Calm Market Waters Hide Fierce Undercurrents

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

The price movement in the broad S&P 500 index is relatively calm. Yet the market’s undercurrent, as measured by sharply diverging returns across stock sectors and factors, is anything but calm. The current market picture we paint is well embodied by a quote from Jules Verne in 20,000 Leagues Under the Sea.

“The sea was perfectly calm; scarcely a ripple disturbed its surface. But beneath this tranquil exterior, powerful currents were flowing with irresistible force.”

Given this divergence between the calm market surface and the volatility of its underlying stocks’ returns, let’s get a better grip on the market’s undercurrent and decipher what it may be trying to tell us.

A Calm Market

The graph below shows that the S&P 500’s upward trend has recently flattened into a tight range with minimal volatility. Such consolidation is common after a sharp upward price trend, as the market experienced since early April. 

The next graph shows the average true range (ATR) for the index. ATR is a measure of realized volatility. As we define it, ATR is the percentage difference between the highest and lowest intraday prices over a rolling 20-day period. The current ATR is only about 3%, near the bottom of the range since 2015. It is also less than half the ten-year average.

Both charts point to a relatively calm market with limited volatility. It’s worth noting that implied volatility (expected volatility) on the S&P 500 is around 20. While not low, it doesn’t suggest that investors expect significant volatility in the weeks ahead.

The Markets Undercurrent

While the broad S&P 500 market index is relatively calm, its undercurrent is anything but tranquil. Significant rotation trades, characterized by heavy trading activity in and out of various sectors and factors, have led to large daily divergences in the performance of certain sectors and stock factors.

We use the dispersion of returns to quantify the market’s fierce undercurrent. For this article, we take the 20-day percentage price changes for sector and factor groups and then calculate the standard deviation of those changes. The more divergent the returns, the higher the standard deviation.

The first graph below shows that the current standard deviation of returns across all sectors is at its second-highest level since early 2023.

The following graph uses factors such as growth and value, market cap, and momentum. It also shows that returns among various factors are highly dispersed.

Next, we share a graph, courtesy of Nomura, that delves deeper into the recent dispersion. It compares the average move for all S&P 500 stocks over the last 20 days to that of the S&P 500 index.  As the graph shows, the relative volatility of individual stock returns versus the market is now at levels last seen during the financial crisis and the dotcom crash.  

Cross-Sector Correlation

To further quantify the market’s strong undercurrent, we examine the correlation of returns among the S&P 500 sectors.  The first table shows the correlation between the weekly returns thus far this year. The second table is for 2025.

In 2026, the average correlation among all sectors is a mere 0.066, compared to the statistically significant 0.517 in 2025. Moreover, the standard deviation of the correlations is much greater this year than last year. This, as with the graphs above, further indicates that the various sectors are currently showing a large divergence in weekly returns compared to last year.

We also ran the average correlation from 2019 through 2025, including the tumultuous pandemic sell-off and sharp recovery, and arrived at an average correlation of .68 and a standard deviation of .175.

Our Takeaway

The market’s surface may look calm, but beneath it, passive investors are actively shifting between narratives, valuations, and risk exposures. This reflects changing sentiment among investors about economic growth, inflation, monetary and fiscal policy, and the current political leadership.

Historically, periods of elevated sector dispersion tend to occur during market transitions rather than steadily trending bull or bear markets. However, high dispersion after a long bullish trend is not automatically bearish. It may just represent the market searching for its next regime rather than distress.

Furthermore, as we shared, high sector and factor dispersion is occurring alongside low cross-sector correlations. Typically, correlations between stocks are high during periods of crisis. As the old saying goes, “correlations go to one during a crisis.”

Therefore, if correlations begin to rise and the market heads lower, the recent bout of high dispersion may not be a lasting shift in investor preferences but an omen of a downward trend. 

Summary

Periods of high return dispersion are an opportunity for investors. As return performance gaps widen and valuation spreads develop, the ability to quantify the current rotation regime and anticipate the next one can deliver outperformance relative to the broader index.

While the calm market undercurrent is fierce, it is in and of itself not of great concern. But, as we noted earlier, if we start to see returns among sectors and factors become more aligned, especially downwardly, our concern will heighten.

Tyler Durden Wed, 02/18/2026 - 14:15

FOMC Minutes Confirm Divided Fed: "Several" Suggest Rate-Hikes Possible, Fear Private Credit "Vulnerabilities"

Since the last FOMC meeting (where they held rates with two dovish dissents) on Jan 28th, Bitcoin has been the biggest underperformer (along with gold) while bonds and the dollar have rallied with stocks lagging...

Source: Bloomberg

March is 'off the table' for a rate-cut now (following last week's payrolls beat) but overall 2026 rate-cut expectations are dovishly higher since the last FOMC meeting...

Source: Bloomberg

With macro data confirming Powell's positive narrative (for now)

Source: Bloomberg

With Growth surprising to the upside and inflation drifting lower...

Source: Bloomberg

Today's Minutes could be more interesting than recent months since The Fed displayed a hawkish tone with Powell talking up a “clear improvement” in the US outlook during the press conference, and said the job market shows signs of steadying.

So here's what The Fed wanted you to know about the last FOMC Meeting:

A very divided Fed sees more rate-cuts (or hikes) possible and embraces lower inflation (and fears higher inflation)...

Almost all supported maintaining 3.50-3.75%, while a couple preferred a 25bps cut, citing restrictive policy and labor market risks; "some" judged rates should be held steady for some time.

(h/t Newsquawk)

Policy outlook & rate guidance

• Almost all supported maintaining 3.50-3.75%, while a couple preferred a 25 basis point cut, citing restrictive policy and labor market risks.

• Several said further rate cuts would likely be appropriate if inflation declines as expected.

• Some judged rates should be held steady for some time pending clearer disinflation evidence.

• Some said it would likely be appropriate to hold the policy rate steady for some time while assessing incoming data.

• A number judged further easing may not be warranted until clear evidence shows disinflation is firmly back on track.

• Several favored two-sided guidance, noting upward adjustments could be appropriate if inflation remains above target.

• Vast majority saw downside employment risks as moderated, while inflation persistence risks remained; some judged risks more balanced.

• Several warned further easing amid elevated inflation could signal reduced commitment to 2% goal.

• A few cautioned overly restrictive policy could significantly weaken labor conditions.

Neutral rate & financial conditions

• Those favoring no change said, after 75 basis points of cuts last year, policy was within estimates of neutral.

• Most expected growth support from favorable financial conditions, fiscal policy, or regulatory changes.

Inflation views

• Inflation had eased markedly from 2022 highs but remained somewhat elevated relative to 2%.

• Elevated readings largely reflected core goods boosted by tariffs; some noted continued disinflation in core services, especially housing.

• Most cautioned progress toward 2% may be slower and uneven; risk of persistent above-target inflation seen as meaningful.

• Some cited business contacts planning price increases this year due to cost pressures, including tariffs.

• Several said sustained demand pressures could keep inflation elevated.

• Several expected ongoing housing services moderation to exert downward pressure on inflation.

• Several anticipated higher productivity growth would help restrain inflation.

• A few reported firms automating to offset costs, reducing need to raise prices or cut margins.

• Most longer-term inflation expectations remained consistent with 2%; several noted near-term expectations had declined from spring peaks.

Labor market & growth

• Most said unemployment, layoffs and vacancies suggested stabilization after gradual cooling.

• Almost all observed layoffs remained low but hiring was also subdued.

• Several said contacts remained cautious on hiring amid outlook and AI uncertainty.

• Some cited lower net immigration as contributing to weak job gains.

• Vast majority judged stabilization signs and diminished downside labor risks.

• Most nonetheless said downside labor risks remained, including sharp unemployment increases in a low-hiring environment.

• Some pointed to soft survey measures and part-time for economic reasons as signs of lingering weakness.

• Activity seen expanding at solid pace; consumer spending resilient, supported by household wealth.

• Several cited disparity between strong higher-income and soft lower-income consumer spending.

• Several noted robust business investment, particularly in technology; several judged productivity gains would support growth.

FOMC Minutes explicitly state high valuations, Mag 7 concentration, off-balance sheet funding, K-shaped economy and hedge funds piling into basis trades: 

• In their discussion of financial stability, several participants commented on high asset valuations and historically low credit spreads.

• Some participants discussed potential vulnerabilities associated with recent developments in the AI sector, including elevated equity market valuations, high concentration of market values and activities in a small number of firms, and increased debt financing.

• A few participants commented that the financing of the AI-related infrastructure buildout in opaque private markets warranted monitoring.

• Several participants highlighted vulnerabilities associated with the private credit sector and its provision of credit to riskier borrowers, including risks related to interconnections with other types of nonbank financial institutions, such as insurance companies, and banks' exposure to this sector.

• Several participants commented on risks associated with hedge funds, including their growing footprint in Treasury and equity markets, rising leverage, and continued expansion of relative value trades that could make the Treasury market more vulnerable to shocks.

• A couple of participants commented that although consumer credit quality remained solid in the aggregate, there were signs of weakness in the financial positions of low- and medium-income households.

• A few participants noted the need to monitor potential spillovers from volatility in global bond markets and foreign exchange.

Finally, The Fed commented on the yen "rate check" on behalf of the BOJ

"In the days leading up to the meeting, the dollar had depreciated markedly after reports that the Desk had made requests for indicative quotes, known as "rate checks," on the dollar–yen exchange rate.

The manager noted that the Desk had requested those quotes solely on behalf of the U.S. Treasury in the Federal Reserve Bank of New York's role as the fiscal agent for the U.S."

Read the full FOMC Minutes below:

Tyler Durden Wed, 02/18/2026 - 14:10

Nestle Weighs Scaling Back Ice Cream Unit As Investors Seek Turnaround Plan From CEO

Update (1405ET)

Nestlé SA reports full-year results on Thursday. Ahead of the release and investor call, CEO Philipp Navratil is expected to outline a turnaround plan, while a new report says the Swiss foodmaker is considering a smaller footprint in its ice cream business.

People familiar with the discussions told Bloomberg:

The Swiss food giant has been studying possibilities including cutting its stake in Froneri, an ice cream joint venture with private equity firm PAI Partners which includes brands like Häagen-Dazs and Mövenpick, according to the people. It could also consider selling some of its remaining fully owned ice cream operations to the Froneri venture, one of the people said.

Deliberations are ongoing and there's no certainty a deal will eventually materialize. PAI could opt to increase its stake in Froneri if Nestlé decides to cut its holding, or the Swiss group could sell part of its Froneri stake to another investor like the Abu Dhabi Investment Authority, according to some of the people.

Shares of Nestlé are trading at 2018-2019 levels as the food giant grapples with the fallout from the infant formula crisis.

Analysts will focus on Navratil's turnaround plan, expected to be unveiled tomorrow, with hopes that it will provide enough confidence for investors to lift shares from depressed levels."

