At The Money: How Big Can Active ETFS Get?  (Dave Nadig , October 22, 2025)

 

Full transcript below.

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About this week’s guest:

Dave Nadig is President and Director of Research at ETF.com, and he shares with us how investors should navigate all of these new products. Dave helped design and market some of the first exchange-traded funds. He is the author of  “A Comprehensive Guide to Exchange-Traded Funds” for the CFA Institute.

For more info, see:

LinkedIn

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Substack

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Find all of the previous At the Money episodes here, and in the MiB feed on Apple Podcasts, YouTube, Spotify, and Bloomberg. And find the entire musical playlist of all the songs I have used on At the Money on Spotify

 

 

 

TRANSCRIPT:

Intro: Pump it up, When you don’t really need it. Pump it up, Until you can feel it

When we think about ETFs, we tend to think about large, cheap passive indexes. After all, those are the biggest ETFs from places like BlackRock, Vanguard, and State Street.

But when we look at all the new ETF launches, they tend to not be passive indexes, not be cheap, and not come necessarily from those three big companies. They’re active and they are involved in all sorts of different areas, that are off the beaten path.

To figure out what this means for you and your portfolio, let’s bring to figure out what this means for your portfolio. Let’s bring in Dave Nadig. He is the President and Director of Research at ETF.com and an ETF structural expert, really since the inception of the entire sector.

Dave, we’ve seen an explosion in the growth of not just new ETFs, but primarily active ETFs in all sorts of niches. What are you seeing in this space?

Dave Nadig: Well, you know, for a long time ETF meant cheap index, right? I mean you go back to SPY and then the first iShares products, and then even when we started getting into the big expansion of the two thousands, it was all just index, index, index. Then we got some smart beta where we tried to be a little bit more clever and it wasn’t really until the late 2010 cycle where Kathy Wood at Ark Invest, launched ARKK and really put herself out there as the portfolio manager in a way that I don’t really frankly remember seeing since the dot-com boom, right?

It’s been a long time since we’d had superstar managers on CNBC talking about, you know, pounding the table for a single stock. And Kathy did that and obviously had enormous amounts of success, has had some performance hiccups along the way, but that sort of went a little bit dormant during some of the pandemic when people really discovered trading.

What we’ve seen now is this resurgence – particularly to folks I’d mentioned Dan Ives Wedbush, people know him;  and Tom Lee from Fundstrat with his Granny Shots ETF, both of which have pulled in huge money,

Barry Ritholtz: Billions of dollars?

Dave Nadig: Billions and billions of dollars. And for the reasons you would expect because you’ve got smart people talking on podcasts and TV and on their own air and their own newsletters telling you why they own what’s in the fund. I know that sounds so dumb, but that’s why people love superstar managers because they can look and they can see Tom Lee on screen and he can sit there and say, yeah, this is why we like Bitcoin here. Here are the three firms we have in our fund because of it. We might be wrong, we might be right.

There’s a level of authenticity to that that I think is really appreciated. I also think the fact that they’ve doubled the S&P this year doesn’t hurt.

Barry Ritholtz: So to put some flesh on the bones here, Kathy Woods during 2020 was a huge Tesla and Bitcoin bull. The fund arc put up giant numbers, triple digit gains. Dan Ives has been an apple and an Nvidia bull, pretty much for as long as I can remember. He’s been a whole lot more right than wrong, and Tom Lee has been very constructive exactly when it paid to be constructive and stay bullish.

All three of those managers have really big followings. What does the resurgence of brand name active managers mean for the ETF space?

Dave Nadig: Well, first of all, I think it’s great for the ETF space because I think the dichotomy that we’d had where people thought of active as being a thing that happens somewhere else and ETFs were only passive, wasn’t helpful. I think we are moving towards a world where all of your exposures, for the most part are gonna be in an ETF wrapper. So by all means we should get active managers as part of this mix. And now we’ve got lots of them. You know, we’ve got a bunch of active funds from PIMCO was early, we’ve got lots in the bond space. You know, everything from Cumberland advisors to State Street with the double line and, and Jeff Gundlach. Lots of active managers in lots of different areas. I think that’s very healthy for the industry.

For the individual investor, it doesn’t necessarily make your life easier because as much as I happen to, like all the people we have talked about, Dan, Dom Lee and Kathy – personally as people I would have dinner with, the math is not on their side as an industry, right?

Barry Ritholtz: Why is that?

Dave Nadig: As an industry, we have to point out active managers categorically underperform over time. Doesn’t mean they all do, but it means that you’ve gotta be the special person who managed to pick the right active manager at the right time. That is a tough business and even the active managers running these funds will tell you trying to time when to get in and out of their own funds is gonna be tough. So that’s the problem is

that active management is tough to evaluate.

Barry Ritholtz: Yeah, and to put some numbers there, half of all active managers underperform in any given year. You go out to 10, five years, it’s 80% underperform; at 10 years it’s 90%. So it’s a tough road to hoe

But let’s talk about what makes active ETFs somewhat different than active mutual funds. And that data I referenced where all mutual fund data, mutual funds have to do a regular filing each quarter about their largest holdings, there has been a lot of back and forth about

how transparent active ETFs have to be versus other active funds. What’s the state-of-the-art today? What is the regulatory environment?

Dave Nadig: So there are solutions if you’re an active manager and you don’t want to tell everybody what you’re doing every day. There are solutions and there’s plenty of funds that have been launched on them. Fidelity has their versions. T Rowe Price has been one of the more successful funds out there. They have a pretty popular blue chip strategy called T Chip, which isn’t semi-transparent, meaning they’re not telling you the whole portfolio every day. They’re telling you once in a while and they’re giving the street just enough information to make a good market, not knowing all the information. So it’s sort of a, a clue, a bit of a hack to be semi-transparent.

This solves a problem for some asset managers. It doesn’t solve a single problem for an individual investor, right? So like I’ve never heard an individual investor say, golly, I wish I knew less about what I owned. Right?

Barry Ritholtz: Let’s talk about why it’s a problem for fund managers. Fund managers don’t buy a stock on a Monday and then they’re done. If they say, “Hey, we like XYZ, they’re buying that stock trying to take advantage of drawdowns buying it over days, weeks, even months. So there is a price advantage to the investor if the fund manager can be a little less transparent. Fair, fair description.

Dave Nadig: That’s the, that’s certainly the argument that the active management industry who does not wanna disclose what they’re doing would give you.

So you have articulated that side of the argument. Well, my counter to that would be if your strategy requires you buying securities where your action is going to move the market absent disclosure or absent, you know, obfuscation, then that strategy probably doesn’t belong in an ETF because you’ve got bigger problems, right? That means that you are in something small or a liquid or micro cap, at which point already, my question would be how do you plan on running a $10 billion ETF with that strategy?

Because you can’t really close an ETF. So if you are a special situations manager, if you are a really sort of obscure nichey finding those stocks, nobody else knows about manager, you do not belong in the ETF industry. I’ll just flat out say it as simple as that. The mutual fund structure or even better, a liquidity cap structure like a CEF or an interval fund is actually a better structure for those kinds of investments. Everybody else, CEF, honestly there’s so much liquidity. I think it’s tough to argue that somebody like Tom Lee is being particularly hurt by being transparent. He’s double, he’s at 30% for the year. The S&P500 is up 15%

Barry Ritholtz: CEF stands for closed end funds as opposed to ETFs.

Dave Nadig: Yes.

Barry Ritholtz: So, let’s talk about some other varieties of active funds that are a little bit out there. We see funds with options, futures, derivatives, inverse leveraged, and along with some wild income promises in an ETF wrapper. Tell us about some of those products.

Dave Nadig: Yeah, the, the interesting thing about those is most of them are very mechanical, right? So if you’re running a leveraged strategy, you’re not making any decisions, right? I’ve got Apple, I need 2X Apple, I’m gonna go to my swap counterparty overnight and they’re just gonna settle up my two x swap. That’s the whole management process.

But technically that’s gonna be an actively managed fund because you can’t just automate that whole process. Somebody still has to make a call about whether or not you’re teeing up the swap at this rate or that rate.

Same thing with almost anything in the option space, because the options are constantly changing and constantly repricing and constantly rolling off. It’s very difficult to create solid index product around actively or high frequency moving positions in the options market. So for convenience as much as anything, almost all of those type products you mentioned are listed as active products.

I refer to them as AiNOs — Active in Name Only, because they’re really, there’s no Tom Lee saying I really want Apple options today. There’s some guy generally Jay, pastor Elliot at title, sitting on a desk somewhere pushing a button to say yes, we want those options because the model says we need to roll. And that becomes active management.

And consequently, I mean it is active management, it has higher costs associated with it for a reason. Some of that is the profit that the issuer wants, but some of it is legitimately you need a trading desk with a bunch of people doing work.

Barry Ritholtz: So let’s talk about another niche. Illiquid alts, things like private equity, private credit, private debt, real estate. Are we gonna see those asset classes that really don’t trade on their own — because they’re not public – are we gonna see those in an ETF wrapper?

Dave Nadig: We’re starting to, we’re starting to the, the canary in the coal mine here was some products from State Street, the big ones, priv, PRIV for private, which has a bunch of Apollo private credit in it. Generally pretty short maturity stuff, two, three year kind of things and, and fairly straightforward, understandable private credit. Intel needs to bill a fab in Ireland. They go get a loan, Apollo gives ’em the loan, you get a slice of it.

Nothing super complicated, nothing super interesting either. I mean, it’s not, you’re not getting 20% yields out of or anything like that. You’re getting some marginal increase in the yield you would get if you were simply investing in say, junk or short term co corporates.

So those products are starting to come to market. The concerns I have about them is they’re just gonna be untested. We’re not gonna really know how they’re going to perform when the markets go hinky, right?

And, and also what does that even mean? Like if we had a corporate bond blowout and we saw a bunch of triple C stuff start defaulting, I have no idea what the impact on Apollo private credit issued in Ireland to Intel is going to be when that happens.

I also have no idea how they’re gonna respond if half the fund decides they want out on that Tuesday and now you’ve got a bunch of illiquid stuff, which can be up to 35% of the portfolio that literally the only buyer is Apollo.

Technically they’ve got answers to all those questions. I’m, and I read all the answers to those questions and I’m sort of not convinced, but it’s one of those things that if you wanna be, if you wanna be out there on the edge, by all means go ahead. But I think the private securities in the daily liquid vehicle has not really been through the ringer yet, so I remain very skeptical.

Barry Ritholtz: So let’s talk a little bit about crypto and, and how that’s going to impact in both investor behavior and portfolio construction. Last year, BlackRock, was it last year or this year, BlackRock introduced IBIT. 2024. So it’s a year ago coming up on a 100 billion dollars in assets, probably the fastest ETF ever to do that. What does this mean? And explain the concept of tokenization.

Dave Nadig: Yeah, so what it means is all of these assets are going to be more and more available to the average Joe like us who’s just trading in their Schwab account or something like that. And because the SEC has said they’re gonna make it very easy very soon, we’re gonna have every major coin that people know about a Solana and Avay whatever. There’ll be a sleeve of that in an ETF that you’ll be able to trade. That’s all great.

Then having those building blocks is awesome, also because it will now allow portfolio managers to create portfolios of those individual securities, which right now you can’t even do, you can’t even buy an index right, of the top 10 coins because there isn’t a target for the top 10 coins to invest in. So that will be fun when we get that, and I suspect you’ll see firms like Bitwise and BlackRock who’ve got some real bonafides in the crypto management space, start bringing pretty institutional active management products there. That’s probably a 2026 side.

Long term though, if we wanna talk 10 years from now, that’s when crypto starts becoming an interesting competitor to the ETF space. I think we will eventually end up in a world where how you move your ownership of Apple around is going to happen. Not by going to the New York Stock Exchange and exchanging ledger entries to move around your Schwab account. Instead, you’re gonna have an actual token. You’ll be able to look at the serial number of it, you’ll be able to put it in a wallet and say, “Oh no, this is worth a hundred shares of Apple.” And that wallet will be able to directly move that security to your wallet without any exchange being part of the process.

Most of it will happen, like crypto happens now on giant exchanges because price discovery. But just like with Bitcoin, I could walk up to you when we could engage in a direct transaction, you’re gonna start seeing that with other securities.

It’s happening more in bonds and real estate now. To do it in equities is gonna require some actual legislation and we don’t make so many laws these days. So that may take some time. Instead, what we’ll do is we’ll wrap a lot of stuff. So you, you’ll probably hear about things like Wrapped Apple and wrapped Cisco and what that’s gonna be is a token that owns the security in some sort of trust pool. That’s a baby step, but that’s what we’ll start hearing first. So be skeptical when people say we’re tokenizing everything ’cause it’s gonna be a decade.

Barry Ritholtz: I had a conversation with Jose Minyana who is the head of wealth strategies at investment Giant BNY (Bank in New York) and he was saying, Hey,

we went from T+3 to T+1, meaning it used to take three days to settle a trade. Today it’s gonna take one day. If we wanna get to T+0, we have to really have confidence in both sides of the transaction. And theoretically, tokenization solves that problem.

