across grids. In the new age of electricity, AI must be not just another energy-hungry mouth to feed, but a central part of the green solution.

FT : Saudi broadcaster MBC under fire over ‘terrorist’ label for slain Hamas chi

Saudi broadcaster MBC under fire over ‘terrorist’ label for slain Hamas chief
Middle East’s biggest media group withdraws report on Yahya Sinwar after regional backlash

Saudi Arabia’s media regulator has ordered an investigation into officials from the Middle East’s largest media group after one of its television channels broadcast a report describing the slain Hamas leader Yahya Sinwar as a “new face of terrorism”.

Without naming the channel, the General Authority for Media Regulation said in a statement on X that the report by Saudi-owned MBC, which sparked a strong backlash on social media from pro-Palestinians across the region, was “in violation of the kingdom’s regulations and media policy”.

The investigation into MBC, a conglomerate founded in London and now majority-owned by the government, highlights the delicate balance Riyadh is seeking to strike in the Middle East conflict: the Hamas and Hizbollah militants being pounded by Israel are its historical foes, but Saudi Arabia is also conscious of the outrage among Muslims and Arabs in the kingdom and across the region at the ferocity of Israel’s year-long assault on Gaza.

Saudi Arabia is worried that the war could further destabilise the region and has repeatedly condemned Israel’s conduct of its military offensive in Gaza since the latest conflict was triggered by Hamas’s attack on southern Israel last October. At the same time, Riyadh has long considered Iran and the militant groups it backs, including Hamas and Hizbollah, to be malign forces in the region.

Riyadh has made no official public comment on Sinwar since Israeli forces killed him in southern Gaza last week. The MBC report was broadcast shortly after Israel confirmed his death.

In neighbouring Iraq, the country’s media regulator also said it has moved to suspend MBC’s licence over the same report after protesters stormed the MBC offices in Baghdad. Videos circulating online appeared to show the protesters filming themselves chanting anti-Israel and anti-Saudi slogans as they broke into the offices while smashing computers and other equipment on Friday night.

MBC, which is listed on the Saudi exchange and operates studios and offices across the region, aired a 15-minute long news report that described Sinwar, the architect of the attack on October 7 last year, as the latest in a long list of names that belong to political Islamist groups that Saudi Arabia designates as terrorist.

In addition to Sinwar, the MBC report mentioned Osama bin Laden, the Saudi leader of al-Qaeda killed by the US; the Iranian general Qassem Soleimani, who was assassinated in an American air strike; and Hizbollah’s leader Hassan Nasrallah, who was killed by Israel last month.

Under Saudi law, it is illegal to express sympathy with designated terrorists. But in Iraq, which is dominated by political parties backed by Iran, people such as Soleimani and Nasrallah are revered and considered martyrs.

“Given the MBC satellite channel’s violation of media broadcasting regulations via its repeated violations and its attacks on the martyrs, leaders of victory, and heroic resistance leaders who are fighting the battle of honour against the usurping Zionist entity, we confirm taking all necessary legal measures and suspending it from operating in Iraq,” the Iraqi regulator said in a statement published by the state news agency.

Saudi Arabia was in advanced talks with the US over a potential deal to normalise relations with Israel before Hamas’s attack a year ago. But Riyadh has now insisted that Israel would have to end its war in Gaza and take irreversible steps towards the establishment of a Palestinian state before any agreement. It has also become increasingly frustrated with the conduct of Israeli Prime Minister Benjamin Netanyahu’s government.

MBC Group has a market capitalisation of more than $4bn. The channel, which did not respond to a request for comment, has since deleted the controversial report from its social media feeds.

FT : Top BBVA shareholder sells out over Sabadell hostile bid

Top BBVA shareholder sells out over Sabadell hostile bid
GQG Partners, which also holds stakes in Commerzbank and CaixaBank, sold shares during the summer

One of BBVA’s biggest shareholders has sold its entire stake over the Spanish bank’s decision to pursue a hostile bid for domestic rival Banco Sabadell.

GQG Partners, which is a big investor in several European banks, was a top-five shareholder in BBVA but sold out this summer after telling the bank’s management team it opposed their contentious attempt to buy Sabadell, according to people familiar with the conversations.

BBVA’s €10bn bid for Sabadell, which would be the largest European bank takeover for several years, has met with fierce resistance from the Sabadell board and the Spanish government. 

BBVA chair Carlos Torres has pressed ahead with the bid despite the prospect of a drawn-out process that would need to clear several regulatory hurdles.

In July, BBVA shareholders voted in favour of a €10bn share issue to facilitate the bid. But GQG had by that time decided to sell up, having told the bank’s management team that it believed the Sabadell bid would be too time-consuming and distracting, while also diluting its exposure to emerging markets.

“What we liked about BBVA was they actually had divested their US and some other Latin American assets,” said Brian Kersmanc, a portfolio manager at GQG. “They had come back to their core focus. They were really good in Mexico, Turkey and Spain.

“They are doing good enough on an organic basis, just outcompeting organically.”

Mexico, a fast-growing but unpredictable market, delivered 56 per cent of BBVA’s net profit in the first quarter of 2024.

BBVA did not comment on GQG’s disposal, but said: “The overwhelming support from our shareholders at [July’s] general meeting is the clearest signal of their endorsement of the Banco Sabadell transaction.

“We believe this is one of the most compelling projects in European banking.”

A combination between BBVA and Sabadell would create the second-biggest player in Spain’s loan market, leapfrogging Santander.

BBVA wants to make its formal tender offer to Sabadell shareholders before the end of this year. But despite BBVA winning investor support for the share issue, the bid faces other obstacles, including a crucial Spanish antitrust review and the opposition of Spain’s Socialist-led government, which has vowed to prevent BBVA from merging the banks even if it succeeds in acquiring Sabadell.

The deal also needs to be approved by Spain’s financial regulator, which has said BBVA must tell investors what would happen if the government blocks the merger. If the acquisition is a success, the earliest the transaction would be completed is the start of 2025, though it could drag in to the summer.

GQG, which is based in Florida and founded by former Vontobel star fund manager Rajiv Jain, bought a 3 per cent stake in BBVA three years ago, making it the bank’s third-biggest shareholder. As recently as June this year, GQG was still a top-five shareholder, according to S&P Capital IQ data.