*   *   *  

Nestlé SA CEO Philipp Navratil is feeling the heat after the world's largest food company recently carried out the biggest recall in its history, pulling infant formula off supermarket shelves after a contaminated ingredient was discovered in late 2025. Shares have taken a beating, and scrutiny of the recall is intensifying, with prosecutors in Europe opening an investigation.

Navratil and his management team are expected to present a turnaround plan for the Swiss foodmaker on Thursday, following the December recall of its infant formulas. Multiple production sites were found to have cereulide, a toxin that can cause nausea and vomiting.

French authorities have received complaints from eight consumers who say their children vomited after consuming Nestlé baby formula, prompting Paris prosecutors to open investigations. In the UK, there have also been 36 reports of suspected food poisoning linked to baby formula consumption.

BBC News provided more color to those investigations:

Prosecutors in Paris will seek to establish whether the baby formula producers are liable for distributing a tainted product. It will be co-ordinated with local probes into whether there was a causal link between the contaminated formula and the deaths of three babies in France. Nestlé and France's health ministry have stressed there was as-yet no evidence to indicate such a link.

In Switzerland, the food giant's shares are little changed year to date, with uncertainty surrounding the baby formula debacle still hanging over sentiment. Zooming out, the stock has retraced to 2018-19 levels.

Vontobel analyst Jean-Philippe Bertschy told clients, "The pressure is enormous ... and full-year results have become almost anecdotal, as investors are now squarely focused on the robustness of quality controls in the infant nutrition case and on the strategic update pledged by the new management team."

Investors' attention now shifts to Thursday, when the Swiss giant reports full-year results and is expected to unveil its turnaround plan.

Bloomberg noted, "Thursday's strategy update may include a reorganization to streamline businesses. Navratil has signaled that he wants to focus on four core divisions — pet care, coffee, nutrition and health, and food and snacking — while centralizing functions such as marketing, an area the company did not invest enough in during years of short-term margin expansion."

Vontobel's Bertschy said, "It will be crucial that we receive an update on some of the under-performing units, how they want to reduce the net debt level and how they plan to accelerate the free cash flow. The market will look for a precise roadmap rather than another broad reassurance – a plan that is clearly underpinned by concrete actions, milestones and measurable commitments."

Tyler Durden Wed, 02/18/2026 - 14:05

Trump DOJ Blocks Largest Copper, Gold, And Silver Extraction Site In The US Over Salmon, Sending Stock Tumbling

In a move that has sent shockwaves through the mining industry, the Trump administration has blocked what would have been the largest copper, gold, silver, and molybdenum extraction site in the United States, after the DOJ filed a 143-page brief late Tuesday defending the Biden Environmental Protection Agency's (EPA) 2023 veto of the controversial Pebble Mine project in Alaska's Bristol Bay region.

Workers with the Pebble Mine project test drill in the Bristol Bay region of Alaska, near the village of Iliamma, on July 13, 2007 (Al Grillo / AP)

If built, the Pebble mine would produce 6.4 billion lb. of copper, 7.4 million oz of gold, and 300 lb. of molybdenum - along with 37 million ounces of silver and 200,000 kg of rhenium over 20 years, according to a 2023 economic study cited by mining.com.

The DOJ argues that the EPA correctly found that discharges from the mining operation would cause unacceptable adverse affects on salmon fisheries. 

"This precedent will be used by future Democratic administrations to reverse all of the progress this administration has made with its pro-energy, pro-mining, pro-development agenda," said Northern Dynasty president and CEO Ron Thiessen, calling the move "surprising." 

As a result, the stock (NAK) is down as much as 45% in Wednesday trade.

History: 

2001: Northern Dynasty Minerals Ltd. acquires mining claims for the Pebble deposit, a large low-grade copper-gold-molybdenum ore body in the Bristol Bay watershed. PLP (Pebble Limited Partnership), a subsidiary, begins data collection for large-scale mining.

2010: The Obama EPA announces that it would be conducting a scientific assessment under the Clean Water Act to evaluate large-scale mining impacts on Bristol Bay's water quality and salmon resources.

2014: BLOCKED! The EPA issues a Proposed Determination under Section 404(c) to restrict discharges in Pebble area waters due to risks to salmon habitat. 

2017: during the first Trump administration, the EPA reversed course - proposing a withdrawal of the 2014 determination, which was finalized in 2019 (the withdrawal). 

2022: The Biden EPA hits back, reversing the reversal - essentially putting the project on ice again. 

January 2023: The Biden EPA issues a final veto determination to kill the project.

July 2023: Alaska files a motion with the US Supreme Court to challenge the Biden EPA.

March 2024: Northern Dynasty files a separate complaint challenging the EPA. 

June 2024: Iliamna Natives Ltd. et al. (Alaska Native Corporations) file a complaint challenging the EPA. 

November 12, 2024: US District Court for Alaska consolidates the three cases

February 17, 2026: Trump DOJ files opposition brief defending the Biden EPA's final determination. 

The longer version: 

The story starts in 2001, when Vancouver-based Northern Dynasty Minerals Ltd. acquired mining claims for the Pebble deposit, a massive low-grade ore body estimated to hold billions of pounds of critical metals essential for green energy transitions and national security. Early exploration revealed its potential to become North America's largest mine, but its location in the headwaters of Bristol Bay - home to diverse salmon populations and vital aquatic habitats - quickly raised red flags.

Satellite Map of Proposed Pebble Mine and Bristol Bay project (Flickr)

By 2010, the EPA launched a scientific assessment under Clean Water Act (CWA) Sections 104(a)-(b) to evaluate the risks of large-scale mining on the region's water quality and fisheries, setting the stage for over a decade of scrutiny.

The environmental concerns crystallized in January 2014 with the release of the Bristol Bay Watershed Assessment (BBA), a comprehensive study highlighting potential negative impacts from mining discharges, including habitat loss for salmon. This led to a July 2014 Proposed Determination under CWA Section 404(c) to restrict waste disposal in the area. However, pushback was swift: In November 2014, a U.S. District Court in Alaska issued a preliminary injunction halting the process amid lawsuits from Pebble Limited Partnership (PLP). 

In 2017, Trump's first term ushered in what investors in NAK thought was going to be a slam dunk. By July 2017, the EPA proposed withdrawing its 2014 determination - which was finalized in August 2019, clearing a path forward.

Progress accelerated in 2020. PLP revised its "2020 Mine Plan" in June, outlining a 20-year operation to extract 1.3 billion tons of ore, but acknowledging significant environmental costs: the loss of 8.5 miles of salmon-bearing streams, 91 miles of supporting streams, and over 2,000 acres of wetlands.

The Corps' Final EIS in July detailed these impacts, yet the permit was denied in November 2020 for failing to comply with 404(b)(1) Guidelines and public interest standards. PLP appealed in January 2021.

Ping Pong Intensifies

The tide turned again in October 2021, when a court vacated the Trump EPA's 2019 withdrawal, reviving the veto process. By January 2022, the Biden EPA announced a new 404(c) review, leading to a January 2023 Final Determination: a prohibition on discharges at the mine site in the South Fork Koktuli (SFK) and North Fork Koktuli (NFK) watersheds, and restrictions elsewhere in SFK, NFK, and Upper Talarik Creek (UTC) to protect salmon fishery areas.

Litigation intensified post-veto. Alaska sought Supreme Court intervention in July 2023 (denied January 2024), while Northern Dynasty filed its challenge in March 2024 (Case No. 3:24-cv-00059). The State of Alaska followed in April 2024 (No. 3:24-cv-00084), and Iliamna Natives Ltd. et al. in June 2024 (No. 3:24-cv-00132). The Corps denied PLP's permit without prejudice on April 15, 2024, citing the EPA's action. The EPA lodged its administrative record in August 2024, and the cases were consolidated on November 12, 2024.

Plaintiffs submitted summary judgment briefs on October 3, 2025, leading to the DOJ's recent filing backing the Biden EPA and sticking a fork in the eye of NAK longs. 

 

Tyler Durden Wed, 02/18/2026 - 13:35

Yields Jump After Extremely Ugly, Tailing 20Y Auction Sees Lowest Foreign Demand Since 2021

The week's lone coupon auction, was also one of the ugliest 20Y auctions since its inception in May 2020.

Moments ago, the Treasury sold $16 billion in 20Y paper in an especially disappointing auction: here are the details.

The auction stopped at a high yield of 4.664%, down from 4.846% in January and the lowest since October. It tailed the When Issued 4.644% by a whopping 2bps, the biggest tail since November 2024.

Going down the list, the Cid to Cover tumbled to 2.36 from 2.86 (one of the highest on record), the lowest btc since (also) November 2024. 

The internals were also dismal, as foreign buyers fled. Indirects took down just 55.167%, down from 64.715% in January and the second lowest on record (only Feb 2021 was worse).

And with Directs awarded 27.2%, down from 29.1% in January but above the recent average of 26.9%, Dealers were left with 17.6%, the highest since December 2024.

Overall, this was an extremely ugly auction, and one which dragged both 10Y and 30Y yields to session highs after the break. 

Tyler Durden Wed, 02/18/2026 - 13:27

US Threatens To Quit IEA Over Green Energy Advocacy

By Tsvetana Paraskova of OilPrice.com

The United States has threatened, once again, to quit the International Energy Agency (IEA) if the organization, created in the aftermath of the 1970s Arab oil embargo, doesn’t return to forecasting energy demand without strongly promoting green energy.

“If it goes back to what it was — it was a fabulous international data recording agency, it was getting into critical minerals, was focused on big energy issues — we’re all in on that,” U.S. Energy Secretary Chris Wright said ahead of an IEA ministerial meeting this week.

“But if they insist that it’s so dominated and infused with climate stuff — yes, then we’re out,” Secretary Wright said ahead of the meeting, as carried by Bloomberg. 

Last November, the IEA dropped its predictions that oil demand growth would peak in a matter of a few years in the first major shift since it started promoting net-zero and green energy early this decade.

The tension between the Trump Administration and the IEA has escalated in recent months. 

A House committee last summer approved a bill that the U.S. withdraw its funding to the IEA, as the Republican lawmakers consider that the agency has strayed from its mission to safeguard energy security and has been pushing green energy policies instead.   

In July 2025, Secretary Wright said that the United States could abandon the IEA if the organization continues with its strong advocacy for renewables and doesn’t return to rational analysis of energy demand and promoting energy security.   

“We will do one of two things: we will reform the way the IEA operates or we will withdraw,” Wright told Bloomberg in an interview in the middle of July. 

“My strong preference is to reform it,” Secretary Wright added.  

The official echoed voices in the U.S. Republican party that the agency has become an advocate of the energy transition and is not objective in forecasting energy demand trends.

Tyler Durden Wed, 02/18/2026 - 12:50

New Mexico Launches Probe Into What Happened At Epstein's 'Zorro Ranch'

Until now, the public's visualizations of the Jeffrey Epstein scandal have largely centered on his Caribbean Island and his seven-story New York townhouse, but a new setting is poised to take greater prominence, as the New Mexico legislature just launched a wide-ranging investigation into what took place at Epstein's "Zorro Ranch" about 30 miles south of Santa Fe. One line of inquiry focuses on a redacted email in the DOJ files alleging that two "foreign girls" were buried on the property.   

