US equity futures are flat and European stocks headed for a record high as third-quarter earnings continued to flow in.  As of 8:20am, S&P and Nasdaq futures are little changed. Pre-market, Mag 7 are mostly flat except for a -3% selloff in TSLA given the underwhelming earnings release last night which saw profits tumble despite record revenues (pulled forward due to expiration of tax credits) on sharply higher costs. Quantum-computing stocks rallied on a WSJ report the US Is mulling buying stakes (Rigetti Computing (RGTI US) +9.1%, IonQ (IONQ US) +8.7%). Overnight, the most important headline was US’s sanction on the two largest oil company in Russia which sent WTI crude surging 5.5% higher this morning. As a result, bond yields are 1-5bp higher led by 30y, and the 10Y trading just below 4.00%. The USD is higher. Commodities are mostly higher led by oil and precious metals (silver +1.1%). US-China trade talk is set for Friday in Malaysia. Today’s economic calendar calendar includes September existing home sales (10am) and October Kansas City Fed manufacturing activity (11am); weekly jobless claims data have been suspended by the shutdown.

In premarket trading, Mag 7 stocks are mixed: Tesla (TSLA) falls 3.5% after profit plunged despite a record quarter of vehicle sales (Alphabet +0.4%, Amazon +0.3%, Microsoft +0.2%, Apple -0.06%, Nvidia -0.2%, Meta -0.1%)

• Quantum-Computing Stocks Rally on Report US Is Mulling Stakes (Rigetti Computing (RGTI US) +9.1%
  IonQ (IONQ US) +8.7%, D-Wave Quantum (QBTS US) +12.5%)
• Dow Inc. (DOW) rises 6% after the chemicals company reported third-quarter operating Ebitda that beat the average analyst estimate.
• Honeywell (HON) gains 4% after the industrial company reported third-quarter adjusted earnings per share that surpassed analysts’ expectations. 
• International Business Machines Corp. (IBM) is down 7% after it reported disappointing revenue in two key software categories, including its closely watched Red Hat unit.
• Las Vegas Sands (LVS) rises 5% after the casino operator reported adjusted earnings per share for the third quarter that beat the average analyst estimate.
• LendingClub (LC) soars 11% after the online lender provided a guidance range for new 4Q originations with a midpoint above estimates. JPMorgan upgraded the stock to overweight.
• Moderna (MRNA) is down 4% after the company said its vaccine to prevent cytomegalovirus, a common cause of birth defects, failed to meet its goal in a late-stage trial.
• Molina Healthcare (MOH) is down 18% after the health insurer cut its adjusted profit guidance for the full year, citing higher medical cost trends in all its businesses.
• T-Mobile US Inc. (TMUS) falls 1% after posting third quarter results.
• Tractor Supply (TSCO) falls 3% after the retailer narrowed its full-year guidance range for net sales, with the midpoint toward the lower end of the previous range.
• Ribbon Communications (RBBN) falls 14% after the developer of software for large phone companies posted third quarter profit that disappointed. Guidance for fourth quarter revenue also missed expectations.
• Ventyx Biosciences (VTYX) surges 105% after the drug developer said mid-stage clinical trial results showed significant reductions in cardiovascular risk factors in patients with obesity.

In corporate news, the Wall Street bonus pool is expected to break records this year as big banks reap profits from soaring stocks and a return to more dealmaking after a long drought. Musk, meanwhile, spent the end of Tesla’s earnings call pleading with investors to ratify his upcoming $1 trillion pay package. Polymarket is said to be holding early conversations with investors and looking to raise money at a valuation between $12 billion and $15 billion.

Oil prices jumped after the Trump administration sanctioned Russian state-owned group Lukoil and Rosneft, ramping up the pressure on Russian President Vladimir Putin to negotiate an end to the war in Ukraine. Brent has jumped by 5% to start testing $66/barrel. The oil price spike may accelerate a shift in equities to value from growth sectors.

While valuations on the S&P 500 appear stretched, drawdowns in recent weeks have been brief as investors look for better entry points. The “artificial intelligence ecosystem” and banks have shown strong earnings, according to Arun Sai, a senior multi-asset strategist at Pictet Asset Management. “We’re seeing froth skimmed off the top, which so far I think is a healthy correction,” Sai said. “You still don’t have evidence to suggest there is anything fundamentally wrong with the US economy or with markets” given strong earnings and the lack of US government data, he said.

While the market remains very steady at the index level, big rotations are going on below the surface, with momentum trades like AI losing steam, as earnings misses pile up in the tech sector and geopolitical tensions simmer. Oil jumped after the US announced sanctions on Russia’s biggest producers. Tesla shares are lower premarket after quarterly profit plunged, while Elon Musk’s vision of an AI-focused future failed to convince. IBM also disappointed, adding to a slate of poor tech earnings this week including SAP, Netflix and Texas Instruments. Intel is due to report after the close.

The meme stock mania of the past few days may also be passing, with Beyond Meat and Krispy Kreme both lower in premarket trading. A four-day surge that sent Beyond Meat shares up more than 1,300% pushed short sellers’ paper losses to more than $120 million from last week’s record low close, according to data from S3 Partners. Some shorts have been scrambling to exit, while others have doubled down on bets against the plant-based protein producer.

Trade tensions are also never far away. China said Vice Premier He Lifeng plans to meet with US officials in Kuala Lumpur from Oct. 24 to 27 for the next round of talks. The Trump administration is weighing export restrictions against China that would bar the purchase of a wide swath of critical software, a White House official said Wednesday.

“Because of the trade tensions, there was a narrative of caution going into third-quarter season and that has now abated, given the stronger numbers,” said Nina Stanojevic, an investment specialist at St James Place. “People were looking to this earnings season to see if there was any flow-through from the trade tariffs but it seems that the market has taken it in its stride so far.”

The markets are jittery about the US-China tensions, and “though it could probably be just another TACO situation, and even though everyone knows that’s how it goes, there are still people who have to react until things settle down,” said Ryuta Otsuka, a strategist at Toyo Securities.

Looking at Q3 reporting season, earnings so far have been broadly positive, helping to support equities as a mix of macro fears injected a note of nervousness into global markets. The Trump administration said it’s considering curbs on software exports to China, risking another escalation of the trade dispute. Traders are also pinning their hopes on another Federal Reserve interest-rate cut later this month, even as they await delayed September inflation data due to be released on Friday.

European equities rose on Thursday, with energy shares leading gains as oil rallied after the US imposed sanctions on Russian producers. Travel and technology shares are the biggest laggards. Stoxx 600 rises 0.2% to 573.25 with 277 members down, 313 up, and 10 little changed. Here are the biggest movers: 

• Energy is the best-performing sector in Europe on Thursday as oil rallies after the US announced sanctions on Russia’s biggest producers, with President Donald Trump ramping up pressure to negotiate an end to the war in Ukraine
• LSE Group shares rise as much as 9%, after the data company and stock exchange operator reported third-quarter results that analysts described as strong and raised its guidance for 2025 adjusted Ebitda margin to the top end of the prior range
• Nokia shares surge as much 13%, the most since April 2021, as analysts cheer a strong report from the Finnish digital infrastructure firm in which net sales beat expectations; Jefferies sees strong momentum building in the quarter
• DSV gains as much as 7.6%, the most since April, after the Danish logistics group’s third-quarter report showed positive impacts from cost control as well as an earlier-than-expected boost from the recent Schenker acquisition, according to analysts
• Kering shares rise as much as 10%, hitting the highest level since April 2024, after the luxury-goods maker reported better-than-expected third-quarter revenue
• Dassault Systemes shares drop as much as 17%, the most since 2002, after the software firm lowered its revenue forecast for the year. The shares are trading at the lowest since April 2020
• RELX falls as much as 2.7% after the UK information and analytics firm reported results in line with analysts’ estimates. Underlying trends indicate the company is on track to meet FY expectations
• Evolution shares drop as much as 13% to the lowest intraday level in almost five years. The Swedish gambling operator’s revenue and earnings missed estimates in the third quarter, with Asia a particular source of weakness
• Carrefour shares drop as much as 5.9%, the most since June, after the grocer reported 3Q LFL sales excluding fuel and calendar effects that missed analyst estimates
• Roche shares drop as much as 3.4%, the most since May 12, after the Swiss drugmaker reported weaker-than-expected sales for the third quarter. Vontobel called the upgraded earnings guidance for the full year an “unconventional move”