GQG built up a top-10 position over the summer in Germany’s Commerzbank, which is the subject of a potential bid from Italian rival UniCredit. It is also a top-10 investor in CaixaBank, Spain’s biggest lender by loan market share.

FT : Meet the non-doms fighting Rachel Reeves’s tax raid

Meet the non-doms fighting Rachel Reeves’s tax raid
With chancellor planning tax shake-up in this month’s Budget, Foreign Investors for Britain is trying to affect debate

In April, Hungarian investor Gábor Futó attended an event in London hosted by a private bank. The theme of the gathering was the end of the UK’s non-dom tax regime and conversations with the cohort of 50 or so wealthy foreigners who also attended unfolded in a similar vein.

“Everyone was talking about where to go, how to go and what happens with a trust,” the co-founder of real estate developer Futureal Group recalls.

The previous month, Tory chancellor at the time Jeremy Hunt had attempted to wrongfoot the Labour party when he unexpectedly pledged to abolish Britain’s colonial era non-dom regime, which allows wealthy foreigners to avoid paying UK tax on overseas income. But Hunt made a number of concessions which his then opposition shadow Rachel Reeves shortly afterwards vowed to end. Crucially, Labour pledged to end the use of offshore trusts to avoid inheritance tax — levied at a standard rate of 40 per cent in the UK. 

Futó conducted a straw poll of the room, predominantly non-dom entrepreneurs and investors. He asked them if they would be willing to pay an annual fee of say £500k to remain in the UK and continue to enjoy the non-dom regime’s benefits. “Everyone raised their hands,” he said. 

Facing a big personal tax hit — or the unappealing prospect of leaving the country to avoid one — the episode persuaded Futó there was an opportunity to modernise the tax regime for foreigners that would allow the UK to hold its own against the sweeteners offered by nations like Italy, Switzerland and the United Arab Emirates that are luring high earners. 

Futó is one of the protagonists in a group of entrepreneurs, investors and advisers who are attempting to shape the biggest overhaul of the UK’s taxation of wealthy foreigners since the regime was put in place in 1799, to shelter those with foreign property from wartime taxes.

Building on earlier work done by a group of law firms including Withers, Charles Russell Speechlys and Taylor Wessing, the campaign has crystallised into Foreign Investors for Britain, a lobby group set up after the July general election. While much of the country faces tax rises at the upcoming Budget, but has neither the means nor the connections to lobby the government, Foreign Investors for Britain received an initial £300,000 in funding from its founding members, according to a person familiar with the situation.

Its main ask is for the government to put in place a tiered tax regime that would exempt non-doms from inheritance tax on non-UK assets and free them from UK levies on foreign income, gains and certain UK investments for up to 15 years.

They would pay different levels of annual charge to achieve this, ranging from paying £200,000 on net wealth as high as £100mn to £2mn for net wealth more than £500mn. This would mirror similar regimes in the likes of Italy and Switzerland.

“We support Labour doing away with the non-dom regime, which is antiquated,” said Alex Algard, a founding member of Foreign Investors for Britain, who moved to London from Seattle eight years ago to open the international headquarters of his software company Hiya. “But we want to lessen the blow for this important segment to UK tax revenue. These people are highly mobile, and it would be costly to the UK economy to lose them.”

The lobby group initially set out “to make sure the government was making decisions on an informed basis, not on the back of guesswork, blind optimism or previous research which was deeply flawed”, said Dominic Lawrance, a partner at law firm Charles Russell Speechlys and one of its early members. He admits that “financial modelling has been the hardest thing” because of the paucity of comprehensive data on contributions from the UK’s non-dom contingent. 

It also wanted to dispel the idea that a 2023 report by academics at Warwick University and the London School of Economics was an appropriate basis for government policy. The report estimated that scrapping the tax perks enjoyed by the UK’s non-dom regime would net £3.6bn a year for the government. The findings suggested that there was only a “modest” risk of wealthy people leaving the country, something that anecdotal evidence from the lobby group’s members and their advisers contradicts.

Earlier this summer, Foreign Investors for Britain commissioned consultancy Oxford Economics to conduct a report on the proposed reforms, which it worked on throughout the summer holidays to complete. It set up a website and distributed an online survey to its network of non-doms and their advisers to establish the behavioural impact of any changes.

When the first phase of the OE report came out in September, it contradicted the academics’ figures, and those from the UK government’s own Office for Budget Responsibility. It estimated that, instead of raising additional tax revenues, the proposed reforms could cost the exchequer £0.9bn in 2029-30. It also found that 83 per cent of the 73 non-doms surveyed identified inheritance tax on worldwide assets as a key driver of their decisions. 

Leslie MacLeod-Miller, chief executive of Foreign Investors for Britain, met officials from the Treasury and HM Revenue & Customs in early September to present the findings. The group has not engaged directly with the OBR, the person familiar with the situation said.

By late September, Reeves had also been warned by Treasury officials that parts of her plan — notably imposing inheritance tax on the global assets of UK residents who say their domicile is overseas — could end up costing money by driving a large number of wealthy taxpayers overseas.

Faced with a £40bn funding gap, the government signalled that Reeves was likely to drop the inheritance tax element of her plan, although she is still expected to raise the tax take overall on non-doms.

“We have to close a big fiscal gap, but we will only make tax changes that are pragmatic and raise money,” said one ally of Reeves. “We are not being ideological.” Despite the timing of Labour’s retreat, a government insider insisted that Foreign Investors for Britain’s lobbying efforts had not been “particularly effective”.  

The second phase of the OE report, published last week, showed that its 95 non-dom respondents paid, on average, £800,000 of UK VAT in the 2023-24 tax year, and an average of £890,000 in UK stamp duty over the last five years. Wealthier non-doms paid substantially more of these levies, and respondents indicated they were already divesting significantly from UK assets, and pausing investment and philanthropy because they feared tax hikes.

Foreign Investors for Britain is expected to hold a call with Varun Chandra, Sir Keir Starmer’s business adviser, this week, and is updating the Treasury on any further data and research. 