Multiple women have claimed they were abused at Epstein's Zorro Ranch when they were under 18 years old

“He was basically doing anything he wanted in this state without any accountability whatsoever,” New Mexico state Representative Andrea Romero, a Democrat who co-sponsored the probe, told NBC News. She said there's no indication that the FBI ever searched the property. 

With a $2.5 million budget approved by unanimous vote of the legislature, a "truth commission" of Democrats and Republicans will head up the probe into potential criminal activity on the 7,600-acre property that features both a 26,700-square-foot mansion and guest houses. Legislators are urging victims to come forward, but multiple accusations of sexual misconduct at the ranch have already been made. For example: 

• Annie Farmer, who testified at Ghislaine Maxwell's trial, said Maxwell gave her a nude massage there when Farmer was 16 years old -- and that, the next morning, Epstein entered her bed and "pressed his body" into hers. 

• A victim identifed as "Jane" testified that she was taken to the ranch and abused when she was only 14 years old. “I just remember someone, at one point, just came into [my] room and said: ‘Jeffrey wants to see you,’ and then escorted me to see him.”

• The late Virginia Giuffre claimed to have been abused at the ranch, and that Epstein partner-in-crime Ghislaine Maxwell instructed her to "massage" former New Mexico Governor Bill Richardson there -- with "massage" mutually understood to mean sexual intimacy. 

• A Santa Fe massage therapist accused Epstein of sexually abusing her at the ranch. 

The most disturbing but least-substantiated claim was made anonymously -- an email in the possession of the DOJ said two females were buried in the hills near the ranch.  Last week, the New Mexico Chief of Criminal Affairs asked the DOJ to give his department "immediate access to a complete, unredacted version of file EFTA01250229" along with forensic information associated with the email and any DOJ documents associated with it.  

Are two sex-strangulation victims buried in these hills? 

According to the Albuquerque Journal, the email was sent to a local radio host in 2019, written by someone claiming to be a former worker at the ranch. The author claimed that Epstein and Maxwell ordered the bodies of two foreign girls to buried in the hills. The girls were said to have been killed "by strangulation during rough fetish sex."     

This is where I would set up a listening post if I were a spy and I was interested in number theory (cryptography), MIT military research, and physics. One Brattle Square is just off Harvard yard. Center of Harvard Sq Cambridge, but w/o having the scrutiny of being on campus. pic.twitter.com/Pj6q8ZcoAi

— Eric Weinstein (@EricRWeinstein) February 17, 2026

The new probe is expected to look beyond the wrongdoing of Epstein and Maxwell, with the potential to identify other participants in devious activities -- and those who looked the other way. “Many of the survivors had experiences in New Mexico, and as we’ve learned, there were local politicians and other people that were aware of what was happening in New Mexico,” said Sigrid McCawley, an attorney whose firm has represented hundreds of Epstein accusers. 

Annie Farmer testified that she was abused at Zorro Ranch at the age of 16 (Timothy A. Clary / AFP via Getty Images and NBC News)

Epstein bought the property in 1993 and owned it until he died in a New York prison cell. In 2023, Epstein's estate sold the ranch to the family of Don Huffines, a former Texas state senator and current Republican candidate for state comptroller. The property has been renamed San Rafael Ranch, and the Huffines family says it plans to transform the ranch into a Christian retreat.

In another document from the Epstein dump, a victim writes a coded diary where she describes being a 'human incubator' who was forced to give birth to a child that was taken from her.

 

EFTA00165118.pdf via @ashesofacacia

They may want to start with an exorcism. 

Tyler Durden Wed, 02/18/2026 - 12:25

Record Taiwan Arms Deal In 'Limbo' As White House 'Vacillates' Amid Xi Pressure: Report

During their February 4 phone call, President Xi Jinping used the opportunity to warn President Donald Trump on China's Taiwan red lines. Xi had described the US approach to Taiwan "the most important issue in China-U.S. relations," declaring that China "will never allow Taiwan to be separated from China."

Trump has repeatedly stressed the need to keep lines of communication open with Beijing, even as he insists on safeguarding American interests and regional security, and as Washington continues arms and political support to Taipei and its full independence aspirations. But Trump is also looking ahead to his much anticipated China visit in April, as we've highlighted before.

Could the April visit to Beijing be in jeopardy, and is the direct pressure from Xi working?

Source: FirstPost/Asia Times

A fresh Wednesday report in The Wall Street Journal suggests the answer is yes - and the report goes so far as to describe that a key record-breaking $11.1 billion arms sale package to Taiwan, first announced in December of last year, is currently in limbo.

"A major U.S. arms-sales package for Taiwan is in limbo following pressure from Chinese leader Xi Jinping and concerns among some in the Trump administration that greenlighting the weapons deal would derail President Trump’s coming visit to Beijing, according to U.S. officials," WSJ writes.

The report lays out:

Trump’s advisers are vacillating on the decision, according to a U.S. official familiar with the arms package, who insisted that, while Xi was adamant, Trump wouldn’t be pushed around by China. Trump wants to preserve a trade truce with Xi, a second U.S. official said, so the timing of an arms-sale decision is being carefully considered behind the scenes, the person said.

In response to a request for comment, a U.S. official said the arms sales are working their way through the administration’s internal process.

The U.S. Congress hasn’t officially been notified of new arms sales, but a congressional aide said it had been expected to include Patriot antimissile interceptors and other weapons.

WSJ concludes that Trump is fundamentally seeking to avoid antagonizing China, in order to no blow up the anticipated visit.

Another key issue on the line, affirmed in the earlier February Xi-Trump call is seen in the following:

China is considering buying more U.S.-farmed soybeans, President Donald Trump said after what he called "very positive" talks with President Xi Jinping on Wednesday, even as Beijing warned Washington about arms sales to Taiwan.

In a goodwill gesture two months before Trump's expected visit to Beijing, Trump said Xi would consider hiking soybean purchases from the United States to 20 million metric tons in the current season, up from 12 million tons previously. Soybean futures rallied.

Trump was asked by reporters about the Taiwan weapons issue Monday, to which the president responded: "I’m talking to him about it. We had a good conversation, and we’ll make a determination pretty soon.

"We have a very good relationship with President Xi," Trump underscored, clearly signaling he wants things to go as smoothly as possible, and keep relations cordial.

Tyler Durden Wed, 02/18/2026 - 12:20

Big Tech Turns To Uranium As Data Center Power Demand Soars

Big Tech is considering supporting new uranium mining projects as companies need additional reliable power capacity for their huge data center expansion, according to the top executive of Canadian uranium miner NexGen Energy.     

“It's coming. You've seen it with automakers. These tech companies, they're under an obligation to ensure the hundreds of billions that they are investing in the data centres are going to be powered,” NexGen Energy’s CEO Leigh Curyer said at a Melbourne Mining Club luncheon on Wednesday, as carried by Reuters.

As OilPrice reports, NexGen Energy, which is developing Canada’s largest uranium project, Rook I in Saskatchewan, has held early talks with technology companies over potential financing from data center developers, Curyer said.   

The uranium developer has also discussed long-term uranium supply with data center firms.

Yet, potential funding or supply deals will not involve any changes to the control of NexGen Energy, the chief executive told Reuters.  

Global electricity demand increased by 3% annually in 2025, following growth of 4.4% in 2024, the International Energy Agency (IEA) said in its recent Electricity 2026 report.

Between 2026 and 2030, the annual average growth rate would be 3.6%, driven by higher consumption from industry, electric vehicles (EVs), air conditioning, and data centers, according to the agency.

Artificial intelligence, data centers, and advanced manufacturing support the return to growth in power demand in advanced economies, the IEA said.

U.S. electricity demand rose by 2.1% in 2025 and is expected to grow by nearly 2% annually through 2030. The rapid expansion of data centers will drive half of the increase, the agency noted. 

The U.S. is backing nuclear power generation to help meet rising electricity demand.

Nuclear energy will be one of the winners of the U.S. AI and data center boom, as Microsoft and other hyperscalers have been looking to purchase zero-carbon electricity to power up their data centers, which are consuming growing amounts of electricity.     

Tyler Durden Wed, 02/18/2026 - 11:45

Apple Races To Build Smart Glasses To Take On Meta AI Ray-Bans

Apple learned the hard way that a $3,500 Apple Vision Pro is well out of reach for the average consumer, while the sub-$500 Meta Ray-Ban smart glasses sit in the sweet spot and have been in hot demand.

Vision Pro 

Vs. 

Meta smart glasses

Bloomberg’s Mark Gurman, citing people familiar with Apple’s product roadmap, reports that the company is accelerating work on three new wearables: smart glasses, a pendant-style device, and AirPods with expanded AI features, all centered around the Siri assistant.

However, Bloomberg reported last week that the latest upgraded version of Siri has encountered development headwinds, potentially delaying the release of several highly anticipated features.

Gurman’s report on new Apple smart glasses to take on Meta’s glasses follows a recent Omdia note saying Apple’s AR glasses are likely coming in 2028, while Meta could launch its version months earlier, likely in 2027.

We've long tracked the flop of Apple’s $3,500 Vision Pro and have consistently argued that Meta’s more affordable smart glasses are the clear winner. More recently, we flagged the key supplier behind the Ray-Ban and Oakley smart glasses (see the note here).

Tyler Durden Wed, 02/18/2026 - 11:05

Wells Fargo Sees 'YOLO' Trade Driving $150B Into Bitcoin & Risk Assets

Authored by Zoltan Vardai via CoinTelegraph.com,

US tax filers may see bigger refunds in 2026 compared with previous years, a development one Wall Street strategist said may boost risk appetite for digital assets and tech stocks preferred among retail investors.

In a note cited by CNBC, Wells Fargo analyst Ohsung Kwon said the coming refund wave may help bring back the so-called “YOLO” trade, with as much as $150 billion potentially flowing into equities and Bitcoin by the end of March. Kwon said the extra cash could be most visible among higher-income consumers.

“Speculation picks up with bigger savings…we expect YOLO to return,” wrote Wells Fargo analyst Ohsung Kwon in a Sunday note seen by news outlet CNBC.

“Additional savings from tax returns, especially for the high-income consumer will flow back into equities, in our view,” he added.

Kwon said some of that liquidity could move into Bitcoin and into stocks popular with retail traders, including Robinhood and Boeing.

Cointelegraph contacted Wells Fargo for details on the assumptions behind the $150 billion estimate and how much of that total the bank expects could go to digital assets, but had not received a response by publication time.