Asian stocks declined, in risk-off trading after news that the White House is considering curbs against China that would bar the purchase of a wide swath of critical software. The MSCI Asia Pacific Index dropped as much as 0.7% before paring losses. TSMC and SoftBank were among the biggest drags, tracking a continued selloff in global AI shares, while tech stocks also slid in Hong Kong. Japan and South Korea led losses among regional benchmarks. The US is considering curbs similar to those implemented against Russia if China doesn’t back down from its threat to restrict rare-earth exports, Reuters reported earlier. While it’s not clear how serious the effort is, it caused fresh anxiety for traders ahead of trade talks planned for next week between Donald Trump and Xi Jinping. China announced in the afternoon that Vice Premier He Lifeng plans to meet with US officials in Kuala Lumpur from Oct. 24 to 27 for the next round of trade talks. Chinese equities staged a rebound later in the day, with the onshore benchmark CSI 300 Index ending the day 0.3% higher, while the Hang Seng China Enterprises Index rose 0.8%. A pivotal political gathering on the nation’s development plan for the next five years was also in focus, with authorities expected to deliver fresh policy measures to support growth. Elsewhere, Indonesia’s stock benchmark climbed more than 1%, leading gainers around the region. Here are the most notable Asian movers

• Japanese shipbuilders including Namura Shipbuilding and Sumitomo Heavy Industries surged after the Nikkei reported that an industry group will soon announce a ¥350 billion capital investment plan. Meanwhile, Tesla supplier stocks including Renesas Electronics and TDK fell after the EV maker reported worse-than-expected profit.
• Sands China shares gain as much as 4.6% in Hong Kong after the casino operator’s parent reported an adjusted EBITDA for its Macau operation in the third quarter that beat estimates.
• Pop Mart International Group Ltd. shares plunged on Thursday, reflecting renewed concerns about the toy maker’s long-term sales outlook despite a strong third-quarter performance.
• LS Electric shares surge as much as 13% to a record high as NH Investment & Securities and other brokerages raise their price targets for the South Korean energy equipment maker following a 19% on-year jump in quarterly sales.
• Giant Biogene shares rise as much as 14% in Hong Kong, the most since March 2023, after the co.’s controlling shareholder increased stake in the firm.

Chinese officials conclude their Fourth Plenum gathering in Beijing, with a readout expected later in the day. Treasury Secretary Scott Bessent is expected to huddle with his Chinese counterparts over the weekend ahead of the Trump-Xi talks.

In FX, an earlier gain in the dollar eases, with the Bloomberg Dollar Spot Index little changed and Japanese yen underperforming. The US currency was supported by its 0.5% gain versus the yen to 152.66; the Japanese currency was pressured by expectations of fiscal expansion under the country’s new prime minister and fading prospects for interest rate hikes

In rates, Treasuries hold losses accumulated during London morning as oil prices surged after the US announced sanctions on Russia’s biggest producers, with yields higher by 2bp-5bp and curve steeper. Treasuries lead losses for most bond markets globally. The US 10-year yield is near 3.99% after touching 3.936% Wednesday, with 2s10s and 5s30s curves wider by about 1.5bp near 52bp and 99bp respectively. The US session includes 5-year TIPS auction, following strong demand for Wednesday’s 20-year bond sale. Yields are higher across Europe.

In commodities, WTI crude futures remain more than 5% higher on the day after climbing as much as 5.8% after the Trump administration sanctioned Russian state-owned group Lukoil and Rosneft, ramping up the pressure on Russian President Vladimir Putin to negotiate an end to the war in Ukraine. Brent has jumped by 5% to start testing $66/barrel. Gold turned positive after two days of steep declines as the Trump administration’s latest trade threats introduced fresh tension into US-China relations. 

Today’s economic calendar calendar includes September existing home sales (10am) and October Kansas City Fed manufacturing activity (11am); weekly jobless claims data have been suspended by the shutdown

Market Snapshot

• S&P 500 mini little changed
• Nasdaq 100 mini little changed
• Russell 2000 mini +0.3%
• Stoxx Europe 600 +0.2%
• DAX -0.4%
• CAC 40 +0.3%
• 10-year Treasury yield +4 basis points at 3.99%
• VIX +0.3 points at 18.91
• Bloomberg Dollar Index little changed at 1213.5
• euro little changed at $1.16
• WTI crude +5.2% at $61.52/barrel

Top Overnight News

• Republican Senators are said to consider a bill to keep SNAP program benefits flowing during the government shutdown, according to POLITICO.
• Bessent said they might see CPI coming down next month and the month after, while he thinks housing prices are a lagging indicator, and they are going to see substantial tax refunds for Americans.
• President Trump has announced substantial new sanctions on Russia’s two biggest oil companies as frustration in Washington grows over the war in Ukraine. The new sanctions target Lukoil and Rosneft as well as nearly three dozen of their subsidiaries. WSJ
• U.S. President Donald Trump said on Wednesday he expected to reach agreements with Chinese President Xi Jinping when they meet in South Korea next week that could range from resumed soybean purchases by Beijing to limits on nuclear weapons. Trump also plans to discuss China’s purchases of Russian oil an dhow to stop Russia’s war in Ukraine. RTRS
• A Treasury analysis has found the Trump administrations economic policies have put the US on track to narrow its yawning deficit using a mix of spending cuts and tariff revenue to improve the fiscal outlook. FT
• China said Vice Premier He Lifeng plans to meet with US officials (Bessent, Greer) in Kuala Lumpur from Oct. 24 to 27 for the next round of trade talks, aimed at defusing a standoff between the world’s two largest economies. BBG
• Trump’s administration is in talks to take equity stakes in quantum computing firms: WSJ.
• President Trump said interest rates are down, while he criticized the Fed chair, and noted that he will be doing something very quickly to get beef prices down. 
• The new junior party in Japan’s ruling coalition is likely to give Prime Minister Sanae Takaichi the green light she needs for a big spending package, but will stop short of supporting a revival of Abenomics-style fiscal and monetary policies. RTRS
•  
• BOJ watchers pushed back their forecast for the next interest-rate hike after Sanae Takaichi took over as PM. Only 10% of economists now predict a rate hike on Oct. 30, down from 36% in the previous survey. BBG
• Indian refiners are poised to sharply curtail imports of Russian oil to comply with new U.S. sanctions on two top Russian producers, industry sources said on Thursday, potentially removing a major hurdle to a trade deal with the United States. The change comes as India faces punishing 50% tariffs on its exports to the US and tries to negotiate a trade deal. RTRS
• Canada aims to double its non-US exports by 2035, PM Mark Carney said in a rare prime-time televised speech. He also plans to introduce an immigration strategy to lure talent that might’ve otherwise gone to the US. BBG
• Retail traders are cementing themselves as a force in markets. One proxy for their involvement is stock trades at off-exchange venues, which are poised to make up 50% of total volume this year for the first time. BBG
• Investors are more bullish than before according to the latest Barron’s money manager survey – 47% anticipate higher stock prices over the next 12 months vs. just 28% in the spring (although 57% believe stocks are overvalued). Barron’s

