Zero Hedge

Putin Says 'Ready For War' Against Europe If Attacks On Russian Tankers, Energy Continue

Putin Says 'Ready For War' Against Europe If Attacks On Russian Tankers, Energy Continue

US envoy Steve Witkoff and Trump's son-in-law and unofficial diplomat Jared Kushner have been at the Kremlin on Tuesday for high-level talks with President Vladimir Putin. The Americans are presenting Trump's Ukraine peace plan in its current form after the high stakes Miami meeting with the Ukrainian delegation, which focused on ceding territory and what future boundaries might look like in the Donbass.

President Putin's public words in the context of the meeting wherein the US side is formally pitching the plan have presented an opportunity for him to lash out at Europe. If Europe starts a war with Russia, soon there will be "no one left to negotiate with" - he warned after several EU and NATO officials have lately issued hawkish words and threats.

Russia is not planning to fight European countries, but if Europe starts a war, Russia is "ready right now" - the Russian leader said.

Via The Kremlin/BBC

The Kremlin had last month issued a generally positive outlook on what it framed as genuine efforts of the Trump administration to reach peace settlement in Ukraine. Putin has previously said the now 19-point plan could be a workable basis on which to find a solution. By day's end Tuesday, the world might get a better glimpse of how this is proceeding.

There are reports of a several hours-long meeting unfolding late into the night (local time)...

But on the question of Europe, which has been largely sidelined when it comes to the US peace plan version, Putin is angry. He denounced a recent series of drone strikes on oil and gas tankers carrying Russian energy exports acts of "piracy".

He also on Tuesday made clear that European demands related to Moscow are not at all acceptable, suggesting that they are by intention an effort to prod and anger Russia. He said that "Europe only proposes unacceptable demands," according to Interfax. "They are on the side of war," he said of the Europeans.

“Russia has no intention of going to war with European countries. But if Europe wants war Russia is ready” – Putin has told journalists before meeting Witkoff and Kushner.

"Europe has withdrawn itself from the Ukrainian settlement. It has no peace agenda, and now they are hindering US efforts to achieve a settlement," Putin said additionally. "Europe is putting forward proposals for a peace plan for Ukraine that are unacceptable to Russia."

Putin calls for Western "fantasies" of imposing "strategic defeat" on Russia to end...

Importantly, he also vowed to expand strikes on Ukrainian ports, as retaliation for the some four tankers which have already been hit by Ukrainian attacks, which are believed to have had the support of Western intelligence. According to more of his words via newswires:

  • Europeans have detached from the talks themselves.
  • Attacks on tankers near Turkey are piracy.
  • Will take measures against tankers of countries that help Ukraine.
  • Will increase strikes on facilities and Ukrainian vessels.
  • If attacks continue, Russia may strike Ukraine tankers.

President Zelensky has meanwhile admitted the road ahead will be "tough" - but he's yet to outright reject the Trump-proposed plan, also knowing he could be cut off in terms of US funding and political support at any time. "Now, more than ever, there is a chance to end this war," he has has said during a Tuesday visit to Ireland.

Below is a note contextualizing where things stand via Rabobank...

Ukraine is saying there are still “tough issues” to be resolved to get to a peace deal, but the US revolver on the table may overcome them: the White House team is in Moscow to negotiate; Europeans are not at the table. That’s as Russia claimed Filipino troops are fighting in Ukraine(!); a test of its Satan II ballistic missile failed; a Chinese firm took a stake in a Russian drone maker; and Russia claimed it’s finally captured the strategic Ukrainian towns of Pokrovsk and Vovchansk.

Europe is to revamp its border-control force and told the White House it won’t accept a pardon for Putin’s war crimes in any deal - but what if the US agrees one? The WSJ says ‘Trump’s Push to End the Ukraine War Is Sowing Fresh Fear About NATO’s Future.’ That all smells like a lot more military spending for Europe, and faster than timetabled; or a split between those who see it as necessary and those who think you can defend yourself with committees and acronyms.

* * *

Things in Moscow are looking friendly so far...

Tyler Durden Tue, 12/02/2025 - 10:45

No "Unmoved Mover", All Part Of A Now Systemic Metacrisis

No "Unmoved Mover", All Part Of A Now Systemic Metacrisis

By Michael Every of Rabobank

"The unmoved mover" is ancient philosophy from Aristotle interpreted to mean ‘the divine’. For modern Mammon, it means a finance industry with siloed sector coverage grudgingly agreeing that the US is primus inter pares. But not always. Yesterday, markets moved a lot: crypto crumbled, again; stocks were down; and bond yields were up, as were silver and copper. What moved them most was perhaps Japan, not the US.

If you started working in markets after the late 90s, all you’ve known until recently is Japanese low/deflation and ultra-low or negative yields. Not anymore. Japanese CPI is around 3% and has been there for over three years: “transitory”? The 2-year JGB yields is 1.02%, as in 2008; the 10-year yield is 1.88%; and the 30-year is 3.40%, the highest this century and well into the previous. This is leading global bond yields higher just as ‘Japanification’ used to depress yields.

