General Market News

China's new 20% tax levy on offshore assets held by wealthy individuals is pressuring luxury brands already facing weakening demand in the U.S. and a prolonged three-year sector slowdown. The tax crackdown is expected to weigh on third-quarter earnings for major luxury houses including LVMH, Kering, and Hermes, which report results starting next week. Chinese consumers account for roughly one-fifth of global luxury purchases, making this market critical to the $350 billion luxury sector.

• Major luxury stocks have plummeted in 2025: LVMH and Hermes are down about 40% while Kering has fallen 29%, all trading near multi-year lows.
• Mainland China mall data shows sharp deceleration, with smaller 'quiet luxury' brands like Brunello Cucinelli and Loro Piana outperforming more conspicuous brands like Louis Vuitton and Gucci.
• U.S. credit card spending on luxury goods fell for the third consecutive month in August, adding pressure as demand softens in the industry's largest market amid election-related economic uncertainty.

Refresco, a Netherlands-based beverage manufacturer owned by KKR, is preparing for a potential IPO that could value the company at over $10 billion. KKR acquired Refresco in 2022 for approximately $8 billion, and the company is now considering listings in either the U.S. or Europe. The plans remain preliminary as investment banks recently pitched for roles in the offering.

• Refresco generated nearly $7 billion in revenue and around $930 million in adjusted EBITDA in 2025, operating 85 production facilities across North America, Europe and Australia
• The company serves major retailers like Walmart and Aldi on private label products, plus branded partners including Coca-Cola, PepsiCo and Monster Beverage
• The potential IPO faces uncertain market conditions, as recent volatility, higher bond yields and AI valuation concerns have caused several companies to delay planned listings in recent weeks

State Street research challenges common ETF selection practices, showing that focusing solely on expense ratios can overlook significant liquidity costs. Analysis of hypothetical ETF positions demonstrates that funds with higher fees but tighter bid-ask spreads can be cheaper to own overall. The findings urge advisors to consider trading costs, ownership concentration, and execution methods alongside expense ratios.

• A $10 million position example showed a fund with 0.10% fees but 0.01% spread costing 0.11% total versus 0.12% for a 0.07% fee fund with 0.05% spread, with the gap widening on larger trades
• Among the 100 largest U.S. equity ETFs, State Street found no correlation between expense ratios and average bid-ask spreads, meaning fee screens alone miss actual client trading costs
• Fund size does not guarantee liquidity: two smart beta ETFs with similar $500+ million assets showed dramatically different trading volumes (4,616 vs 43,271 trades) due to one having 90% concentrated ownership

US stocks closed mixed on Thursday as the Nasdaq fell 1.24% amid pressure on AI stocks following concerns about OpenAI's revenue and capital requirements, while rising oil prices fueled inflation worries. The Dow gained 0.09% and the S&P 500 declined 0.46%, with semiconductor stocks particularly weak despite having risen over 80% year-to-date.

• AI semiconductor stocks including Nvidia, AMD, Oracle, and Broadcom declined after reports on OpenAI's revenue challenges and massive financing needs, with Broadcom arranging $50 billion in funding for OpenAI.
• Oil prices surged over 3%, with Brent up 3.6% and WTI up 3.19%, driven by Middle East tensions and supply concerns; US crude has risen more than 60% this year, raising inflation fears.
• Treasury yields remained elevated near multi-year highs with the 10-year at 5.22%, while markets price in a nearly 70% probability of a December Fed rate hike according to CME's FedWatch tool.

Treasury yields have surged to 24-year highs, pressuring consumer borrowing costs, but David Zervos, a new counselor to Treasury Secretary Bessent, expects them to decline soon. He characterizes current real yields as exceptionally high by historical standards and views the spike as a temporary issue driven by global factors including central bank rate expectations, AI infrastructure spending, and energy price shocks from the U.S.-Iran conflict.

