TheChek News Flow

-Anheuser-Busch InBev, the brewer of Budweiser and Michelob, is emerging as a potentially undervalued investment despite declining alcohol consumption in the US and Europe. Barron's argues that the company's expanding range of alcohol-free beers could provide a new growth opportunity, drawing a parallel with the transformation of soft drinks through diet products. Shares trade at a discount, suggesting investors may be underestimating the commercial potential of zero-alcohol beverages and the company's ability to adapt its established brands to changing consumer preferences.

-Henry McVey, head of global macro and asset allocation at KKR, argues that spending on the “security of everything” is becoming a defining investment theme. Governments and companies are directing more capital toward protecting supply chains, energy systems, technology infrastructure and strategic industries. McVey identifies India, Japan and Poland among the markets positioned to benefit. The thesis reflects a broader shift in corporate investment priorities as geopolitical competition and concerns about economic resilience encourage businesses to prioritize security alongside efficiency.

-The selloff in CoreWeave and growing scrutiny of Anthropic illustrate the financial pressures confronting the AI industry, particularly the enormous capital requirements of computing infrastructure. Investors are increasingly distinguishing between the technological promise of artificial intelligence and the ability of individual companies to generate sustainable returns. The central question is whether revenue growth can justify aggressive capital expenditure, mounting debt and elevated valuations as financing conditions tighten.

-Growing skepticism about AI investments has unsettled equity markets, but Barron's argues that the resulting declines could create buying opportunities for investors willing to tolerate volatility. The correction reflects concerns over excessive capital spending, stretched valuations and the sustainability of corporate earnings expectations. The investment case for buying declines depends on distinguishing companies with durable competitive advantages and strong balance sheets from businesses whose valuations rely heavily on continued investor enthusiasm.

-Oracle faces the possibility of a credit-rating downgrade as investors scrutinize the borrowing needed to support its ambitious AI infrastructure expansion. The concern extends beyond Oracle to the wider market for debt-financed data centers, where rising credit spreads are increasing funding costs even as Treasury yields decline. A downgrade could reinforce fears that the AI investment boom is creating financial vulnerabilities, particularly among companies committing large amounts of capital before the associated revenue streams have fully materialized.

-The S&P 500 dividend yield has fallen to just over 1%, its lowest level on record, reducing the income available to investors relying on traditional large-cap equity portfolios. The decline reflects elevated share prices and the relatively modest dividends paid by several of the index's largest companies. Barron's examines alternative income strategies as investors weigh higher-yielding equities and bonds against the need to preserve capital and maintain exposure to long-term market appreciation.

-Voters in more than a dozen American states will consider tax-related constitutional amendments and ballot measures in November, including proposals affecting higher-income households. The initiatives could influence investment decisions, household migration and state competitiveness, while providing a test of political support for more progressive taxation. Their outcomes may also shape the national debate over taxing wealth and high earners, particularly if similar proposals gain traction beyond traditionally Democratic states.

-European governments are intensifying efforts to defend domestic manufacturers against Chinese competition, particularly in the automotive industry. Trade barriers and negotiations over vehicle imports are creating opportunities for European automakers that have struggled with Chinese rivals' pricing and technological advances. The potential beneficiaries will depend on how Brussels balances industrial protection with the risk of retaliation against European exporters, particularly German manufacturers with substantial commercial exposure to China.

Emerging Markets

-KKR's Henry McVey identifies India as a significant beneficiary of the global shift toward securing production, infrastructure and supply chains. The investment opportunity reflects companies' growing willingness to diversify manufacturing and reduce exposure to geopolitical concentration risks. India's prospects depend on its ability to translate these strategic advantages into sustained investment, infrastructure development and productivity growth as multinational companies reassess the geographical distribution of their operations.

-Alcoa shares look undervalued following a sharp selloff, according to Barron's, after the aluminum producer reported stronger third-quarter earnings amid improving commodity prices and production. Net income more than doubled to $483M, while revenue rose 24% to $3.7B and adjusted earnings of $1.82 a share exceeded analysts' $1.51 estimate. Despite the improvement, the stock had fallen 24% this year and 43% over six months through Thursday. Barron's sees potential value in the depressed shares, although higher input costs, planned maintenance and uncertainty over commodity prices remain risks.