The BOJ is indicating it’s leaning towards a December hike. Yet JPY is still weak given the BOJ base rate is far below the level of inflation. Worse, decades of massive JGB issuance at ultra-low yields ensures higher yields raise questions about debt sustainability; but reversing BOJ course when inflation is high would weaken JPY further, which given Japan’s dependence on imported commodities, would push inflation up even more. Bloomberg called the 10-year JGB auction this morning “a global event” – though with firmer demand than the 12-month average it didn’t meet that top billing.

Indeed, we live in a world full of global events, and most still revolve around the US: but not its monetary policy, rather its political, economic, and military statecraft.

Ukraine is saying there are still “tough issues” to be resolved to get to a peace deal, but the US revolver on the table may overcome them: the White House team is in Moscow to negotiate; Europeans are not at the table. That’s as Russia claimed Filipino troops are fighting in Ukraine(!); a test of its Satan II ballistic missile failed; a Chinese firm took a stake in a Russian drone maker; and Russia claimed it’s finally captured the strategic Ukrainian towns of Pokrovsk and Vovchansk. Europe is to revamp its border-control force and told the White House it won’t accept a pardon for Putin’s war crimes in any deal - but what if the US agrees one? The WSJ says ‘Trump’s Push to End the Ukraine War Is Sowing Fresh Fear About NATO’s Future.’ That all smells like a lot more military spending for Europe, and faster than timetabled; or a split between those who see it as necessary and those who think you can defend yourself with committees and acronyms.

In Latam, as Honduras’ presidential election vote is counted in a very tight race, Trump posted: “Looks like Honduras is trying to change the results of their Presidential Election. If they do, there will be hell to pay!” That’s after Trump had earlier named the only candidate he is prepared to work with. Welcome to the Monroe Doctrine.

Oil markets are monitoring Venezuela, where Trump has reportedly given Maduro a Friday deadline to leave the country as Caracas accuses the US of wanting to “take over its oil resources” and is seeking help from OPEC+: as Stalin asked, “How many divisions do they have?”

Elsewhere, Ukraine not only just struck another oil terminal, but may have attacked a ‘shadow fleet’ ship carrying Russian oil near Singapore. Who had ‘more global attacks on upstream commodity supply chains’ on their bingo cards? Those who listened to our 2026 Financial Markets Outlook.

Not being focused on by oil markets (yet) is Israel saying it will strike Iraq if Iran-backed militias there support Hezbollah, with whom tensions are again running high, as Israeli media also underline risks that Iran may try to attack it, for which Jerusalem is preparing a new spectrum of weapons - as the US warns Israel not to bomb Syria again, with which it’s now partnering against ISIS.

In broader geoeconomics, the Aussie spy boss warned businesses of “hacking, sabotage, and assassinations”;

The WSJ reports Chinese rare-earth dealers are finding ways to dodge Beijing’s export restrictions – is this “because markets” related to the US deepening rare earths supply chains with Japan, South Korea, Singapore, the Netherlands, the UK, Israel, the UAE, and Australia? That’s as European firms report debilitating impacts from rare earths restrictions – one saw it cost 20% of its global revenue, 40% see licensing process added two months-plus to delivery times, 38% expect significant disruption or production stoppages, 11% had to disclose sensitive IP info to get licenses, and 42% said once license is granted, there are further delays gaining customs clearance.

Japan defense firms are seeing sales boom as Tokyo eyes the end of more export curbs – which will also help JGB yields rocket (as Bloomberg says, ‘Japan’s Inflation-Proof ‘Stan Economy’ Is Booming’);

Canada is to join the EU Security Action for Europe (SAFE) instrument (again, what did Stalin say?), as the EU will axe trade perks for countries that refuse to take back failed migrants, and its CBAM carbon border tax is criticized for going easy on ‘dirty’ Chinese imports because “Brussels got its math wrong on the carbon footprint of imports from China, Brazil and the US.”;

In politics, spot the pattern: ‘Germany’s far-right AfD attempts to rebrand as real power comes within reach’ (Politico); ‘German Mittelstand in turmoil after breaking taboo on meeting far’ (FT); ‘France’s business leaders scramble to shape far right’s agenda as election looms’ (Politico); and ‘One in four male Gen Xers now support One Nation’ (AFR). Elsewhere, the head of the UK fiscal watchdog was forced to quit after a pre-Budget info leak – so perhaps now won’t have to testify to Parliament about what happened; and the UK’s new far-left Your Party saw its first conference plagued with cries of factionalism, cliques, splittists, rigged votes, and exclusionary tactics – and decided on a 20-member ruling executive rather than a party leader.

In the economy, Aussie private sector wages just soared 6% y-o-y, outpacing profits: so, not “rate cuts!” then(?) On the other hand, the US financial press warns consumers are ‘losing patience’ with high car prices and are downsizing or opting for second-hand models, as ‘Gen Z Shoppers Aren’t Spending Like Retailers Need Them To.’

In Europe, the think tank Ember claims super-grid plans are threatened by a huge power line funding gap and that “80% of the EU power system is expected to miss the 2030 interconnection target.” The WSJ is blunter and more controversial: ‘Europe’s Green Energy Rush Slashed Emissions - and Crippled the Economy’, adding, “Political consensus is cracking, industry is hobbled and high-profile projects are being postponed thanks to some of the highest electricity prices in the developed world.”