Dave Nadig: It does. Although think about how many big transactions in the world that we could be doing easier. We deliberately put breaks on, think about buying a house…

Barry Ritholtz: Wiring money?! 

Dave Nadig: BarryRight? So it, there’s, you know, the, there’s escrow, there’s secondary inspection processes, there’s separate contracts around just the intention to buy and sell. So the bigger and more interesting a transaction gets, the less T zero is actually a good idea, right? I mean, I, the, the thing I always say about T zero is, did you really want T zero during the flash crash in 2010? Like, did you really want no recourse for that? That fat fingered billion dollar pennies on the dollar trade? No. You wanted this ecosystem that protects you from a bad actor spoofing something into the system. So we we’re gonna have a lot to evaluate as a market, what we actually want. The idea of slowing down markets has actually gotten a lot of traction, like speed bump markets, things like that, that, that are actually pushing against this idea of instantaneous settlement for anything. I don’t even want instantaneous settlement for my bank account. I like knowing that I’ve got somebody I can call when something goes wrong.

Barry Ritholtz: So, so you’ve written about volatility and liquidity laundering. Explain what this is and are these really gonna be ETFs?

Dave Nadig: They already are, man. So volatility laundering is simply moving volatility from one bucket to another and charging something for the privilege of doing that. Right Now you can buy something like MSTY, which will give you a hundred percent income return on a MicroStrategy position through the magic of options, right? And it creates a synthetic long position. Then it does a synthetic covered call against the synthetic long position, and then it does a whole lot of return of capital to give you your money back and promises you this endless stream of high distributions, a high percentage distributions that is volatility laundering.

Because what you are actually doing is you are trying to sell other people the volatility of MicroStrategy, which is probably not a fantastic idea because it, the vol of all is high in those cases. So you are being the person picking up the, in this case, quarters in front of the steamroll, not the pennies, but you’re still exposed to MicroStrategy collapsing and going to nothing. That volatility laundering is what all of these options strategies are really doing.

Barry Ritholtz: So really to wrap this up, the bottom line is bring the same level of common sense and scrutiny to new ETFs that you would to any financial product.

Make sure you understand what the product is, how it generates gains, the sort of risks you’re incurring, especially with these exotic products — And the costs. Are these products worth spending 75, 100, 125 basis points more than what you would get for a plain vanilla passive index that seems to be dominating the asset allocation space and the space for ETFs? Be smart, be thoughtful, do your homework.

I’m Barry Ritholtz. You’ve been listening to Bloomberg’s at the Money.

 

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Find our entire music playlist for At the Money on Spotify.

 

The post At The Money: How Big Can Active ETFS Get? appeared first on The Big Picture.

Tesla Earnings Preview: Record Deliveries, Margin Pressure And AI In Focus

Tesla is set to report its third-quarter 2025 earnings results after the market closes today. Wall Street’s focus this quarter is squarely on whether record deliveries and energy deployments will translate into meaningful profit growth amid persistent price pressures and an increasingly competitive EV landscape. Additionally, Robotaxi, AI and robotics will be in focus for investors looking to model the company's future. 

Revenue and EPS Expectations

Analysts expect Tesla to post earnings of $0.52 per share on revenue of $26.27 billion, while the so-called whisper number stands slightly higher at $0.61 per share. According to Bloomberg’s consensus, adjusted EPS is estimated at $0.54, with total revenue of $26.36 billion, gross margins near 17.2%, operating income of $1.65 billion, free cash flow of $1.25 billion, and capital expenditures around $2.84 billion.

If Tesla meets expectations, the company will post its highest quarterly revenue ever—powered primarily by its record vehicle deliveries. Earlier this month, Tesla disclosed it produced 447,450 vehicles and delivered 497,099 during the quarter, the highest in its history. That total included 481,166 deliveries of the Model 3 and Model Y and 15,933 deliveries of other models. Tesla also confirmed deployment of 12.5 GWh of energy storage capacity during the period, another record for the company. These figures have solidified expectations for top-line growth, even as margins continue to compress.

On the production side, Tesla built 447,450 vehicles, down 4.8% from a year earlier and just under the consensus of 450,313. Model 3/Y production totaled 435,826, a 1.8% decline but still ahead of forecasts. Production of other models slipped to 11,624, down 13% from the prior quarter.

Despite those records, Wall Street does not expect record profits. Tesla earned $0.72 per share during the same period last year, and consensus estimates now suggest an earnings downtrend driven by ongoing price cuts and cost competition across the global EV market. The company’s earnings per share have fallen steadily since peaking in 2022, and analysts expect full-year 2025 EPS of around $1.75, down from $2.28 in 2024 and $3.12 in 2023.

Auto Focus: EV Credit Pull Forward and Cheaper Model Y

Tesla’s automotive business still dominates its results, accounting for the majority of revenue despite Elon Musk’s frequent characterization of the company as an AI and robotics leader. For now, the automaker’s financial health remains tightly linked to the number of vehicles it delivers, not autonomous driving or humanoid robots. 

Recall, Tesla unveiled a cheaper Model Y today weeks ago with prices starting at $37,990–$39,990, about 15% below the previous base model, as the company works to reverse slowing sales and lost U.S. tax incentives. Elon Musk has long promised a mass-market EV, though he scrapped a $25,000 car plan last year. Still, he argued in July: "The desire to buy the car is very high. (It's) just (that) people don't have enough money in the bank account to buy it. So the more affordable we can make the car, the better."

While Tesla just had a record quarter, global sales are down about 6% this year, and analysts expect U.S. EV sales to fall sharply after the credit’s removal.

What Analysts Are Expecting

Analyst opinions ahead of tonight's report are mixed but focused on several key themes. Cantor Fitzgerald’s Andres Sheppard said investors will be watching for “several upcoming key material potential near-term catalysts,” including the rollout of Robotaxi programs in Texas and California, ramp-up of lower-cost Model 3/Y variants, FSD adoption in China and Europe, and updates on the Optimus humanoid robot and future Cybercab launch. Cantor maintains a $355 price target, implying roughly 20% downside from current levels.

Goldman Sachs analysts are watching five key areas in tonight’s call: vehicle delivery guidance, automotive profit margins, progress on robotaxis and FSD, growth in the energy business, and fresh details on the Optimus robot. Goldman’s price target is $425 per share with a Neutral rating, expecting Tesla to have delivered about 475,000 vehicles in Q3, slightly below the reported total.

RBC is more bullish, setting a $500 price target based on a “sum-of-the-parts” valuation that assigns increasing weight to Tesla’s AI and robotics divisions. RBC analyst Tom Narayan recently raised his target after management discussions around Optimus production, which the bank believes could represent a $9 trillion total addressable market over time. Morningstar’s Dave Sekera, meanwhile, is looking for updates on Robotaxi timelines and Tesla’s recently launched lower-cost Model 3 and Model Y variants, suggesting that affordability could be critical for reigniting demand.

Wedbush’s Dan Ives continues to frame Tesla’s next chapter as the “AI era,” emphasizing that “the most important chapter in Tesla's growth story is now beginning with the AI era now here.” Ives believes autonomous driving and robotics could add $1 trillion in value to Tesla’s story in the coming years, positioning the company at the intersection of mobility and intelligence.

Despite the futuristic focus, some are also wary about Tesla’s fundamentals. The company recently recalled nearly 13,000 Model 3 and Model Y vehicles due to a defect that could cause sudden battery power loss, forcing in-person repairs rather than software fixes. The recall underscores the tension between Tesla’s cutting-edge ambitions and its ongoing manufacturing and reliability challenges.

Musk's $1 Trillion Pay Plan Would Be Helped By A Bullish Report

Also in focus will be Elon Musk’s proposed new pay package, valued at nearly $1 trillion in Tesla stock, and which has ignited opposition from unions, pension funds, and governance watchdogs ahead of a shareholder vote next month. The plan would boost Musk’s voting control to about 25% and extend his leadership for another decade.

Proxy firms ISS and Glass Lewis have urged investors to vote against it, while supporters on Tesla’s board say it’s needed to retain Musk’s focus and vision. The vote will test shareholder confidence in Musk’s leadership as Tesla’s growth slows and scrutiny over governance intensifies.

In the short term, analysts and investors alike expect a bullish tone from management on the call. Tesla strategically delayed its annual shareholders meeting to early November, likely to coincide with this strong quarter ahead of key votes on Musk’s compensation and board seats. With tax credit expirations pulling demand into Q3, Tesla has good reason to spotlight its record quarter before potentially facing a tougher demand environment in coming periods.

Tyler Durden Wed, 10/22/2025 - 14:40

Today, in the Calculated Risk Real Estate Newsletter: 2nd Look at Local Housing Markets in September

A brief excerpt:

The NAR is scheduled to release September Existing Home sales on Thursday, October 23rd at 10:00 AM. The consensus is for the NAR to report sales of 4.06 million SAAR. Last year, the NAR reported sales in September 2024 at 3.90 million SAAR.

Housing economist Tom Lawler expects the NAR to report sales of 4.00 million SAAR for September.

September sales will be mostly for contracts signed in July and August, and mortgage rates averaged 6.72% in July and 6.59% in August (lower than for closed sales in July).

In September, sales in these markets were up 8.2% YoY. Last month, in August, these same markets were down 2.5% year-over-year Not Seasonally Adjusted (NSA).

Important: There were one more working days in September 2025 (21) as in September 2024 (20). So, the year-over-year change in the headline SA data will be lower than the NSA data suggests (there are other seasonal factors).
...
More local markets to come after the NAR release.

There is much more in the article.

All That Is Gold Does Not Glitter

By Michael Every of Rabobank

With the BoE Governor warning about pre-2008 bubble conditions in private credit; UK public-sector borrowing coming in higher than thought; Canadian CPI hotter; yet gold -6% Tuesday, its biggest sell-off since 2013, with silver -8.7%, and both -2% again this morning; and Bitcoin soaring as gold fell, then dropping in tandem, there is a lot going on. And I don’t mean GOP leaders are eyeing a new stopgap spending measure to end the government shutdown. Rather:

"ECB's Lane flags dollar risk for banks amid tariff turmoil’ as “Eurozone banks may come under pressure if dollar funding were to dry up,” as their dollars accounted for 7 - 28% of liabilities and 10% of assets in Q2, all reliant on borrowing from US banks. Reuters notes central banks are toying with the idea of pooling their dollar reserves to backstop banks in case the Fed were to withdraw its emergency swap lines. But any such cooperation would be politically difficult and insufficient given the multi-trillion-dollar size of the international market for dollar loans. This is a point of US economic statecraft strength flagged here repeatedly: more so if the Fed is politicised.

"Bessent’s Plan Runs Short on Time to Line Up Argentina Financing’ (Bloomberg) where the market doubts he can find the second $20bn of his $40bn package from the private sector before Sunday’s key election as ‘The US Is Trying to Drive a Wedge Between Argentina and China’ (WSJ).

"China eyes 3-way currency swap with Japan and South Korea amid Trump’s tariff war’ (SCMP) as “Beijing seeks to strengthen regional financial ties and boost yuan use as US trade pressures weigh on East Asian economies”. This would be the same Japan and China rearming against threats from each other, and the South Korea focused on North Korea that is now friendly with China again? Moreover, Blomberg says Ethiopia is in talks with China to convert its dollar loans to CNY, which follows the lead set by Kenya: lower rates – and different pressure points.

Politico underlines ‘Greenland could become the biggest car crash in Atlantic relations’, as “If the US President presses ahead… others can and will follow elsewhere.” Yet what could Europe do given the situation Lane just underlined and its need for US exports, LNG, tech, and arms?

Plans for a Trump-Putin summit in Budapest have been shelved, as Trump said it would be a “waste of time’’ given Russia is clinging to territorial ambitions that make a peace deal with Ukraine impossible. So, more war, with more tit-for-tat blows to Russian and Ukrainian energy infrastructure: and elsewhere? Blasts just hit both Romanian and Hungarian oil refineries tied to Russia. This time last week I was telling clients to prepare for the fat tail risks of deliberate targeting of upstream commodity supply chains as part of a Grand Macro Strategy to strengthen one bloc over another.

Trump again said Modi agreed to ease Russian energy buys, but scepticism remains there; and that’s as India reestablished relations with the Taliban as Afghanistan fights Pakistan.

As Trump threatened Hamas again, VP Vance is “optimistic” the Gaza peace deal will hold, and said the US won’t force Israel to host foreign troops, while US Special Envoy Kushner stated Israel and Hamas are “transitioning to a peacetime posture.” Perhaps: but note the Saudi Crown Prince is expected to visit Trump at the White House on November 18, which flags something is afoot.

The UK Foreign Office dismissed as “nonsense” claims that Mauritius was in discussions with China over selling it one of the Chagos Islands for $10bn, which the UK is handing over shortly alongside a £30bn bill to retain the century lease on its critical airbases there. The FO stated foreign forces are prohibited from building bases in the archipelago as part of the treaty: and treaties are always fully complied with is obviously the UK view as the global system crumbles.