-Barron's introduces a proprietary “Schump” score to assess the disruptive potential of major companies, drawing on the economic concept of creative destruction. The exercise compares businesses ranging from Amazon to privately held SpaceX, examining how technological innovation and new business models challenge established industries. The approach emphasizes that disruptive capacity and investment attractiveness are separate considerations: a company can fundamentally reshape a market without necessarily offering shareholders an attractive return at its prevailing valuation.

Related: CRWV SPCX BUD AA RAGSX KKR ORCL KPE.NL KR5.DE ABI.BE GROLC.NL 1876.HK

Biotech: M&A restart into the midterms + Q4 catalyst and pharma event calendar

Stifel expects the pre-election M&A lull to end, possibly as soon as this week, with a further pickup after the Nov 3 midterms. Large deals are not announced into an election. Early-stage valuations have normalised, so pharma demand returns. Processes take 4-6 weeks minimum, so expect a lag. The driver is unchanged: the patent cliff still has to be covered. Dense tape into JPM in January.

Laurent Chekroun
Graham Advisors
+41 79 350 71 09
lc@grahamadvisors.ch

Tehran’s support is helping the Yemeni group mount its most potent attacks yet on the kingdom

DUBAI—Iranian support has helped the Houthis mount the most potent and sophisticated attacks yet on Saudi Arabia and its Yemeni allies, including help targeting drone and missile attacks, as well as training, intelligence and tactical guidance, people briefed on intelligence from Saudi Arabia and Yemen’s anti-Houthi alliance said.

The assistance has contributed to a Houthi offensive that has produced rapid territorial gains in Yemen. The militant group now controls the coastline on its side of the Bab al-Mandeb Strait, a chokepoint for Saudi oil exports, while it has launched attacks on Saudi oil tankers, energy facilities and airports, including a strike that killed at least 13 people last weekend in Riyadh.

Iran’s contributions highlight its ability to use its integration with Middle East militias like the Houthis to ratchet up pressure in the region—a challenge as President Trump and America’s Gulf allies try to wind down the war with Iran on favorable terms.

“The connection is very, very strong on the operational level,” said Danny Citrinowicz, a former head of the Iran branch for Israeli defense intelligence. “Iran has a major interest in the Houthis’ success. It harms Saudi Arabia, it raises the oil prices. Therefore there is a shared strategic interest that isn’t based on a client-patron relationship, but rather on strategic cooperation.”

Saudi Arabia has been fighting the Houthis on and off for more than a decade. The group surged out of the mountains in northern Yemen to take the capital, San’a, in 2014, and seized armaments, such as missiles, left behind by the fleeing government’s military. Saudi Arabia and the United Arab Emirates lined up with forces loyal to the government and fought back.

Iran sided with the militant group. It sent arms hidden on traditional dhow boats and brought in operatives from the Islamic Revolutionary Guard Corps and the Lebanese militia Hezbollah to train the Houthis to assemble their own missiles and drones and use them more effectively. When shipping arms by boat got interrupted by U.S. and Israeli strikes earlier this decade, Iran sent weapons to Yemen by submarine, European and Houthi officials said at the time.

The latest outbreak of fighting shattered a four-year truce and dates back to July, when Iran sent two flights to Houthi-controlled territory to ferry Yemeni pilgrims and officials with the militant group to and from Tehran for the funeral of former Supreme Leader Ali Khamenei. The flights were on Mahan Air, an Iranian airline under sanctions for ferrying cash, gold, weapons and personnel for the regime’s Revolutionary Guard.

The flights were carrying something else, too: Iranian paramilitary officers and a cargo hold full of weaponry including drone parts, missile guidance systems and impact detonators, according to people familiar with intelligence from Saudi Arabia and Yemen’s anti-Houthi alliance.

Discovery of the secret cargoes led Saudi-aligned forces to try to stop the second flight by bombing the runway of the Yemeni airport in San’a—lighting the fuse on the new conflict.

Mohammed al-Bukhaiti, a senior Houthi official and spokesman who said he was on the second flight, called the allegations about Revolutionary Guard officers and weapons an exaggeration to justify the Saudi attack.

“Portraying this civilian flight as an operation to transport military commanders and weapons is nothing more than an attempt to exaggerate the incident, justify the attack on San’a airport and deny citizens their right to travel,” he said.

The militants began building up positions threatening the Red Sea and Bab al-Mandeb in several locations, deploying missiles and radars with help from Revolutionary Guard officers inside Yemen, people briefed on regional intelligence said.