In markets, new RBNZ Governor Breman told parliamentary select committee that she would be “laser focused” on the Bank’s core mandate of low and stable inflation, and she favoured greater transparency. Excellent. Except it’s transparent that we need to ask what a laser focus on low and stable inflation means when so many factors domestic and foreign can impact on it in so many ways and monetary policy has nothing to do with most of them. Tellingly, Powell spoke today and didn’t say anything at all for markets to mull over. Should we start to get used to it(?)

Look around and see that there is no earthly unmoved mover, be it Japan, or crypto, the Mag-7, or any central bank - even the Fed. They are all just part of a now systemic metacrisis.  

Tyler Durden Tue, 12/02/2025 - 10:40

Welcome To Hotel California: Democrats Push Retroactive Billionaire Tax

Welcome To Hotel California: Democrats Push Retroactive Billionaire Tax

Authored by Jonathan Turley,

California was once known as the destination for anyone seeking a fortune, from the Gold Rush to Hollywood. The image of a line of wagon trains heading West has now been replaced by a line of U-Hauls heading anywhere but California. Unable to stem the exodus, California is again toying with retroactive taxes — targeting the wealthy regardless of whether they flee the state.

Welcome to Hotel California, “you can check out any time you like, but you can never leave.”

California democrats have long faced the same dilemma of constantly tapping the wealthy to cover their deficit spending: these individuals and their wealth are mobile. They can simply leave and many are doing so. We recently discussed how California is now losing a taxpayer every minute.

Previously, the state moved to tax people who left the state. Now, the state is seeking a billionaire tax and making it retroactive. Thus, even if you were waiting to decide to leave, it is too late. You are being taxed for the prior year.

California Governor Gavin Newsom is pushing the retroactive billionaire tax targeting the roughly 220 billionaires residing in California in 2025. It signals not just desperation in the face of crippling debt and overspending but a recognition that California is chasing its highest earners out of the state.

The “2026 Billionaires Tax Act” would impose a one-time 5% tax on individual wealth exceeding $1 billion. While technically using 2026 wealth figures, it would apply to billionaires who resided in California in 2025.

So you cannot hope to flee… at least with your wealth intact.

It is a penalty for those who stayed too long hoping that rational minds would prevail in California.

The tax is a familiar tactic of many in politics who attack the wealthiest citizens as somehow ripping off the poor.

If states can do this for billionaires, it is likely to do it for those in lower tax brackets as they face the choice between financial discipline and tax increases.

As I discuss in my forthcoming book, Rage and the Republic: The Unfinished Story of the American Revolution, there is a common myth that the top five percent of this country do not “pay their fair share.” However, putting that debate aside, the question is whether it will produce more revenue than it costs the state in the long run. As these politicians campaign on clipping the “fat cats” who are not paying their fair share, many are likely to follow the exodus to lower tax states with greater fiscal discipline.

The constitutionality of a retroactive tax has long been controversial. In Landgraf v. USI Film Products (1994), the Supreme Court declared “the presumption against retroactive legislation is deeply rooted in our jurisprudence… [e]lementary considerations of fairness dictate that individuals should have an opportunity to know what the law is and conform their conduct accordingly; settled expectations should not be lightly disrupted.”

Most Americans are obviously not billionaires, but see the obvious unfairness to such retroactive taxes. People are allowed to make decisions on whether they want to stay in a state and how to invest their money in light of tax and other considerations. These retroactive taxes allow a bait-and-switch for taxpayers as politicians tap wealth from prior years.

However, in United States v. Carlton (1994), the Court addressed a new estate tax deduction for selling stock in employee stock ownership plans that was included in the 1986 tax reform law. In January 1987, the IRS announced that the legislation had a flaw: it did not require a taxpayer to own the stock before dying. New legislation was passed in December 1987 with retroactive effect to the 1986 law.

The Supreme Court refused to strike down the 14 months of retroactive application. Calling the change “modest,” the Court noted that the IRS sent out a quick notice that it would seek a legislative fix, and that the law essentially corrected an unintended error. However, even that left some on the Court uneasy, and justices like Sandra Day O’Connor, Antonin Scalia, and Clarence Thomas warned against “bait-and-switch taxation.” The key was the notice and the fact that it only applied to a single year.

Some retroactive taxes have been struck down. For example, in Blodgett v. Holden, 275 U.S. 142 (1927),  a 12-year period of retroactivity was struck down as “so arbitrary and capricious as to amount to confiscation.”

The Court has left the area a mess of countervailing rationales and holdings. However, it has clearly held that retroactive taxes are not per se unconstitutional. In Welch v. Henry, 305 U.S. 134, 147 (1938), the Court upheld a retroactive tax and held that the outcome depends upon whether “retroactive application is so harsh and oppressive as to transgress the constitutional limitation.” It stressed that:

“Provided that the retroactive application of a statute is supported by a legitimate legislative purpose furthered by rational means, judgments about the wisdom of such legislation remain within the exclusive province of the legislative and executive branches . . .’

The rational basis test is difficult for a state to fail. However, California could force the Court to reexamine this area and offer more concrete protections for citizens who are retroactively fleeced by a state.