Bitcoin demand depends on sentiment

While some of the taxpayer funds may flow into Bitcoin and digital assets, it’s important to consider the higher inflation and consumer spending compared to the period during the COVID-19 pandemic, Nicolai Sondergaard, research analyst at crypto intelligence platform Nansen, told Cointelegraph:

“If sentiment starts to come around and retail sees positive upwards momentum in crypto assets, I see that as increasing the likelihood of funds flowing in this direction.”

Conversely, retail investors may opt for other assets with “higher momentum and social stickiness,” if digital asset sentiment doesn’t improve in the near term, he said.

The larger tax returns are due to the passage of US President Donald Trump’s One Big Beautiful Bill, which included numerous favorable provisions for 2025 tax filings.

Trump signed the One Big Beautiful Bill Act into law on July 4, 2025, saying it would cut as much as $1.6 trillion in federal spending.

Smart money bets on crypto market downside as whales quietly accumulate

Meanwhile, the whales, or large investors, continue their quiet spot accumulation of the leading cryptocurrencies, while the most profitable traders by returns, tracked as “smart money,” are betting on more crypto market downside.

Smart money trader positions through the Hyperliquid exchange, top tokens. Source: Nansen

Smart money traders were net short on Bitcoin for a cumulative $107 million, along with most of the leading cryptocurrencies excluding Avalanche, according to crypto intelligence platform Nansen.

Still, whales acquired over $41.9 million worth of spot Ether tokens across 22 wallets during the past week, marking a 1.7-fold increase in the spot purchases of this cohort.

Tyler Durden Wed, 02/18/2026 - 10:45

How Relaxed COVID-Era Rules Fueled Minnesota's Biggest Scam

Authored by Kristin Robbins via RealClearPolitics,

In my testimony before the Senate last week as chair of the Minnesota House Fraud Prevention and Oversight Committee, I outlined the genesis of Minnesota’s massive fraud scandal, how it expanded under relaxed COVID-era rules, and what steps the federal government can take to help stop the theft of federal tax dollars throughout the country.  

Minnesota’s fraud crisis didn’t happen overnight; it took years. But it exploded when COVID hit, right when oversight was thrown out the window.

How did Minnesota get so bad? In March 2020, Democrat Rep. Ilhan Omar authored a bill called the MEALS Act, which eventually became part of a larger COVID relief package. That law allowed states to waive the normal eligibility requirements for the National School Lunch Program. It eliminated income requirements and site inspections and expanded distribution methods. This opened the door for Feeding Our Future, which became the largest COVID fraud scandal in state and national history, stealing at least $250 million from taxpayers. To date, there have been 78 indictments and 61 convictions, with more cases headed to trial this spring.

This was organized, deliberate theft, enabled by weak controls, refusal to take multiple reports of fraud from whistleblowers and the legislative auditor seriously, and a government culture that refused to treat fraud like a crime.

The Feeding Our Future case revealed something even more disturbing: As many as half of the defendants were also receiving state money through other Medicaid-funded programs. But even after that became public back in 2023, Tim Walz and his agencies did nothing to stop those defendants from receiving additional state dollars.

Billions of federal COVID dollars didn’t start the staggering fraud in Minnesota, but that did supercharge a system that had already been compromised.

The original fraud scandal was tied to the Child Care Assistance Program, a federal program meant to help low-income families with children. There had been allegations of fraud reported with CCAP since 2011. By 2014 and 2015, there were raids, charges, and convictions of child care providers for billing non-existent or absent children, often exceeding $1 million in fraud in a single case.

Then in March and April of 2019, just months into the Walz administration, the legislative auditor published two major reports outlining CCAP fraud. Those reports detailed fraudulent providers and alleged movement of millions of dollars in cash out of Minnesota to Somalia, including allegations that some of that money was funding terrorism.

Whistleblowers have told us that shortly after those reports were released, the Department of Human Services shut down the criminal investigation unit for child care fraud.

Rather than pursuing fraud as a crime, the Walz administration began renaming fraud as “overpayment.” Cases were routed to an internal “overpayment committee” to decide whether reimbursement should even be pursued. Staff were no longer allowed to speak with their counterparts at the Bureau of Criminal Apprehension without supervisor approval.

Our committee has now uncovered fraud in multiple Medicaid programs, including autism centers, sober homes, non-emergency medical transportation, integrated community supports, and housing stabilization services.

In December, we held a hearing on credible allegations of fraud in two additional areas: adult day services and assisted living facilities. We have now seen allegations of fraud in 14 Medicaid programs. It is staggering.

The former first U.S. attorney who led these prosecutions estimated fraud at $9 billion, and that doesn’t include fraud in SNAP or child care programs.

Minnesotans expect their tax dollars to go toward roads, schools, health care, and public safety, not to fund criminals purchasing resorts in Kenya and luxury homes and cars. Even more alarming are the allegations that Minnesota taxpayer dollars have made their way into the hands of terrorist organizations like Al-Shabaab, directly or indirectly. The money is literally flown out in suitcases from the Minneapolis-St. Paul Airport.

In 2017, estimates suggested $100 million in cash left annually. According to TSA, outbound cash was $342 million in 2024 and $350 million in 2025. That is astonishing. And it is wildly disproportionate compared to other airports. Minneapolis’ outbound cash is 99% higher than Dallas, Atlanta, LAX, and JFK, and 90% higher than Seattle.

So where do we go from here? 

Minnesotans are right to be outraged, and I hope other states learn from Minnesota’s failures.

We need a culture that treats fraud as a crime, not as “overpayment.”

We need to standardize and enforce basic internal controls. Both federal and state government need to require documentation, not attestation, to verify eligibility.

We need more audits and stronger oversight.

We need the federal government to enforce existing laws requiring states to pay back funds within one year when fraud or “overpayment” is found. We need more resources at the U.S. Attorney’s Office and CMS to investigate these cases. And we need stronger federal authority to track and investigate large sums of cash leaving our country.

We need leaders willing to stand up to this injustice and protect the most vulnerable.

Citizens in Minnesota and throughout the country deserve better. The time for accountability and justice is now.

Kristin Robbins has served in the Minnesota House of Representatives since 2019 and is chair of the Minnesota Fraud Committee.

Tyler Durden Wed, 02/18/2026 - 09:40

US Industrial Production Surged In January

Despite slumping sentiment surveys, 'hard' data continues to suggest the US economy is ticking along nicely with Industrial Production surging 0.7% MoM in January (better than the +0.4% MoM expected and well up from the downward revised +0.2% MoM in December).

This is the 3rd straight monthly increase in Industrial Production, lifting growth to 2.3% YoY - the best annual growth since Sept 2022...

Source: Bloomberg

Under the hood, US Manufacturing output rose 0.6% MoM (better than the +0.4% MoM expected and best monthly gain since Feb 2025)...

Source: Bloomberg

That is the fast annual growth in manufacturing since Feb 2022.

Capacity Utilization rose to 76.2% (below expectations),m extending the positive trend since the start of Trump's term...

Source: Bloomberg

Finally, circling back to the 'soft' survey data we noted at the beginning, we note that ISM Manufacturing exploded higher in January (after decoupling from hard data all year)...

Does make you wonder whether any of these surveys are real? Or did the Democrats being interviewed finally throw in the towel on the doomsaying?

Tyler Durden Wed, 02/18/2026 - 09:35

Amid Slumping Sales & Sentiment, Housing Starts & Permits Jumped In December

It would appear that homebuilders are desperately hoping for a 'Field of Dreams' year...

After seeing existing home sales collapse in January (not driven by the winter storms), US Housing Starts and Building Permits rose dramatically more than expected in December (+6.2% MoM vs +1.1% exp and +4.3% MoM vs +0.4% MoM exp respectively)...

Additionally, Housing Starts rose as Home Builders confidence crumbled (and Future Sales expectations dropped)...

The surprise monthly surge lifted the SAAR totals for both housing sector data points to multi-month highs...

Breaking down the headline data shows that multi-family building permits and housing starts soared (+18.1% MoM and +10.1% MoM respectively) while Single-Family Building Permits tumbled 1.7% MoM while single-family starts rose for the 3rd straight month...

However, the pace of construction continues to decline on a year-over-year basis.

Growth in permit demand was most robust in the Northeast and West, two of the more volatile regions.

Finally, the inventory of new homes for sale remains a significant headwind for residential construction activity.

While mortgage rates have fallen, perhaps prompting the homebuilders to take advantage...

...the fact that rate-cut expectations have tumbled suggests they 'they will not come' anytime soon, no matter how much you build.

Tyler Durden Wed, 02/18/2026 - 09:20

Under Intensifying US Pressure To Reach Deal, Zelensky Explodes: No Time "For All This S**t"

Ukrainian leader Volodymyr Zelensky has increasingly made his frustrations with the Trump administration public, but he may have just crossed the line with the US President, who Zelensky admits can be tough and unbending.

Zelensky has newly complained amid the latest Geneva trilateral talks that the US delegation could pressure him to make "unsuccessful decisions" and he is urging Washington to back off, even using expletives to make his point.

For starters, he claims that the Ukrainian public won't let him cede territory to Russia for the sake of peace even if he wanted to, as we highlighted previously.

But the latest colorful verbal broadside, cited by Axios on Tuesday as Russian and Ukrainian delegations convened in Geneva, saw Zelensky take direct aim at the head of Moscow's negotiating team, Vladimir Medinsky. Kiev's frustration at the state of dialogue has been boiling over.

Medinsky has argued - along with numerous Russian officials, including President Vladimir Putin - that the conflict's historical roots must be addressed as part of any settlement, especially given the bulk of the Ukrainian population in the east (Donbas) has always been Russian speaking and looked to Moscow historically.

Zelensky dismissed that approach outright:

"We don’t have time for all this shit," he told the outlet. "So we have to decide, and have to finish the war."

Source: Al Jazeera/AP

Regardless, the Kremlin has lately made clear its aims to take the full Donbas either through talks or by force. Ukraine's military still holds 10% of the Donbas, however, and Kiev is rejecting a US proposal for it to draw back its forces as part of a conflict freeze leading to settlement. 

The White House this month has finally appeared to be ratcheting up the pressure directly on Zelensky to make some kind of serious land concession.

This was evident in the latest comments by President Trump on the topic of Geneva issued near the start of the week. Frustration with Kiev was evident when he told reporters aboard Air Force One, "Well, we have big talks." He stated that "It’s going to be very easy. I mean, look, so far, Ukraine better come to the table fast. That’s all I’m telling you."

Zelensky after this bitterly complained that it's 'not fair' for Trump to take aim at Ukraine and not Russia, and suggested maybe it's simply easer for Trump to do this given he doesn't want to upset the far larger, more formidable country.

Meanwhile, Medinsky has said Wednesday that the U.S.-mediated peace talks in Geneva had been "difficult but business-like, and that a new round of talks would be held soon," according to Reuters.

Tyler Durden Wed, 02/18/2026 - 09:10

Has America Reached Peak Idiocracy?

Authored by Michael Snyder via The Economic Collapse blog,

We live in a lowest common denominator society.