"Colombia's president embraces war of words with Trump’ (AFP), saying “President Trump doesn't like us being out of his control… they want a coup against me." We still wait to see what the new, “substantial” US tariffs on Colombia will look like.

"Trump Sees Successful Xi Meeting, But Allows It Might Not Happen" (Bloomberg), again underlining 155% tariffs are going live from 1 November if he doesn’t get the deal he wants.

"How US-Australia rare earth deal aims to loosen China’s grip on critical minerals market’ (SCMP), as ‘China fires warning at Australia over ‘bloc confrontation’’ (Australian) for doing so.

The EU is to stockpile critical minerals amid supply chain threats. From whom, when they aren’t easily available right now? That’s as the ‘Dutch seek solution to stand-off with China over chipmaker Nexperia, while carmakers fret’ as ‘VW says production pauses planned, denies chip crunch as reason’ (Reuters). If chips aren’t available soon then that correlation will be obvious.

"South Korea Senior Officials to Visit US Again for Tariff Talks’ (Bloomberg) as Seoul said it wants to produce more of its own weapons – who doesn’t? And with whose rare earths?

Transcending all of the areas above, the FT reports ‘US army taps private equity groups to help fund $150bn revamp.’ On one hand: “This special military operation was brought to you by Snickersnacks.” On the other, as @michaeljmcnair notes, the Office of Strategic Capital (OSC) and International Development Finance Corp (DFC) could be mutating into a private equity-style sovereign wealth fund vehicle. Previously, OSC and DFC credit/equity investments were scored at face value, but a new accounting rule means only the net present value of the expected subsidy is charged to the federal budget so a defence deal may run:

1. DFC/OSC puts in 10% equity or a thin guarantee covered by Treasury debt;
2. Crowd in SWFs/PE funds for the 90% - a lot of this has been pledged already via tariff threats;
3. The OBBBA lets the DFC retain and redeploy proceeds/dividends, not return them to Treasury.

In short, this would be what I call financial ‘fartcraft’ to transform the US for warcraft via fiat not gold, even if gold -- and Bitcoin -- may play a role in the process later. That still needs the hard physical supply side, which is where deals with Australia and threats to LatAm come in – and then all the market disruption and inflation (and deflation) that comes with it.

All that is gold does not glitter; Not all those who wander are lost

Meanwhile, the FT op-ed bewails ‘The hard task of exiting the populist trap’, flagging Argentina as a bad role model, which the US is following: fair comment, perhaps. Yet a French mega opinion poll in Le Monde notes “France's democratic crisis is showing increasingly alarming symptoms.” Indeed, the numbers are shocking:

Of those surveyed, 96% feel dissatisfied or angry about the state of the country; 90% believe it is in decline; 81% don’t think democracy is working for them; 66% think most politicians are corrupt; 71% think their living standards are getting worse; 57% have trouble making ends meet; 85% think France ‘needs a real leader to restore order’; and 63% say they don’t ‘feel at home any more’. That sounds like FT-friendly technocratic centrism leads to populism, as was flagged way back in 2019’s ‘The Age of Rage’ – and this survey was taken before France’s crown jewels were humiliatingly stolen from the Louvre in minutes, with no official resignations in response yet.

FT chief economics commentator Martin Wolf, we are *still* waiting for your promised blueprint for a global economic system that works sustainably and inclusively for everyone: don’t keep us in suspense any longer!

Tyler Durden Wed, 10/22/2025 - 14:25

The post The Economics of Trade and Trump’s Little Water Pistol appeared first on CEPR.

A Dip Below $100k "Seems Inevitable", But StanChart Sees Bitcoin At $200k By Year-End

The 10 October US-China trade war fear-driven selloff put paid to any further push higher in crypto, according to Standard Chartered's Geoffrey Kendrick, and the question now is how far does Bitcoin need to fall before finding a base?

On that Kendrick is now thinking a dip below 100k seems inevitable, although the dump may be short-lived. 

To determine when the turn higher comes, which I think it will, I am watching:

Gold v Bitcoin flows.

Yesterday’s sharp gold selloff coincided with a strong intra-day bounce in Bitcoin. This was presumably a sell gold, buy Bitcoin flow.

Medium term I expect more of this, and further such evidence would be constructive for a Bitcoin low being formed.

Gold has been outperforming Bitcoin a lot recently (as chart), something which has perhaps started to turn

Fig – Bitcoin/gold ratio

Liquidity type measures.

There are several of these which have mostly been getting tighter. The question for me is when does the Fed see them as “tight” and react by either acknowledging said measures or stopping QT...

Fig – USD Liquidity proxy

On a side note, liquidity on a global basis signals considerable upside for crypto...

Technicals

Although I am not a technical analyst I note that the 50 week moving average in Bitcoin has held since early 2023 (when Bitcoin was 25k and I forecast it to reach 100k by end-2024)

Stay nimble, Kendrick warns, and be ready to buy the dip below 100k if it comes. 

It may be the last time Bitcoin is EVER below 100k.

As CoinTelegraph's Zoltan Vardai notes, despite the volatility, he remains confident that Bitcoin will rebound as markets stabilize.

“My official forecast is $200,000 by the end of the year,” he told Cointelegraph during an exclusive interview at the 2025 European Blockchain Convention in Barcelona. 

Despite the “Trump noise around tariffs,” Kendrick said he still sees a price rise “well north of $150,000” in the bear case for the end of the year, assuming the US Federal Reserve continues cutting interest rates to meet market expectations.

Kendrick said the aftermath of the liquidation event may take several weeks to settle, but investors may soon view the sell-off as another accumulation phase.

This could ultimately become the next significant “buying opportunity” for investors, he said.

Kendrick predicted continued inflows to Bitcoin exchange-traded funds (ETFs) as the primary driver of Bitcoin’s price momentum for the rest of the year.

Bitcoin ETFs recorded a sharp rebound in flows this week after several days of politically driven outflows.

And sure enough, on Tuesday, the funds saw $477 million in net positive inflows, according to Farside Investors, breaking a four-day losing streak.

The current dip will prepare us for another leg up, “mostly on the back of the ETF inflows,” Kendrick said, adding:

“There’s no reason for them to stop. The US government shutdown, Fed rate cuts. All that story is playing out already in gold.”

Gold’s recent all-time highs will also translate into more momentum for Bitcoin, as its safe-haven asset narrative reemerges, he added.

Tyler Durden Wed, 10/22/2025 - 13:35

Impressive 20Y Auction Sees Jump In Foreign Demand, First Stop Through In Months

With market risk mostly off, especially among high beta momentum stocks, bonds have again emerged as a flight to safety and this was certainly on display during today's auction of 20Y paper.

The reopening of 19 Year, 10 Month paper (cusip UN6) was the week's only coupon auction, and was issued flawlessly and without a glitch amid solid -mostly foreign - demand; the high yield of 4.506% was up notably from last month's 3.953% but more importantly, stopped through the When Issued 4.518 by 1.2bps, the first stop since July and followed two weak, tailing auctions.

The bid to cover surged to 63.6% from 56.4%, but was still slightly below the six-auction average of 67.3%. And with Directs taking down 26.3% (just above the recent average of 23.1%), Dealers were left with 10.0%, which was also in line with the average of 9.6%.

Overall, this was an impressive auction, although to be expected in a day when suddenly everything in stock world is coming unhinged, and not surprisingly yields slumped back toward session lows.

Tyler Durden Wed, 10/22/2025 - 13:24

The "Triumph Of Big Government" Created The Current Sovereign Debt Crisis

Authored by Daniel Lacalle,

A few years ago, The Economist published an issue called “The Triumph of Big Government,” highlighting the rise of government intervention as the main driver of economic recovery and growth. The years of budget and deficit control were over. Mainstream economists hailed the decisive action of governments in developed nations, committed to spending to boost growth and abandoning the old “austerity” principles.

Only a few years later, The Economist publishes an issue titled “The Coming Debt Emergency,” mentioning the enormous deficit and debt problems in France, the United Kingdom, Japan, and the United States.

What happened? How can long-term bond yields rise when central banks are cutting rates? How did government debt lose its place as a reserve asset? Easy. Developed economies’ governments of all colours, from Biden and Sunak to Macron and Ishiba, bought the MMT fallacy that “deficits do not matter” and “sovereign nations can issue all the debt they need without risk.” Virtually all international bodies hailed statism as the global solution. However, in 2022, global central banks and investors started abandoning sovereign debt as a reserve asset and decided to add gold.

Developed nations have surpassed the three limits of indebtedness: the economic, fiscal and inflationary limitations. When more public debt creates lower economic and productivity growth, the economic limit has been surpassed. When interest expenses and deficits continue to rise despite rate cuts and higher taxes, the fiscal limit collapses. Additionally, when governments become addicted to issuing more debt in any part of the cycle, with diminishing investor demand, inflation becomes persistent.

No one really believes developed nations’ governments will control their public finances, and constant tax hikes and excessive regulation have choked the productive economy.

Employment is showing the negative effect of the “triumph of big government”. Bloating government spending may disguise GDP but does not create jobs.

Even as government spending continues to artificially elevate headline GDP figures, global labour markets are showing weakness. According to S&P Global’s October 2025 PMI Bulletin, the global economy continues to show headline growth, but employment growth has stalled, and productivity improvement has declined sharply.

S&P Global’s global composite PMI stood at 52.4 in September, its lowest level in three months. Companies are attempting to manage high taxation and regulatory burdens, resulting in stagnant employment levels and output growth. Employment was broadly flat across both manufacturing and services sectors, a sign of declining confidence and cost-saving across advanced economies.

The eurozone is a key example of how big government destroys employment growth, real wage improvements and investment. The modest improvement in activity comes with a decline of hiring and investment. The United Kingdom’s tax hikes and net zero policies have decimated the industry and obliterated employment growth.

These evident deteriorating employment trends come in a period of artificial GDP growth. Government spending is now one of the leading factors in “economic growth” in France, the UK, Germany, Japan and other major economies. Excluding the government spending increase, most of these economies are in recession. S&P Global’s October 2025 Global Economic Outlook signals that output growth is increasingly supported by governments’ fiscal irresponsibility rather than private sector dynamism. The report states, diplomatically, that “looser fiscal stances in the US and Germany are growth-supportive” but warns that the “fragility of sovereign debt markets in many of the world’s largest economies remains a key source of risk.” State-driven “investment” programmes in the eurozone and the UK have partially offset weak private demand. An enormous trail of debt remains, leading to further tax increases.

Government spending and persistent inflation bloat nominal growth, while real economic productivity and private labour opportunities deteriorate. The erosion of value-added generated by the productive economy is alarming. Considering that major governments are borrowing heavily to fund what they call stimulus measures, and they refuse to reduce current spending, GDP figures are being inflated by debt-financed public sector demand.

This labour market stagnation highlighted by S&P Global coincides with a significant slowdown in real wage growth. Although headline CPI has eased in most advanced economies, real inflationary pressures are elevated and continue to erode disposable income even using official CPI figures. This situation leads to weak real consumption and worsening demographic trends.

Big government means low growth, high taxes, weak real wages, and a persistent productivity drag. Malinvestment and excessive government intervention are now the norm in major economies. SP Global explains that “the most interest rate–sensitive sectors, such as manufacturing and construction, account for a smaller share of economic activity in advanced economies than in the past.” However, the problem is not just interest rates but rising taxes and insurmountable regulations that dampen activity in high multiplier sectors.

The 2030 agenda, along with the so-called green regulations and net zero policies, has resulted in capital misallocation and distortions in policy. Thus, productivity gains are increasingly limited to digital and financial sectors.

Fiscal expansion now drives most of the headline economic activity in developed nations with negative side effects everywhere. The debt service burden is crowding out productive expenditure, high taxes limit investment and hiring, and regulation makes the economy stagnant. As sovereign yields climb, countries like France and the UK are already facing “vicious cycles” of slower growth and higher financing costs.

The reader may think that this is the result of incompetence and malinvestment, and if governments spent wisely and invested in productive activities, all would be fine. No. Central planning never works, even if there are some allegedly beneficial intentions. Keynesianism and social democracy always fail. Why are governments not worried? Because they can raise your taxes and present themselves as the solution.

The solution is simple. Less government means more growth.

Tyler Durden Wed, 10/22/2025 - 13:00

Another 'Cockroach': Subprime Auto-Lender PrimaLend Enters Bankruptcy

Another cockroach?

PrimaLend Capital Partners, which provides financing to auto dealerships that cater to subprime borrowers, filed for bankruptcy after months of negotiations with creditors following missed interest payments on its debt. 

Its products include financing for receivables, real estate and automobile inventory, according to its website.

This follows the sudden collapse of Tricolor (subprime auto lender) and First Brands (after-market auto parts supplier) with PrimaLend listing estimated assets and liabilities below $500 million each, according to court documents it filed in the Northern District of Texas. 

In a press release, PrimaLend said it was pursuing a sale of the business in bankruptcy court and would continue to fund and service loans to its own borrowers.

PrimaLend finances “buy here, pay here” auto dealerships, which serve low-income borrowers.

“No debt is being called due or accelerated as a result of this process,” PrimaLend’s chief executive officer, Mark Jensen, said in the release.