Until then, welcome to the Hotel California:

Last thing I remember, I was
Running for the door
I had to find the passage back
To the place I was before
“Relax,” said the night man
“We are programmed to receive
You can check out any time you like
But you can never leave”

Tyler Durden Tue, 12/02/2025 - 10:20

Michael Burry Is (Once Again) Going To Try And Short Tesla

Michael Burry Is (Once Again) Going To Try And Short Tesla

Michael Burry is once again taking aim at Tesla — a reminder of his high-profile 2021 short, when he bet against the stock just before it nearly doubled before dropping from its peak. 

In a new Substack post, the “Big Short” investor called Tesla “ridiculously overvalued” and argued that shareholder dilution will only worsen under Elon Musk’s newly approved $1 trillion pay package.

Burry estimated that Tesla’s stock-based compensation dilutes shareholders by roughly 3.6 percent a year, noting that the company conducts no buybacks to offset it, Yahoo Finance/Bloomberg reported.

Burry used Tesla to illustrate what he described as the “tragic algebra” of tech-sector compensation, and he took a swipe at the company’s shifting narratives: first electric vehicles, then autonomous driving, and now humanoid robots — each emphasis fading once competition arrives, he said.

He did not disclose his current position in Tesla, but the comments add to a recent string of bearish calls. Last month, Burry opened sizable put positions against Nvidia and Palantir, echoing concerns raised by fellow short seller Jim Chanos about Nvidia’s use of vendor financing.

Burry has since deregistered Scion Asset Management and moved his commentary to Substack.

Wall Street, however, has grown more upbeat on Tesla. Melius Research recently deemed the stock a “must own” based on its autonomy efforts and in-house chip development, while Stifel raised its price target and reiterated a Buy rating tied to progress in full self-driving and the robotaxi program.

Burry’s latest broadside comes nearly five years after his last disclosed Tesla wager. In May 2021, Scion held puts on 800,100 Tesla shares, a bet revealed in regulatory filings.

 Burry's first go-round in the name was tumultuous, with Tesla stock up almost double in 2021 after Burry disclosed his position.

At the time, Tesla was coming off a 700 percent surge to record highs before suffering a drawdown — a pattern Burry suggests could repeat.

Tyler Durden Tue, 12/02/2025 - 10:00

Chinese, Japanese Boats In Tense Standoff Near Disputed Islands As Taiwan-Related Feud Escalates

Chinese, Japanese Boats In Tense Standoff Near Disputed Islands As Taiwan-Related Feud Escalates

The severe diplomatic standoff which was triggered by last month's words of Japanese Prime Minister Sanae Takaichi wherein she suggested Japan would militarily aid in Taiwan's defense in the event of a Chinese invasion is increasingly becoming a potential military standoff. We earlier detailed that Japan has even deployed medium-range missiles to a remote Japanese island not far from China.

Already there's been a confrontation involving China's coast guard boats, which attempted to run off a Japanese fishing vessel for allegedly being inside claimed Chinese waters. The fresh incident happened near a group of geopolitically sensitive islands in the East China Sea on Tuesday.

Japan and Chinese coast guard vessels have clashed somewhat frequently in the recent past. Illustrative: Kyodo News, via Associated Press

The Japanese boat is accused of entering the waters of the Diaoyu Islands - which Tokyo calls the Senkaku Islands and has long administered. 

But a nearby Japanese Coast Guard ship which had been accompanying the fishing vessel then in turn expelled two Chinese Coast Guard ships as they approached and tried to enforce Beijing's expansive maritime claims over the territory.

The area is already a bit of a flashpoint between the two historic rivals, as Taiwan is located just less than 100 miles southwest of the Senkaku Islands. There are conflicting accounts of the incident, with the Chinese side relating as follows:

China Coast Guard (CCG) spokesperson Liu Dejun said that Chinese vessels on Tuesday approached and warned off a Japanese fishing boat that had "illegally entered the territorial waters of China's Diaoyu Dao", according to a state media report.

Liu added that the CCG took "necessary law enforcement measures", claiming that the islands were Chinese territory and urging Japan to "immediately stop all acts of infringement and provocation in these waters".

However, Japan has countered that its coast guard boats approached the Chinese vessels shortly after they were seen breaching Japanese waters and issued warnings and threats demanding they leave sovereign waters.

The current broader standoff over PM Takaichi's Taiwan comments is now trickling down to the common populations on either side, as events like concerts have been canceled:

The abrupt cancellations of several Japanese music events in Shanghai - one of them midway through a song - have sparked criticism among fans, with some calling the moves "rude" and "extreme".

Maki Otsuki was halfway through the theme of hit anime One Piece on Friday when the lights and music went off, after which she was rushed off stage by two crew members.

On Saturday, pop star Ayumi Hamasaki performed to an empty 14,000-seat stadium after organizers axed her concert in Shanghai, citing "force majeure".

This spate of cancellations come as diplomatic tensions between Beijing and Tokyo fester over Japanese Prime Minister Sanae Takaichi's remarks on Taiwan.

China earlier warned Japan will suffer a "crushing" defeat if it ever decided to directly intervene in the Taiwan dispute. Recent years have also seen Beijing's anger grow after NATO briefly talked about opening an official office in Tokyo, but these plans were soon abandoned for the time being.