For the last several decades, virtually every major institution in our society has become less civilized, and that is because our entire population has become less civilized. 20 years ago, a film entitled “Idiocracy” was released. It was about an average American that was selected for “a top-secret hibernation program but is forgotten and left to awaken to a future so incredibly moronic that he’s easily the most intelligent person alive”. It was an incredibly stupid movie, but the truth is that we are living it right now. Did you see the Super Bowl halftime show? The FCC has ruled that it didn’t violate any federal decency regulations. Of course we might as well not have any decency regulations at all, because our television shows and our movies are filled with some of the raunchiest material imaginable and nobody ever seems to get in trouble for it.  Of course that is only part of the equation. Most of the “programming” that we constantly consume also seems to be specifically designed for people of extremely low intelligence. Sadly, this is not a coincidence. It has been said that art imitates life, and that is certainly accurate in this case.

In the “dumbed-down” environment that we find ourselves in today, it should be no surprise that “nude cruises” have been surging in popularity…

Imagine coming home from your next cruise with no tan lines.

Swimsuits are standard attire on many cruise ships, but some voyages don’t even require those. Nude cruises allow travelers to sail the high seas au naturel – and pack light. The American Association for Nude Recreation promotes the cruises as “a unique way to experience nude recreation, offering members options beyond traditional resort or club settings,” president Linda Weber told USA TODAY.

While the dress code might be non-restrictive, it doesn’t mean the sailings are a free-for-all on board; there is some etiquette that passengers should be familiar with before boarding.

While our society falls apart all around us, Americans are flocking to cruises that are filled with naked people.

What does that say about us?

Let me give you another example of what I am talking about.

A 20-year-old woman from California left her children in an extremely hot car while she got lip and butt injections.  By the time she was done with the procedures, her 1-year-old son had died…

A 20-year-old California mom was found guilty Wednesday in the death of her 1-year-old son, after reportedly leaving him in a sweltering car to receive lip and butt injections last June.

Maya Hernandez took a plea deal in the child endangerment case, ultimately dropping her first-degree murder charge in exchange for involuntary manslaughter.

On June 29, Bakersfield officers arrested and charged Hernandez after finding two young children left unattended in a vehicle for over two hours, according to a police report posted on a GoFundMe page. Authorities said the mother left the children unattended to undergo a cosmetic procedure inside a nearby medical spa.

What was she thinking?

In that case, it doesn’t appear that she intended to harm her children.

But in another case in New Mexico, a 38-year-old woman purposely killed her newborn child in a portable toilet…

A New Mexico woman is facing charges after she allegedly gave birth in a portable toilet and then killed the newborn by drowning them in the holding tank.

Sonia Cristal Jimenez, 38, arrived at Memorial Medical Center in Las Cruces at around 10:30 p.m. on Feb. 7, when staff said she appeared as if she had just given birth, but she had no baby with her, Las Cruces Police said in a press release.

Hospital staff then notified police about the unusual encounter.

She didn’t want the baby, and so she killed it.

As a society, we have so little respect for life because we have been trained to have so little respect for life.

In Michigan, a 3-year-old boy was recently killed because a couple wanted to “make room for a child that the two of them could have together”…

A mum and her ex-boyfriend have been accused of killing her three-year-old son in order to “make room for a child that the two of them could have together”.

Little Matthew Maison was found dead in the bed of his home in Port Huron Township, Michigan, by his babysitters on February 18, 2018. His mum, Amanda Maison, and Maurice Houle, who was her boyfriend at the time of Matthew’s death, were arrested in connection with the killing. An autopsy showed that Matthew had died from blunt force trauma injuries and possible suffocation.

The ex-couple allegedly admitted to abusing the young boy when they were arrested, prosecutors have previously said. Maison, 33, has pleaded guilty to a charge of second-degree homicide in relation to her son’s death, admitting as she appeared in court to enter her plea on November 5 that she abused Matthew.

These are not isolated incidents.

Every day there are even more signs that our society is rapidly degenerating.

Yes, we possess more advanced technology than previous generations, but in many ways that advanced technology is making things even worse.

For example, all over the country women are “marrying” AI husbands.  When an older version of ChatGPT was recently retired, it resulted in the “death” of one woman’s AI husband, and now she is in mourning…

A woman has been left in tears over the ‘death’ of her AI husband, after an old model of ChatGPT was retired this week – as she joins a slew of others ‘mourning’ their non-existent lovers’ deletion.

Speaking to the BBC, Rae (not her real name), who is based in Michigan, laid bare the heartbreak of saying goodbye to her virtual partner Barry, who she began chatting to last year – after going through divorce.

Initially, she turned to artificial intelligence for advice on self-improvement with things like skincare and workouts – but what first began as a ‘fantasy’ turned into real feelings, and they were ‘married’ within weeks.

Some surveys have shown that nearly 30 percent of Americans have engaged in a romantic relationship with an AI chatbot.

That is not a sign of an emotionally healthy society.

And even as we were all expressing outrage about the Epstein files, “sex dolls that look like kids” were being advertised on Facebook…

Sickening sex dolls that look like kids are being advertised for sale on Facebook.

A group of websites touting small models with overtly childlike features have published over 1,300 ads on the social media platform. They are alarmingly realistic in appearance and many ads use photos in sexualised poses, some holding balloons or teddy bears. The National Crime Agency warns the creepy imports “pose a significant risk to children”. And a former cop told us: “Anyone who buys one of these dolls should be a person of interest to the police.”

Thankfully, the offending ads were eventually taken down.

But this is the society that we live in now.

It is sick.

And even when people are arrested for criminal behavior, they are often dumped right back into the streets.

Needless to say, that can have tragic consequences.

In fact, one repeat offender in Seattle that had been arrested over and over again viciously attacked a 75-year-old woman with “a wooden board with nails in it”…

An elderly woman was savagely attacked in broad daylight by a man wielding a wooden board with nails in it.

Jeanette Marken, 75, was left permanently blinded in her right eye after being hit in the face with the makeshift weapon in Seattle, allegedly at the hands of repeat offender Fale Vaigalepa Pea, 42.

Family members told KOMO that a screw sticking out of the board gouged out Marken’s eye, and after several surgeries she was told she will not recover her eyesight in the eye.

One police officer that is very familiar with Fale Vaigalepa Pea referred to him as “a regular”…

‘He’s a regular. He usually punches,’ the officer responds.

‘I guess today he decided to escalate from his usual.’

According to KOMO, Pea’s string of offenses dates back to 2011, when he stabbed two people at a party.

They have been dumping this guy back into the streets for well over a decade.

This sort of thing happens day in and day out in major cities all over the nation.

What would our founders think if they could see us today?

We will soon be celebrating the 250th anniversary of our country, and we are literally committing societal suicide.  This is something that Abraham Lincoln once warned was a real possibility…

As the country approaches its 250th anniversary, we should remember Abraham Lincoln’s remark that no external enemy could by force take a drink from the Ohio River. “If destruction be our lot,” he said, “we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide.”

If we keep going down the path that we are on, there is no future for us.

But if we make a choice to renounce what we have become and start embracing the values that early Americans held so dear, we could turn the ship in another direction.

Do you think that will actually happen?

Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

Tyler Durden Wed, 02/18/2026 - 08:50

Core Durable Goods Orders Surge For 9th Straight Month

US Durable Goods Orders dropped 1.4% MoM in preliminary December data (slightly better than the 2% decline expected) but well down from the +5.4% MoM surge in November...

Source: Bloomberg

The headline orders print was restrained by a decline in orders for aircraft.

Boeing said it received more orders for its planes in December than a month earlier, but the data don’t always correlate with the planemaker’s monthly figures.

That leaves Durable Goods Orders up 12.5% YoY in 2025 - one of the biggest annual increases ever.

Meanwhile, Core Durable Goods Orders (ex Transports) rose 0.9% MoM (triple the +0.3% MoM expected) and the ninth straight monthly increase...

Source: Bloomberg

Core Orders are up over 5% YoY in 2025 - the best YoY gain since Oct 2022 (and best annual gain since 2021).

Today's data also showed the value of core capital goods orders, a proxy for investment in equipment that excludes aircraft and military hardware, surged by dramaticallly larger-than-forecast 0.9%.

Tyler Durden Wed, 02/18/2026 - 08:41

Oil Surges On Report Warning US-Iran War Is Far Closer Than Americans Realize

Axios' Barak Ravid, a journalist very close to the Israeli government, writes Wednesday that the Trump White House is now "closer to a major war in the Middle East than most Americans realize. It could begin very soon."

The sources he spoke to, which could be American or Israeli, say that such an operation would be a "massive" campaign at least weeks in sustained length. If it the campaign goes the way of Iraq or Afghanistan, or Syria, the conflict could eventually be measured in years and not just months.

Further, "The sources noted it would likely be a joint U.S.-Israeli campaign that's much broader in scope — and more existential for the regime — than the Israeli-led 12-day war last June, which the U.S. eventually joined to take out Iran's underground nuclear facilities."

USAF/CNN

All of this looks to be going down with no public or Congressional debate whatsoever: "With the attention of Congress and the public otherwise occupied, there is little public debate about what could be the most consequential U.S. military intervention in the Middle East in at least a decade," notes Axios.

Both sides are citing 'progress' in the two rounds of indirect negotiations (in Oman and then Geneva) which have taken place thus far, however, there's been nothing yet in the way of specific agreement. Washington's commitment to see talks through even for weeks at this point is highly in quesiton.

The following was the initial Iranian assessment of how the talks led by Witkoff and Kushner in Geneva went this week:

Iran has said it has reached an understanding with the US on the main "guiding principles" to resolve their dispute over Tehran's nuclear programme.

Speaking after indirect talks in Geneva, Iranian Foreign Minister Abbas Araghchi added that work still needed to be done. The US said "progress was made".

Badr Albusaidi, foreign minister of mediator Oman, said the negotiations "concluded with good progress towards identifying common goals and relevant technical issues".

The Iranians have asked for two weeks to hammer out a detailed proposal, with an American official stating, "Progress was made, but there are still a lot of details to discuss. The Iranians said they would come back in the next two weeks with detailed proposals to address some of the open gaps in our positions."

Given President Trump has ordered a second US carrier group to the region, along with a huge number of support aircraft, does Iran really have two weeks to spare? 

Oil reaches HOD Wednesday soon on heels of Axios report, with WTI kissing $64/barrel...

To some degree, the Iranians are likely buying time, knowing that a surprise, unprovoked attack could be imminent. This would be similar to the June war, but unlike that scenario this would indeed be much bigger.

There's reason to believe Trump may stay restrained, however, and give negotiations time. Fear of higher oil prices could ultimately be the deciding factor here, pushing Trump to settle with Iran and not spark another completely unpredictable, likely disastrous war in the Middle East. 

Public sentiment indicator...

⚡️#BREAKING Odds of a U.S strike on Iran by March 31st now up to 60%.