Trade/Tariffs

• US President Trump’s administration is considering a plan to restrict globally produced exports to China made with or containing US software, while the new export controls under consideration by the US could curb exports on a wide range of goods to China, and the plan would retaliate against China’s rare earth export restrictions if adopted, according to Reuters sources. However, the sources said that the measure, details of which are being reported for the first time, may not move forward, and administration officials could announce the measure to put pressure on China but stop short of implementing it, while narrower policy proposals are also being discussed.
• US President Trump said a long meeting is scheduled with Chinese President Xi in South Korea, and he thinks something will work out, while he thinks he will make a deal with Chinese President Xi and could make a deal on soybeans. Trump added that they could even make a deal on nuclear and thinks he will talk to Xi about Russian oil, as well as ending the war in Ukraine. Trump also commented that tariffs are vital and that they might go to the Supreme Court for the tariffs case.
• US Treasury Secretary Bessent said he was leaving on Wednesday for Malaysia to meet with Chinese officials and is hoping they can iron things out, while he will have two days of fulsome talks with Chinese officials in Malaysia. Bessent said it would be a shame to waste the first meeting of Trump and China’s Xi during Trump’s second term, as well as noted that he is contemplating the US and allies’ next move if China talks fail.
• US Treasury Secretary Bessent said any export controls regarding China will be in coordination with G7 allies.
• Taiwan US envoy said they are close to reaching a trade agreement with the US.
• China Commerce Ministry says Vice Premier Lifeng will hold talks with the USA regarding trade in Malaysia within 24-27 October.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly subdued following the negative handover from Wall St, where sentiment was weighed on by US-China frictions. ASX 200 traded rangebound as participants digested quarterly updates, and with gains in energy and utilities offsetting the weakness in tech and mining. Nikkei 225 underperformed after gapping lower at the open to beneath the 49,000 level despite a weaker currency. Hang Seng and Shanghai Comp were negative with the mainland pressured amid US-China tensions after reports that the Trump admin considers restricting globally-produced exports to China made with or containing US software.

Top Asian News

• BoK kept the base rate unchanged at 2.50%, as expected, with the decision not unanimous as board member Shin Sung-Hwan dissented and said a rate cut is needed to support growth. BoK said it will maintain the rate cut stance to mitigate downside risk to economic growth, and will adjust the timing and pace of any further base rate cuts, while it will closely monitor changes in domestic and external policy conditions, as well as examine the impact on inflation and financial stability. BoK Governor Rhee revealed that four board members said the door for rate cuts should be open for the near future, while two board members said current rates should be maintained. Rhee also said that a rate cut at the meeting could have accelerated the upswing in property prices and that it was too early to tell if the rate-cut stance could continue through next year. Furthermore, he said there is greater focus on financial stability among board members, and noted that the chip cycle and US-China trade talks should be watched as the board prepares for the November forecast revision.
• Japan’s RENGO says it will be seeking wage hikes of 5% or more in 2026 shunto negotiations
• China publishes fourth plenum communique, via Xinhua; approves draft of next five-year plan as plenum ends, aims to boost trade innovation, further open markets and extend bilateral investment opportunities. Plans measures to stabilise the job market. Will strengthen public opinion guidance to effectively prevent ideological risks. To enhance social security controls to legally combat crime. Promotes long-term prosperity and stability in Hong Kong and Macau. Will persevere in advancing comprehensive and strict governance over the Communist party. Aiming for a ‘big increase’ in the level of tech self-reliance. To comprehensively enhance independent innovation capabilities.

European bourses (STOXX 600 +0.2%) are mostly firmer but with some slight underperformance in the DAX 40, which is being pressured by post-earning losses in SAP (-2.4%). European sectors are mixed. Energy takes the top spot, joined closely by Consumer Products; the latter boosted by upside in Kering (+9%) after the Co. reported strong Q3 metrics. To the downside, Evolution (7%) weighs on the Travel & Leisure sector.

Top European News

• SNB Minutes (Sep): discussed diverging interest rate developments in the US and EZ with experts. Board concluded that the current implementation of monetary policy was appropriate under various scenarios.
• German Council of Tax Experts expect EUR 33.6bln more in total tax revenue in 2025-2029 vs May; German Finance Minister says more positive economic outlook is reflected in rising tax rev.; Gov. is bearing most of growth booster expenses

FX

• USD is slightly firmer/flat and trades within a very narrow 98.92-99.10 range; lack of data releases and Fed speak (due to blackout) has led to quiet trade for the Dollar. However, this should all pick-up on Friday, with the BLS set to release US CPI, despite the government shutdown. There have been some important trade-related newsflow recently; Reuters reported that the Trump administration is mulling a plan to restrict globally produced exports to China made with or containing US software. Though the piece suggested that the US may not go forward with the plan, and may only be used to apply pressure on China amid trade negotiations. On that, Treasury Secretary Bessent is set to meet with China’s VP in Malaysia over the weekend; Bessent said he hopes “to iron things out”.
• EUR is flat/incrementally lower vs USD. EUR/USD is currently trading in a 1.1591-1.1614 range, which is towards the mid-point of Wednesday’s bounds. Overnight, ECB’s Kazaks said “it may well be the case that the next rate move could as easily be a hike as a cut” – comments which are in contrast to Villeroy (cut more likely than hike) and Kocher (sees equal chance).
• JPY is right at the foot of the G10 pile, alongside haven peer CHF; nothing really driving the “risk-on” sentiment seen in the FX-space today, but perhaps some focus on US Treasury Secretary Bessent’s meeting with China VP this weekend – it is worth caveating that other trade-related reporting has been broadly negative (discussed above). Newsflow out of Japan has been very light, with USD/JPY largely moving at the whim of the Dollar; currently trades at the upper end of a 151.82-152.66 range, a peak which marks a WTD best. Further upside could see a breach back above 153.00 and then to the 10th October high at 152.27.
• GBP is flat, taking a breather following the prior day’s subdued trade in the aftermath of a softer-than-expected inflation report. Newsflow since has been incredibly light, and this has been reflected in Cable, which currently trades in a narrow 1.3329-1.3362 range; at the mid-point of Wednesday’s confines.
• Antipodeans are at the top of the G10 pile, but little fresh behind the strength; though upside which seemingly coincided with an early-morning uptick in copper prices.
• PBoC set USD/CNY mid-point at 7.0918 vs exp. 7.1205 (Prev. 7.0954)

Fixed Income

• USTs were softer by a tick or two in APAC trade and have continued to dip into and throughout the European morning. Pressure a function of the pockets of improvement in the risk tone as the US-China situation isn’t perhaps as bad as first thought, a point added to by the fact the US’ Bessent and China’s He are still set to meet in Malaysia from tomorrow.
• Thus far, down to a 113-16+ trough with downside of nine ticks at most and approaching the 113-10 WTD base. Ahead, Fed’s Barr and Bowman are scheduled, but the blackout means this will be a non-event. Data-wise, the shutdown continues to limit, but any comments from the KC survey on inflation are of note ahead of Friday’s CPI.
• EGBs followed suit to the above. Bunds below the 130.00 mark, matching the 129.24 low from Tuesday, but yet to test 129.76 from Monday. EGBs hit by the better tone around trade as outlined above. Further pressure for fixed income also stemming from the continued advances in energy prices, biasing yields higher.
• Gilts, unsurprisingly, saw a softer start after closing with gains of nearly 60 ticks on Wednesday. Gilts opened lower by a handful of ticks and despite a brief move into the green have since conformed to the bearish bias and trade lower by 15 ticks, an amount comparable to Bunds.
• UK sells GBP 4.75bln 4.125% 2035 Gilt: b/c 2.83, average yield 4.00%, tail 0.7bps