Source: VOA

Last month China's foreign ministry warned that "Right-wing forces in Japan are ... leading Japan and the region toward disaster." Foreign ministry spokesperson Mao Ning further told a regular news briefing. Beijing "is determined and capable of safeguarding its national territorial sovereignty."

Tyler Durden Tue, 12/02/2025 - 09:00

Chinese, Japanese Boats In Tense Standoff Near Disputed Islands As Taiwan-Related Feud Escalates

Chinese, Japanese Boats In Tense Standoff Near Disputed Islands As Taiwan-Related Feud Escalates

The severe diplomatic standoff which was triggered by last month's words of Japanese Prime Minister Sanae Takaichi wherein she suggested Japan would militarily aid in Taiwan's defense in the event of a Chinese invasion is increasingly becoming a potential military standoff. We earlier detailed that Japan has even deployed medium-range missiles to a remote Japanese island not far from China.

Already there's been a confrontation involving China's coast guard boats, which attempted to run off a Japanese fishing vessel for allegedly being inside claimed Chinese waters. The fresh incident happened near a group of geopolitically sensitive islands in the East China Sea on Tuesday.

Japan and Chinese coast guard vessels have clashed somewhat frequently in the recent past. Illustrative: Kyodo News, via Associated Press

The Japanese boat is accused of entering the waters of the Diaoyu Islands - which Tokyo calls the Senkaku Islands and has long administered. 

But a nearby Japanese Coast Guard ship which had been accompanying the fishing vessel then in turn expelled two Chinese Coast Guard ships as they approached and tried to enforce Beijing's expansive maritime claims over the territory.

The area is already a bit of a flashpoint between the two historic rivals, as Taiwan is located just less than 100 miles southwest of the Senkaku Islands. There are conflicting accounts of the incident, with the Chinese side relating as follows:

China Coast Guard (CCG) spokesperson Liu Dejun said that Chinese vessels on Tuesday approached and warned off a Japanese fishing boat that had "illegally entered the territorial waters of China's Diaoyu Dao", according to a state media report.

Liu added that the CCG took "necessary law enforcement measures", claiming that the islands were Chinese territory and urging Japan to "immediately stop all acts of infringement and provocation in these waters".

However, Japan has countered that its coast guard boats approached the Chinese vessels shortly after they were seen breaching Japanese waters and issued warnings and threats demanding they leave sovereign waters.

The current broader standoff over PM Takaichi's Taiwan comments is now trickling down to the common populations on either side, as events like concerts have been canceled:

The abrupt cancellations of several Japanese music events in Shanghai - one of them midway through a song - have sparked criticism among fans, with some calling the moves "rude" and "extreme".

Maki Otsuki was halfway through the theme of hit anime One Piece on Friday when the lights and music went off, after which she was rushed off stage by two crew members.

On Saturday, pop star Ayumi Hamasaki performed to an empty 14,000-seat stadium after organizers axed her concert in Shanghai, citing "force majeure".

This spate of cancellations come as diplomatic tensions between Beijing and Tokyo fester over Japanese Prime Minister Sanae Takaichi's remarks on Taiwan.

China earlier warned Japan will suffer a "crushing" defeat if it ever decided to directly intervene in the Taiwan dispute. Recent years have also seen Beijing's anger grow after NATO briefly talked about opening an official office in Tokyo, but these plans were soon abandoned for the time being.

Source: VOA

Last month China's foreign ministry warned that "Right-wing forces in Japan are ... leading Japan and the region toward disaster." Foreign ministry spokesperson Mao Ning further told a regular news briefing. Beijing "is determined and capable of safeguarding its national territorial sovereignty."

Tyler Durden Tue, 12/02/2025 - 09:00

Futures Rebound As Bitcoin Halts Plunge

Futures Rebound As Bitcoin Halts Plunge

After Monday's dismal start to December, US equity futures are higher (if only for the time being), although lacking conviction with few major catalysts on deck today. As of 8:15am, S&P 500 futures are up 0.3% and Nasdaq 100 contracts add 0.4%. Pre-market, Mag 7 are mostly higher led by META (+0.6%) and AMZN (+0.4%). Bond yields are unchanged and the USD is flat. Commodities are mostly mixed: Oil is flat; base metals are all higher (aluminum +0.9%), while precious metals are lower. After the latest post-BOJ bloodbath, bitcoin has managed to hold a modest bid and was trading above $87,000. The US economic calendar is blank for scheduled data releases.

In premarket trading, Mag 7 stocks are mostly higher (Meta +0.6%, Alphabet +0.5%, Nvidia +0.8%, Amazon +0.7%, Tesla +0.3%, Microsoft +0.05%, Apple -0.1%). 