• The 10-year and 30-year Treasury yields reached multidecade highs, with Brent crude oil climbing 38% since the start of the U.S.-Iran conflict, contributing to rate pressure
• Fed funds futures traders see an 82% probability of another rate increase at the December meeting, following the Fed's first rate hike in three years last month
• Zervos notes the yield surge is a global phenomenon affecting Germany, France, Italy, and Japan, not a U.S.-specific problem, with corporate AI spending adding to upward pressure on rates

Gas prices are expected to remain elevated above $4 per gallon through the November 3 midterm elections, according to prediction market speculators. Prices have been high since the U.S.-Iran war began and Iran's closure of the Strait of Hormuz disrupted Middle Eastern oil exports. The persistent high fuel costs are affecting consumer affordability heading into the elections.

• Speculators on Kalshi give 87% odds gas prices will stay above $4 per gallon on Election Day, with current national average at $4.36 per gallon as of the article date
• Diesel prices are also expected to remain elevated, with 68% probability of staying above $6 per gallon on Nov. 3, particularly impacting agricultural states like Iowa and Kansas with competitive Senate races
• Gas prices peaked at $4.56 per gallon in late May following the Iran conflict and Strait of Hormuz closure, while diesel hit nearly $6.53 per gallon in September

The U.S. Treasury Department sanctioned 17 vessels connected to Iran's 'shadow fleet' used for transporting oil and gas, as part of 'Operation Economic Outcast' aimed at pressuring Tehran's economy to end a war that began over seven months ago. The sanctions target vessels registered under multiple jurisdictions responsible for transporting millions of barrels of Iranian crude and petrochemical products.

• The sanctions are part of 'Operation Economic Outcast', the official name for the U.S. economic pressure campaign against Iran
• The 17 sanctioned vessels are registered under more than a dozen jurisdictions and have transported millions of barrels of Iranian crude, petroleum, and petrochemical products
• Treasury Secretary Scott Bessent stated the goal is to 'starve the tyrannical regime in Tehran' of funds allegedly used to wage regional war and support terror proxies

Major U.S. banks including Bank of America, Citigroup, Wells Fargo, and Morgan Stanley are set to report earnings during the week of October 12-16, 2026, marking the start of earnings season. The week will also feature key economic data releases including the Consumer Price Index (CPI) and wholesale trade figures. Additional corporate reports are expected from healthcare, industrial, and consumer companies like Johnson & Johnson, UnitedHealth Group, and Domino's Pizza.

• Economic calendar includes September CPI data (Oct 14), PPI and wholesale trade figures (Oct 15), and industrial output data (Oct 16)
• Banking sector earnings from BAC, C, WFC, MS, and SCHW will provide insights into financial sector performance
• Additional corporate earnings scheduled from diverse sectors including AA, JNJ, UNH, DPZ, and TRV throughout the week

Mortgage rates have climbed for the seventh consecutive week, with the average 30-year fixed mortgage rate reaching 7.4%, up from 7.28% the previous week and significantly higher than 6.3% a year ago. The increases are driven by rising 10-year Treasury yields, which averaged 5.28% this week, pressured by inflation expectations, bond market selloffs, and growing fiscal deficits.

• The 30-year fixed mortgage rate rose to 7.4%, marking the seventh straight weekly increase and up from 6.3% one year ago
• The 10-year Treasury yield averaged 5.28% this week, up 9 basis points from the prior week, driving mortgage rate increases
• 15-year fixed mortgage rates also climbed to 6.73% from 6.6% the previous week, as inflation fears and fiscal deficit concerns pressure bond markets

Revolut CEO Nik Storonsky stated in a Bloomberg TV interview that the digital bank would prefer a primary listing in the United States if it proceeds with an initial public offering in the future. The statement signals the fintech company's preference for U.S. capital markets over other jurisdictions for a potential IPO. Reuters could not immediately verify the report.

• CEO explicitly favors U.S. over other markets (such as London or Europe) for Revolut's primary listing
• The statement was made during a Bloomberg TV interview on Thursday, though Reuters has not independently confirmed the remarks
• No timeline for an IPO was provided, with Storonsky referring to the listing as a potential future event

Audi's Neckarsulm factory in Germany, employing about 15,000 workers, faces possible closure from 2031 unless viable solutions are found. CEO Gernot Doellner told workers the plant needs sustainable industrial vision beyond its tradition and expertise. The closure threat is part of Volkswagen Group's broader restructuring to address declining margins from U.S. tariffs and Chinese competition.