When the Houthi offensive got rolling in early September, the militants deployed large numbers of fighters backed by missiles and drones in a well-planned attack. Yemeni forces aligned with the internationally recognized government and their Saudi backers were caught off guard as the militants swept into the Red Sea port city of Mokha and took territory in and around the Bab al-Mandeb.

The Houthis’ tactics showed more sophistication than in previous fights, combining infantry assaults with attacks by missiles and drones, including first-person-view drones guided by fiber-optic wire, that pointed to training by Iran, a person with the forces opposing the militants said. Revolutionary Guard officers were on the front lines helping direct drone and missile attacks, another anti-Houthi official said.

The combined impact of the Houthi gains along the Red Sea and Iran’s threat to traffic in the Strait of Hormuz has expanded the threat to U.S. and allied interests, raising the costs of the war.

“It is helping Iran project power,” the Soufan Center, a New York-based security think tank, said of the Houthis’ gains.

The Houthis are fiercely independent. They make some of their own weapons, and hew to domestic priorities that, until the summer, kept them on the sidelines of the war between the U.S. and Iran. Researchers have found the Houthis now source parts for drones and missiles directly from China.

Bukhaiti, the senior Houthi official and spokesman, said the claims of Iranian help ignore the group’s own progress in developing its capabilities and are a baseless attempt to explain away the Saudi-backed forces’ losses.

“Iran does not interfere in Yemeni affairs,” Iranian Foreign Ministry spokesman Esmail Baghaei told reporters last month, saying the Houthis are “entirely independent actors who make their decisions based on their own interests.”

But the Houthis also operate as part of a network of Iran-backed regional militias that share know-how, weaponry, personnel and goals. The Houthis have set up joint operations rooms in Lebanon and Iraq to coordinate activities, a United Nations panel of experts found in 2024. During the fiercest fighting of the war with Iran, as many as half the attacks on Saudi Arabia came from inside Iraq.

Iran built up the militias into a self-described Axis of Resistance to project power and keep fighting away from its borders. Revolutionary Guard officers are assigned to support units involved in every aspect of Houthi military capability—drones, missiles, tunnels, logistics—people familiar with the Saudi intelligence said.

Members of the Revolutionary Guard recently praised the Houthis’ battlefield advances and air attacks on social media.

“The support the Houthis received from Iran and other Axis actors undeniably paved the way for the rapid-fire gains they’ve made over the past few months,” said Adam Baron, a Yemen expert and fellow with New America, a policy institute in Washington.

Hermès Is Targeting a New Emerging Market: The American Suburbs

The French brand is analyzing Zip Code data to zero in on pockets of growing U.S. affluence

WILMETTE, ILL.—It used to be that if wealthy Americans wanted to buy Hermès RMS -0.07%decrease; down pointing triangle, they made a pilgrimage to a store in Manhattan or Beverly Hills or a glamorous European city like Paris or Milan. Now, the brand is chasing customers by meeting them where they are: Short Hills, N.J., and Wilmette, Ill. The luxury-retail executives refer to such wealthy suburbs, as well as smaller American cities like Nashville, Tenn., and Austin, Texas, as “emerging markets.”

The store in Wilmette, which opened in August and features a Spanish revival-style facade and dragonfly motifs, was built in an open-air mall across from a CVS pharmacy and down the road from a Jewel-Osco supermarket. Luxury neighbors Oscar de la Renta and Thom Browne recently opened up stores in the complex, too. Once Hermès moves in, other high-end tenants tend to follow.

The U.S. is emerging as a rare bright spot for luxury. Demand in traditional luxury strongholds like China and the Middle East has softened. In the first half of this year, the strongest region for sales growth for Hermès was in the Americas, where revenue grew at 15%. In another major market, Asia excluding Japan, the company’s revenues grew by just 2%.

The luxury brand is one of the most valuable companies in the world. Its market cap has at certain points surpassed that of rival LVMH, despite being a single brand. But the headwinds of the industry are shifting.

The U.S. accounted for almost half of newly created millionaires in 2025, according to a June UBS report. That year, the country was home to 35.7% of the personal wealth in the world, ticking up from nearly 35% in 2024, UBS found in its analysis.

“Wealth in the U.S. today is widespread and diverse,” said Diane Mahady, Hermès’ chief executive for the Americas. “The data will show you that there are billionaires in 47 states.”