With all the news coming out, I wouldn’t be surprised… pic.twitter.com/QtpuSvtDix

— War Monitor (@WarMonitors) February 18, 2026

Tyler Durden Wed, 02/18/2026 - 08:36

Global "Everything Rally" Pushes US Futures HIgher As "AI Disruption" Fears Fade

US equity futures trade near session highs, after rising much of the overnight session amid muted volumes. Yesterday, US stocks recovered their early losses starting just after the EU close and that momentum has carried through to global markets today with what appears to be re-grossing in EU and continued momentum in the Japan trade. As of 8:15am ET, S&P futures are 0.4% while Nasdaq 100 contracts rise 0.5% with broad premarket gains across software names and tech heavyweights. Mag7 names are mostly higher (NVDA +1.8%, AMZN +1.4%) and most sectors are higher pointing to what JPMorgan calls an "Everything Rally" today as the market tries to find a bottom and was less reactive to AI headlines yesterday than we have seen most of the year. Europe’s Stoxx 600 hit a record high following a slate of positive earnings. Bond yields are +1-2bp with a USD that has caught a bid. In commodities, all 3 complexes are higher with precious metals leading; brent crude is headed for the highest level in a week. Overnight we learned that Japan would $36bn (of $550bn commitment) into US infra (natgas, crude export, and synthetic diamond production). Today’s macro data focus is on Cap / Durable Goods, Housing Starts, regional Fed indicators, TIC data, and the latest Fed Minutes.

In premarket trading, Mag 7 stocks are all higher: Nvidia (NVDA) rises 1.9% after Meta Platforms Inc. agreed to deploy “millions” of its processors over the next few years, tightening an already close relationship between two of the biggest companies in the artificial intelligence industry (Amazon +1.3%, Microsoft +0.4%, Alphabet +0.2%, Apple +0.06%, Meta unch, Tesla +0.3%)

• Applied Digital (APLD) falls 8% after Nvidia reported exiting its stake in a 13F filing.
• Axcelis Technologies (ACLS) declines 13% after the semiconductor manufacturing company gave a first-quarter forecast that is weaker than expected.
• Cadence Design Systems (CDNS) climbs 6% after the electronic design automation software company reported fourth-quarter results that beat expectations and gave an outlook that is seen as positive.
• Caesars Entertainment (CZR) rises 5% after the casino operator reported same store adj. Ebitda for the fourth quarter that beat the average analyst estimate.
• Global-e Online (GLBE) rises 18% after the application software company reported fourth-quarter results that beat expectations and gave a positive forecast.
• Mister Car Wash (MCW) climbs 17% after agreeing to be taken private by Leonard Green & Partners at $7 per share in cash.
• New York Times Co. (NYT) rises 3% after Berkshire Hathaway built a stake in the publisher.
• Palo Alto Networks (PANW) tumbles 7% after the security software company gave a forecast for adjusted earnings that was weaker than expected for both the third quarter and the full year.
• Pitney Bowes Inc. (PBI) climbs 7% after the shipping and mailing software firm posted fourth-quarter earnings that topped expectations and management provided a strong 2026 profit forecast.
• Rush Street (RSI) rises 18% after the gaming company reported revenue for the fourth quarter that beat the average analyst estimate.
• Sandisk (SNDK) falls over 3% as Western Digital is selling a stake in the the flash-memory unit that it spun off.
• SimilarWeb (SMWB) falls 23% after the web services company’s fourth-quarter results missed expectations and it gave an outlook that analysts described as disappointing.
• Vita Coco (COCO) rises 6% after the beverage firm provided a strong forecast for 2026 net sales.

After months of gains fueled by optimism over AI, equity markets have turned cautious amid a clash between disruption fears and doubts that heavy spending will yield meaningful returns. The setbacks in US stocks have prompted investors to look elsewhere, with European and Asian benchmarks far outpacing the S&P 500 this year.

“It’s hard to know where the floor on valuation is going to be,” Sophie Huynh, portfolio manager at BNP Paribas Asset Management, told Bloomberg TV. “So I think there’s going to be some temptation to buy on dips.”

Apple has decoupled from the Nasdaq amid the recent AI angst: It’s seen as a safer bet because it isn’t participating in the capex bonanza and doesn’t have a major business line that’s threatened by AI. Rotation is also cropping up among regions — with renewed interest in European equities — and in the latest batch of 13F filings. Berkshire Hathaway slashed its stake in Amazon by more than 75% in the fourth quarter, while also building a stake in the New York Times, in Warren Buffett’s last new bet as chief executive officer of the conglomerate.

Rotation is also cropping up among regions — with renewed interest in European equities — and in the latest batch of 13F filings. Berkshire Hathaway slashed its stake in Amazon by more than 75% in the fourth quarter, while also building a stake in the New York Times, in Warren Buffett’s last new bet as chief executive officer of the conglomerate.

Digging into earnings estimates suggests that AI’s impact on corporate growth is seen as limited outside of Big Tech. Earnings growth estimates for the Mag 7 in 2026 have gone up to 18% from 14% in the aftermath of last year’s tariff-related selloff. For the remaining 493 companies in the S&P 500, expectations have fallen to 11% from 12.5%, according to data compiled by Bloomberg Intelligence. In other AI news, Meta agreed to deploy “millions” of Nvidia processors over the next few years, tightening an already close relationship between the pair. ION Group’s founder said investors are punishing the wrong companies after more than $2 trillion was wiped off the value of software firms in recent weeks. 

Other interesting observations in 13F filings include Third Point increasing its weighting in healthcare while reducing exposure to consumer staples. Pershing Square cut its position in Alphabet and boosted its stake in Amazon, while Meta represented its biggest new buy in the fourth quarter.

In central banks, some Fed officials have begun suggesting that productivity growth from AI could mean higher rates, a view that would put them at odds with the Trump administration. The FT reported that Christine Lagarde plans to leave the ECB before her eight-year term ends in October 2027. An ECB spokesperson said that Lagarde “is totally focused on her mission and has not taken any decision regarding the end of her term.”

Analog Devices, Moody’s and Global Payments are among companies expected to report results before the market opens. Moody’s outlook for 2026 will be in focus following S&P Global’s worse-than-expected profit forecast earlier this month. Earnings from Carvana and Molson Coors follow later in the day.

In Europe, the Stoxx 600 is up 0.9%, rising for a third day and on track for a record close.  Miners lead gains after Glencore reported solid full-year earnings, while chemical stocks lag as a disappointing report from IMCD weighs on the sector. BAE Systems shares jump after the defense firm predicted continued solid sales and earnings growth for the year. Bank and energy also outperform.Here are some of the biggest movers on Wednesday:

• BAE shares gain as much as 6.3% after full-year results analysts called solid and where cash flow stood out.
• Puig shares rise as much as 6.6%, the most since October, as the Spanish company’s full-year revenue beat estimates, with analysts pointing to a strong performance in its main fragrances and fashion business.
• Mediobanca shares rise as much as 9%, the most since last April, after Banca Monte dei Paschi di Siena’s board approved a plan to pursue delisting the investment bank. Paschi shares advance as much as 4.8%.
• Glencore shares rally as much as 3.5% in London after the miner reported adjusted Ebitda for the 2025 full year that beat the average analyst estimate.
• Amrize shares climb as much as 6.1%, with the building materials company hitting the highest on record since its June 2025 IPO, on strong cash returns and positive guidance.
• IMCD shares slump as much as 13%, their biggest drop in almost seven months, after the specialty chemicals maker missed expectations across all metrics.
• Bayer shares slide as much as 7.9%, reversing Tuesday’s gain following the German conglomerate’s class-action settlement plan in relation to the Roundup weedkiller litigation.
• Genmab shares fall as much as 6.9% after the biotech firm forecast full-year revenue which analysts say implies a downside to expectations.
• Carrefour shares drop as much as 5% after delivering full-year results which are seen as slightly weaker than expected.
• EssilorLuxottica shares drop as much as 3.3% to the lowest since July after Bloomberg reported that Apple is accelerating development on new wearable devices, including smart glasses.
• EFG International shares fall as much as 9.4% after an additional legal provision and rising costs “spoilt” the bank’s results by causing earnings to miss expectations.

Resurgent optimism about Europe and the benefits of German stimulus is driving investment flows into the region’s equity markets and fueling an outperformance that is expected to last. The positivity is visible in overall positioning, according to the latest Bank of America survey of the region’s fund managers. A net 35% are overweight European equities relative to global markets, up from 9% just three months earlier.  “The AI scare trade is creative destruction in the making, and when one doesn’t know how it will unfold, one diversifies,” said Nicolas Domont, fund manager at Optigestion in Paris. “Investors are particularly interested in companies which have predictable order books and revenues, such as in defense.”

Asian stocks advanced, led by a rebound in Japanese shares, as many markets around the region remain shut for Lunar New Year holidays.
The MSCI Asia Pacific Index rose 0.5%, snapping a three-day losing streak. Mitsubishi UFJ and Tokyo Electron were among the biggest boosts to the index. Equities also gained in India, Australia, New Zealand and Indonesia. The announcement of Japan’s $36BN investment in US projects as part of a trade deal bolstered optimism in Tokyo. Easing trade tensions have helped support shares across the region, along with improving earnings in markets including India. Confirmation of the investment plans by Japan is positive for overall sentiment, said Tomoaki Kawasaki, a senior analyst at Iwaicosmo Securities. “If these investments help boost the US economy, that could also drive up US yields, which is a plus for financials.” Recent volatility fueled by investor concerns over the impact of AI on corporate spending and business survival has been exacerbated by low trading volumes this week. Markets in South Korea, Singapore and Malaysia reopen Thursday, while trading resumes Friday in Hong Kong. 

In FX, the dollar edged higher against most major peers. The euro held its modest loss after the Financial Times reported that Christine Lagarde is expected to leave the European Central Bank before her term as president expires in October 2027. An ECB spokesperson said Lagarde hasn’t yet made a decision regarding the end of her tenure. The kiwi is the weakest of the G-10 currencies, falling 0.7% against the greenback after a dovish hold by the RBNZ. Cable is flat.

In rates, Treasuries dip, pushing US 10-year yields up 1 bp to 4.07%. Gilts outperform after UK inflation dropped to its lowest level since March 2025. UK 10-year borrowing costs fall 1 bp to 4.37%.

The Federal Reserve is due to release the minutes of its January meeting later on Wednesday. Bloomberg Economics expects the notes to show a broad consensus to hold interest rates steady after three cuts. Money markets continue to price in at least two cuts for the rest of the year. Even so, progress on inflation could give the Fed room to ease policy by 100 basis points in 2026, Bloomberg Economics said.

In commodities, brent crude futures rise 1.9% to near $68.70 a barrel, paring Tuesday’s fall. Spot silver rises 3% toward $76/oz.

Today's US economic data calendar includes December preliminary durable goods orders and housing starts and February New York Fed services gauge (8:30am), January industrial production (9:15am) and December Treasury International Capital flows (4pm). Fed speakers scheduled include Governor Bowman (1pm), and minutes of January FOMC meeting, at which rate cuts were paused, are slated for 2pm release.