Commodities

• Crude benchmarks are strong today as the US placed new sanctions on Russian oil companies. After an initial c. USD 1.30/bbl move late on Wednesday, WTI and Brent trended higher during APAC trade from USD 59.72/bbl and USD 63.86/bbl respectively to peak at USD 60.90/bbl and USD 65.04/bbl. Currently, benchmarks are continuing to trade higher to new session highs at USD 61.79/bbl and USD 65.96/bbl respectively. To recap, late in Wednesday’s session, the US placed sanctions on Russian oil companies Rosneft and Lukoil because of “Russia’s lack of serious commitment to a peace process”.
• Spot XAU is a little firmer and is currently oscillating in a tight USD 4066-4137/oz band as the metal consolidates following Tuesday’s selloff from record highs.
• Base metals traded rangebound during the APAC session but broke out of recent ranges following Antofagasta copper production and confirmation of a China-US meeting in Malaysia. 3M LME Copper oscillated in a tight c. USD 50/t range during APAC trade before trending higher and is currently making fresh session highs at USD 10.82k/t.
• Reliance, India will be halting Russian oil imports as part of the term-deal with Rosneft due to the latest US sanctions, via Reuters citing sources
• Russian oil supply to India is set to fall to near zero, according to sources cited by Bloomberg.
• Indian state refiners reviewing bills of lading for Russian oil cargoes arriving post-November 21st to ensure no supply comes directly from US-sanctioned Rosneft and Lukoil, according to a source cited by Reuters

Geopolitics: Middle East

• US Secretary of State Rubio said the Israeli Knesset’s moves on West Bank annexation threaten the Gaza peace deal.

Geopolitics: Ukraine

• US President Trump said it didn’t feel right to have a meeting with Russian President Putin, so he cancelled it and felt it was time for Russian sanctions but hopes sanctions won’t be on for long. Trump also stated that whenever he speaks with Russian President Putin, they are good conversations, but they don’t go anywhere, while he added that sanctions will hopefully make Russian President Putin reasonable.
• US Secretary of State Rubio said they would still like to meet with the Russians and are always going to be interested in engaging with Russia if there’s an opportunity to achieve peace.
• US Treasury Secretary Bessent said a substantial pick up in Russia sanctions was expected to be announced on Wednesday or Thursday. Bessent separately commented that Russian President Putin has not come to the table in an honest manner and President Trump is disappointed with where we are in talks to end the war, while he said the incoming Russia sanctions will be among the largest and the US is urging European and G7 allies, plus Canada and Australia, to join the sanctions push.
• US Treasury Department announced it is imposing sanctions on Russia related to oil and is targeting Russia’s Rosneft and Lukoil in the latest batch of sanctions, while it added that OFAC is designating a number of Russia-based Rosneft and Lukoil subsidiaries. Furthermore, it stated that all entities owned 50% or more, directly or indirectly, by Rosneft and Lukoil are blocked, even if not designated by OFAC and it called on Russia to immediately agree to a ceasefire.
• Ukraine President Zelensky says a ceasefire is a possibility. More pressure on Russia is needed. Will not agree to territorial concessions.
• Russia’s Deputy Security Council Chair Medvedev states that the US is a Russian opponent and that US President Trump is on a warpath, his actions are like an act of war.

Geopolitics: Other

• North Korea said its missile test on Wednesday was successful and was for self-defence, while it added that the missiles tested were hypersonic projectiles, according to KCNA.

US Event Calendar

• 8:30 am: Oct 18 Initial Jobless Claims, est. 225k
• 8:30 am: Oct 11 Continuing Claims, est. 1932k
• 10:00 am: Sep Existing Home Sales, est. 4.06m, prior 4m
• 10:00 am: Sep Existing Home Sales MoM, est. 1.5%, prior -0.2%

DB’s Jim Reid concludes the overnight wrap

Markets struggled for momentum yesterday, with the S&P 500 (-0.53%) falling back after 3 consecutive gains. The main drivers were fears around the US-China trade situation, weaker earnings announcements, as well as growing concerns about a protracted US government shutdown. So that meant sentiment took a hit, with investors becoming a bit less confident in the near-term outlook. Indeed, there was little respite in any direction, as gold fell another -0.65% after Wednesday’s -5.30% slump. However, one asset that did jump were oil prices, with Brent Crude back above $64/bbl this morning after the US announced new sanctions against Russian oil.

Those trade concerns were one of the biggest market catalysts yesterday, and Reuters reported that the Trump administration were considering a plan to restrict exports to China on items that contain US software or were produced using US software. The article said the plan wasn’t the only option on the table, but was designed to retaliate against China’s restrictions on rare earth exports.  That left a sense of both sides engaging in hard bargaining ahead of the possible Trump-Xi meeting and trade-sensitive indices took a particular hit yesterday, including the Philadelphia Semiconductor index (-2.36%). That said, we did see hear some constructive-sounding comments later on, with Trump suggesting that he and China’s Xi would “make a deal on, I think, everything”.

The tech mood didn’t improve much after the close, as Tesla was the first of the Mag-7 to report earnings this season. While its revenue beat expectations, they posted a larger-than-expected decline in profits with earnings per share down 31% year-over-year ($0.50 vs $0.54 estimate) weighed down by a surge in operating expenses. So that left Tesla’s shares down -3.95% in after-hours trading, following on a -0.82% decline in yesterday’s regular session. However, it hasn’t caused too big a hit to overall sentiment, with futures on the S&P 500 (+0.11%) and the NASDAQ 100 (+0.17%) both pointing higher this morning.

Before the Tesla results, the S&P 500 (-0.53%) had already lost ground yesterday. While chip stocks led the underperformance, the Mag-7 saw a similar -0.53% decline. The more cyclical industrials (-1.31%) and consumer discretionary (-1.00%) sectors struggled in particular, while the small cap Russell 2000 (-1.45%) saw one of the biggest losses. Meanwhile, Netflix (-10.07%) was the second worst performer in the S&P 500 after their earnings were beneath analysts’ estimates the previous evening. And it was a tough day in Europe too, as the STOXX 600 (-0.18%) also lost ground, with the DAX (-0.74%) and the CAC 40 (-0.63%) posting even bigger declines.

Matters haven’t been helped by the ongoing US government shutdown, which is now on day 23. So, it’s now the second-longest shutdown, only ranking behind the most recent 35-day shutdown in 2018-19, and there’s still no sign of a compromise between Republicans and Democrats that would bring it to an end. Indeed, the Polymarket probabilities currently suggest there’s a 75% chance that this will be the longest shutdown in history, so it could be some time before the regular flow of US economic data resumes. That backdrop was supportive for Treasuries however, as the risk-off move and a strong 20yr auction supported demand. So the 10yr yield (-1.3bps) fell to a fresh one-year low of 3.95%, and the 30yr yield (-1.2bps) was down to its lowest since the Liberation Day turmoil in April, at 4.53%.

Overnight, the biggest market move has come from oil prices, after the US Treasury announced sanctions against Russia’s two largest oil companies, citing “Russia’s lack of serious commitment to a peace process to end the war in Ukraine”. These are the first material US sanctions against Russia introduced since Trump re-entered the White House in January and mark a sharp shift in tone compared to a week ago, when the two sides had talked about a possible meeting in Budapest between Trump and Putin. And with increased risks of oil supply disruption, Brent crude is +3.10% higher overnight at $64.53/bbl, extending a +2.07% gain yesterday, which if sustained would be its biggest 2-day jump since July.

Despite the risk-off move globally yesterday, here in the UK there was a decent market rally after the latest CPI print showed a clear downside surprise. So headline CPI remained at +3.8% (vs. +4.0% expected), and core CPI unexpectedly fell to +3.5% (vs. +3.7% expected). That meant investors dialled up their expectations for another BoE rate cut this year, with the probability of a cut by the December meeting up from 42% to 72% by the close yesterday. In turn, that led to a huge rally for gilts, with the 2yr gilt yield (-8.8bps) down to its lowest since August 2024, whilst the 10yr gilt yield also fell -6.0bps. So that’s also positive from a fiscal standpoint ahead of the government’s budget next month, and UK equities saw a decent rally too. That meant the FTSE 100 was up +0.93%, whilst the more domestically-focused FTSE 250 (+1.47%) posted its strongest gain in over 6 months to close at its highest level since February 2022.
Elsewhere in Europe, bond yields picked up after their recent declines, with yields on 10yr bunds (+1.1bps), OATs (+1.2bps) and BTPs (+0.5bps) all moving higher. In part, that was driven by a pickup for inflation expectations, which came as oil prices moved higher even before the new US sanctions story broke.