Also this week, OE plans to publish the third phase of its research, which will cover the potential fiscal impact of a tiered tax regime. A separate report from the free-market Adam Smith Institute last week recommended introducing an annual flat fee of £150,000 for non-doms, valid for 15 years, which it said could potentially generate at least £12.45bn annually in direct revenue.

“This is not just something that affects the wealthy,” said MacLeod-Miller. “These funds will go to frontline service like schools and hospitals.”

But time is running out for Foreign Investors for Britain’s lobbying efforts. With the Budget less than two weeks away, the most it can realistically hope for is for Labour to drop the inheritance tax element of its non-dom reforms while it considers alternative proposals — such as tiered tax — that would take longer to implement. 

“The best thing the government could do would be on Budget day to say something to steel people’s nerves and stop the exodus,” said Lawrance at Charles Russell Speechlys. “But they don’t have the data they need to make a firm decision [on the tiered tax regime] . . . they haven’t had enough time to think it through yet.”

WSJ : Are the Amazon’s Trees Worth More Alive than Dead? A New Industry Thinks S

Are the Amazon’s Trees Worth More Alive than Dead? A New Industry Thinks So
Brazil is encouraging bioplastics, ecotourism and fishing businesses in the rainforest to replace illegal logging and mining

CARAJÁS, Brazil — Jefferson Sousa could have been eking out a living at the expense of the Amazon forest, working on a cattle ranch like his father.

“It was all I knew, it was what kept our family alive,” he said.

But now Sousa, who is in his mid-30s, spends his days cultivating jaborandi, a once-endangered shrub used in glaucoma medication and one of the Amazon’s most promising new sustainable industries.

In Brazil’s long-running battle between industries that exploit the rainforest’s riches and environmentalists trying to protect it, a middle way is emerging that fuses business interests to the Amazon’s survival and makes its 400 billion trees worth more money alive than dead.

The idea is to cultivate different sorts of industries—the so-called bioeconomy—to lure the Amazon’s 40 million inhabitants away from activities such as logging and mining. The forest becomes so valuable, the theory goes, that there is no economic sense in cutting it down.

The effort comes as the Amazon nears a tipping point when climate scientists say swaths of the forest will turn into savanna with catastrophic effects for global warming.

Some of Brazil’s biggest companies are involved, including the huge mining company, Vale, which runs Sousa’s nursery. As the owner of Carajás, the world’s largest iron-ore mine dug into the middle of the Amazon jungle, the company isn’t a natural beacon in the fight against the mass extraction of natural resources

As part of its pledge to regenerate mined areas and support local communities, however, the company has become one of Brazil’s biggest private-sector investors in the Amazon’s burgeoning green economy.

Here in the Brazilian state of Pará, an expanse of jungle almost twice the size of Texas that has seen some of the Amazon’s highest rates of deforestation over the past decade, politicians are turning to the bioeconomy to ensure its protection.

The new agenda is a shift from cattle ranching, which in the Amazon was the primary use of 90% of deforested land between 1985 and 2023, according to a study this month by MapBiomas, a nonprofit land-use research group.

“If you improve people’s living conditions, they are more likely to help monitor the forest,” said Claudomiro Gomes, mayor of Altamira, the state’s largest municipality. “It’s the best way, the only way to preserve the forest,” said Gomes, who is on a mission to turn the gritty, crime-ridden city into the world’s biggest producer of high-end chocolate.

Pará is Brazil’s biggest grower of cacao, which grows in the shade of native trees, and has long exported much of what it produces. But in a bid to squeeze more value—and jobs—out of the crop, the state last month hosted Latin America’s biggest chocolate festival, drawing some 800 producers from across the region.

Government organizations, private philanthropies and bilateral donors such as the U.S. Agency for International Development have poured money into sustainable agriculture and fishing, alongside activities such as the harvest of indigenous remedies and the use of seed oils for everything from lipstick to bioplastics. Other examples include nature-based tourism—from bird-watching to luxury cruises down the Amazon—to lure high-paying visitors to the forest with minimum impact.

In Belém, some 60 miles upriver from the Atlantic Ocean on the Pará River, dozens of scientists working in Vale’s research laboratory carry out genetic studies of the flora and fauna of the forest surrounding Carajás. They alternately get excited about the possibilities held by the Amazon and despair over the other potentially valuable and yet unknown species being lost with every new square mile of forest razed.

“It’s a battle against time,” said Cecílio Caldeira, an agronomist at the lab who has been researching the jaborandi shrub. “We’re losing species faster than we can discover them.”

Used by indigenous tribes to treat fever and snake bites, jaborandi leaves are the only known natural source of pilocarpine, an important component used in eyedrops for glaucoma for decades. In addition, the U.S. Food and Drug Administration approved pilocarpine last year for use against presbyopia, or near-vision loss, opening up more of the global eyedrops market that, according to Zion Market Research, is forecast to be worth $23 billion by 2030.

After attempts to grow jaborandi outside the Amazon produced plants with low concentrations of pilocarpine, Caldeira and his team set about sequencing its genome to understand how it produces the compound. Vale also has bought up disused cattle ranches near Carajás for experimental plantations of the shrub.

Centroflora, a São Paulo-based company that extracts some two-thirds of the pilocarpine for pharmaceutical companies, said it now counts on some 30,000 people to collect the leaves in the forest but expects that to grow with the FDA’s approval for presbyopia.

To get more companies involved, the Inter-American Development Bank along with some 20 development banks from South America have agreed to lend up to $20 billion to bioeconomy businesses in the Amazon by 2030 as part of the so-called Green Coalition launched last year. By 2030, the global bioeconomy market is expected to reach $7.7 trillion, according to a report in June by the bank.

Environmentalists warn, however, that developing new industries is no panacea. Their implementation relies on progress in other areas, namely laborious and politically fraught efforts by the government to determine who actually owns swaths of the Amazon.

The push for bioeconomies isn’t without its own risks, say its critics. Too small, and the alternative industries fail to compete with logging and mining. Too big, and the new activities can bring more people into the forest and inadvertently accelerate its destruction, said Ricardo Hausmann, a former minister of planning in Venezuela and professor at Harvard Kennedy School.

Creating new industries in the forest means building more roads, extending the power grid, building schools and health clinics, all of which makes the surrounding land more valuable and susceptible to illegal logging, said Hausmann. “Suddenly you’ve brought economic activity to an area of nature that you supposedly wanted to protect.”