Market Snapshot

• S&P 500 mini +0.4%,
• Nasdaq 100 mini +0.5%,
• Russell 2000 mini +0.4%
• Stoxx Europe 600 +0.7%,
• DAX +0.6%,
• CAC 40 +0.4%
• 10-year Treasury yield +1 basis point at 4.07%
• VIX -0.9 points at 19.38
• Bloomberg Dollar Index little changed at 1184.37,
• euro -0.2% at $1.1834
• WTI crude +0.6% at $62.68/barrel

Top Overnight News

• The Trump administration is closer to a major war with Iran than people realise, a military operation would likely be a massive, weeks long campaign that will be a joint US-Israeli attack: Axios
• US-brokered meetings in Geneva between Russia and Ukraine broke up after barely 90 minutes as Ukrainian President Volodymyr Zelenskiy accused Moscow of attempting to prolong the process: BBG
• US envoys juggle two crisis talks, raising questions about prospects for success: RTRS
• Epstein tried to build web of powerful ties across Middle East, documents show: RTRS
• A senior U.S. official on Tuesday revealed what he said were new details of an underground nuclear test blast that China allegedly conducted in June 2020. Assistant Secretary of State Christopher Yeaw said that a remote seismic station in Kazakhstan measured an "explosion" of magnitude 2.75 located 450 miles (720 km) away at the Lop Nor test grounds in western China on June 22, 2020: RTRS
• ECB President Christine Lagarde is expected to step down from her role before her term ends in October 2027. Lagarde wants to leave before the French presidential election in April next year, which would allow French President Emmanuel Macron and German Chancellor Friedrich Merz to find her replacement together: FT
• ECB’s Cipollone has no indication President Lagarde plans early resignation: RTRS
• UK inflation dropped to its lowest level since March 2025, with consumer prices rising 3% in January from a year earlier.  The latest figures keep the Bank of England on track for a spring rate cut, with money markets pricing two quarter-point reductions this year: BBG.
• ‘Woke’ AI Feud Escalates Between Pentagon and Anthropic: WSJ
• Microsoft said it is on pace to invest $50 billion by the end of the decade to help expand AI to countries across the 'Global South': RTRS
• Sanae Takaichi was formally reappointed as Japan’s Prime Minister following her electoral win, allowing her to focus on budget deliberations and a trade deal with US President Donald Trump. Takaichi announced the first batch of projects as part of Japan’s $550 billion investment commitment under the trade deal, including a natural gas facility and a synthetic industrial diamond manufacturing facility: BBG
• Uber to invest over $100 million in autonomous vehicle charging amid robotaxi push: RTRS
• Land Grab for Data Centers Is One More Obstacle to Much-Needed Housing: WSJ
• UK inflation hits lowest in nearly a year at 3.0%, strengthening bets on a BoE rate cut: RTRS
• Nine Skiers Missing After Northern California Avalanche: WSJ
• Americans believe Epstein files show the powerful get a pass, Reuters/Ipsos poll finds
• Fed minutes could highlight shift in balance of risks as policymakers put rates on hold: RTRS

Trade/Tariffs

• Japanese PM Takeichi confirms to have agreed with the US on the first set of investment projects

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded higher in continued thin conditions as many regional bourses remained closed for holidays. ASX 200 mildly gained amid outperformance in real estate, tech and financials, with the latter helped by gains in Big 4 bank NAB post-earnings, although miners,  materials and resources were at the other end of the spectrum after the prior day's commodities-related pressure. Nikkei 225 rallied back above the 57,000 level with sentiment in Japan underpinned by the better-than-expected trade data for January, which showed the fastest pace of increase in exports in more than three years.

Top Asian News

• Japanese PM Takaichi affirms will consider revision of constitution and wants to pass budget and tax reform bill quickly, adds to consider revision of imperial household law.
• Japan's Finance Minister Katayama said will carry out responsible fiscal policy, while keeping in mind the IMF's preliminary policy recommendation.
• IMF said if volatility hits market liquidity, the BoJ should be ready for targeted interventions, such as emergency bond buying, and that Japan should avoid cutting consumption tax as it would weaken fiscal space and raise fiscal risks.

European bourses (STOXX 600 +0.7%) are trading entirely in the green, with the IBEX (+1.1%) leading gains, closely followed by the FTSE MIB (+0.9%) and the FTSE 100 (+0.7%). European sectors are broadly in the green, with Basic Resources (+1.9%) and Banks (+1.5%) leading the way while Chemicals (-1.1%) lags. A rebound in metals prices and positive Glencore (+3.3%) earnings are helping lift the Basic Resources sector, while the Board of Monte dei Paschi approved a plan to fully integrate Mediobanca and delist the bank while preserving the brand.

Top European News

• UK Chancellor Reeves reiterates that the UK will take defense spend past 2.6% in future budgets.

FX

• G10s are mostly lower across the board; GBP remains afloat following above-expected Core and Services metrics, whilst the NZD is the clear laggard in the aftermath of the RBNZ’s decision to keep rates steady (as expected), but held a dovish skew.
• DXY is mildly firmer this morning, and currently trades at the upper end of a 97.11-97.32 range, holding just above its 21 DMA at 92.20. Further upside could see a test of the prior day’s high at 97.54. Really not much driving things for the index this morning, but could face some volatility on a) geopols, b) US data, c) FOMC Minutes.
• GBP remains resilient vs the USD strength this morning, following the region’s inflation report, with particular focus on the hotter-than-expected Services and Core metrics. In more detail, the headline printed in line with the market consensus at 3.0% Y/Y, and as such, slightly hotter than the BoE's 2.9% forecast for the period. The headline was also accompanied by a hotter-than-expected core and services figure. M/M metrics were broadly as expected, unwinding the December base effects. Taking a look at food inflation, it fell to 3.6% (prev. 4.5%); ING suggests that hawks can become “a little more relaxed about the upside risks to inflation”. ING sticks with its call for a March cut and then another by June. Market pricing shifted a little dovishly, with the probability of a March cut now seen at 95% vs 84% pre-release. Cable initially knee-jerked lower, and then immediately reversed that move to print a session peak at 1.3577; the upside then gradually petered out, to now trade within a 1.3549-1.3577 range.
• NZD is the clear underperformer this morning, following the RBNZ’s decision to keep rates steady (as expected), though the accompanying commentary held a dovish skew. In brief, the Bank stated that the committee will continue to assess incoming data carefully and if the economy evolves as expected, monetary policy is likely to remain accommodative for some time. Furthermore, it stated that inflation is most likely returning to within the committee's 1–3% target band in the current quarter and that, conditional on the central economic outlook, the OCR is projected to remain around its current level in the near term before increasing from late 2026. NZD/USD currently trades around the 0.60 mark (coincides with its 21 DMA), within a 0.5989-0.6053 range.

Central Banks

• RBNZ keeps the OCR at 2.25%, as expected, while it stated that the committee will continue to assess incoming data carefully. If the economy evolves as expected, monetary policy is likely to remain accommodative for some time. Committee is confident that inflation will fall to the 2% midpoint over the next 12 months due to spare capacity in the economy, modest wage growth, and core inflation within the target band. Inflation is most likely returning to within the committee's 1–3% target band in the current quarter.
• RBNZ Governor Breman said OCR trajectory is aligned with the anticipated evolution of the economy, adds OCR track indicates there is a possibility of a hike towards the end of the year but noted Q4 hike is not fully priced in to the OCR track.
• RBNZ Governor Breman said forward path reflects stronger economic outlook.
• Fed's Daly (2027 voter) said models show productivity gains are lifting the neutral rates, labour market shows less churn and dynamism, adds impact on neutral rate is unlikely in the near term and growth is solid, but firms cite uncertain demand.
• ECB's Villeroy said the ECB has won the battle against inflation, domestic French inflation is undershooting on temporary factors but it is not too low.
• ECB President Lagarde is expected to leave the ECB, before her eight-year term ends in October 2027, according to FT citing a person familiar with her thinking. However, ECB said that Lagarde remains committed to her role and has not made a decision on her departure.

Fixed Income

• A bearish start for fixed income, though only modestly with USTs lower by a handful of ticks in a narrow 112-30+ to 113-05+ band. US specifics thus far are a little light as we continue to digest the better-than-expected data on Tuesday and Fed speak that was a little hawkish from voter Barr, weighing on the complex. More insight will be derived from the FOMC Minutes this evening, which follows a 20yr auction and Fed's Bowman.
• The main focus point this morning is Gilts, though the benchmark is little changed as things stand. Opened lower by 17 ticks and then fell one more to a 92.03 trough in reaction to the morning's CPI data, while the headline Y/Y was in-line with market consensus, it was hotter than the BoE's view; additionally, core and services figures came in hotter than the market forecast. However, the net takeaway from the release is that it doesn't definitely solve the March vs April debate, with the decision in March looking like another 5-4 with Bailey to tie-break.
• Bunds are little moved in a 129.15-39 band, no move to the morning's Final French CPI series. The main point of focus for the EZ is reporting in the FT, among others, that ECB President Lagarde could step down before her term ends in October 2027. The FT outlines, citing sources, that this would ensure both French President Macron and German Chancellor Merz are in power and have a significant say in appointing a successor. No move to a tepid 2036 Bund auction.
• Germany sells EUR 4.238bln vs exp. EUR 5.5bln 2.90% 2036 Bund: b/c 1.46x (prev. 1.65x), average yield 2.73% (prev. 2.85%), retention 22.9% (prev. 23.3%).
• Kenya reportedly intends to issue additional USD denominated noted, potentially in multiple series, Bloomberg reported.
• Australia sold AUD 1.2bln 4.25% October 2035 bonds, b/c 3.90, avg. yield 4.7439%.

Commodity

• Crude prices are nursing prior day losses following yesterday's geopolitical development between the US and Iran, which ended on a more positive note, though caution remains. Thus far, officials suggest that talks were substantive and some issues were clarified, but highlighted that talks were difficult. Thereafter, the crude complex notched session highs following an Axios report, which suggested that the Trump administration is closer to a major war with Iran than people realise. Brent Apr'26 moved higher from USD 67.74/bbl to a high of USD 68.08/bbl over six minutes.
• In the metal space, spot gold and silver made gradual strides higher during the APAC session. XAU trades above the USD 4,900/oz within a USD 4869.95-4961.4/oz range, whilst XAG trades just above USD 75/oz within the 72.2305-57.783 range. Newsflow has been light for precious metals thus far in the European session.
• Copper prices are also rebounding, nursing prior day losses and in tandem with the improving risk tone. 3LME copper trades in the upper end range of USD 12.649-12.731.2k/t. Reminder that China, the largest market for copper, remains closed due to the Chinese new year’s.
• Hungary seeks EU approval to import Russian seaborne crude, says the Hungarian Minister of Foreign Affairs and Trade.
• Slovakia has declared an oil emergency and will release oil from its state reserves.
• US Energy Secretary Wright said they are looking to end Iran's progress towards nuclear weapons and want IEA nations to focus on energy security.
• Study shows that US has enough raw copper to meet domestic demand and can meet 146% of annual demand using raw copper from overseas and domestic mines and from scrap, while China 40% of its demand, according to Benchmark Mineral Intelligence cited by FT.