“We deeply value our dealer-borrower relationships and look forward to continuing to serve the buy-here-pay-here industry as we move forward.”

The company has received a commitment for bankruptcy financing to help fund operations in Chapter 11 from existing lenders, according to the release.

None of this should come as a surprise since we have seen auto loan delinquencies soar and now repossession breaking records.

Building a business on the back of lending to illegal immigrants to enable the purchase of a rapidly devaluing asset - brilliant!

There are many more dominoes left to fall (or cockroaches left to discover) in this space - the question is, will there be contagion? Even Bank of England Governor Andrew Bailey chimed in this week, warning that the First Brands (and similar Tricolor) collapses could signal "much bigger financial problems" ahead.

Tyler Durden Wed, 10/22/2025 - 12:40

As Auto Loan Delinquencies Soar, Repossessions On Track To Break Record

On Friday we noted that auto loan delinquencies among low-tier consumers have surged 50% since 2010, as new vehicle prices have spiked over 25% since 2019 and 20% of borrowers forking over at least $1,000 per month for their depreciating asset (at 9% APR, no less). 

Via CBS / Vantagescore

And so it makes perfect sense that with over 100 million auto loans in America, the number of cars being repossessed is approaching records.

According to data from the Recovery Database Network (RDN), there have been over 7.5 million repossession assignments in the United States so far this year - meaning, authorizations given to an agency to recover a vehicle on behalf of a lender. This figure is on track to exceed 10.5 million by the end of the year. Of note, an assignment =/= a repossession, as repo men aren't always successful.

Yet despite recovery ratios having fallen in recent years, over three million cars could be repossessed this year, a level not seen since 2009. 

Paycheck to Paycheck

According to a Goldman survey published earlier this month, around 40% of Americans under the age of boomer report living paycheck to paycheck as inflation continues to erode purchasing power.

For those living primarily paycheck to paycheck, the top issue cited by 87% of those asked was "Too many monthly financial expenses" - like an auto loan. In second place is financial hardship (81%) such as home repairs, followed by credit card debt (77%). 

Meanwhile, Fitch reports that 6.43 percent of subprime auto loans were at least 60 days past due in August, while Cox Automotive reported last week that the average transaction price for a new vehicle hit $50,000 last month - the highest level eva. 

"Auto finance is at a breaking point, as Americans owe over $1.66 trillion in auto debt. Delinquencies, defaults, and repossessions have shot up in recent years and look alarmingly similar to trends that were apparent before the Great Recession," wrote the Consumer Federation of America, a nonprofit advocacy group.

"Cars are more expensive than ever, due in part to economic factors, but also due to the fraught experience of buying and financing a car. Dealers and lenders have long engaged in deceptive and predatory practices that jack up prices for car buyers in order to line their pockets."

Tyler Durden Wed, 10/22/2025 - 11:30

'Worst Of The Worst' Illegal Immigrants Arrested In Memphis, DHS Says

Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

Immigration and Customs Enforcement officers have arrested multiple “worst of the worst criminal illegal aliens” in Memphis, Tennessee, as part of President Donald Trump’s push to crack down on violent crime and make the city safe, the Department of Homeland Security (DHS) said in an Oct. 20 statement.

FBI agents patrol Beale Street in Memphis, Tenn., on Oct. 5, 2025. Travis Gillmore/The Epoch Times

Arrested individuals include alleged pedophiles, gang members, drug traffickers, domestic abusers, and rapists, according to the agency.

Among the arrested are a Honduran national who allegedly committed “the sex offense of fondling a child,” an alleged Mexican Sureno 13 gang member with convictions of assault and possession of narcotic equipment, and a Guatemalan national who allegedly committed domestic violence.

“Memphis has suffered from historic levels of violent crime including a murder rate that is four times higher than Mexico City. No American should be afraid to walk down the streets in their own neighborhoods,” DHS Assistant Secretary for Public Affairs Tricia McLaughlin said.

“In Memphis, DHS law enforcement is working hand in glove with Attorney General [Pam] Bondi to enhance public safety, fight crime, and provide much-needed support to our law enforcement partners at the local, state, and federal level. The Trump administration WILL make America safe again.”

Trump issued a presidential memorandum on Sept. 15 to establish a Memphis Safe Task Force and make National Guard personnel available to support public safety and law enforcement operations in Memphis.

“The city of Memphis, Tennessee, is suffering from tremendous levels of violent crime that have overwhelmed its local government’s ability to respond effectively,” the memorandum states.

The National Guard started patrolling in Memphis on Oct. 10.

Memphis has the highest violent crime rate among U.S. cities at 2,501 per 100,000 residents in 2024, much higher than second-ranked Detroit at 1,781 violent crimes. Memphis’ violent crime rate last year was around six times higher than the national average.

Trump’s deployment of the National Guard in Tennessee has faced opposition. On Oct. 17, a group of state officials filed a lawsuit against Tennessee Gov. Bill Lee and other officials.

Tennessee’s Constitution limits the governor’s ability to use the state’s National Guard, stating that such troops shall only be called into service in the case of rebellion or invasion, the lawsuit said.

The state’s General Assembly must declare that, by law, such deployment is necessary for public safety, it said, adding that state statutes forbid the governor from unilaterally using the military for civilian law enforcement.

“Defendants have trampled on Tennessee law by unilaterally deploying Tennessee National Guard members in Memphis as a domestic police force. On October 10, 2025, military police in fatigues descended upon Memphis, in a deployment of the Tennessee National Guard authorized by Governor Bill Lee,” state officials said in the complaint.

“Governor Lee acted at the request of President Donald Trump, but not at the request of any Memphis or Shelby County officials. He also had no approval or authorization from the Tennessee General Assembly. The deployment is patently unlawful.”

The lawsuit asked the court to issue a temporary injunction requiring the defendants to cease the deployment of National Guard personnel in Memphis for civilian law enforcement purposes.

In a Sept. 13 post on X, Memphis Mayor Paul Young said that the governor and the president have the authority to deploy the National Guard to his city.

He shared a clip from an MSNBC interview in which the host asked what the National Guard could do for his city.

“We do have issues with blight in our community, and if there is a way for them to help support our team on that front, we have a deficit of about 300 to 500 officers that we need,” Young said.

In his X post, Young added that he never asked for such a deployment and does not believe this is the path to bring down crime in Memphis.

“However, the decision has been made. As your Mayor, my commitment is to work strategically to ensure this happens in a way that truly benefits and strengthens our community,” he said in a follow-up post.

Trump and FBI Director Kash Patel said during an Oct. 15 press conference that the administration’s crime crackdown has resulted in more than 28,000 violent criminals being arrested over the past seven months.

“We’re going to go into other cities that we’re not talking about, purposely,” Trump said. “We’re going to have a surge of strong, good people, patriots, and they’re going to go in, [they’re going to] straighten it all out.”

Tyler Durden Wed, 10/22/2025 - 11:10

Stocks Extend Momentum Meltdown As Trump Admin Mulls Massive China Export Ban

Update (1235ET): US equity markets were already down notably, dragged down by momentum weakness, when Reuters reported the Trump admin is mulling broad software curbs on chip exports to China.

The United States has ordered a broad swathe of companies to stop shipping goods to China without a license and revoked licenses already granted to certain suppliers, said three people familiar with the matter.

The new restrictions - which are likely to escalate tensions with Beijing - appear aimed at choke points to prevent China from getting products necessary for key sectors, one of the people said.

Products affected include design software and chemicals for semiconductors, butane and ethane, machine tools, and aviation equipment, the people said.

The Commerce Department said it is reviewing exports of strategic significance to China, while noting "in some cases, Commerce has suspended existing export licenses or imposed additional license requirements while the review is pending."

This sparked an immediate drop in all the US Majors...

*  *  *

As we detailed last night, the market is experiencing a strong degrossing in recent narrative themes, and that is most evident in Goldman's high-beta momentum basket which is getting slammed again this morning...

It appears that momo meltdown is finally bleeding over into the broad markets...

The outperformance from the momentum factor this year (pure factor up 7% our baskets up between 15 and 35% depending on the pair) has been driven by the long leg...

...which could be at risk of giving up more of the gains as clients protect performance going into year end...

The last six days have seen momentum longs dumped and momentum shorts bid (until today), hitting the overall momentum market with a double whammy.

The drawdown in Momentum may be at risk to continue as November through January is the worst 3 months period for Momentum...

For a tactical market hedge Goldman likes limited loss on their X7 (Top 500 Ex Mag 7) index, given hedges are outright cheaper than S&P 500 hedges.

More here from the rest of Goldman's Sales & Trading team available to pro subs.

Tyler Durden Wed, 10/22/2025 - 10:56

Senate GOP Mull Filibuster Reform To End Shutdown

As Democrats continue to dig in their heels over Obamacare, Senate Republicans are now considering changing the filibuster's rules to end the shutdown. 

Senate Majority Leader John Thune , June 24, 2025. (Shawn Thew/EPA/Shutterstock)

"Nobody talked about filibuster two weeks ago. Now that we see that the Democrats are just not going to agree to anything, then that’s probably a viable option," Sen. Tommy Tuberville (R-AL) told The Hill. "I don’t know the answer to this. I don’t think anybody does because they’re not going to give; we’re not going to give. So it’s going to be a stalemate, and the loser is going to be the American people."

Tuberville notably defended keeping the filibuster after Republicans won control of the Senate in last year's election, while other GOP senators are predicting that President Trump will start pressuring Senate Majority Leader John Thune (R-SD) to change the Senate rules if the shutdown continues into next month - a move Thune has explicitly said he opposes. 

"I think the pressure from the White House will become pretty enormous," one GOP senator told the outlet. "We’re reaching a point here where the SNAP benefits start going down, the military - pretty soon [the president] isn’t going to have enough money to pay them. We’re going to reach a point where people are literally not able to buy food," the senator continued, referring to Supplemental Nutrition Assistance Program (SNAP) winding down, along with the military eventually going without pay.

"We’re going to reach a point where people are literally not able to buy food," the senator continued, adding "There’s going to come a breaking point. Filibuster reform means all kinds of different things. It could be a talking filibuster." 

"The longer this goes on and the more intransigent the Democrats are, I think they’re inviting a conversation about, ‘Are there steps we can take here?"

"If this goes past Nov. 1, I think the mood is really going to turn in the country in a big way," they continued. 

According to Sen. Ron Johnson (R-WI), Republicans want to preserve the 60-vote threshold for passing legislation, but admitted they were looking into the "possibility" of a carve-out to end the shutdown.

"It’s something Republicans don’t want to do," he said. 

That said, "There’s a certain comity here, there’s a way of getting along. That’s just been busted by the Democrats, time and time again," Johnson argued - accusing Democrats of trying to undermine Trump. 

Thune, as noted, is opposed to weakening or eliminating the filibuster - something he vowed to maintain when he ran against Sens. John Cornyn (R-TX) and Rick Scott (R-FL) for majority leader in November - telling reporters that getting rid of the rule to end the shutdown would be a "bad idea." 

Sen. Susan Collins (R-ME) said she's opposed to changing the rule, but will review any plan to reopen the government even if it includes reforms. 

Asked about this 'nuclear option,' Collins replied: "I know that that is being discussed," adding "I am a strong supporter of the filibuster, but obviously I’ll look at any plan that anyone puts out in order to reopen government."

Sen. Josh Hawley (R-O) said all “options” need to be on the table if the shutdown drags on for weeks longer.

He noted Senate Republicans changed the Senate rules to confirm lower-level executive branch nominees en bloc after Democrats slow-walked more than 140 of Trump’s nominees, refusing to confirm a single civilian nominee by voice vote or unanimous consent to save time.

“I’d just say to the Democrats, ‘Listen, you saw what happened when we had to change the nominations rule to overcome their unprecedented obstruction,’” he said.

“At a certain point, the pain becomes so severe on working people that all options may be on the table,” he warned. “At a certain point, people have to be able to go to the VA and get health care. They have to. People have to be able to get their food stamp benefits. They won’t be able to live.” -The Hill

Meanwhile, the Senate is slated to vote today on the House-passed funding bill. The vote is likely to fail (again), while House Speaker Mike Johnson (R-LA) and Minority Leader Hakeem Jeffries (D-NY) will once again each host pressers to call each other unreasonable. 

Tyler Durden Wed, 10/22/2025 - 10:45

"They've Cut It Way Back" - WTI Holds Gains After Trump Comments On Indian Imports, Record US Crude Production

Oil prices are higher this morning (extending yesterday's gains) on a report the US and India are nearing a trade deal that could see the South Asian nation gradually reduce imports of Russian crude, which would boost demand for alternative supplies.

President Trump said on Oct. 21 that Indian Prime Minister Narendra Modi has agreed to scale back India’s imports of Russian oil in response to Russia’s ongoing invasion of Ukraine.

As Aldgra Fredly reports for The Epoch Times, Trump told reporters in the Oval Office that he spoke with Modi about the matter during a phone call on Tuesday. He said that their conversation primarily focused on U.S.–India trade relations.