Time is running out. Taking office in January last year, Brazilian President Luiz Inácio Lula da Silva promised to end deforestation in the Brazilian Amazon by 2030, launching an all-out attack on illegal loggers and miners in a bid to slow global warming.

Under da Silva, Brazil’s environmental-protection agency, Ibama, carried out more than 600 combat operations in indigenous lands across the Amazon last year, handing out twice as many fines as it did under his predecessor, Jair Bolsonaro.

The results were immediate. Brazil lost some 4,400 square miles of primary forest last year, a 36% reduction from 2022—the lowest level of deforestation since 2015. The decline represented the largest annual decrease for any country in the world, according to Global Forest Watch, a platform developed by researchers at the University of Maryland with Brazilian government data.

Vale’s scientists have also been studying ways to produce more, and better-tasting cacao, by improving pollination of the trees and fermentation of its seeds. They also have been genetically mapping the pirarucu, a valuable river fish, to make fishing more sustainable, advising fishermen on how much they can catch in certain areas without wiping out local populations.

Other bioeconomies have flourished across the Amazon, including sustainable timber, the production of biofuels from material such as palm husks, and the fast-growing market for açai, an Amazonian berry packed with antioxidants now widely popular in the U.S., Europe and Japan. Production of the berry reached 1.9 million tons in 2022, a near-50% increase since 2016, according to government figures.

State governments also have encouraged farmers to adopt agroforestry, the plantation of crops such as cacao and banana trees alongside native Amazonian trees in scorched wastelands that were once soybean plantations or cattle ranches. The native trees provide shade for the crops, but also help improve soil quality and retain water, encouraging the regeneration of deforested lands while providing a source of income, agronomists say.

The efforts are already paying off. Pará shipped some 74,000 tons of cacao to the country’s processing plants last year, a near-30% increase from the previous year, according to the Brazilian association for cacao processors.

But for Joel Luis Guerra, a banana and cacao producer some 30 miles deep into the jungle south of Altamira, that is still a distant dream.

After a recent drought left part of his 20-hectare plot (roughly 50 acres) unfit for planting, Guerra said he was preparing to clear another 5 hectares of the forest to make way for his next banana crop. While given the right by the government to settle in the area in 2006, Guerra still doesn’t have a deed to the land, meaning he can’t get a loan to buy fertilizer to reuse the land he already cleared.

“I get it, if we cut down all of this, the world stops breathing,” he said, pointing to the pristine forest surrounding his farm, part of which he is soon to raze. “But what can we do?”

>>> Barron's Weekend Summary

Cover:
-Millennials, born from 1981 to 1996, may be the most economically divided generation in America. Barron's simulated the projected net worth of four hypothetical millennials to illustrate financial ups and downs facing this generation. The simulations also highlighted the role of safety nets in giving some millennials a head start, such as assistance with college, early cash gifts or inheritance, or early access to an investment account. Millennials in the middle of the wealth spectrum held average assets of $103,021 in 2022, surpassing the $58,118 their boomer counterparts had held in 1992, adjusted for inflation. Much of that increase was driven by those with homes, 401(k) retirement plans, or brokerage accounts that benefited from a booming stock market. Covid-era assistance, like child-care tax credits and stimulus checks, helped others chip away at debt or shore up savings. The wealthiest 10% of millennial households saw a 140% increase over the wealth their boomer peers had in 1992, while the poorest 10% came out behind their boomer peers.

Interview:
-Wasatch Global Investors, a Salt Lake City-based asset-management firm, focuses on collaboration as the core of its investment strategy. The firm, which has $29.4B in assets, invests in 20 domestic and international small-cap growth strategies. Analysts and portfolio managers work together throughout the investment process, sharing ideas across strategies. This teamwork creates a deep bench of long-tenured employees. JB Taylor, CEO and portfolio manager at Wasatch, has helmed the Wasatch Core Growth fund since 2000, which has returned an annualized 13.9% in the past 15 years, outperforming the Russell 2000 Growth index's return of 10.9% and peers' return of 11.5%. The fund has an average fee level of 1.17%. The firm's approach to collaboration is based on the idea that multiple people working together will come up with better answers than a single, smart person.

Tech Trader:
-ASML's third-quarter earnings were leaked early, sparking an industrywide panic. The company's weak outlook was due to Moore's Law, a prediction made by semiconductor pioneer Gordon Moore in 1975 that the number of transistors that could be etched into silicon would double every two years. However, this prediction was challenged when tinier transistors ran up against the limits of ultraviolet light wavelengths used to etch them into silicon. ASML, a Dutch-based semiconductor lithography machine manufacturer, invested over six billion euros ($6.49B) in EUV research and development over 17 years. After several false starts, the company was able to harness the tiny wavelengths needed to manufacture high-performance chips used in smartphones, PCs, and data centers. ASML's EUV machines saved Moore's Law, as they generate extreme ultraviolet light using a CO2 laser that fires two separate laser pulses at a fast-moving drop of tin.

The Trader:
-The Dow Jones Industrial Average and S&P 500 index have reached new highs, with analysts referring to the market as "animal spirits." The S&P 500 and Dow rose 0.9% and 1% respectively, marking their sixth consecutive week of gains. The Nasdaq Composite was up 0.8%. Bankers' third-quarter earnings have been primarily focused on investment banking and trading, with revenue up over 20% at big banks in the latest quarter. Goldman Sachs CEO David Solomon and Morgan Stanley Chief Financial Officer Sharon Yeshaya have predicted a multiyear capital markets recovery. Adam Turnquist, chief technical strategist at LPL Financial, notes that the tone of bank earnings calls has taken a positive turn, with the words "economic growth" and "soft landing" being more frequently used than "recession" and "economic slowdown." The latest economic data shows retail sales rising 0.4% in the latest month, and the Federal Reserve appears to be on track to cut interest rates again in November.
-Tech giants Google and Amazon have announced investments in new types of nuclear reactors, signaling a new phase where companies could build new nuclear reactors. This has lifted the stocks of companies that own reactors, including Vistra and Constellation Energy. A separate group of stocks has begun to rise, including Nuscale Power, Oklo, BWX Technologies, GE Vernova, Lightbridge, and Centrus Energy. Amazon will finance the construction of several small nuclear reactors in Washington state and invest in Maryland start-up X-energy. Google's deal with California-based Kairos Power supports the development and construction of several reactors, with financial terms not released. The tech giants are looking for ways to secure power for their data centers, which are consuming more electricity as artificial-intelligence usage grows. Nuclear plants don't emit carbon and operate continuously, unlike solar and wind. The biggest obstacles for nuclear adoption are the long construction time and high costs. The new kind of nuclear plants built by Kairos and X-energy are called small modular reactors (SMRs), which are cheaper and easier to construct.