Overnight in Asia, the more negative theme has continued this morning, with the major equity indices falling back as they react to the prospect of a further escalation in the US-China trade war. That’s been led by Japan’s Nikkei (-1.43%), but there’ve also been losses in China for the CSI 300 (-0.58%) and the Shanghai Comp (-0.66%). Meanwhile in South Korea, the KOSPI (-0.88%) has also fallen, which comes as the Bank of Korea left its policy rate unchanged at 2.5%, in line with expectations. And in the FX space, the Japanese yen has weakened against the US dollar for a 5th consecutive session and is now trading at 152.45 per dollar.

To the day ahead now, and data releases include US existing home sales for September, the Kansas City Fed’s manufacturing index for October, and the Euro Area’s preliminary consumer confidence measure for October. Otherwise from central banks, we’ll hear from the BoE’s Dhingra.

Authored by Christopher Whalen via DailyReckoning.com,

During a conference call with investors last week, JPMorgan CEO Jamie Dimon made a memorable response to a question from Wells Fargo analyst Mike Mayo about the collapse of a subprime auto lender called Tricolor that cost the bank $170 million. Tricolor went bankrupt due to allegations of fraud, including double-pledging of collateral, which led lenders to halt financing.

“Mike, you should assume that whenever something like that happens, we scour all process, all procedures, all underwriting, all everything, and we think we’re okay in other stuff,” said Dimon.

“But I – my antenna goes up when things like that happen. And I probably shouldn’t say this, but when you see one cockroach, there are probably more.”

Dimon’s instinct about there being more big credit problems lurking beneath the surface of the US economy is correct, but even he may not fully appreciate the scale of the threat. The collapse of auto parts maker First Brands has revealed an enormous fraud at the center of the $2 trillion market for leveraged loans. Based on losses reported so far and the numerous acts of fraud emerging, half of the leverage loan market may end up being lost to investors.

There are a growing number of examples of malinvestment in the US economy, but much of it springs from excessive liquidity supplied by the Federal Open Market Committee. Since 2008 and particularly since COVID in 2020, the Fed did too much. While classical economic theory states that reserves at the central bank do not impact prices, in fact we can see that the “ample reserve” policy first adopted by the Fed under Chairman Ben Bernanke fueled a massive increase in fraudulent activity and inflation.

In a speech to the National Association of Business Economists, Fed Chairman Jerome Powell admitted that the Fed added too much liquidity to the economy after 2020. “With the clarity of hindsight, we could have—and perhaps should have—stopped asset purchases sooner,” said Powell. “Our real-time decisions were intended to serve as insurance against downside risks.” But the downside risk created by the FOMC is that mortgage delinquency may rise dramatically even as interest rates fall into 2026.

Even as the Trump Administration looks for ways to boost housing, this by again lowering interest rates, there are troubling signs of both inflation and deflation in the residential sector. In blue states, home prices continue to rise because of a dearth of new home construction. In red states that are more attractive for home builders, however, over supply is starting to force prices down from Florida to Texas. Lower interest rates may slow the home price correction, but we anticipate a significant drop in home values by 2028.

But beyond the housing market, the low-interest rate environment created by the FOMC has spawned an epidemic of fraud throughout the public and private credit markets. When we say private credit, we don’t refer only to the subprime assets being peddled to retail investors by the major Wall Street firms, but Main Street kind of fraud. The vast waves of liquidity provided by the Fed provided a ready environment for all types of commonplace swindles to proliferate.

“Gerald Marcil, a Los Angeles landlord and Republican donor, is among investors accused by Zions Bancorporation and Western Alliance Bancorporation of manipulating loan structures, leading to nearly $160 million in alleged losses for the banks,”reports The Real Deal, an invaluable publication that covers the national real estate market.

Space does not permit us to tell you the full story of this all too typical California saga of bait and switch in commercial real estate.

Meanwhile, the CEO of Jefferies & Co, lead banker for First Brands, said that his bank likewise had been the victim of deception. Chief executive Rich Handler insists that the unravelling of First Brands, which could involve tens of billions in losses to investors, had not inflicted significant damage on the bank’s core business. Jefferies sold most of the debt raised for First Brands to investors. These victims of fraud will now look to the investment house for reparations.

The tales of woe regarding the Fed-fueled credit boom in commercial real estate and private credit will continue to grow in number, but it is important to point out that the relatively high-interest rates that prevailed in the US since 2022 have not prevented massive stock bubbles in technology stocks involved in “artificial intelligence” or AI, the latest marketing scam concocted by Wall Street to drive commissions.

Most of the private ventures formed around creating large language models to implement AI, for example, will never be profitable. An August 2025 MIT study found that 95% of AI projects within companies fail to deliver a positive return on investment or significant profit gains. The investment bankers will profit, however, proving yet again that the pages of the calendar may change, but human nature does not.

In the classic book, The Great Crash 1929, John Kenneth Galbraith argued that the crash revealed widespread financial misconduct, including embezzlement and other forms of bad behavior that had gone unnoticed during the preceding boom. The Roaring Twenties was an era characterized by rampant speculation in stocks and Florida real estate, which created an environment where it was difficult to distinguish between legitimate and fraudulent activity.

The Florida land boom crashed in 1926, primarily due to a combination of over-speculation, a credit crunch, and devastating hurricanes that year and in 1928. Even Charles Ponzi, whose eponymous scheme collapsed in 1920, later was involved in the Florida land business and was one of many swindlers whose scams were exposed. Florida real estate prices did not recover from the Great Depression until the 1970s. And here we are a century later, with Florida real estate prices starting to weaken.

Significantly Galbraith also described a form of fraud he called “the bezzle,” where fraud and theft are hidden, with the discovery of the crime only occurring after the passage of time.

Galbraith explained that the speculative excess of the era created an illusion of wealth that made it difficult to distinguish between genuine and dishonest activity. In a 1929 article titled “Everybody Ought to Be Rich,” businessman John J. Raskob promoted the idea that anyone who invested a small amount each month could become wealthy.

As the US moves into 2026, you can be pretty sure that reports of losses to banks and nonbanks will multiply as the Roaring Twenties of the 21st Century grind to a close.

Major Wall Street firms from JPMorgan to Goldman Sachs to Jefferies have already reported lapses in credit management and due diligence, the result of an era where bankers feel entitled to a certain level of wealth and are not particularly bothered about how they get it.

But how big is the bezzel in the 21st Century?

*  *  *

Learn more about Christopher Whalen at his website. Also be sure to check out his latest book, Inflated: Money, Debt, and the American Dream.

Authored by Tiffany Smiley via The Epoch Times (emphasis ours),

This week marks the third week of the government shutdown – and there continues to be no end in sight. This week, millions of federal workers officially missed their first paycheck. These workers are staring down the barrel of piling bills; many are unable to put gas in the car or food on the table for their families.

The consequences of a prolonged shutdown are stacking up fast. Federal services are grinding to a halt. Veterans’ career counseling and regional offices have gone dark. Flight delays and travel disruptions are wreaking havoc across the country. And for every week this drags on, the U.S. economy takes a $15 billion hit. A month-long shutdown means 43,000 more Americans are thrown out of work.

And yet, there’s one group that hasn’t missed a single paycheck: members of Congress. While working-class families are about to miss paychecks their livelihoods depend on, fat-cat politicians in Washington continue to get paid. It’s time for Congress to feel the pain they’re inflicting on millions of Americans.