  • Cloudflare Inc. (NET) gains 2% after Barclays launched coverage on the infrastructure software company with an overweight rating and a $235 price target.
  • Credo Technology (CRDO) rises 18% after the communications equipment company’s second-quarter results came in much stronger than expected. It also gave a strong forecast. Shares of competitor Astera Labs (ALAB) gain 5%.
  • MongoDB (MDB) rallies 23% after the database software company reported stronger-than-expected results. It also raised its full-year forecast.
  • Six Flags Entertainment (FUN) gains 3% after Truist Securities upgraded the theme park operator’s stock to buy from hold.
  • Solaris Energy Infrastructure Inc. (SEI) rises 4% after the data center power generator was initiated at Morgan Stanley with a recommendation of overweight on power supply demand.
  • Warner Bros. Discovery Inc. (WBD) inches 1.1% higher. The company was fielding a second round of bids on Monday, including a mostly cash offer from Netflix Inc., in an auction that could wrap up in the coming days or weeks, according to people familiar with the discussions.

In corporate news, The Information reported that Amazon is planning a new ultrafast grocery delivery offering in major US urban areas, sending shares of Instacart lower. Warner Bros. Discovery was said to be fielding a second round of bids on Monday, including a mostly cash offer from Netflix. The Commerce Department agreed to invest as much as $150 million in xLight, a chip technology startup tied to former Intel CEO Pat Gelsinger. 

With the market stuck in a holding pattern until the next leg higher or lower, investors are awaiting eco data later this week, and the Fed is now in a blackout period. Black Friday and Cyber Monday offered some clues on the economy, with Bloomberg describing “anxious but still active” consumers, and Salesforce data showing Cyber Monday spending grew more slowly in the US than Europe for the first time as tariffs stung American shoppers.

“For long-only investors like we are, I’d say in the absence of any major catalyst, it’s very much wait-and-see until the Fed meeting, while keeping an eye on US jobs and inflation data,” said Karen Georges, a fund manager at Ecofi Investissements in Paris.

Much now depends on the Fed’s decision at next week’s meeting. Disappointment would pose a risk for equities, though confidence in a cut is virtually certain, with market odds of a cut at 100% following softer labor and inflation data and a run of dovish comments from officials.

“Dips continue to present attractive buying opportunities,” wrote Michael Brown, senior research strategist at Pepperstone. “The narrative behind that bull case remains an attractive one, with earnings growth solid, the underlying economy resilient, a calmer tone on trade continuing to prevail, and the monetary backdrop growing looser.”

Bitcoin is steady today after a more than 5% plunge on Monday which saw almost $1 billion of leveraged crypto positions liquidated. Crypto retail investors who piled into exchange-traded funds tracking Strategy’s volatile stock have paid a heavy price. Both MSTX and MSTU - which offer double the daily return - have dropped more than 80% this year, among the 10 worst-performing funds in the entire US ETF market.

While bitcoin longs were hammered again, so were stock short sellers: they were down $80 billion in mark-to-market losses in the final week of November, wiping out the bulk of what had been nearly $95 billion in month-to-date profits prior to last week, per data compiled by S3 Partners. “Being short here requires high confidence in a much weaker economic backdrop or a significant change in the outlook for AI capex,” said Dennis Debusschere, co-founder and chief market strategist at 22V Research.

Ahead of next week’s Fed decision, Barclays strategists noted that S&P 500 implied moves ahead of FOMC meetings have declined since early 2023, with realized moves hovering near zero recently. It’s a trend that underscores the fading influence of monetary policy, they wrote. 

After hitting a record high just shy of $60, silver pulled back modestly with a technical gauge showing that a six-day rally had pushed the metal into overbought territory. Copper also retreated amid signs that softer Chinese demand heading into winter might help to ease a looming global supply crunch.

Elsewhere, Bloomberg found that among the 14 largest markets, the US currently ranks 5th from last in local-currency terms and 4th from last in dollar terms this year. That raises questions about whether the AI theme will lead it to victory or whether volatility tied to nascent tech exposure is doing more harm than good.

European stocks and US equity futures hold modest gains; the Stoxx 600 rises 0.2%, led by gains in banks, utilities and construction. Bayer soars after the Trump administration urged the Supreme Court to take up the company’s appeal of the Roundup case. Here are some of the biggest movers on Tuesday:

  • Bayer shares surge as much as 15% after the US solicitor general urged the high court to consider the German company’s appeal targeting thousands of lawsuits blaming its Roundup weedkiller for causing cancer.
  • Bilfinger shares rise as much as 6% after the German company said it aims to achieve an advanced average revenue growth of 8% to 10% annually, elevate its Ebita margin to 8% to 9%, and ensure a cash conversion rate of at least 90% until 2030.
  • Victrex shares jump as much as 11% after JPMorgan said the thermoplastic maker cleared a low bar by beating expectations in the second half. Jefferies noted that a feared dividend cut hasn’t materialized.
  • Biotalys shares rise as much as 8.8% after the Belgian agricultural technology company received regulatory approval from the US Environmental Protection Agency for its first biofungicide, called Evoca.
  • Compagnie des Alpes rises as much as 6.9% following 2025 results from the French ski resort and theme park operator, which CIC Market Solutions describes as “excellent.”
  • Swissquote shares tumble as much as 8.6% after one of its investors offered shares at a discount to the last closing price. Shares fell below the offer price before paring losses.
  • Scandic Hotels drops as much as 8.8% as Morgan Stanley downgrades to underweight from equal-weight, saying the country’s acquisition of Dalata’s hotel operation may not be as profitable as previously expected.
  • Foresight Group shares decline as much as 8.2% after the UK infrastructure and private equity investment management services company’s interim results, with Peel Hunt noting impact from margin compression.
  • Pantheon Resources shares drop as much as 28% after the company’s update on work at the Dubhe-1 well. Canaccord Genuity said markets are still waiting for representative flow rates and that the cost of the work has come in higher than previously forecast.