• Four Volkswagen Group production sites in Germany face staggered closures from 2031, including three VW plants and the Audi Neckarsulm facility that produces A5, A6, and A8 models
• Volkswagen CEO Oliver Blume is exploring alternatives including Chinese partnerships or defense deals to avoid closures while cutting jobs and excess capacity
• Audi leadership emphasized that tradition alone does not guarantee future viability, pressing for improvements in cost competitiveness, speed, and productivity across the brand

Ukraine's military struck Russia's largest oil refinery in Omsk, Siberia, located approximately 2,500 km from Ukraine. The Gazpromneft-operated facility, which supplies fuel to the Russian army, was previously attacked in July and had to halt operations. The strike is part of Ukraine's long-distance drone campaign targeting Russian military, energy, and commercial infrastructure to increase the cost of the war for Moscow.

• The Omsk refinery is Russia's largest oil refinery, situated deep in Siberia some 1,550 miles from Ukraine
• A previous strike in July forced the facility to completely halt operations
• Ukraine is conducting long-distance drone strikes against Russian targets in response to heavy missile and drone attacks it faces from Russia

American consumers now expect inflation of 3.9% over the next year, the highest level since May 2023, according to the Federal Reserve Bank of New York's September survey. The spike is largely driven by visible price increases, particularly gasoline which jumped from $3.12 to $4.37 per gallon year-over-year. This diverges sharply from bond market expectations, which price in only 2.36% inflation based on Treasury yields.

• Expected price increases vary widely by category: medical care 9.2%, college 7.5%, rent 6.8%, food 5.5%, and gas 4.8%, all significantly above the Fed's target
• Expected wage growth fell to 2.6%, meaning real income is projected to decline as prices outpace paychecks, leading to deteriorating household financial views
• Bond traders and households show a major disconnect: 10-year Treasury break-even inflation sits at 2.36% while consumer surveys show expectations of 3.9% to 4.6%, suggesting either surveys or market pricing will need to adjust

Asian countries are accelerating oil stockpiling efforts and renewable energy development in response to supply disruptions from the Iran war. Southeast Asia has been particularly affected as 80% of oil transported through the Strait of Hormuz flowed to the region before the conflict. Japan, ASEAN members, and partners are coordinating to boost crude reserves and expedite a long-delayed regional power grid.

• The Philippines will create a national oil reserve by end of 2027 that could later become a regional stockpile, with priority access for the host country during emergencies
• ASEAN members are targeting 30% renewables in primary energy supply and 45% in installed capacity, up from current levels of 14.1% and 33.7% respectively, making the region a major laggard in green energy
• Countries reached enhanced agreement on a regional power grid first proposed in 1997, with plans to accelerate implementation from the original 2045 target

U.S. Treasury yields rose on Thursday as Federal Reserve Governor Christopher Waller indicated more interest rate hikes are needed to combat inflation, though not necessarily at consecutive meetings. Markets await a $22 billion 30-year bond auction while digesting stronger-than-expected demand at Wednesday's 10-year note sale and better-than-forecast jobless claims data.

• The 10-year Treasury yield climbed to 5.292%, near its highest level since 2002, while the 30-year yield held steady at 5.661% just below a 24-year high
• At Wednesday's $39 billion 10-year note auction, global central banks purchased over 80% of the offering, well above the 72.4% average, despite it being the highest-yielding 10-year auction since November 2000
• Weekly jobless claims came in at 197,000, below the 200,000 forecast, while investors expect the Fed to hold rates steady at its October 28 meeting before hiking again on December 9

US stocks opened lower on Thursday with the Dow falling 127 points as oil prices surged over 4% on Middle East supply concerns and Treasury yields remained near multi-year highs. The selloff reflects investor anxiety that sustained energy inflation and elevated borrowing costs could pressure corporate profits heading into third-quarter earnings season.