The company, she said, sees “a lot of potential in the U.S. in terms of the number of stores.” Hermès openings in the past few years include stores in Scottsdale, Ariz., and Princeton, N.J. It currently has 45 locations nationwide, including a new store in Manhasset on New York’s Long Island opening this month.

Mahady recently presented a map at a meeting of global Hermès leaders that showed bubbles of wealth across America. “You know, the term ‘emerging market’ is probably a misnomer,” she said. “You see that there’s opportunity everywhere.”

Physical retail has always been at the heart of Hermès strategy. Its 300 rarefied boutiques are where the high-end brand, known for its leather craftsmanship and status handbags, derives most of its sales. Hermès made about 16 billion euros, or $17.9 billion, in revenue last year.

The company opens only a few stores a year in part because Hermès typically has one Parisian architecture firm do the design and each shop has to be different from the stores that have come before it.

“Our strategy would boil down to the singularity of every location,” Mahady said. “We don’t want any two stores to be the same.”

When the Hermès team decides where to build, a few factors come into play. They look at data demographics. They do a ZIP Code analysis of where existing clients live and where e-commerce clients seem clustered. They analyze shopping patterns and adjacency to other lifestyle destinations, for example a fantastic coffee shop or restaurant.

When Hermès opened in a redbrick former hosiery factory in Nashville last year, there was a Soho House and some popular eateries nearby, but not many other retail options.

“Businesses are moving their headquarters to Nashville, then their executive population also moves to Nashville, and we start to say, ‘OK, this maybe can be a place where our clients are moving to or enjoying living there, and that can be a place for us,’” Mahady said.

For the location in Wilmette, the calculation was different. Hermès’ downtown 6,000-square foot Chicago location was only a 35-minute drive away.

Executives were trying to solve a puzzle: They could see some clients in Chicago’s affluent North Shore suburbs weren’t buying from the downtown Chicago store. That store tended to attract customers from neighboring states like Wisconsin, Minnesota and Ohio.

Hermès executives theorized that North Shore shoppers might like having a store closer to them, the kind of place they could stop by while walking the dog or in between errands.

Now that the 4,400-square foot Wilmette store is open, Hermès executives see much more local clientele there.

Hermès employees are quick to bring up that theirs is a sixth-generation family business and artistic stewardship is part of the job: All of the company’s leather handbags must be made in France by family decree, which in part explains the extraordinary bottleneck for their bags, including the Birkin, which can retail for well over $11,000.

But Hermès is trying to diversify. Leather goods and saddlery accounted for 44% of the brand’s revenue in 2025. It is expanding clothing, silks and shoe offerings in an effort to draw more shoppers.

Store directors occupy an important position in the effort to grow the customer base. Many have been with the company for decades, and lean on extensive personal relationships. Hermès moves talented salespeople around the country often and they are responsible for client outreach.

When store managers who work in close proximity—say, at the Chicago and Wilmette locations—go on their quarterly buying trips to Paris, they keep an eye on whether the inventory they choose overlaps.

“We’re almost like a loose confederation of small specialty stores, and I think that creates such a rich culture for us,” Mahady said.

Born in Horseheads, N.Y., Mahady got her first retail position in high school, with a part-time job at Tallman’s Department Store in Painted Post, a New York second-generation family business specializing in big and tall and selling Carhartt, Red Wing and Dickies to factory workers in the foundry across the street.

She was hired by Saks after college and spent 12 years in various buying and planning roles, ultimately becoming a vice president in the men’s sportswear division. She also worked for LVMH and Coach before joining Hermès in March of 2021.

Hermès didn’t operate like other luxury retailers, Mahady realized. She had a lot more free rein to experiment with different sales models, without a need for a centralized directive or a one-size-fits all solution.

But it was crucial to get the store mix right. Stores needed to be distinct, but complement each other.

Each is decorated with photography and art pieces from the family collection, many of which are equestrian-themed. Each has to feel homey: Some clients end up dropping in for coffee or champagne several times a week, Mahady said.

And each has to blend into the community, said Pierre-Alexis Dumas, Hermès artistic director. It’s an extension of an ethos championed by Dumas’s father, Jean-Louis, who ran the company for close to three decades.

“He always told me we have to be American in America. We have to be Japanese in Japan,” Dumas said at a recent opening of another store, in the Williamsburg neighborhood in New York’s Brooklyn borough. “We have to engage in a dialogue. We cannot just come as conquerors.”