Earlier in the session, Asian stocks gained, snapping a two-day decline, helped by a rally in tech-heavy markets of South Korea and Taiwan. The MSCI Asia Pacific Index rose as much as 0.5%, before paring gains. TSMC, Samsung Electronics and SK Hynix were among the biggest boosts to the gauge’s climb. Shares eked out small gains in Japan as banks extended advances on speculation of a Bank of Japan interest-rate hike this month. Growing expectations of an interest rate cut in the US is aiding risk-on in the region. A stabilization in bitcoin also helped sentiment after a selloff in cryptocurrencies led declines in global risk assets on Monday. Shares drop in India, as the rupee hit a record low. Concerns over the lack of a trade deal with the US is weighing on the currency. Benchmarks in China also traded lower. 

In FX, the yen is the weakest of the G-10 currencies, falling 0.4% against the dollar and pushing USD/JPY above 156. The euro loses a few pips with little reaction to a surprise uptick in euro-area CPI. The pound is down 0.2%.

In rates, treasury yields are higher, within two basis points of Monday’s close with 10-year trading around 4.11%. Bund and gilts are little changed. In Asia, JGBs were supported after Tuesday’s 10-year auction drew solid demand. The corporate issuance slate is expected to grow following a heavy day on Monday. The IG dollar bond issuance slate is empty so far. Tuesday is expected to bring more US investment-grade bond issuance after around $16 billion of new deals on Monday, led by Merck’s acquisition-related $8 billion eight-part offering.

In commodities, spot gold falls $45 and back below $4,200/oz. US crude futures are treading water at $59.30 a abrrel. 

The US economic calendar is blank for scheduled data releases. Fed members are in external communications blackout ahead of the Dec. 10 policy announcement

Market Snapshot

  • S&P 500 mini +0.2%
  • Nasdaq 100 mini +0.3%
  • Russell 2000 mini +0.5%
  • Stoxx Europe 600 +0.2%
  • DAX +0.5%
  • CAC 40 +0.2%
  • 10-year Treasury yield unchanged at 4.09%
  • VIX -0.4 points at 16.85
  • Bloomberg Dollar Index little changed at 1219.09
  • euro little changed at $1.1604
  • WTI crude little changed at $59.34/barrel

Top Overnight News

  • Trump's schedule noted he will host a Cabinet meeting on Tuesday at 11:30am and will make an announcement at 2:00pm. Some expect he could announce Kevin Hassett as next Fed Chair (Hassett's odds are up to 79% on Polymarket). 
  • Senators have about a week before they’re set to vote on soon-to-expire Affordable Care Act subsidies. Most of them already believe the chances for a bipartisan breakthrough by then are roughly zero. Politico
  • US envoy Steve Witkoff is set to meet Vladimir Putin to discuss a Ukraine peace plan as Russia claimed its forces seized Pokrovsk on the Donetsk frontline. A fourth Russia-connected tanker in less than a week was attacked today. BBG
  • Officially, the search for a new Federal Reserve chair is still under way. A handful of finalists are scheduled to sit down for interviews beginning this week with Vice President JD Vance and senior White House staff. Unofficially, the process seems to be all but over, with President Trump appearing to favor longtime adviser Kevin Hassett. If Hassett does end up the nominee, it will be because he met Trump’s two key criteria: loyalty, and credibility with the markets. WSJ
  • OpenAI Chief Executive Sam Altman told employees Monday that the company was declaring a “code red” effort to improve the quality of ChatGPT and delaying other products as a result. OpenAI plans to launch a new reasoning model next week that the company claims outperforms Gemini 3. WSJ
  • The world economy is weathering Trump’s trade tariffs better than expected, the OECD said. It raised its US and euro-area growth forecasts. Still, it continues to predict global growth will slow to 2.9% in 2026, from 3.2% in 2025. BBG
  • China is expected to ramp up US soybean purchases this month to meet a pledge to buy at least 12 million tons by year-end, led by state firms like Cofco, traders said. So far, only about 3 million have been booked. BBG
  • Strong demand for Japanese government bonds helped to steady Asian markets on Tuesday, a day after hawkish comments from the central bank governor sparked a global selloff. FT
  • Europe’s headline CPI for Nov ran a bit warmer than anticipated at +2.2% (vs. the Street +2.1% and up from +2.1% in Oct) while the core number was inline at +2.4% (and steady vs. Oct). BBG
  • Members of the House of Representatives are quitting Congress at a record rate, with Republican retirements and resignations outpacing Democrats by a nearly 2-to-1 ratio in the first 11 months of the year. In previous cycles, the party with more departures tends to lose seats — if not the majority. Axios
  • Apple plans not to follow the order by the Indian government to preload phones with a state-run cyber safety app, according to Reuters, citing sources; Co. to voice its concerns around privacy and security following new app order

Trade/Tariffs

  • Chinese rare-earth magnet companies are reportedly finding workarounds to their government’s export restrictions, as they seek to keep sales flowing to Western buyers, according to WSJ.
  • China reportedly issues first rare earth magnet general export licence after the Trump-Xi meeting, according to Reuters sources
  • Exxon (XOM) is reportedly in talks with Iraq over purchasing Lukoil's stake in the West Qurna 2 oilfield, via Reuters citing sources.
  • Russia's Kremlin Spokesperson Peskov says that Russia continues to be an important supplier of energy to India on a competitive basis. Looking at possibilities to increase imports from India. A decrease in oil trade volumes can be decreased for a brief period of time.