“We just have a good relationship, and he’s not going to buy much oil from Russia. He wants to see that war end as much as I do. He wants to see the war end with Russia–Ukraine,” he said.

“And, as you know, they’re not going to be buying too much oil. So they’ve cut it way back and they’re continuing to cut it way back.”

Modi took to social media to thank Trump for his warm Diwali greetings and the phone call, but provided no details about what was discussed during their call.

“On this festival of lights, may our two great democracies continue to illuminate the world with hope and stand united against terrorism in all its forms,” Modi stated in a post on X.

Trump said last week that he had received assurances from Modi that India would stop purchasing oil from Russia.

“That’s a big stop,” he told reporters in the Oval Office during a press conference on Oct. 15.

“Now [I’ve] got to get China to do the same thing.”

Experts at the Observer Research Foundation think tank estimate that India accounts for more than one-third of Russia’s crude exports, behind China’s 50 percent share.

Meanwhile, European Union leaders are expected to greenlight a 19th Russia sanctions package at a summit on Thursday, after Slovakia dropped its objections.

Crude inventories fell (and gasoline stocks dipped) according to a report from API overnight. Traders will now focus on the official data

API

• Crude -2.98mm

• Cushing

• Gasoline -236k

• Distillates -974k

DOE

• Crude -961k

• Cushing -770k

• Gasoline -2.147mm

• Distillates -1.479mm

Official inventory data confirmed the trend of API overnight with across the board drawdowns (though smaller than API). This is the 3rd straight week of drawdowns for products and at the Cushing hub...

Source: Bloomberg

As we detailed yesterday, the Trump administration announced plans to buy 1 million barrels of crude to add to the SPR. As the chart below shows, that's not exactly 'unprecedented' as weekly additions have been around 500k barrels all year. The 819k barrel addition last week was not quite enough to offset the961k barrel decline from DOE...

Source: Bloomberg

US crude production hovered near record highs (as the rig count started to decline again)...

Source: Bloomberg

WTI is holding gains for now, back above $58.50...

Bloomberg notes that oil still remains on track for a third monthly loss as signs of a global surplus put downward pressure on prices, though that’s provided an opportunity for the Trump administration to buy crude for strategic reserves.

“Traders are beginning to question the prevailing supply-glut narrative, as movements in the Brent and WTI forward curves remain far from levels that would typically reflect such an imbalance,” according to Ole Hansen, commodities strategist at Saxo Bank AS.

The premium that front-month Brent futures command over the next month’s contract, known as the prompt spread, has narrowed over the past few months but still signals tight short-term supplies in a price structure known as backwardation. That’s also true for West Texas Intermediate crude.

Tyler Durden Wed, 10/22/2025 - 10:36

Tylenol Manufacturer Resists Proposed Label Changes

Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

Kenvue Brands LLC, the manufacturer of Tylenol, sent a letter to the Food and Drug Administration on Oct. 17, pushing back against demands to modify the medication’s label to show more safety warnings.

Tylenol lines the shelves of a store in Brandon, Miss.., on Sept. 24, 2025. John Fredricks/The Epoch Times

On Sept. 22, federal officials said that Tylenol use during pregnancy is likely associated with autism and that pregnant women should not take the drug unless they have severe fevers. The FDA sent a letter to doctors on Sept. 22, notifying them that using the drug during pregnancy “may be associated with an increased risk of neurological conditions.”

The same day, nonprofit group Informed Consent Action Network submitted a citizen petition to FDA Commissioner Martin Makary regarding safety-related labeling changes for drug products containing acetaminophen during pregnancy. Tylenol is one of the brand names for acetaminophen.

The petition asked for labels on these drugs to be revised to reflect potential risks that frequent prenatal use of acetaminophen has on the neurodevelopment of fetuses, “including an increased risk of autism spectrum disorder (‘ASD’) and attention deficit/hyperactivity disorder (‘ADHD’).”

In its Oct. 17 letter to the FDA, Kenvue stated that the label change requests were “unsupported by the scientific evidence and legally and procedurally improper.”

The company has continuously evaluated the science on the use of acetaminophen during pregnancy and on neurodevelopmental disorders for over a decade, the letter said. Yet, Kenvue has “found no causal association,” it said.

“The expansive scientific evidence developed over many years does not support a causal link, as confirmed in the Food and Drug Administration’s (‘FDA’) own public statements and analyses,” the company said.

According to an Aug. 14 update on acetaminophen published by the FDA, the agency has “not found clear evidence” that the appropriate use of the drug during pregnancy would result in harms such as negative neurobehavioral or developmental outcomes among children.

However, the FDA recommended that pregnant women consult with a health care professional before using any drugs, including acetaminophen.

Kenvue said that adding warning language to labels could result in pregnant women getting discouraged from seeking medically appropriate treatment for pain and fever.

According to the Tylenol website, the drug’s label already contains a warning: “If pregnant or breast-feeding, talk to your healthcare professional before use.”

Tylenol and Autism

In the Sept. 22 letter sent to doctors, the FDA said that “an association between acetaminophen and autism has been described in many studies.” However, “a causal relationship has not been established and there are contrary studies in the scientific literature,” it said.

During a news briefing that day, Makary said that “we now have data we cannot ignore.”

A 2019 paper published in “JAMA Psychiatry” found evidence that babies exposed to the drug while in the womb had a significantly higher risk of developing ADHD or autism.

However, a 2024 analysis of almost 2.5 million children from Sweden found no link between autism and fetal exposure to acetaminophen.

Back in March 2017, Tylenol said in a post on X, “We actually don’t recommend using any of our products while pregnant.”

Kenvue’s Oct. 17 letter to the FDA criticized comments made by the Trump administration during a Sept. 22 press conference.

“Taking Tylenol is not good,” Trump said while referring to the FDA’s Sept. 22 notice to doctors.

“For this reason, they are strongly recommending that women limit Tylenol use during pregnancy unless medically necessary. That’s, for instance, in cases of extremely high fever, that you feel you can’t tough it out, you can’t do it. So ideally, you don’t take it at all.”

Kenvue said that the comments made during the press conference, attended by Health and Human Services Secretary Robert F. Kennedy Jr. and other officials, “diverged from FDA’s long-established approach to acetaminophen use during pregnancy.”

The announcement “included repeated incorrect statements about the well-established safety profile of acetaminophen, in general, and Tylenol, in particular, including statements implying a causal association between acetaminophen use during pregnancy and ASD,” the letter stated.

On Sept. 22, the FDA announced it had initiated the process for making label changes to acetaminophen drugs such as Tylenol.

“The FDA is taking action to make parents and doctors aware of a considerable body of evidence about potential risks associated with acetaminophen,” Makary said.

“Even with this body of evidence, the choice still belongs with parents. The precautionary principle may lead many to avoid using acetaminophen during pregnancy, especially since most low-grade fevers don’t require treatment. It remains reasonable, however, for pregnant women to use acetaminophen in certain scenarios.”

One in 31 American children is estimated to have autism, according to an April 15 report from the Centers for Disease Control and Prevention.

Studies and Recommendations

An Aug. 14 study published in the journal “Environmental Health” looked at 46 studies that examined links between prenatal acetaminophen exposure and neurodevelopmental disorders or related symptoms among offspring.

Out of the 46 studies, 27 reported positive associations with “significant links” to neurodevelopmental disorders, it said, adding that higher-quality studies were likely to show such associations.

“Appropriate and immediate steps should be taken to advise pregnant women to limit acetaminophen consumption to protect their offspring’s neurodevelopment,” the study said, adding that more than 50 percent of pregnant women globally are estimated to use acetaminophen.

However, a September advisory issued by the American College of Obstetricians and Gynecologists said that acetaminophen remains the “analgesic and antipyretic of choice during pregnancy.”

The group said current evidence “does not support a causal link” between prenatal acetaminophen use and neurodevelopmental disorders.

“Clinicians should continue to recommend its judicious use, provide evidence-based counseling, and reassure patients that current data do not support a causal link to neurodevelopmental disorders,” the group recommended.

Tyler Durden Wed, 10/22/2025 - 10:00

Apple Slashes iPhone Air Output, Boosts Production Of Base, Pro iPhone 17 Models, Nikkei Reports

Building on the "Are We In An iPhone Supercycle?" note we published on Tuesday, a new report from Nikkei Asia says Apple has sharply cut production of the iPhone Air due to soft demand while boosting orders for other iPhone 17 models, particularly the base and Pro versions.

Nikkei cited multiple sources with access to Apple's supply chain and revealed on Wednesday:

The adjustment to production plans reflects both the lukewarm reception of the iPhone Air in markets outside China and unexpectedly strong demand for the iPhone 17 and iPhone 17 Pro models. As a result, Apple is maintaining its production forecast of 85 million to 90 million units for the lineup as a whole.

Another source said the iPhone Air was initially expected to account for 10% to 15% of total production, yet orders for the "lite" version have been reduced to "near end of production levels." Apple has reportedly slashed component and module orders, with November production volumes expected to side below 10% of September's levels. The model's poor demand ex-China contrasts with its solid launch there last week.

The report continued:

The model is seen as strategically paving the way for the first foldable iPhone, expected to debut in 2026, according to three people with knowledge of the matter. Nikkei Asia earlier reported that Apple has high hopes for the launch of such a phone next year.

While the iPhone Air has been a disappointment, demand for the iPhone 17 and iPhone 17 Pro has exceeded expectations. Two sources said this robust demand prompted Apple to increase production orders for the baseline iPhone 17 by about 5 million units and to boost orders for the iPhone 17 Pro.

In the U.S. this week, the average wait time for an iPhone 17 with 256 gigabytes of storage is about two to three weeks, and about one to two weeks for the iPhone 17 Pro, while there is no wait time for the lite version.

Dropped my iPhone Air… glass is fine but dented the titanium! pic.twitter.com/S76IR8tnF4

— Max Weinbach (@MaxWinebach) October 21, 2025

On Tuesday, a team of Goldman analysts led by Michael Ng told clients that iPhone 17 demand is tracking ahead of the iPhone 16 series, supported by longer lead times, higher production builds, and positive carrier feedback.

Important:

This prompted Ng to ask clients: "Are we in an iPhone supercycle?"

For more details on iPhone demand, ZeroHedge Pro subscribers can read the full note here.

Tyler Durden Wed, 10/22/2025 - 09:40

VW Halts Golf Production In Wolfsburg As Chip Shortage Worsens 

In 2022, European Commission President Ursula von der Leyen's State of the Union address bragged about "toughest sanctions the world has ever seen" against Russia which she claimed at the time, "Russia's financial sector is on life-support. We have cut off three quarters of Russia's banking sector from international markets" and "The Russian military is taking chips from dishwashers and refrigerators to fix their military hardware, because they ran out of semiconductors. Russia's industry is in tatters." 

Give von der Leyen's speech a quick listen. 

In true meme fashion, the best way to mock left-wing Brussels elites might be with a classic "How it started vs. How it's going" - only this time, it's not Russia in trouble, but rather von der Leyen may have spoken a little too soon. Memes are still legal in the U.S...

German tabloid newspaper Bild reports that Volkswagen is preparing to suspend production of one of its most popular models, the Golf, at its Wolfsburg factory today. The Tiguan and other models will follow this, as the worsening semiconductor shortage begins to send shockwaves across the European auto sector. 

As explained by the German media outlet, the missing Chinese chips are due to the "supply stoppage of Nexperia chips." 

Here is more color on the situation:

In addition to the Golf and Tiguan, the Touran and Tayron are also manufactured in Wolfsburg.

The reason for the production suspension: a supply stoppage of Nexperia chips. The Nijmegen-based semiconductor manufacturer is at the center of a dispute between China and the United States. Under pressure from the US government, the Dutch government took control of Nexperia; in response, Beijing banned the export of Nexperia chips from the People's Republic.

Nexperia also produces in Europe, but the majority of its chips come from China. VW apparently has no alternative at the moment. Semiconductors from other manufacturers would first have to be tested and certified, company sources said.

The chip crisis could affect not only VW but also the entire automotive industry and even other sectors. Spokespersons for BMW, Mercedes, and Daimler emphasized that the situation is being analyzed. Production at the companies is currently still running.

Production line stoppages will likely impact tens of thousands of employees in Europe's largest economy. Other automakers like BMW, Mercedes, and Daimler are monitoring the situation, though their production continues.

The latest developments in the Nexperia turmoil that's now rippling through the EU auto sector:

• Dutch Govt Suddenly Seizes Control Of China-Owned Chip Maker

• Chipmaker Nexperia's China Arm Tells Staff To Ignore Dutch HQ, Deepening Semiconductor Split

VW has no timeline for when Nexperia chip deliveries will resume. Will the Germans soon be taking chips from dishwashers and refrigerators to build their VWs?

Tyler Durden Wed, 10/22/2025 - 09:05

Slovak PM Claims EU Tried To Sabotage Canceled Trump–Putin Peace Summit In Budapest

Authored by Thomas Brooke via Remix News,

Slovak Prime Minister Robert Fico has accused some within the European Union of attempting to sabotage peace by disrupting the now-canceled meeting between Russian President Vladimir Putin and U.S. President Donald Trump in Budapest.