Features:
-Amazon.com, the largest sponsor of H-1B work permits for skilled foreign workers, is facing an immigration crisis. The company would likely hire more if allowed, and is chronically short of warehouse workers. However, Amazon would face backlash if it pushed for more immigration, as public opinion has hardened on undocumented immigrants. The labor market remains tight, with 1.2 job openings per unemployed person, and immigration ranks as a top issue for voters. The next Congress and Trump or Harris will impact the country's economic growth, labor markets, and the U.S. fiscal deficit. Most companies express their view through groups like the U.S. Chamber of Commerce, which has lobbied Congress to increase work permits for years. Expanding the labor pool with immigrants helps companies by giving them more choices of employees and potentially allowing them to pay less.
-Costco Wholesale has been a strong performer in 2024, with solid earnings and sales growth. The company's shares have gained 35% this year, outperforming the S&P 500's 23% rise. Evercore ISI analyst Greg Melich believes Costco's compounder characteristics should help maintain a premium at the higher end of its historical norm. Four main areas of growth for the company include steady membership growth, market share gains in discretionary categories, advertising, and international expansion. Costco's membership fees have been a steady source of income, helping to pad both its top and bottom lines. The latest fee hike went into effect in September, and the benefits will continue to trickle in over the remaining fiscal year as shoppers renew their memberships at the higher price. Costco's home delivery and haul-away logistics services are giving the retailer a leg-up, which could boost same-store sales growth in the long run. International expansion is another potential area for Costco, with net sales growth at its international warehouses outstripping that of its U.S. counterparts in fiscal 2024, up 9% year over year compared with 4%.

European Trader:
-The European Central Bank (ECB) has lowered interest rates for a second consecutive meeting, following the Federal Reserve's reduction of borrowing costs last month. The key deposit rate was lowered by a quarter point to 3.25%, marking the second time the ECB has cut rates since June. The ECB's decision follows the Federal Reserve's reduction of borrowing costs last month. The inflation rate in Europe has fallen below the ECB's 2% target, reaching its lowest since 2021. The ECB expects economic growth to slow in the second half and remain meager compared to the US rate of expansion. Deutsche Bank expects the ECB to continue lowering rates until about 2.25% in the first half of next year.

Emerging Markets:
-No update

Commodities:
-Oil prices are dropping after the death of Hamas leader Yahya Sinwar, but this does not necessarily mean the war between Israel and Iran has ended. WTI crude oil futures have dropped 2.6% to $68.83, suggesting traders are pricing in an easing of the conflict between Israel, Iran, Hezbollah, Hamas, and other groups. Brent futures were 2.5% lower at $72.61, while WBS00 crude oil futures dropped 2.6% to $68.83. However, the conflict seems to not be ready to end, with Israeli Prime Minister Benjamin Netanyahu stating the "war isn't over," Hezbollah escalating its attacks, and Hamas and Iran's statements indicating continued fighting. If oil prices are not falling due to the Middle East, it could be attributed to China's weaker third-quarter gross-domestic product, which could spill over into global energy markets. Currently, it is best to hope for peace in the Middle East, which could lower oil prices, but be prepared for more violence, which would send them higher.

Streetwise:-(Only in Podcast this week)
-Jack Hough discusses his minimalist investing philosophy, Financial Nudism, which suggests that a successful investor needs quality stocks and bonds, such as index funds. He also discusses the concept of dollar cost averaging, which involves spending regular amounts of money to buy shares in the stock market or index fund. This method helps lower average costs and is more reliable when considering longer time periods. However, Hough warns that investing all cash at once may not be the best option, as you are not a sample size and only have one shot at it. He believes that recovering from a stock market tumble may take an emotional toll, and that investing all cash at once may not be the best option for everyone.

>>> Weekend Papers Summary

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.

Electrek : Tesla releases closer look at its upcoming wireless EV charger

Tesla releases closer look at its upcoming wireless EV charger


Tesla has released a closer look at its upcoming wireless electric vehicle charging station, which was showcased at the Robotaxi unveiling.

Tesla never seemed interested in wireless charging for its electric vehicles until recently.

The problem wireless charging solves is not a major one. It alleviates the need to plug in your car, which is not a super difficult or time-consuming task. Nonetheless, Tesla has previously talked about automating the task in order to be ready for self-driving technology. If the cars could drive themselves, it would make sense for them to be able to charge themselves without a human needing to plug them in.

Then, there’s also the issue of efficiency. Wireless charging historically had a bigger loss than cable charging, but some more recent solutions, like with magnetic resonance, for example, do claim similar ~95% efficiency as cable charging.

Nonetheless, over the years, Tesla has favored an automated robot arm instead of wireless charging to complete this task, but things have changed recently.

Last year, Tesla teased a new wireless home charging station – pictured above. The automaker never commented on the situation other than releasing this picture as part of a presentation.

However, the image pretty clearly shows a wireless charging station and Tesla did briefly acquire a startup that focuses on wireless charging before selling it back – not before integrating some of its staff, though.

Furthermore, Tesla chief designer Franz von Holzhausen more recently confirmed that Tesla is working on a wireless charging pad.

Earlier this year, we also learned that the Cybertruck has inductive charging connectors, which hints that it could be retrofitted with a wireless charging pad.

At Tesla’s ‘We, Robot’ event where they unveiled their new Robotaxi, the automaker confirmed that wireless charging is going to be the company’s solution to charge its autonomous vehicles in the future.

Now, Tesla has released a new video giving us the best look at its wireless charging pad yet:


The automaker went a step further with the Robotaxi and didn’t even include a charging port. It looks like wireless charging is the only way to charge the vehicle.