Congress should miss their paychecks.

Arizona Democratic Sen. Ruben Gallego displayed the hypocrisy out loud as the shutdown began. In an interview with NBC News, he defended his refusal to forgo his salary during the shutdown, saying, “I’m not wealthy, and I have three kids. I would basically be missing, you know, mortgage payments, rent payments, child support.”

Exactly, Senator. That’s precisely what millions of everyday Americans are facing right now.

Ask yourself – would this shutdown even happen in the first place if members of Congress couldn’t make their own mortgage payments or pay their own rent? If they were scrambling to fill up their gas tanks or stay on their feet? Not a chance.

My heart breaks for the families who are beginning to feel this impact while their members of Congress treat this like a political game. I’ve lived this struggle myself. In 2005, my husband Scotty was blinded by an IED suicide bomb while serving our country in Iraq. While he lay in a coma at Walter Reed, I was forced to navigate a system that offered no real support – not for him, and certainly not for me. I had resigned from my job to be by his side, while facing student loan debt and mounting care expenses. There were no safety nets, no clear guidance – just bureaucracy and silence.

That was 20 years ago. Shamefully, not much has changed. While I’m thrilled and thankful to see President Trump ensure that members of our military get paid, law enforcement, air traffic controllers, and millions of moms and dads are still missing paychecks.

I know firsthand what it’s like to take on the government with no help, no roadmap, and no reward. If we’re serious about solving these systemic failures, then we must start by holding Congress accountable – not just for writing policy, but for standing behind the people they claim to serve.

Meanwhile, our Democratic politicians continue to prolong the government shutdown – voting six times to keep the government shuttered. While Democrats vote for a continued shutdown, President Trump and congressional Republicans are fighting for a clean-funding extension that will immediately open our government. Passing this stopgap funding measure gives Congress time to pass its funding bills through regular order and continue this historically bipartisan process.

I’ll be blunt: Enough is enough. If the American people have to feel the pain of a government shutdown, members of Congress should be in the foxhole with them.

They should be the ones holding the empty bank account. Imagine the urgency if every member of Congress faced foreclosure notices. Some members, both Republicans and Democrats, have already pledged to forgo their pay; others, like Gallego, should join them and stand with the people they claim to represent. Withhold congressional salaries until the government is funded. And watch how fast the government gets funded.

This shutdown isn’t about policy – it’s about power. Democrats are gambling with American families’ paychecks to score political points. Senate Democrats need to pass the clean funding extension or face the consequences of their own making.

Let’s end this farce and stop paying Congress. And reopen the government today.

Authored by Steve Watson via Modernity.news,

Fox News reports that the Trump administration is on course to “shatter” the record for deportations in one year, with over two million illegals sent packing since his second term in office began.

The segment notes that the numbers include an estimated 1.6 million self deportations and more than 400,000 forced deportations. 

The DHS has said that it expects to deport “nearly 600,000 illegal aliens by the end of President Donald Trump’s first year since returning to office.”

The number will likely be much higher than this, however, with figures released this week showing that 515,000 have already gone, with more than two months left of 2025.

The numbers show an exponential increase of 100,000 just since late last month.

DHS Assistant Secretary Tracia McLaughlin also told reporters that an additional 485,000 illegals have been arrested, presumably awaiting deportation.

“Trump is set to shatter the U.S. deportation record by the end of 2025.” pic.twitter.com/8iyJgBfM1e

— Karoline Leavitt (@PressSec) October 21, 2025

McLaughlin said that “this is just the beginning” and that Trump and Homeland Security Secretary Kristi Noem “have jumpstarted an agency that was vilified and barred from doing its job for the last four years.”

“Illegal aliens are hearing our message to leave now or face the consequence. Migrants are now even turning back before they reach our borders,” said McLaughlin.

She further highlighted an almost 100 percent drop in migration through Panama’s Darien Gap, a primary migration route to the U.S.

“In the face of a historic number of injunctions from activist judges, ICE, CBP, and the U.S. Coast Guard have made historic progress to carry out President Trump’s promise of arresting and deporting illegal aliens who have invaded our country,” McLaughlin asserted.

There is still some way to go however, given that under the treasonous Biden regime, more than 10 million illegals (conservatively) were allowed to walk across the border.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Premiums for Affordable Care Act plans are rising in 2026, according to new figures from 12 states.

Premiums are set to increase by thousands of dollars for the average family, according to the data, which was published by the Center on Budget and Policy Priorities.

That includes a $20,700 annual jump for a 60-year-old couple in Oregon and a $32,600 annual spike for a family of four in Vermont with $130,000 annual income, according to Oct. 20 posts on X by Gideon Lukens, a senior fellow and director of research at the center.

Oregon and Vermont are also seeing premium spikes due to expiring tax credit enhancements, as their window shopping is underway for 2026 ACA marketplace plans. A typical 60-year-old Oregonian couple making $85,000 will face a $20,700 increase in annual premiums. (1/4) pic.twitter.com/2WntKbf4Dt

— Gideon Lukens (@GidLukens) October 20, 2025

As Zachary Stieber details below for The Epoch Times, the enrollment period for the Affordable Care Act, commonly known as Obamacare, is set to open on Nov. 1 for most marketplaces.

Some states have been allowing people to preview plans.

The federal government has not published prices for the 28 state exchanges it runs.

The higher prices stem from Congress not reaching a deal to extend broad subsidies for Obamacare, which are slated to expire at the end of 2025. The subsidies come in the form of refundable tax credits. The credits had for years been available to poorer individuals not eligible for Medicaid or other public insurance, before Congress in 2021 loosened eligibility criteria. Lawmakers extended the broadened criteria in the Inflation Reduction Act.

KFF, a nonprofit that analyzes health data, said in September that if the broadened subsidies expire, premiums would more than double on average in 2026 to $1,904 from $888.

Americans across income brackets would see increases, although those with little income would see maximum increases of about $82 a month.

The majority of the more than 24 million people enrolled in a plan currently receive the credits.

A man near an office with a sign about Obamacare, or the Affordable Care Act, in Miami, Fla., in an undated file photograph. Joe Raedle/Getty Images

Permanently extending the enhanced credits would increase the number of people with health insurance by 3.8 million in 2035, but add $350 billion to the federal deficit in the next decade, the Congressional Budget Office said.

Congress is in the midst of a shutdown after parties failed to reach an agreement on a funding bill.

Some lawmakers have been trying to extend the Obamacare subsidies or otherwise alter the health insurance system.

Sen. John Thune (R-S.D.), the Senate Republican majority leader, said recently he is open to discussing Obamacare with Democrats, but only if the shutdown ends.

“I will not negotiate under hostage conditions, nor will I pay a ransom. Period,” he said.

Rep. Hakeem Jeffries (D-N.Y.), the top Democrat in the House of Representatives, told a briefing on Monday that the parties must find a way to reopen the government with an agreement that extends the Obamacare subsidies.

“In Idaho, 100,000 Americans are at risk of losing their health care if the Affordable Care Act tax credits expire because it will become unaffordable for them,” he said.

This is NOT an end-of-year issue. Open enrollment runs Nov.1 – Jan.15 for most states and window shopping begins in October. If Congress waits until Dec.31, 1.5 million more people will be uninsured in 2026 compared to an earlier extension. (4/4)https://t.co/fdcuhagfEw

— Gideon Lukens (@GidLukens) October 20, 2025

Authored by Tom Ozimek via The Epoch Times (emphasis ours),

The federal government has issued new guidance on the Trump administration’s $100,000 H-1B visa fee, outlining payment procedures, eligibility, and limited exemptions under a policy aimed at discouraging the replacement of U.S.-citizen workers with cheaper foreign labor and driving down wages for Americans.

The guidance, published by the U.S. Citizenship and Immigration Services (USCIS) on Oct. 20, marks the first formal implementation document following Trump’s Sept. 19 proclamation establishing the one-time $100,000 fee for new H-1B visa applications.