“The foreign minister of a European Union member state says that Russian President V. Putin could be detained during a flight over this country, and the European Commission’s media environment is warning Hungary that it should implement an international arrest warrant,” Fico said in a statement released by the Slovak Government Office.

“I have always maintained that the EU has turned into a war cabinet, that a significant part of EU member states support the war in Ukraine in the naive belief that this way Russia can be weakened and even defeated,” he added, calling attempts to derail peace talks a “sad sight.”

Fico criticized what he called a paradox, where “some leaders are pushing for the Budapest summit” while others are undermining it. He said there were also efforts to include Ukrainian President Volodymyr Zelensky, describing this as “throwing pitchforks into a possible agreement.”

The foreign minister referred to by Fico is Poland’s Radoslaw Sikorski, who warned that his government could not guarantee Putin’s safe passage through Polish airspace, citing the International Criminal Court’s arrest warrant for the Russian leader over alleged war crimes. “I cannot guarantee that an independent Polish court won’t order the government to escort such an aircraft down to hand the suspect to the court in The Hague,” Sikorski told Radio Rodzina.

Sikorski said Poland, as a member of the ICC, is obliged to act if Putin enters its jurisdiction.

“I think the Russian side is aware of this,” he added.

“And, therefore, if this summit is to take place, hopefully with the participation of the victim of the aggression, the aircraft will use a different route.”

Fico had urged the European Union to do everything in its power to ensure that the Trump-Putin peace summit in Hungary goes ahead “as quickly as possible and without obstacles.”

He declared:

“The Trump-Putin summit in Budapest as soon as possible, without any obstacles and with the full support of the EU—that is my official position.”

Prospects for such a summit now appear to have dimmed. President Trump said on Tuesday that he did not want a “wasted meeting,” and the White House confirmed that there were “no plans” for a Trump-Putin meeting “in the immediate future,” following earlier suggestions that the two leaders would meet in Budapest within two weeks.

Trump said the sticking point was Moscow’s refusal to halt fighting along the current front line, noting, “Let it be cut the way it is. I said: cut and stop at the battle line. Go home. Stop fighting, stop killing people.”

Kremlin spokesman Dmitry Peskov said that Moscow’s position “doesn’t change,” insisting that Russia would only accept a “long-term, sustainable peace.” Foreign Minister Sergei Lavrov said the current proposal floated by Ukraine and the United States amounted merely to a temporary ceasefire and that “the root causes of the conflict” had to be addressed.

A preparatory meeting between U.S. Secretary of State Marco Rubio and Russian Foreign Minister Sergei Lavrov was due to be held this week, but the White House said the two had had a “productive” call and that a meeting was no longer “necessary.”

Hungarian Prime Minister Viktor Orban has previously stated that “Budapest is the only suitable place in Europe for a USA-Russia peace summit. With long-standing pro-peace leadership and trusted partnerships, we provide a reliable, secure, and politically stable setting. There was no other option. Simply put: They can count on us.”

Read more here...

Tyler Durden Wed, 10/22/2025 - 08:45

Futures Flat As Gold Selloff Extends

US equity futures are flat again, with tech and small caps lagging as traders parsed the latest earnings reports and corporate news amid worries over trade, the US government shutdown and geopolitical risks. Gold and silver extended declines after Tuesday’s slump. As of 8:00am, S&P futures were unchanged while Nasdaq futures dropped 0.2% after a rally on Wall Street lost steam. Pre-market, Mag7 names are mostly weaker ex-GOOG on its cloud deal. Netflix tumbled 6.8% in premarket trading after the streaming-video company reported third-quarter results that missed across the board despite stronger forecasts. Texas Instruments also plunged about 8% on an underwhelming outlook. Meme stocks are back, with Krispy Kreme among those joining Beyond Meat in the retail trader frenzy today. Mining stocks are weaker pre-market though gold and silver are bouncing off their overnight lows; both are underperforming platinum / palladium.  The yield curve shifts lower and the USD continues its recent move higher. USD is +2.5% since making a 52-wk low on Sep 16. The balance of the commodity complex is bid with WTI +1.7% the standout on report that US and India are nearing an accord that could lead India to reduce imports of Russian crude. US / China situation still has aides talking behind closed doors as Trump / Xi remain likely to meet next week. There is no macro today .

In premarket trading, Netflix and Texas Instruments shares are both lower after disappointing results, with Tesla and IBM among the big names to watch later. The EV maker is expected to post a 25% drop in quarterly profits — but traders may not care. The shares have more than doubled in the past year on AI hopes.

• Mag 7 stocks are mostly lower. Alphabet (GOOGL) rises 1.8% as Anthropic is in discussions with Google about a deal that would provide the artificial intelligence company with additional computing power valued in the high tens of billions of dollars, according to people familiar with the matter (Tesla -0.2%, Nvidia +0.06%, Meta -0.1%, Microsoft +0.2%, Apple -0.6%, Amazon -1.3%).
• Alector (ALEC) tumbles 50% after the drug developer said a late-stage trial of its lead asset as an investigative treatment for dementia failed to meet a primary endpoint.
• AT&T Inc. (T) rises 1.4% after the company added more mobile-phone and home internet subscribers this summer than analysts expected.
• Avadel Pharmaceuticals (AVDL) gains 4% after Alkermes agreed to buy the company for up to $20 per share.
• Beyond Meat Inc. (BYND) soars 85%, boosting its four-day rally to almost 1,300%, in an echo of the meme-stock frenzies that periodically roil the market.
• DraftKings (DKNG) climbs 3% after the sports betting company said it acquired predictions platform Railbird for an undisclosed amount.
• Intuitive Surgical (ISRG) rallies 16% after the robotic-surgery company boosted its worldwide da Vinci procedure growth forecast for the full year.
• Manhattan Associates (MANH) falls 7% after the supply-chain software company posted a key metric — “remaining performance obligations” — for the third quarter that fell short of estimates.
• Mattel Inc. (MAT) is down 5% after the company reported third-quarter sales and earnings that missed analysts’ estimates as US retailers delayed orders due to uncertainty over President Donald Trump’s tariff policies.
• Netflix (NFLX) falls 7% after the streaming-video company reported third-quarter results it said were hurt by a tax dispute with Brazil.
• Texas Instruments (TXN) drops 7% after the chipmaker gave an outlook that is weaker than expected. The outlook indicates that some customers are slowing orders as they navigate mounting trade tensions.
• Vertiv Holdings (VRT) is up 6% after the company boosted its adjusted earnings per share guidance for the full year; the guidance beat the average analyst estimate.
• Warner Bros. Discovery Inc. (WBD) gains 2% after saying it’s considering a possible sale of the company after receiving unsolicited interest from multiple parties. Netflix Inc. and Comcast Corp. are weighing bids for parts of the media and entertainment company, according to people with knowledge of the matter.

In other company news, Anthropic PBC is said to be in talks with Alphabet’s Google about a deal that would provide the AI company with additional computing power valued in the high tens of billions of dollars. Apple’s iPhone Air got a subdued response from consumers in China. 

Early US earnings point to the best corporate results in four years, with 85% of companies reporting beats. Despite recent de-risking amid concerns over trade and credit, stock exposure among global macro hedge funds and long-only strategies remains at the highest in over a year, according to Barclays Plc. Drawdowns have been short-lived as investors see them as opportunities to add risk to their portfolios.

Earnings will “play a decisive role in determining whether the rally can be sustained,” said Linh Tran, a market analyst at XS.com. “Profit expectations for major tech companies have been revised upward, while consumer and financial sectors may benefit from resilient demand and higher interest margins. If corporate results continue to outperform forecasts, this could help the S&P 500 extend its gains into Q4.”

Markets are also keeping one eye on trade news ahead of the resumption of US-China talks. Six months into Trump’s trade war, the resilience of Chinese exports is proving just how essential many of its products remain even after US levies of 55%.

Gold fell more than 2%, closing in on $4,000 an ounce and deepening its worst intraday drop in more than a dozen years in the previous session, amid concerns its rally had run too far, too fast. Silver also declined following Tuesday’s 7.1% fall. Gold's drop on Tuesday drove the VanEck Gold Miners ETF down 9.4% in its biggest drop since 2020. Still, gold mining stocks are still on track for their biggest ever annual gain over the S&P 500.

Bond traders are preparing for yields to drop further even as the 30-year sank to its lowest in six months on Tuesday. The cost of protection against a bigger decline in yields across the curve is rapidly rising, according to pricing of options wagers. Traders are piling into some risk-off assets as the US government shutdown becomes the second longest on record and amid renewed concerns over the credit market. Meanwhile, dollar trading has become unusually subdued, with the Bloomberg Dollar Spot Index remaining within one standard deviation of its average for about 80% of the time over the past 60 trading days, according to data compiled by Bloomberg.

In Europe, the Stoxx 600 index dipped, with consumer products and services leading declines after results from L’Oreal SA, Hermes International SCA and Adidas AG failed to meet lofty expectations. Energy stocks led gains as crude oil rose. UK stocks got a boost with the FTSE 100 rising 0.7% after UK CPI surprised to the downside as traders ramp up bets on an interest-rate cut by the Bank of England before year end. Among companies reporting in Europe on Wednesday, Barclays Plc gained after raising its earnings guidance and unveiling a £500 million buyback. Akzo Nobel NV slumped after the paintmaker lowered its earnings outlook, with customers more hesitant to spend amid rising global tariffs and softer economic conditions. Here are the biggest movers Wednesday: 

• Precious metals miners in South Africa and Europe rose on Wednesday as gold and silver prices steadied, after suffering their steepest selloffs in years.
• Barclays shares rise as much as 4.1% after the UK lender increased its 2025 guidance and announced a £500 million share buyback, with investors looking beyond an increased provision for motor finance
• Heineken shares rise 2.3% as analysts say a soft quarterly print was no worse than expected. The company’s move of Ebit growth guidance to the lower end of the range had been foreseen, according to consensus views
• Handelsbanken gains as much as 2.1% after posting a slight beat to net interest income (NII) in its third-quarter report. Lower-than-expected costs also contributed to a solid showing from the Swedish lender
• European chipmakers slip on Wednesday after US peer Texas Instruments forecast 4Q sales below estimates, signaling a delay in the rebound of the automotive and industrial chip sector
• ITV shares plummet as much as 12% after the broadcaster’s largest shareholder Liberty Global cut its stake in half after offering shares at a discount
• L’Oreal shares fall as much as 8%, the steepest drop in a year, after the cosmetics company reported third-quarter like-for-like sales that fell short of elevated market expectations
• Hermes falls as much as 5% after sales at constant exchange rates for the third quarter showed double-digit growth in most regions, but key division leather goods slightly missed estimates, while valuation premium is stretched, according to analysts
• DNB Bank shares drop as much as 4.3%, the most since July, after the Norwegian lender posted a disappointing third-quarter report, according to analysts, who flagged misses on net interest income (NII) and fee
• Adidas shares dip as analysts say the sportswear maker’s increased full-year earnings forecast was only in-line with consensus and note a slight miss in third-quarter sales
• TeamViewer shares slump as much as 24% to a record low after the software maker reduced its annual recurring revenue guidance for this year and sales outlook for next year

Asian stocks fell, weighed down by technology shares as investors rushed to lock in gains amid doubts about the sector’s staying power.  The MSCI Asia Pacific Index dropped as much as 0.6% before paring some losses, with TSMC, SoftBank Group and Alibaba among the biggest drags. Shares in Hong Kong and Vietnam declined, while South Korea’s Kospi rose.  Chipmakers and other AI-related stocks in Asia, including SoftBank, declined after Texas Instruments presented a disappointing outlook, which added to concerns that the sectors’ shares may have been running too hot. Precious-metal stocks also tumbled after gold and silver posted their steepest selloffs in years. The slide in Hong Kong and mainland Chinese stocks came despite a bullish long-term call from Goldman Sachs Group Inc., which predicted key stock gauges may gain 30% by the end of 2027. The strategists argued the upside will be supported by pro-market policies, rising profits and strong capital flows. Here Are the Most Notable Movers

• Bangkok Bank shares advance after the lender’s third-quarter net income rose 11% on year, beating the average analyst estimate, partly driven by investments.
• LG Chem Ltd. shares surged by the most in five years after Palliser Capital UK disclosed a stake in the firm and urged changes, in a sign that overseas activists are starting to wade back into South Korea.
• IHI shares climb as much as 5.5% to ¥2,995 after Mizuho Securities raised its target price to ¥3,300 from ¥1,071, saying it expects growth in the civil aero engines business and expansion of defense-related operations.
• Laopu Gold shares fall as much as 8.1%, the most since Sept. 10, after the Chinese jewelry seller agreed to issue about 3.71 million new H shares at HK$732.49 apiece in a placement.
• Pop Mart shares rise as much as 7.9% after the toymaker’s third quarter sales growth of as much as 250% year-on-year came amid investor worries over the possible fading popularity of its collectible toys.
• Innovent Biologics shares rise as much as 9.9% in Hong Kong after the company said it will receive a $1.2 billion upfront payment, including an equity investment, as part of a strategic collaboration with Takeda Pharmaceutical to develop cancer therapies.
• Meituan shares drop 0.5% as JPMorgan cuts its target price, saying the company may face worst-than-expected pressure in its 3Q and 4Q results due to competition in China’s food delivery market and its expansion overseas.
• Taiheiyo Cement shares gain as much as 6% in early Tokyo trading, the most since April 10, following a report in Nikkei that Palliser Capital has taken a stake of over 3%.