The video shows a charge rate of 25 kW:

This is not comparable to level 3 DC fast-charging that Tesla owners are used to with the Supercharger network, but it is higher than your typical level 2 home charging.

However, we don’t know about the efficiency of the system.

We recently reported that Tesla revealed more of its wireless charging technology through several patent applications.

Electric vehicles are best charged by renewable energy, like solar power and there’s no better solar power than the one you own. If you want to make sure you’re finding a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage.

EnergySage is a free service that makes it easy for you to go solar – whether you’re a homeowner or renter. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20 to 30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and you share your phone number with them.

>>> Weekly Market Update

The path of least resistance for US stocks markets remained to the upside this week with S&P once again climbing into uncharted territory. The solid start to Q3 earnings season continued to buoy sentient while supporting widening breadth, though volumes remained relatively subdued. The Dow Jones transports rose to an over 1-year high after investors welcomed commentary from JB Hunt and United Airlines, as well as a pullback in oil prices. TSMC and Netflix posted standout results once again underpinning technology shares. Morgan Stanley, Bank of America, Schwab, Blackstone and Travelers all offered up strong results too, sustaining the strength in financials.

September US economic data was largely stronger than expected, supporting a ‘Goldilocks’ soft landing narrative, but not so much as to drastically change Fed rate cut expectations. Other central banks largely remained on a decidedly dovish track, led by the ECB which cut rates in back-to-back meetings for the first time since 2013, while also providing dovish forward guidance. UK data was relatively weak compared to expectations, which prompted bets on additional BOE easing as well. US Treasury yields remained at some of the highest levels since late July, while the US dollar index climbed back to the 200-day moving average for the first time since this summer. Separately, promises continued to come from Chinese government officials for delivering on additional stimulus measures in the weeks and months to come. WTI crude prices retreated as some of the Mid-East war premium came out of the market as worries surrounding a near term, heavy-handed Israeli response against Iran faded. Gold prices rose to fresh all-time highs above $2700, while Bitcoin and crypto prices rose as polls and betting sites shifted slightly in favor of former President Trump in next month’s election. For the week, the S&P gained 0.9%, the DJIA was up 1%, and the Nasdaq added 0.8%.

In corporate news, several firms reported results that spoke to the health of the US consumer. United Airlines beat estimates handily and said the revenue environment remains strong, boding well for the travel market. Logistics firm JB Hunt posted solid numbers and said it saw positive signs in volume trends. Netflix continued to draw more eyeballs, reporting better than expected subscriber growth and touting the value of its small but growing live content offerings. The streaming service said it was raising prices in select countries but did not implement an across the board price hike that some analysts had expected. On Wall Street, Morgan Stanley and Bank of America reported solid results, though the former said Net Interest Income would decline modestly in Q4, while the latter said NII is expected to grow, despite expectations of rate cuts. Taiwan Semi gave a new shot in the arm to the tech market, reporting strong results and guidance, saying 2025 and beyond looks healthy for chip demand. In M&A news there weren’t many prominent deals this week, but there were rumors that Expedia could be a target for Uber as part of a ‘super app’ push.


MON 10-14
(CN) China's new support measures intended by Pres Xi "to put a floor under growth", but not do "a full U-turn"; Goal is to avert a financial crisis, not veer too far from his agenda - WSJ, citing sources
(IL) Reportedly Iran recently conveyed a message to US through a third country that if Israeli response to the missile attack is limited, then Iran will see this round as closed - Israeli press
(IN) INDIA SEPT CPI Y/Y: 5.5% V 5.1%E
(MX) Mexico's Lower House of Congress approves legislation to implement constitutional overhaul of the judiciary
(US) Fed's Waller (voter): Considerable room for cutting above neutral rate; Should proceed with more caution on pace of cuts; Data warrants moving to neutral at 'deliberate pace'
PAGE.UK Q3 Trading Update: Gross profit £201.4M, -13.5% y/y (cc); Exited September -16% y/y; Expects 2024 Op to be broadly in line with current market consensus of £58M; Notes softer activity and trading in France and Germany