• Brent crude jumped 4.2% above $104/barrel and WTI rose 4% to around $92/barrel due to intensified Middle East tensions affecting Gulf shipping routes
• The 10-year Treasury yield touched 5.35% (highest since 2002) while the 30-year yield reached 5.73% (24-year high), weighing heavily on rate-sensitive tech and bank stocks
• Third-quarter earnings season begins next week with S&P 500 companies expected to post approximately 30% earnings growth, though higher energy costs and rates create additional margin pressure

Options traders are betting that the U.S. Treasury bond sell-off may be bottoming out, following a strong 10-year note auction that sparked a bond rally. Heavy call-buying in the TLT bond ETF and reduced pessimism in rate-sensitive utility stocks suggest traders believe yields may be topping out after a particularly brutal stretch that saw the 30-year yield surpass 5.6%.

• Nine of the top 10 most-traded TLT contracts were calls, with the most popular trade being the 82-strike call expiring Oct. 30, which traded 16,000 times. One aggressive buyer spent at least $250,000 on call options shortly before a strong 10-year Treasury auction.
• The TLT had dropped 6% since September 22, with the 30-year yield passing 5.6%, but traders are now betting on a recovery in bond prices (decline in yields) through bullish options positioning.
• Rate-sensitive utility sector options showed similar optimism, with someone selling $1 million in puts on Friday. Utilities have since risen about 3%, with reduced put-buying activity indicating fading bearish sentiment.

Digital asset company Securitize is launching blockchain-based tokenized stock trading for major listed companies like Apple, Nvidia, and Microsoft, with tokens backed by underlying shares. The tokenized stocks will initially launch on the Solana blockchain and be available to eligible investors in the U.S., EU, and other permitted jurisdictions. Securitize says the products preserve investor rights associated with owning company shares, addressing concerns that many crypto securities lack traditional equity protections.

• Tokenized stocks will initially trade on Solana blockchain during extended hours, with plans for 24/7 availability and eventual trading on NYSE's forthcoming round-the-clock venue and a planned OKX-Intercontinental Exchange platform
• Securitize Stocks preserve investor rights and economic benefits of traditional share ownership, differentiating from typical crypto securities that rarely offer the same rights, disclosures and protections as equities
• The crypto industry promotes tokenizing securities as a way to enable faster settlement and fractional ownership, potentially increasing market accessibility

Ray Dalio warned that the stock market's ability to absorb rising bond yields is diminishing as the cushion from earnings growth narrows. The Bridgewater Associates founder cautioned that while earnings continue improving, corporate free cash flows are likely to deteriorate, leaving equities more vulnerable. He expects the bond sell-off to continue as governments and companies compete for capital amid mounting debt issuance.

• Stock prices have been supported by earnings growth offsetting rising bond yields, but this relative advantage versus bonds is shrinking as stocks climb and yields increase, with credit spreads beginning to widen
• Dalio expects free cash flows to deteriorate despite continued earnings improvement, warning investors may face liquidity issues as companies invest heavily without generating sufficient cash returns
• The bond bear market is expected to persist as governments borrow to finance deficits and companies raise funds for AI and technology investments, creating capital competition that will keep pressure on interest rates

A New York Federal Reserve study found that President Trump's tariffs raised prices on 67 categories of everyday goods by 2.9 percentage points as of February 2026. Without the tariffs, prices for these goods would have declined by nearly 1% during this period. The research provides clear evidence that tariffs directly caused inflation on many consumer items that would have otherwise become cheaper.

• For each 1 percentage point increase in average tariffs, consumer goods prices rose by roughly 0.25% a year later, with effects persisting into 2027
• About 66% of price increases came directly from tariffs, while the remaining third resulted from knock-on effects like U.S. companies raising prices due to costlier imported materials
• The Supreme Court struck down many tariffs in February, triggering billions in retailer refunds, though the White House pledged to reimpose levies through alternative measures