In FX, the Bloomberg Dollar Spot Index rose 0.1%, taking gains into a fourth straight day; the index’s thin gains were led by the US currency’s advance versus the pound, which stumbled after data showing steady UK inflation raises speculation of an interest-rate cut in December. A 1% slide in gold prices also supported the greenback, suggesting that investors still see the currency as a viable haven. The pound fell 0.4% against the dollar and is the clear G-10 underperformer.

In rates, treasury yields sliding again, dropping more than 4bps with 10-year around 3.93%, near Tuesday’s low. They trail steep gains for gilts, where 2-year yields fell more than 10bp to 14-month low after UK headline, core and services CPIs fell short of estimates. UK yield curve is notably steeper as market prices in an increased 70% chance Bank of England cuts rates a quarter-point by December. The US session includes 20-year bond reopening: the $13 billion 20-year bond reopening, first coupon auction in more than a week, has WI yield near 4.510%, about 10bp richer than last month’s 20-year sale, which stopped through by 0.2bp 

In commodities, WTI crude oil futures are up about 2%, which along with the 20-year auction creates resistance to lower Treasury yields. Oil is higher on report that US and India are nearing an accord that could lead India to reduce imports of Russian crude. Spot gold is down $50, having recovered from an earlier nosedive toward $4,000/oz. Silver dips 0.7% while Bitcoin is down 2.4%.

The US economic calendar calendar is blank, and Fed’s external communications blackout ahead of the Oct. 29 Fed policy decision began Saturday. Earnings after the close include Tesla and IBM.

Market Snapshot

• S&P 500 mini little changed
• Nasdaq 100 mini -0.2%
• Russell 2000 mini -0.2%
• Stoxx Europe 600 -0.2%
• DAX -0.3%, CAC 40 -0.6%
• 10-year Treasury yield -1 basis point at 3.96%
• VIX +0.1 points at 17.96
• Bloomberg Dollar Index little changed at 1212.96
• euro little changed at $1.1596
• WTI crude +1.7% at $58.19/barrel

Top Overnight News

• The US government shutdown is now the second-longest in history, and with Trump expected to head to Asia later this week, lawmakers and congressional aides see a real possibility of the closure extending into November. BBG
• US companies are beating earnings expectations at the highest rate in over four years, with 85% surpassing profit estimates in the third quarter so far. BBG
• Trump said he won't meet with Democratic leaders unless the government is reopened.
• Trump's administration plans to release over USD 3bln in aid to US farmers previously frozen due to government shutdown: WSJ.
• US has offered energy companies access to nuclear waste that they can convert into fuel for advanced reactors in an attempt to break Russia’s stranglehold over uranium supply chains: FT.
• Bessent is facing mounting pressure to justify Washington’s multibillion dollar rescue of Argentina as a political backlash builds over the administration’s efforts to support Milei. The Treasury secretary has taken the lead in managing Trump’s effort to provide financial support for Milei’s libertarian government, which the US sees as a crucial Latin American ally, through a package of measures designed to prop up its economy and its currency, the peso. FT
• China is demanding some US semiconductor firms submit sensitive information about their sales in the world’s largest chips market as part of its probe of American suppliers. BBG
• As Japan's new premier Sanae Takaichi got to work on Wednesday, her government began finalising a purchase package, including U.S. pickups, soybeans and gas, to present to President Donald Trump in trade and security talks next week, two sources said. RTRS
• Japan's new Prime Minister Sanae Takaichi is preparing an economic stimulus package that is likely to exceed last year's $92 billion to help households tackle inflation, government sources familiar with the plan said on Wednesday. RTRS
• Indonesia unexpectedly leaves rates unchanged at 4.75% (the Street was anticipating a cut to 4.5%). BBG
• India and the United States are nearing a long-stalled trade agreement that would reduce U.S. tariffs on Indian imports to 15% to 16% from 50%, India's Mint reported on Wednesday citing three people aware of the matter. The deal, which hinges on energy and agriculture, may see India gradually scale back its imports of Russian crude oil. RTRS
• The U.K.’s annual rate of inflation in September unexpectedly held at the pace of the previous month, raising the chance that Bank of England policymakers could cut interest rates later this year, despite price rises remaining at a level still well above the central bank’s target. CPI comes in cooler than anticipated at +3.8% Y/Y on the headline (vs. the Street +4%), +3.5% on core (vs. the Street +3.7%), and +4.7% on services (vs. the Street +4.8%). WSJ

Trade/Tariffs

• US President Trump reiterated that the November 1st tariffs on China will be about 155% and that higher tariffs on China won't be sustainable for them, while Trump also said he spoke with India's PM Modi on Tuesday and talked about trade.
• South Korean chief presidential policy aide said South Korea and the US stand apart on a couple of matters in tariff talks.
• South Korea Minister for Trade Yeo expressed concern in a call with China's Li Chenggang regarding Beijing's shipbuilding curbs, while he asked Li to swiftly lift sanctions on South Korea shipbuilder Hanwha Ocean and discussed China’s rare earths export restrictions.
• India and the US are closing in on a long-pending trade deal that could slash current tariffs from Indian exports to between 15-16% from 50%, according to Mint citing three people aware of the matter.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly subdued following the mixed handover from the US, where participants digested a mixed bag of earnings releases, and precious metals slumped, with a historic drop seen in gold following the recent record-setting rally. ASX 200 retreated with heavy losses in the mining sector after gold prices fell by the most since 2013 and which was its largest one-day dollar value drop on record. Nikkei 225 briefly dipped beneath the 49,000 level with early pressure seen following mixed trade data, although the index gradually pared its early losses as participants also reflected on the new Takaichi-led government, with the PM instructing the cabinet to compile a package of steps to cushion the blow from the rising cost of living. Hang Seng and Shanghai Comp were subdued following a slew of recent trade-related rhetoric, including from US President Trump, who reiterated 155% tariffs on China from November 1st and that he will meet with Chinese President Xi in two weeks, but then also commented that maybe that meeting won't happen.

Top Asian News

• Japanese PM Takaichi is preparing economic stimulus expected to exceed last year's JPY 13.9tln, with the package to be built around three main pillars which are measures to counter inflation, investment in growth industries and national security, according to sources cited by Reuters.
• Japanese PM Takaichi is to meet with US President Trump on October 28th and will discuss national defence. It was later reported that Japanese Chief Cabinet Secretary Kihara said US President Trump is to visit Japan from October 27th to 29th and is to meet Japan’s Emperor and PM Takaichi during the visit.
• Japanese Minister for Economic Security Kiuchi says it is important that the government and the BoJ continue to cooperate and carry out responsible macroeconomic policies, while he hopes the BoJ will closely coordinate with the government to achieve the 2% inflation target, and stated that the economy needs to be supported until strong real wage growth is achieved.
• Japan's Finance Minister Katayama announces that Prime Minister Takaichi will proceed with fiscal reform both in terms of spending and revenue. Says weak JPY boosts food costs, so there needs to be a quick measurement to cushion impact. "Takaichi Trade" has somewhat calmed down.

European equities (STOXX 600 -0.2%) are mostly lower today, but with outperformance in the FTSE 100 (+0.4%) after the UK's inflation report, which has boosted bets around a cut in December. European sectors hold a negative bias. Energy and Utilities lead the pile, with the former benefiting from strength in oil prices today. To the downside, Consumer Products is pressured by post-earning losses in L'Oreal (-6.2%), Hermes (-4.4%) and Adidas (-2%). Beauty name L'Oreal is pressured after a notable quarterly sales miss, Hermes was more-or-less in-line, yet still disappointed investors after recent resilience; Adidas is seemingly swept away with the sectoral losses, given it reported a beat on its headline metrics, and lifted guidance. US equity futures are modestly incrementally lower today, continuing similar price action seen in the prior session. Key pre-market movers today include; Netflix (-7.1%, Q3 profit miss, hit by a Brazilian tax dispute, but sales were in line), Texas Instruments (-8%, co. issued a soft forecast for the next quarter). Apple (AAPL) is reportedly drastically cutting iPhone Air production orders but boosting other 17 models, via Nikkei citing sources; reflecting lukewarm Air demand ex-China and unexpectedly robust 17 & 17 Pro demand.

Top European News

• UK Chancellor Reeves targets tax partnerships in crackdown on UK’s wealthy with Reeves preparing a crackdown on lawyers, accountants, doctors and other professionals who use tax partnerships, according to FT.
• Politico reports that a decision on whether to postpone the French Social Affairs Committee's examination of the Social Security Budget will be taken this morning; in the context of a "rectifying letter" re. pensions likely being adopted on Thursday.
• SNB's Schlegel says inflation is expected to rise slightly in the coming quarters Planned US tariffs on some pharma products could increase downside risk for the economy. Uncertainty in the economy remains high. Will continue to observe the situation and adj. monetary policy where necessary.

FX

• USD is mildly firmer/flat. Nothing really driving things at the moment, but traders are mindful of trade/shutdown developments, and as some begin to position themselves ahead of Friday’s inflation report. For context, some of the recent upside seen in the dollar has been attributed to; a) reversal of debasement trade, b) steep correction in gold, c) easing credit concerns. DXY is currently trading at the upper end of the day’s 98.84-99.05 range
• EUR is essentially flat and trades in an incredibly tight 1.1590-1.1615 range; nonetheless, the bias for today’s price action has been mildly downward. Lacklustre price action, which comes amidst a lack of pertinent newsflow. Some focus on reports that several EU leaders have called for the bloc to review, reduce and restrain legislation to reduce the burden on business, via Reuters.
• JPY is essentially flat/mildly lower vs USD, and currently trades in a 151.48-151.95 range, just shy of the 152.00 mark. On trade, Reuters reported that PM Takaichi is to tell US President Trump that the country will buy US soybeans, pickups and LNG, though may not commit to a new defence spending target. As a reminder, the POTUS will visit Japan from October 27-29. On economic policy, Takaichi is reportedly readying an economic stimulus which is set to top JPY 13.9tln; Reuters suggested measures are to counter inflation, investment in growth industries and national security. Elsewhere, Japan’s Finance Minister Katayama echoed her PM’s recent remarks, pushing back on the government’s involvement with the BoJ. Katayama said it is up to BoJ on specifics on monetary policy but should work together to have effective economic policies.
• GBP is the clear underperformer vs USD today, following the region’s soft inflation report. In detail, headline Y/Y was unchanged from the prior at 3.8% (exp. 4%), with the Services components also softer-than-expected. In an immediate reaction, GBP/USD fell from 1.3384 to 1.3343, before extending to a trough of 1.3314 where the pair currently resides. Further levels to the downside include the low from October 15th and then last week's worst at 1.3248. Following the release, market pricing has shifted dovishly, with markets now assigning a 74% chance of a cut by year-end vs 44% pre-release; the first full 25bps cut is priced in by Feb 2026.
• Antipodeans are the marginal G10 performers today, benefiting from a recent bounce back in metals prices as spot gold and base metals clamber off from the hefty pressure seen in the prior session.
• PBoC set USD/CNY mid-point at 7.0954 vs exp. 7.1225 (Prev. 7.0930)

Fixed Income

• USTs are flat. In a very thin 113-21 to 113-25 band. Focus thus far has been on the mixed trade rhetoric out of the US yesterday with Trump previewing his potential meeting with China’s Xi saying he expects the negotiation to be good. However, he then added that maybe the meeting will not occur. Otherwise, the US docket is limited owing to the shutdown and Fed blackout; note, Barr is scheduled. On the shutdown, Trump overnight poured some cold water on the situation by saying he won’t be meeting with Dem. leaders until the gov’t reopens.
• Bunds are contained, but has experienced a slightly choppy morning. Picked up to a 130.38 peak with gains of c. 15 ticks on the discussed UK inflation report before paring and falling back to a 130.16 low, with downside of around five ticks at most. Ahead, ECB’s de Guindos and Lagarde due, though recent comments from officials have not changed the narrative into the end-October meeting. A weak German auction (b/c 1.2x) sparked some very marginal pressure in Bunds.
• OATs trade broadly in-line with EGB peers in a 123.19 to 123.44 band while the OAT-Bund 10yr yield spread remains steady around the 80bps mark. For OATs, Amova’s Williams spoke to Bloomberg and outlined that they added to their overweight position on French debt in September, and believes OATs are still at attractive levels despite recent sovereign downgrades. On the spread, he believes a move above 100bps would cause the ECB to step in.
• Gilts are the clear outperformer today following the region's inflation report. CPI for September remained at 3.8% Y/Y, cooler than the market and BoE forecast of 4.0%; pertinently, September represented the peak in the BoE’s inflation forecast horizon. Accompanying measures were also cooler-than-expected and while there were some slightly more mixed internals behind the headline figure and somewhat unusual moves in some subset components, the overall narrative is clearly a dovish one vs. consensus. As such, Gilts gapped higher by 54 ticks to 93.45 and then extended further to a 93.78 peak, notching a contract high. Action that pushed the UK 2yr yield down to 3.77% and below the 3.80% mark that desks have been attentive to recently, the 10yr also moderated to 4.4%, convincingly taking out 4.45%.
• Germany sells EUR 2.284bln vs exp. EUR 3.0bln 2.50% 2032 Bund: b/c 1.2x (prev. 1.5x), average yield 2.33% (prev. 2.52%), retention 23.87% (prev. 23.88%)

Commodities

• Crude benchmarks extended on Tuesday’s high during the APAC session as Mint citing sources reported that a US-India trade deal is near, that could see India cut Russian oil imports for a lower export tariff to 15-16% from 50%. WTI and Brent peaked at USD 58.50/bbl and USD 62.62/bbl respectively following the trade news but are currently trading slightly off best levels at USD 58.20/bbl and USD 62.30/bbl.
• Spot XAU began the European morning firmer, bouncing back from Tuesday’s 5% selloff, which was its biggest selloff since November 2020. Although, XAU was then pressured once again to currently trade around USD 4,065/oz - trough for today's session was made overnight at USD 4,005.98/oz.
• Base metals have rebounded from Tuesday’s selloff following a trade deal near its completion between India and the US. 3M LME Copper dipped to a low of USD 10.54k/t before reversing a trending back through Tuesday’s range and is currently trading near session highs at USD 10.66k/t.
• US Private Inventory Data (bbls): Crude -3.0mln (exp. +1.2mln), Distillate -1.0mln (exp. -1.9mln), Gasoline -0.2mln (exp. -0.8mln).
• Russian overnight attack on Ukraine's Poltava region damaged oil and gas industry facilities.