TUES 10-15
(CN) China Housing Ministry, MOF and PBOC to hold briefing at 10:00AM local time on Thurs, Oct 17th on "steady and healthy development of property sector" - press
(DE) GERMANY OCT ZEW CURRENT SITUATION SURVEY: -86.9 V -84.0E (lowest since May 2020); EXPECTATIONS SURVEY: 13.1 V 10.0E
(HK) Hong Kong CEO Lee annual policy address: To boost status as international financial, shipping and trade hub; Some mortgage rules relaxed
(US) Cleveland Fed’s Inflation Nowcast forecasting Oct US CPI Y/Y to accelerate to 2.6% from 2.4% Sept US CPI Y/Y
(US) Tier1 analysts citing call with former head of chip distributor Sourceability LLC: Surprised at the speed of China replacing chips with own ones, with his former business seeing China's contribution to APACs total revenue declining from 60% to 20%; Chinese competitors now more open to new designs, rather than previously replicating from Renesas, Infineon and NXP.
(US) Tier1 analysts Oct Spending Survey (conducted Oct 8-11th): Plans to buy New Appliance is at its lowest level since Dec 2023; New Vehicle next 12-month spending expectations continued its sequential decline since May 2024; Next 3-month spend plans fall in home-related spending
(US) Fed's Kugler (voter): Immigration helps explain disinflation and low unemployment
(US) OCT EMPIRE MANUFACTURING: -11.9 V +3.6E (lowest since May); New Orders: -10.2 v +9.4 prior
ACI Reports Q2 $0.51 v $0.48e, Rev $18.6B v $18.5Be
ADOC.FR Files patents of stable formulations of hormone combinations for the treatment of obesity and diabetes, which "would have the advantage of targeting fat mass, while preserving muscle mass", using its BioChaperone platform
AMZN Said to reach 5-year deal for AI chips with Databricks; Databricks will tap Amazon’s Trainium chips to power services for building AI systems, a move that could cut costs for businesses – WSJ
ASML.NL Reports Q3 Net €2.1B v €4.82e, Net order bookings €2.63B v €5.39Be; Rev €7.47B v €7.00Be; Cuts FY25 outlook with cautiousness expected to continue
ASML.NL CFO: Expect China to come in at around 20%*** of total Rev for FY25, and China will be a more normalized percentage of our order book - post earnings interview [***Note: in Q3, China remained ASML's biggest market accounting for 47% of Rev]
BA *FILES UP TO $25B MIXED SHELF - FILING [**Note: WSJ notes Boeing's mixed shelf includes intent to raise "at least $10B" in new shares]
BAC Reports Q3 $0.81 v $0.78e, Rev $25.3B v $25.3Be
BAC TTN Earnings Call Summary: NII expected to grow in Q4, despite expectations of rate cuts; Growth in consumer payments continues into the October
ERICB.SE Reports Q3 (SEK) adj EBIT 7.33B v 5.57Be, Rev 61.8B v 61.5Be; Sees signs that overall market is stabilizing with North America returning to growth, but expect further near-term sales pressure in Enterprise
GS Reports Q3 $8.40 v $6.85e, Rev $12.7B v $11.6Be
JBHT Reports Q3 $1.49 v $1.42e, Rev $3.07B v $3.04Be
JBHT TTN Summary Q3 Earnings Call: Cuts FY24 Capex below $650-700M (prior Capex $650-700M); Still expect a normal peak season in Q4, with customers not indicating weaker demand; Continue to navigate a challenging freight environment with margin pressure due to deflationary rate conditions.
JNJ Reports Q3 $2.42 v $2.19e, Rev $22.5B v $22.2Be
MC.FR Reports Q3 Rev €19.1B v €20.1Be; Organic rev misses target
PNC Reports Q3 $3.49 v $3.29e, Rev $5.43B v $5.37Be; Notes it is well positioned to achieve record NII in 2025
PNC Guides Q4 average loans 'stable' q/q, Rev stable q/q (implies $5.43B v $5.46Be), NII +1% q/q - earnings slides
WBA Reports Q4 $0.39 v $0.36e, Rev $37.6B v $35.8Be; Guides initial FY25 Rev strong noting FY25 to be important rebasing year; Announces footprint optimization program targeting ~1,200 closures over the next three years

WEDS 10-16
(AU) AUSTRALIA SEPT EMPLOYMENT CHANGE: +64.1K V +25.0KE; UNEMPLOYMENT RATE: 4.1% V 4.2%E
(UK) SEPT CPI M/M: 0.0% V 0.1%E; Y/Y: 1.7% V 1.9%E (annual pace below target for 1st time since Apr 2021)
(US) SEPT IMPORT PRICE INDEX M/M: -0.4% V -0.3%E; Y/Y: -0.1% V 0.0%E
International Air Transport Association (IATA) Director Walsh: Aircraft deliveries going to be a problem for a number of years, situation not getting any better (update)
TTN Research Alert: Yesterday's US NY Fed 1-Year Expectations Survey showed that consumers expectations of credit turbulence rose to the highest level since April 2020; For individuals earning more than $100K, the probability of delinquency was at its highest level in 10 years
ANTO.UK Reports Q3 Copper production 179.0Kt, +15.3% q/q v 183.6Ke
BHP.AU Reports Q1 Waio Iron Ore Production: 71.6Mt v 71.9Me; Shipments 71.54Mt v 72.0.Mte; On track to meet production guidance; Expects copper demand to increase 70% by 2050; Affirms guidance
CSX Affirms FY24 capex ~$2.5B (ex-hurricane rebuild); Guides Q4 volume to 'grow modestly' with revenue 'down moderately' - earnings slides
EXPE Reportedly Uber explored possible bid for Expedia in its 'Super App' growth push; Expedia has not been formally approached by Uber yet - FT
PPG Reports Q3 $2.13 v $2.15e, Rev $4.56B v $4.65Be; Cuts guidance slightly
STLD Reports Q3 $2.06 v $1.98e, Rev $4.34B v $4.25Be; Notes improvement in flat rolled steel prices during the later part of Q3; Expects steel pricing to recover; Plan to begin operating the aluminum flat rolled mill mid-2025
SYF Reports Q3 $1.94 v $1.77e, NII $4.61B v $4.51Be
SVC Cuts Quarterly dividend from $0.20/shr to $0.01/shr and plans to sell 114 hotels to repay debt; Notes slow recovery of hotel portfolio in combination with its hotel capital improvement and renovation program and deteriorating leverage metrics