Trump said in his proclamation that the measure is designed to curb “systemic abuse” of the high-skilled visa system and protect U.S. workers—especially in the fields of science, technology, engineering, and math.

The president alleged that many companies were exploiting existing rules by laying off their U.S.-citizen workforce and replacing them with cheaper H-1B workers. When announcing the changes, Trump told reporters in the Oval Office that their aim was to encourage companies to hire American citizens.

What the Guidance Says

The new USCIS guidance spells out how the rule will work. The $100,000 fee applies to petitions filed on or after Sept. 21 for foreign workers outside the United States who do not already hold a valid H-1B visa. The petitioning employer must make the payment through the federal government’s Pay.gov portal at the time of filing.

Petitions filed before Sept. 21 are exempt, as are those seeking amendments, extensions, or changes of status for workers already in the United States, provided the requests are approved. The fee also applies to petitions requesting consular or port-of-entry notification for workers abroad.

Employers must include proof of the fee payment when filing, and any petition submitted without that confirmation will be denied, USCIS said.

While the new guidance does not address who bears the cost of the $100,000 visa fee, federal labor rules prohibit employers from passing USCIS petition fees to workers. A Labor Department fact sheet states that H-1B employees “can never be required to pay” statutory processing or filing fees, which are considered employer expenses.

USCIS also noted in the new guidelines that a worker whose petition for a change or extension is approved inside the country will not become subject to the $100,000 payment, even if they later depart and apply for a visa abroad or re-enter using a current H-1B visa based on the approved petition.

Exceptions Are ‘Extraordinarily Rare’

Waivers of the $100,000 fee may be granted only in “extraordinarily rare circumstances,” according to USCIS. To qualify, the secretary of Homeland Security must determine that employing the foreign worker is in the national interest and that no qualified American worker is available for the position.

Also, a determination must be made that the foreign worker does not pose a security or welfare threat, and that requiring the payment would “significantly” undermine U.S. interests.

USCIS said such exemptions are decided at the discretion of the Secretary of Homeland Security and may be granted only in extraordinarily rare cases.

The new guidance does not change the annual H-1B visa cap—65,000 regular visas and 20,000 for U.S. advanced-degree holders—but adds significant cost for employers seeking to import foreign workers.

Legal Challenges Mount

Two major lawsuits have been filed seeking to block Trump’s $100,000 H-1B visa fee.

A coalition of labor unions, health care providers, religious groups, and university professors sued on Oct. 3 in federal court in Northern California, arguing the president exceeded his constitutional authority and displaced the visa framework created by Congress.

The complaint, filed by the Democracy Forward Foundation, says the policy will harm hospitals, churches, and universities that depend on foreign professionals.

The U.S. Chamber of Commerce followed with its own lawsuit, characterizing the fee as federal overreach that would make participation in the H-1B program cost-prohibitive for small and midsize employers.

“The new $100,000 visa fee will make it cost-prohibitive for U.S. employers, especially start-ups and small and midsize businesses, to utilize the H-1B program, which was created by Congress expressly to ensure that American businesses of all sizes can access the global talent they need to grow their operations here in the U.S.,” Neil Bradley, the chamber’s chief policy officer, said in a statement.

While Bradley praised Trump’s “ambitious agenda of securing permanent pro-growth tax reforms, unleashing American energy, and unraveling the overregulation that has stifled growth,” he said that the U.S. economy will “require more workers, not fewer,” to support this agenda.

The White House has defended the rule, with spokesman Taylor Rogers telling CBS News it discourages companies from “spamming the system and driving down American wages” while protecting opportunities for U.S. workers.

Before germ theory gained acceptance in the late 1800s, doctors had little understanding of how diseases spread. Epidemics of cholera, typhus, and other communicable diseases were common—especially in overcrowded, unsanitary industrial cities, according to a fascinating new piece from History.

From 1850 to 1880, U.S. life expectancy at birth hovered around 40 years, dipping during the Civil War. But this figure was heavily skewed by high child mortality, says S. Jay Olshansky, professor of public health at the University of Illinois Chicago. Roughly 30 to 40 percent of American children died before age five.

“In the mid-19th century, human mortality was basically in the grip of natural forces,” says Samuel Preston, emeritus sociology professor at the University of Pennsylvania. Medicine offered “little gain,” apart from the smallpox vaccine, which became widespread by the 1840s and 1850s. Child mortality was far higher in cities and among the Black population than among white people, he notes.

The History article details that diseases like tuberculosis and pneumonia were rampant. The prevailing miasma theory blamed foul odors and polluted air—until Louis Pasteur’s 1861 germ theory findings revealed that microorganisms caused disease. Acceptance of this idea by the late 1800s marked the dawn of the Sanitary Revolution.

With new insight into bacterial contamination, cities began transforming water and waste systems, says Michael Haines, economics professor at Colgate University. Water filtration, sewage regulation, and indoor plumbing spread rapidly. By 1902, most New York City neighborhoods had sewer service, and innovations like refrigeration and gas stoves improved food safety.

“Boiling of water and milk was a practice that was unknown until the 1890s,” Preston says. “Handwashing was promoted. Isolating sick patients in households was promoted. There was tremendous enthusiasm.”

Medicine advanced alongside sanitation. The 1890s diphtheria antitoxin became the first effective treatment for a deadly childhood disease, and vaccines for others soon followed. Early 20th-century reforms standardized U.S. medical education, closing low-quality proprietary schools.

“It was [addressing] some of these basic public health issues, combined with medicine, that had a pretty dramatic effect,” says Olshansky.

As parents learned to protect children from infection, deaths among the young plummeted—from about 347 deaths per 1,000 live births in 1880 to 180 per 1,000 by 1915, according to UN data. “Once we gained control over those early deaths … you start to see a dramatic increase in life expectancy,” Olshansky says.

By 1900, U.S. life expectancy had risen to 47 years; by 1950, it reached 68. The 1918 flu pandemic caused a brief dip, but gains continued as infectious diseases declined across all ages.

Haines calls this rise in longevity “one of the great achievements of the modern era.” Life expectancy approached 77 years by 2000 and reached 78.4 years in 2023, according to the CDC.

“Humans 140 to 150 years ago experienced this—subsequent generations, of course, benefitted from it,” Olshansky says. “But a quantum leap in life expectancy like that can only happen once.”

Read History’s full writeup here. 

Authored by Brayden Lindrea via CoinTelegraph.com,

US dollar-pegged stablecoin Tether hit its 500 millionth user on Tuesday, offering a means to transact and save for those who have been excluded by the traditional banking system.

“Likely the biggest financial inclusion achievement in history,” Tether CEO Paolo Ardoino wrote in a post on X.

Source: Paolo Ardoino

Tether said the figure represents 500 million “real people,” not simply Tether wallets, suggesting its stablecoin has now been used by around 6.25% of the world’s population.

The World Bank Group estimates there are 1.4 billion adults who don’t have access to a bank account globally. Crypto is one potential solution to the problem, as anyone with a phone can download a crypto wallet to receive money and store funds securely.

Crypto can also be beneficial for those who live in high-inflation countries or nations where the risk of having one’s funds seized is real.

USDT is helping people and small businesses in Kenya

To celebrate the milestone, Tether shared a 10-minute documentary showcasing USDT adoption in Kenya, where people turn to stablecoins “not for speculation, but for survival.”

Ardoino noted that 37% of USDT users hold the stablecoin as a store of value.

It also highlighted how small businesses have been forced to turn to USDT to pay for imports as an alternative to the weakening Kenyan shilling, providing a lifeline to keep those companies afloat.

USDT is by far the largest stablecoin, with a market cap of $182.4 billion, representing a 58.4% market share, according to CoinGecko. Circle’s USDC comes in next at 76.8 billion.