Geopolitics

• Russia obtained security guarantees from Ukraine to restore power to the Zaporizhia nuclear power plant, according to RIA.
• US President Trump said he has not made a determination yet regarding a meeting with Russian President Putin and doesn't want to have a wasted meeting, while he still sees a chance for a Russia-Ukraine ceasefire.
• Russia's Special Economic Envoy said 'preparations continue' for a Trump-Putin meeting.
• Russia's Deputy Foreign Minister Ryabkov says preparations for a Russia-US summit is ongoing and there has been no agreement on a Lavrov-Rubio meeting; sees no major obstacles for a Trump-Putin meeting via RIA.
• Russia's Kremlin says their position is well known with nothing else to add in regard to reports of a non-paper passed to USA on Ukraine. Preparation is necessary for Putin-Trump summit.
• Ukraine's President Zelensky calls US President Trumps' idea a good compromise in regards to the concept of stopping at the current lines.
• North Korea fired a missile, which the South Korean military said was a ballistic missile, while Japanese PM Takaichi later confirmed there was no damage to Japan's exclusive economic zone and waters from the North Korean missile.
• US is reportedly trying to drive a wedge between Argentina and China with the Trump administration pushing officials in Argentina to limit China’s influence over the distressed South American nation, according to WSJ.
• China's Defence Ministry said it is strongly dissatisfied with Australia's statement about military aircraft around the Paracel Islands, while it added that organised troops are to resolutely block and drive away Australian military aircraft that 'invaded' China's airspace.
• "Israel's Channel 12: The security establishment warns that accelerating the implementation of the Trump plan may harm Israel's security interests", via Sky News Arabia

US Event Calendar

• 7:00 am: Oct 17 MBA Mortgage Applications -0.3%, prior -1.8%
• Fed’s External Communications Blackout (October 18 - October 30)

DB's Jim Reid concludes the overnight wrap

Most markets put in another steady performance yesterday, with the S&P 500 (+0.003%) and the STOXX 600 (+0.21%) closing just below their record highs from a couple of weeks ago, whilst the 10yr Treasury yield (-1.7bps) hit a one-year low of 3.96%. Several factors contributed, including some positive noises on the trade outlook, alongside decent earnings releases. But even as bonds and equities were mostly rallying, it was a completely different story for commodities, with several posting very sharp falls. Indeed, gold prices (-5.30%) posted their biggest decline since August 2020, whilst silver (-7.12%) saw its biggest decline since the Liberation Day market turmoil in April.

That sudden selloff for precious metals really captured the market headlines, but to be honest there wasn’t a single catalyst that sparked the declines, and the big multi-year moves weren’t happening in other asset classes or commodities either. Moreover, the slump happened despite a decline in nominal and real bond yields, which usually help to support gold prices given it’s relatively more attractive to hold a zero-interest asset like gold when bonds aren’t yielding as much. So in many respects, it looked like a classic pullback after a relentless bull run over recent weeks, and it's worth noting that the rolling two-month gain of more than +30% on Monday was already the strongest since the GFC. Indeed, last month saw real-terms gold prices move above their inflation-adjusted peak in January 1980, so it had never been more expensive. And even with yesterday’s moves, its gains of +57% since the start of the year would still make it the strongest annual performance since 1979, back when gold prices more than doubled after that year’s oil shock triggered a huge wave of inflation.

Whilst gold saw the biggest headline moves, there was plenty going on for US Treasuries, with a decent rally that pushed longer-dated yields to their lowest in some time. That was partly driven by a weak survey print from the Philadelphia Fed, as their non-manufacturing activity index came in at -22.2 in October, which is its lowest level in 4 months. To be fair, that isn’t a release that normally gets too much attention, but given the government shutdown, investors are more focused on the data that’s still coming out. So the print added to speculation that the Fed would cut rates rapidly in the months ahead if the economy weakened, particularly given the ongoing government shutdown. And in turn, 10yr Treasury yields (-1.7bps) closed at 3.96%, which is their lowest level since October 2024, whilst the 30yr Treasury yield (-2.6bps) fell to 4.54%, its lowest level since the Liberation Day turmoil in April.

Sentiment got a bit of a boost yesterday from various trade headlines, which added to investor optimism that a tariff escalation would be avoided. For instance, Trump said at the White House that he would see President Xi in South Korea, and that “I expect to be able to make a good deal with him”. However, Trump also floated that the meeting might not happen, saying “Maybe it won’t happen. Things can happen where, for instance, maybe somebody will say, I don’t want to meet”, so that briefly pushed the S&P 500 into negative territory again. And separately, Canadian PM Mark Carney said that they were in “intensive negotiations” with the US, and it was “possible” that a trade deal could be reached ahead of the APEC summit in South Korea next week.  

The S&P 500 had traded slightly in the green for most of the day, before closing virtually unchanged (+0.003%), leaving the index just over a quarter of a percent from its record high two weeks ago. The equity moves were pretty mixed, with nearly 60% of the S&P 500 higher on the day, but the NASDAQ (-0.16%), Mag-7 (-0.31%) and the Russell 2000 (-0.49%) all fell back as value stocks outperformed. Bank stocks were among the underperformers, with the KBW Bank index (-0.37%) losing ground after rebounding the previous two sessions. And after the close, we heard from Western Alliance Bancorp, who saw a -10.81% fall in their share price last Thursday as the concerns around regional banks and private credit gathered pace. The banking group delivered an earnings and revenue beat even as it raised credit loss provisions to $80m (vs. $42.4m est.), and its share price was up +2.85% in after-hours trading. So that offered reassurance to markets after last week’s jitters, particularly after the smooth reaction to Zions Bancorp’s earnings the previous day, and S&P 500 futures are up +0.16% this morning.

In the meantime, the US government shutdown is entering day 22, which now makes this the second-longest shutdown, behind the 2018-19 shutdown that lasted for 35 days. Republican Senate Majority Leader John Thune said yesterday that Republican lawmakers were “hopeful that this will be the week we break out of this”, but there’s still no obvious sign of a compromise emerging between Republicans and Democrats. Indeed, the Polymarket odds for the end of the shutdown have continued to drift into the distance, with the chances of the shutdown lasting beyond November 16 up from 29% this time yesterday to 40% now. So that’s still impacting the usual flow of data, although we will get a delayed CPI report for September this Friday.

Over in Europe, markets put in a strong performance, and France’s CAC 40 (+0.64%) finally exceeded its record high from May 2024. That came alongside fairly broad-based gains, and the STOXX 600 (+0.21%) closed less than -0.1% beneath its own record high. Likewise, sovereign bonds rallied across the continent, with yields on 10yr bunds (-2.5bps), OATs (-2.0bps) and BTPs (-2.2bps) all moving lower. And for 10yr bunds, that took them down to 2.55%, their lowest level since June.

One exception to the global pattern of lower yields was in Canada, after their latest inflation report surprised on the upside. It showed headline CPI rising to +2.4% in September (vs +2.2% expected), whilst both the trim core and the median core measures tracked by the Bank of Canada also moved higher. So that led investors to dial back the likelihood of a rate cut next week, with markets pricing in a 73% chance by the close, down from 77% the previous day. And in turn, Canada’s 10yr government bond yield moved up +2.4bps to 3.08%, making it the only G7 country where yields moved higher yesterday.

Elsewhere, Brent crude oil prices (+0.51%) rebounded from their 5-month low on Monday to $61.32/bbl, on news that the US administration would begin refilling its Strategic Oil Reserve, starting with 1 million barrels. The oil move was also supported by more negative noise between the US and Russia, with Bloomberg reporting that the White House has no immediate plans for a Trump-Putin meeting given differences between the sides on potential ceasefire terms in Ukraine. Meanwhile, Trump himself said he did not want to have “a wasted meeting” with Putin.

Over in Japan, Sanae Takaichi became the new PM yesterday after winning a parliamentary vote. On monetary policy, she said that “I believe the BOJ should retain discretion over the tools of monetary policy”, and that she didn’t see a need to review the 2013 accord between the BOJ and the government. Against that backdrop, the yen weakened by -0.78% against the US Dollar yesterday, making it the weakest-performing G10 currency, although it’s stabilised again this morning. The Nikkei is also up +0.13% currently, leaving the index on track for another record high. And elsewhere in Asia, South Korea’s KOSPI (+0.77%) is also at a record high, although Chinese equities are struggling this morning, with the CSI 300 (-0.70%) and the Shanghai Comp (-0.44%) both losing ground.

To the day ahead now, and data releases include the UK CPI print for September, whilst central bank speakers include ECB President Lagarde and Vice President de Guindos. Otherwise, earnings releases include Tesla and IBM.

Tyler Durden Wed, 10/22/2025 - 08:34

India-US Trade Deal "Likely Soon," Could Be Announced At ASEAN Summit: Mint

The U.S. and India are close to a possible trade deal that would reduce tariffs on Indian exports to about 15% to 16% from the current 50%, according to the Mint. In return, India may reduce imports of Russian oil and open its market to non-genetically modified American corn and soymeal products. The bilateral trade agreement could be announced when President Donald Trump and Prime Minister Narendra Modi meet at the ASEAN Summit in Malaysia between Oct. 26 and 28.

The Indian financial daily newspaper cited three unidentified people who were familiar with the deal. Here's what they said:

India and the U.S. are closing in on a long-pending trade deal that could slash the current tariffs for Indian exports to 15–16% from a punishing 50%, according to three people aware of the matter.

With energy and agriculture emerging as key cards at the negotiating table, India may agree to gradually reduce its imports of Russian oil, the people cited above said on condition of anonymity. The purchases had prompted a punitive levy of 25% on Indian exports, which is over and above the 25% reciprocal tariffs announced in April.

India may also allow more non-genetically modified (GM) American corn and soymeal into its markets. Further, it is pushing for a mechanism to revisit tariffs and market access over time in the agreement.

Mint said the bilateral trade agreement may be announced when Modi and Trump meet at the ASEAN Summit in Malaysia.

Late Tuesday, Modi wrote on X:

Thank you, President Trump, for your phone call and warm Diwali greetings. On this festival of lights, may our two great democracies continue to illuminate the world with hope and stand united against terrorism in all its forms.

Thank you, President Trump, for your phone call and warm Diwali greetings. On this festival of lights, may our two great democracies continue to illuminate the world with hope and stand united against terrorism in all its forms.@realDonaldTrump @POTUS

— Narendra Modi (@narendramodi) October 22, 2025

Russian crude remains a major flashpoint. India is the world's second-largest buyer of Russian oil after China, importing around 1.6 million barrels per day, up sharply from 50,000 bpd in 2020. Trump previously hiked tariffs by 25% as a penalty for India's continued purchases.

Earlier this year, the U.S. and India agreed to target $500 billion in trade by 2030, but those talks broke down after U.S. trade officials demanded greater access to India's agricultural and dairy sectors. According to Mint sources, the new deal stated that "broad contours of the agreement are in place, but sensitive areas such as agriculture and energy need political clearance before the deal can be announced."

What may overshadow any trade deal between the U.S. and India is what Trump described on Tuesday about a potential "fantastic" trade deal with China.

Tyler Durden Wed, 10/22/2025 - 08:25