THRS 10-17
(CN) CHINA Q3 GDP Q/Q: 0.9% V 1.1%E; Y/Y: 4.6% V 4.5%E (slowest annual pace since Q1 2023)
(CN) China PBOC: CONFIRMS 7-DAY REVERSE REPO RATE OPERATION HAS BEEN CUT BY 20BPS [corrected]
(CN) China Commerce Ministry (MOFCOM): Ready for face-to-face talk with EU on EV tariffs; Invited EU technical team to China
(EU) Reportedly ECB policymakers expect rate cut in Dec unless economic data showed turned around – press
(EU) EURO ZONE SEPT FINAL CPI Y/Y: 1.7% V 1.8%E (lowest since May 2021); CORE CPI Y/Y: 2.7% V 2.7%E
(EU) ECB CUTS KEY RATES BY 25BPS; AS EXPECTED; Reiterates language on forward guidance
(EU) ECB Chief Lagarde: Disinflationary process is well on track - Prepared remarks
(EU) ECB Chief Lagarde: More downside than upside risk to inflation; attentive to oil prices - Q&A
(JP) Japan Sept National CPI Y/Y: 2.5% v 2.5%e; CPI Ex Fresh Food (Core) Y/Y: 2.4% v 2.3%e
(US) Atlanta Fed GDPNow: Raises Q3 GDP forecast from 3.2% to 3.4% (update)
(US) BOFA INSTITUTE: WEEK-TO-OCT 12TH TOTAL CARD SPENDING +0.8% Y/Y V V -0.9% AVERAGE IN SEPT
(US) Mid-Oct Manheim wholesale used vehicle Index: 203.5 v 203.0 prior; -1.7% m/m; -2.8% y/y
(US) INITIAL JOBLESS CLAIMS: 241K V 258KE (off ~1.5-yrs high); CONTINUING CLAIMS: 1.867M V 1.865ME
(US) Redfin: Pending U.S. home sales rose 3.2% y/y during the four weeks ending October 13, the biggest increase in three years; New listings are up 3.6% nationwide, the smallest y/y increase in a month.
(US) SEPT ADVANCE RETAIL SALES M/M: 0.4% V 0.3%E; RETAIL SALES (EX-AUTO) M/M: 0.5% V 0.1%E
(US) OCT PHILADELPHIA FED BUSINESS OUTLOOK: 10.3 V 3.0E; New Orders: +14.2 v -1.5 prior
(US) WEEKLY EIA NATURAL GAS INVENTORIES: +76 BCF VS. +76 BCF TO +78 BCF INDICATED RANGE
USD/JPY Tests above 150.00 level for 1st time since early Aug
ABBN.CH Reports Q3 $0.51 v $0.40e, Oper EBITA $1.55B v $1.52Be, Rev $8.15B v $8.34Be
CMC Reports Q4 $0.90 v $0.91e, Rev $2.00B v $2.07Be
ELV Reports Q3 $8.37 v $9.70e, Rev $44.7B v $43.3Be; Cuts EPS outlook citing unprecedented mix shift in Medicaid membership related to eligibility redeterminations
HBAN Reports Q3 $0.33 v $0.30e, Rev $1.88B v $1.86Be
MAN Reports Q3 $1.29 v $1.28e, Rev $4.53B v $4.48Be; Guides Q4 EPS below est noting employers in North America and Europe remain cautious, with demand levels have largely stabilized at lower levels in these markets
MI TTN Summary Earnings Call: "In my decades of experience... I've never seen a macro environment so rich with opportunities for incremental build-out of natural gas infrastructure"; expecting to be a major player in developing it.
NESN.CH Reports 9M (CHF) Rev 67.1B v 68.8B y/y; Cuts outlook; Announces changes to its organization and its Executive Board
NFLX TTN Earnings Call Summary: Advertising tier membership +35% q/q, with plans to launch a first-party ad server and expand advertising formats in 2025; Expects FY25 ad Rev to 'roughly double' y/y; FY25 programming slate will reflect ambition and diversified storytelling; Plans to debut new seasons of several popular shows
NFLX Reports Q3 $5.40 v $5.09e, Rev $9.83B v $9.77Be; Raises FY24 guidance; Guides initial Rev guidance above estimates; Do Not expect ads to be a primary driver of Rev growth in 2025
NOKIA.FI Reports Q3 €0.03 v €0.06e, adj Op €454M v €445.2Me, Rev €4.33B v €4.66Be; Notes recovery is happening slower than expected previously, however, this is being partially offset by an improving gross margin and quick action on cost
PPG Reaches agreement to sell architectural coatings US and Canada business to American Industrial Partners for $550M; announces comprehensive cost reduction program with anticipated annualized pre-tax savings of ~$175M once fully implemented, including savings of $60M in 2025; To cut 1.8K jobs
TSM Reports Q3 (NT$) Net 325.3B v 299.3Be, Op 360.8B v 228.1B y/y, Rev 759.7B v 759.7B prelim; Notes strong smartphone and AI-related demand for its industry-leading 3nm and 5nm technologies
TSM *EXEC: EVERYTHING STABILIZED, STARTED TO IMPROVE FOR OVERALL CHIP DEMAND; 2025 LOOKS TO BE A HEALTHY YEAR AND NEXT 5 YEARS GROWTH ALSO TO BE VERY HEALTHY FOR TSMC - POST EARNINGS COMMENTS
TSM *CFO: GUIDES Q4 REV $26.1-26.9B V $24.2BE (V $19.6B Y/Y); RAISES FY24 REV OUTLOOK NOTING "AI IS NOT A BUBBLE, AI DEMAND IS REAL AND JUST A BEGINNING, WILL CONTINUE FOR MANY YEARS" - EARNINGS CALL
TRV Reports Q3 $5.24 adj v $3.79e, Rev $11.9B v $11.7Be; Very confident in outlook for its business into 2025 and beyond
WAL Reports Q3 $1.80 v $1.90e, Net Rev $823.1M v $811Me; Guides Q4 NII lower q/q

FRI 10-18
(KR) Follow up: South Korea spy agency confirms North Korea agreed to send 12,000 troops for Russia to Ukraine war
(US) Fed's Bostic (hawk, voter for 2024; non-voter for 2025): May see lull in investment activity and household spending amid election uncertainty
(US) Fed's Waller (voter for 2024 and 2025): Doesn't comment on monetary policy; Stablecoins need 'guardrails' to minimize run risk - speech text
(US) SEPT HOUSING STARTS: 1.354M V 1.350ME; BUILDING PERMITS: 1.428M V 1.460ME
(US) Tier1 week-to-Oct 17th US Truckload Demand Indicator at 54.0 v 53.2 prior; This uptick moves the survey near the 54.2 average of the prior 3 Freight Recessions ('12, '15, '19), given tightness after 2 Hurricanes (Milton and Helene) and a 3-day East Coast port strike
(US) Tier1 analysts citing call with data provider to homebuilders Zonda: Builders still planning to grow starts in 2025; Demand has improved from the slowdown over the summer, but it's still slow compared to the strength at the beginning of the year
(US) Redfin: Pending home sales jumped 2.5% m/m in September on a seasonally adjusted basis, the largest increase since Jan 2023
ALLY Cuts FY24 NIM 3.20% v 3.35% y/y (prior 3.30%); Raises FY24 net charge offs; Navigating a fluid operating environment – slides
AXP Q3 Card Member Loans 30+ Days Past Due at 1.3% v 1.2% q/q v 1.5% pre-pandemic - earnings slides
PG Reports Q1 Core $1.93 v $1.90e, Rev $21.7B v $21.9Be; Raises FY eps and affirms rev outlook; China volume declines seen in Beauty and Health Care
RF Reports Q3 $0.57 adj v $0.53e, Adj Rev $1.87B v $1.79Be
SLB Reports Q3 $0.89 v $0.88e, Rev $9.16B v $9.28Be; Notes short-cycle activity growth softened with producers exercised cautious spending triggered by lower oil prices and ample global supply