Tether could be worth half a trillion dollars

Last month, Tether was said to be in talks with investors to raise up to $20 billion at around a $500 billion valuation, which would make Tether one of the most valuable private companies in the world.

Financial services firm Cantor Fitzgerald is acting as a lead adviser in the potential deal.

Authored by Andrew Korybko via Substack,

Poland’s role in providing more US LNG to Central & Eastern Europe is expected to erode Germany’s influence in this region and accelerate Poland’s revival of its lost Great Power status.

The European Council decreed that the import of Russian gas will be banned across the bloc next year, but with varying lengths of grace periods for countries with short- and long-term contracts, the longest of which will last till 1 January 2028. The Council earlier admitted that pipeline gas and LNG combined accounted for a little less than a fifth of the bloc’s imports last year. It should also be mentioned that the EU continues to import Russian oil too, including indirectly, which has proven to be similarly scandalous.

Nevertheless, the EU’s plans to phase out the remaining fifth of its gas imports from Russia will further enfeeble its economy by leading to their replacement with more expensive US LNG, which will predictably result in the costs being passed down to consumers. This was entirely predictable too since the EU agreed to purchase $750 billion in US energy by 2028 per the terms of their lopsided trade deal from last summer that was assessed here as having turned the EU into the US’ largest-ever vassal state.

Germany is expected to be the most dramatically affected by this development in terms of its domestic politics and geostrategy. As regards the first, a greater decrease in living standards caused by the costs of more expensive US LNG being passed down to consumers could accelerate the AfD’s rise, which would lead to significant political changes if they’re ever able to form a government. Even if they’re kept out of power, such blatant meddling by the elites could worsen political polarization and associated tensions.

On the topic of German geostrategy, Poland with whom Germany is competing for influence over Central & Eastern Europe (CEE) is poised to play a supplementary role in supplying Czechia and Slovakia with US LNG via the Swinoujscie terminal and the planned one in Gdansk. Ukraine will be supplied too. These countries lie within the sphere of influence that Poland envisages creating upon the revival of its lost Great Power status. Czechia and Slovakia are also part of the Visegrad Group together with Poland.

Hungary is a member too and could be supplied with US LNG via Poland or Croatia’s Krk terminal, whose expansion is one of the priority projects of the “Three Seas Initiative” (3SI) that Poland and Croatia co-founded in 2015 but which is now led by Warsaw. While Germany commands much more influence over CEE due to being the EU’s de facto leader and boasting its largest economy, Poland’s influence over them is increasing through its future role in suppling US LNG, which might pull them away from Berlin one day.

Energy geopolitics play a significant role in geostrategy so the impact of the aforesaid trend shouldn’t be underestimated if it continues to unfold. In that event, the overarching trend would be the likely decline of German influence over CEE, greatly facilitated as it was by Germany’s voluntary participation in the US’ anti-Russian sanctions regime and then the Nord Stream terrorist attack which pushed it beyond the point of no return. These might be seen in hindsight as the beginning of a new regional order in CEE.

While Germany thought that it would inflict a strategic defeat upon Russia, the US ended up inflicting a strategic defeat upon Germany by engineering the circumstances whereby its only Western competitor’s economy would decline. Together with Poland, whose Anglo-American-backed revival of its Great Power status conveniently creates a regional wedge between Germany and Russia, the US is geostrategically re-engineering Europe at Germany’s expense in order to facilitate Russia’s post-Ukraine containment.

Authored by Brahma Chellaney via Project Sybndicate,

From surveilling and repressing Chinese citizens to firing and prosecuting potential rivals, Chinese President Xi Jinping seems able to rule only through fear. But fear is not a foundation for long-term stability, and the more Xi seeks to consolidate power, the more vulnerable his position becomes.

During his 13 years in power, Xi Jinping has steadily tightened his grip on all levers of authority in China – the Communist Party of China (CPC), the state apparatus, and the military – while expanding surveillance into virtually every aspect of society. Yet his recent purge of nine top-ranking generals, like those before it, shows that he still sees enemies everywhere.

After taking power in 2012, Xi launched a crackdown on corruption within the CPC and the People’s Liberation Army (PLA). The campaign was initially popular, because China’s one-party system is rife with graft and abuse of power. But it soon became clear that enforcement was highly selective – a tool not for building a more transparent or effective system, but for consolidating power in Xi’s hands. In Xi’s China, advancement depends less on competence or integrity than on earning the leader’s personal trust.

But even after more than a decade of promoting only loyalists, Xi continues to dismiss officials regularly, including top military commanders. According to the US Office of the Director of National Intelligence, nearly five million officials at all levels of government have been indicted for corruption under Xi. And this is to say nothing of those who simply disappear without explanation.

True to form, Xi’s regime claims that the military leaders swept up by his latest purge – including General He Weidong, a member of the Politburo, Vice Chair of the Central Military Commission, and the third-highest-ranking figure in China’s military hierarchy – committed “disciplinary violations” and “duty-related crimes.” But a more plausible explanation is that Xi is playing an interminable game of Whac-a-Rival, desperately trying to preserve his grip on power.

Xi’s fears are not entirely misplaced: each new purge deepens mistrust among China’s elite and risks turning former loyalists into enemies. From Mao Zedong to Joseph Stalin, there is ample evidence that one-man rule breeds paranoia. By now, Xi may well have lost the ability to distinguish allies from foes. At 72, Xi remains so insecure in his position that, unlike even Mao, he has refused to designate a successor, fearing that a visible heir could hasten his own downfall.

None of this bodes well for China. By refusing to lay the groundwork for an eventual leadership transition, Xi sharply increases the risk that the end of his rule – however that comes – will usher in political instability. In the meantime, Xi’s emphasis on personal fealty over ideological conformity is weakening institutional cohesion in a system once grounded in collective leadership. Coupled with his arbitrary firings and prosecutions, Chinese governance is now increasingly defined by sycophancy and anxiety, rather than competence and consistency.

China’s military is paying a particularly steep price for Xi’s insecurity. In recent years, the PLA has undergone sweeping structural reforms aimed at transforming it into a modern fighting force capable of “winning informationized wars.”

But Xi’s purges risk undermining this effort by disrupting military planning and leadership. For example, his abrupt removal in 2023 of the leaders of the PLA’s Rocket Force, which oversees China’s arsenal of nuclear and conventional missiles, may have jeopardized China’s strategic deterrent.

Replacing experienced commanders with untested loyalists might ensure Xi’s political survival – and Chinese leaders have often used the military to safeguard their own power – but it does nothing for national security.

And when generals are preoccupied primarily with political survival, both morale and operational readiness suffer. Can the PLA fight and win a war against a major adversary like the United States or India while operating under the political constraints Xi has imposed on it?

So far, Xi has advanced his expansionist agenda through stealth and coercion rather than open warfare. But a paranoid leader surrounded by sycophants unwilling or unable to challenge him is always at risk of strategic miscalculation. Recall that Stalin decimated the Red Army’s leadership on the eve of the Nazi invasion – with disastrous results. In Xi’s case, it might be China that does the invading, if he orders an amphibious assault on Taiwan.

For all the pomp surrounding China’s rise, the country is beset by structural problems, including a slowing economy, rising youth unemployment, and an aging and declining population. Popular discontent may well be growing, but it is masked by repression, just as any potential challenge to Xi’s leadership is preempted by purges and prosecutions. Ultimately, Xi seems able to rule only through fear.

But fear is not a foundation for long-term stability. A leader consumed by fear of disloyalty may command obedience but not genuine fidelity. Obedience is not merely a poor substitute for strength; it can become a source of fragility, as it leaves little room for creativity, competency, or collaboration. The great irony of Xi’s approach is that the more he seeks to consolidate power in his own hands, the more vulnerable his rule becomes.

Mao’s purges culminated in chaos and national trauma. Xi’s methods are more sophisticated, but the underlying logic is the same – as could be the results.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.