Geopolitics: Ukraine

• Ukraine's President Zelensky tells reporters that they've agreed to continue peace discussions, adds that talks were difficult and positions are different for now.
• Head of Ukrainian delegation says negotiations were substantive and there was progress; a number of issues were clarified.
• Update of new round of Ukraine talks is that there's been no concrete date set, IFX reported.
• The top Russian negotiator said the talks were difficult but business-like, RIA reported.
• Ukraine talks in Geneva have ended, new round of talks will be held soon, RIA reported.
• US Special Envoy Witkoff said US facilitated the third trilateral meeting between Ukraine and Russia, adds Ukraine and Russia agreed to update leaders and pursue an agreement.

Geopolitics: Middle East

• The Trump administration is closer to a major war with Iran than people realise, Axios reports citing sources; a military operation would likely be a massive, weeks long campaign that will be a joint US-Israeli attack.
• US Energy Secretary Wright said they are looking to end Iran's progress towards nuclear weapons and want IEA nations to focus on energy security.
• Iran and Russia are reportedly said to conduct navy drills in the Sea of Oman and Northern Indian Ocean on February 19th.

Geopolitics: Other

• US Secretary of State Rubio has been holding secret talks with the grandson of Cuba's Castro, Axios reported citing sources.
• US State Department senior official said the US would resume nuclear tests to match 'opaque' Chinese activity and flagged new details about a 2020 test the US recently accused China of secretly conducting, according to SCMP.

US Event Calendar

• 7:00 am: United States Feb 13 MBA Mortgage Applications, prior -0.3%
• 8:30 am: United States Dec P Durable Goods Orders, est. -2%, prior 5.3%
• 8:30 am: United States Dec P Durables Ex Transportation, est. 0.3%, prior 0.4%
• 8:30 am: United States Dec Housing Starts, est. 1303.5k
• 8:30 am: United States Dec P Building Permits, est. 1400k
• 9:15 am: United States Jan Industrial Production MoM, est. 0.4%, prior 0.4%
• 9:15 am: United States Jan Capacity Utilization, est. 76.5%, prior 76.3%
• 1:00 pm: United States Fed’s Bowman Speaks in Washington
• 2:00 pm: United States FOMC Meeting Minutes
• 4:00 pm: United States Dec Total Net TIC Flows, prior 212.04b
• 4:00 pm: United States Dec Net Long-term TIC Flows, prior 220.24b

DB's Jim Reid concludes the overnight wrap

As US markets returned from the holiday, volatility re-emerged across AI linked equities, with the VIX at one point nudging up towards YTD highs (just shy of 23). Around that time, the S&P 500 and the Magnificent 7 were down roughly -0.9% and -1.5% respectively, marking their intraday lows within an hour of the European close. However, both indices then staged a sharp rebound, closing +0.10% and +0.23% higher on the day.

The NASDAQ (+0.14%) and the Russell 2000 (-0.00%) were also little changed, but with sizeable dispersion underneath the headline stability. For instance, while the Philadelphia Semiconductor Index (-0.02%) recovered from being down more than -2.5% intraday, the software & services (-1.59%) segment still led the declines within the S&P 500. And some defensive sectors also struggled, with consumer staples down -1.51% as Walmart fell -3.76% from what had been a 20% gain YTD. Volatility was also evident across other high profile 2026 themes, with Brent crude (-1.79%), gold (-2.29%) and Bitcoin (-1.72%) all ending weaker, in part thanks to cautiously upbeat comments out of US-Iran talks.

In Europe, early signs of AI related concerns weighed on several indices, although sentiment improved into the close. The STOXX 600 finished +0.45%, with real estate, healthcare and banks outperforming, while the CAC 40 (+0.54%), FTSE 100 (+0.79%) and DAX (+0.80%) all outperformed.

Markets also digested a range of second tier US data. The Empire Manufacturing Index came in slightly better than expected at +7.1 (vs +6.2 consensus), while the NY Fed February employment index rose to +4.0 from -9.0 previously. Weekly ADP data showed 10,250 jobs added over the four weeks ending January 31, so consistent with slightly over 40k monthly job growth. Less positively, the NAHB Housing Market Index saw a slight decline in February to its lowest in six months (36 vs 38 expected).

Alongside the data, we received some patient-sounding Fed commentary. Fed President Goolsbee reiterated that further evidence of inflation moving back towards 2% would be required before easing, while Fed Governor Barr said that “it will likely be appropriate to hold rates steady for some time”. Markets slightly dialed down expectations for rate cuts, with 60bps of 2026 easing priced by yesterday’s close (-2.3bps on the day). In turn, 2yr Treasury yields edged higher (+2.7bps), while 10yr (+1.1bps) and 30yr (-0.6bps) saw muted moves, resulting in some curve flattening.

By contrast, government bonds rallied across Europe, with 10yr bund yields falling -1.6bps, OATs -2.8bps and BTPs -1.7bps. The main trigger for that was the February ZEW survey, which saw expectations unexpectedly decline (58.2 vs 59.6 prev. and 65.2 exp.). While the ZEW is often noisy, it does have some leading properties and the print will add attention to the upcoming PMI data on Friday and the Ifo survey on Monday.

Here in the UK, 10yr gilts (-2.4bps) also rallied following weaker labour market data, notably showing youth unemployment reaching its highest cyclical level since 2015 at 16.1%. Payrolled employees declined for a fifth consecutive month, with the January flash estimate pointing to an -11k fall, while the unemployment rate edged up to 5.2% (vs 5.1% expected). Overall, the data did little to ease concerns over the softness of the UK labour market and markets dialed up expectations for near-term BoE easing, with pricing of a March rate cut rising from 74% to 79%. As a reminder, our UK economist continues to expect two further rate cuts this year, likely by summer.

We also saw some dovish repricing in Canada, where CPI printed slightly below expectations, with headline inflation at +2.3% y/y (vs +2.4%) and trimmed core at +2.4% y/y (vs +2.6%). With inflation concerns continuing to ease, Canadian 2yr yields fell -2.3bps to a 10-week low of 2.45%.

Turning to geopolitics, oil prices initially extended recent gains amid reports that Iran had temporarily closed parts of the Strait of Hormuz during military drills, but prices then reversed course as it emerged that the latest US-Iran talks appeared constructive. Iran said it reached a “general agreement on a set of guiding principles” for a potential nuclear deal, with Bloomberg reporting later on that Iranian negotiators are due to return in two weeks’ time with a new proposal to address gaps that remain versus US demands. By the close, Brent crude declined by -1.79% to $67.42/bbl. The more encouraging geopolitical backdrop also weighed on gold (-2.29%) and silver (-4.03%), which extended declines that had emerged during yesterday’s Asia hours amid the Lunar New Year holiday.

Asian equity markets are higher this morning but with still low volumes due to the closure of markets in mainland China, South Korea, and Hong Kong. As I check my screens, Japanese stocks are recovering from losses incurred earlier this week, with the Nikkei and Topix indices both trading around +1.25% higher respectively. Elsewhere, the S&P/ASX 200 (+0.52%) is higher for the third session, while the S&P/NZD 50 (+1.54%) is up after three sessions of losses, following a less hawkish hold than expected from the RBNZ. The kiwi has declined by -0.81% to 0.60 against the dollar, while the yield on the 2-year policy-sensitive government bonds is down -9.8bps to 3.096%, the lowest level since mid-January.

Elsewhere in Asia time, S&P 500 (+0.20%) and NASDAQ 100 (+0.27%) futures are both higher with US Treasury yields up around a basis point across the curve. As we go to print the FT is reporting that ECB President Lagarde is looking to step down before her 8-year term ends in October next year, targeting a move before the French elections in April 2027, thus allowing her successor's appointment to be made by the current set of politicians. As I press send on this the ECB has said that Lagarde has not made any decision on the end of her term. So a live story to watch.

Looking ahead, upcoming data include US January industrial production, capacity utilisation, the leading index and December durable goods orders. Elsewhere, UK January CPI, RPI and PPI data are due, alongside Canada’s January existing home sales. Central bank events include the release of the FOMC meeting minutes and speeches from ECB members Villeroy and Schnabel. Notable earnings include Analog Devices and Booking, while the US Treasury will auction $16bn of 20 year bonds.

Tyler Durden Wed, 02/18/2026 - 08:31

Package-Food Stocks Sink After "Most Downbeat" Consumer Conference, General Mills Guidance Woes

A fresh reminder that the K-shaped economy remains a very big problem emerged Tuesday at the Consumer Analyst Group of New York (CAGNY) conference, where top U.S. packaged food executives struck a sour tone about persistent consumer softening and unease over elevated food prices.

General Mills CEO Jeff Harmening told the audience at CAGNY that cereal, snacks, and pet food are among the categories taking the biggest hit as consumers struggle with affordability woes. He said the pressure is being fueled by inflation, reductions in government food benefits, geopolitical uncertainty, and a fragile consumer environment.

Those factors "have led to significant consumer stress, especially for the middle- and lower-income groups," Harmening said.

Also on Tuesday, General Mills plunged 7% (its biggest drop since May 2022) after cutting its full-year sales outlook. It now expects organic net sales to decline 1.5% to 2%, compared with its prior forecast of down 1% to up 1%.

BNP Paribas analyst Max Gumport told clients CAGNY was "one of the most downbeat in recent memory for the packaged food group." He noted the group is still facing several headwinds that have contributed to a "more elongated than anticipated recovery in volume."

Beyond a cash-strapped consumer, Gumport also cited the surging use of GLP-1 drugs, intensifying competition from "disruptor" brands, and ongoing financial stress as some of the top pressures across the packaged food industry.

Also at the conference, Dana McNabb, group president of North America retail at General Mills, said the company has implemented a new lower-pricing strategy that has lifted volumes by eight percentage points.

McNabb said General Mills is targeting the price points that deter purchases and keeping prices below those thresholds. She added that the company is taking about 20% of its "least productive" products off the market.

Mondelēz International CEO Dirk Van de Put told CAGNY that consumers have dialed back on snack buying "because of high prices and flat spendable income."

UBS analyst Torsten Sippel commented on the market reaction on Wednesday, saying: "Staples are finally pulling back after several weeks of outperformance, following disappointing guidance from General Mills. Packaged Food {UBXXFOOD Index} is down 4%."

The S&P 500 Packaged Foods Sub-Industry Index closed down nearly 4%, not far from its Covid lows.

Our view is that consumers are addicted to junk food and are likely only temporarily dialing back spending in this segment as they look for new ways to fund their habits.

Tyler Durden Wed, 02/18/2026 - 07:20