A more detailed look at global markets courtesy of Newsqsuawk

APAC stocks were predominantly in the green as the region shrugged off the weak lead from Wall Street, but with the upside capped amid quiet macro catalysts and in the absence of any tier-1 data. ASX 200 eked mild gains with the help of outperformance in energy, resources and mining, but with gains limited by underperformance in tech and utilities, while data was uninspiring with a larger-than-expected contraction in building approvals. Nikkei 225 nursed some of the prior day's losses but with the rebound contained amid risks of a BoJ December hike. Hang Seng and Shanghai Comp mostly traded mixed as participants reflected on a slew of monthly auto sales updates, while the mainland lagged after the PBoC's open market operations resulted in a net daily drain of CNY 146bln.

Top Asian News

  • RBNZ Governor Breman said she will discuss with the MPC the possibility of being more transparent with how members vote, while she added that the mandate is very clear that we should focus on keeping inflation low and stable. Breman said that they aim to support a healthy, strong and growing economy, but keep inflation low and stable. It was separately reported that the RBNZ is to begin weekly open-market operations from December 4th and will update changes to the format in Q1 2026.
  • Samsung Electronics (005930 KS) has completed development of its 6th-gen HBM4 and is entering full-scale mass production, via AJUNews.

European bourses (STOXX 600 +0.2%) started the session flat/incrementally firmer before then catching a bid as the morning progressed; no clear driver for the upside, but a move which has sustained as indices reside near peaks. European sectors hold a slight positive bias. Banks take the top spot, with gains broad-based across the UK and Europe, but traders may also be digesting the latest update via the BoE, where it lowered capital requirements for UK banks as they pass stress tests. Media is found at the foot of the pile, joined closely by Travel & Leisure.

Top European News

  • Confederation of British Industry said Britain's private sector expects output to decline during the next three months in the gloomiest outlook since May as cautious consumer spending and cost pressures continue to weigh on businesses.
  • BoE Financial Policy Committee Record: System-wide level of Tier 1 capital requirements is now around 13% of risk-weighted assets, 1ppt lower than its previous benchmark of around 14%. CCyB maintained at 2%. "The Committee has also identified areas for further work, including on buffer usability, the implementation of the leverage ratio in the UK, and initiatives by the Bank to respond to feedback on interactions, proportionality, and complexity. Committee supports the Bank’s plans for a private markets system-wide exploratory scenario (SWES)".
  • OECD sees global growth of 3.2% in 2025 (maintained from prev. forecast), 2.9% in 2026 (maintained), 3.1% in 2027 (new forecast).
  • UK OBR's Miles says it was not misleading for Chancellor Reeves to have said that the situation with public finances was very challenging. 
  • BoE Governor Bailey says he expects banks to support the economy through lending following recent capital changes. 

FX

  • DXY and most G10 FX are uneventful in relatively quiet trade, with a similar lack of macro drivers seen during APAC hours. Specifically, DXY resides in a narrow 99.38-99.52 parameter, with ING calling for a lower dollar this week - "we expect that the remainder of the week will validate the market’s dovish pricing for next week’s Fed meeting". As it stands, the index trades at the upper end of the mentioned ranges, with recent strength thanks to some pressure seen in the GBP.
  • EUR traded flat ahead of the EZ HICP metrics, and then was little moved on the release itself. Headline printed a touch above expected at 2.20% (exp. 2.10%) whilst the Services figure also ticked higher from the prior month. Overall, given the figures were near enough in line with expectations, there was little follow-through into the single-currency and held within a 1.1604 to 1.1616 range, before then touching 1.1600 as the USD picked up a touch.
  • USD/JPY outperforms amid a pick-up in risk sentiment and after the pair's volatile Monday session, which saw a slump to 154.66 lows before bouncing back up and clear of 155.50 and then 156.00, with the pair eyeing yesterday's 156.15 peak as the near-term resistance level, and thereafter Black Friday's 156.58 high.
  • GBP traded flat against the USD, before then moving lower in recent trade. Nothing behind the latest bout of pressure, but it does come after Cable breached 1.3200 to the downside, and then continued to tumble to make a fresh trough at 1.3180 (though it is a moving target).
  • AUD outperforms after ANZ removed its call for an RBA cut in H1-2026, now sees the RBA on an "extended pause" through 2026. As a reminder, CBA and NAB also expect the RBA to be on hold for an extended period of time/foreseeable future. Westpac continues to expect two 2026 cuts, touting May and August for those. AUD/NZD marginally eclipsed 1.1450, from a 1.1418 trough.

Fixed Income

  • A lack of fresh drivers for USTs. The March contract is near-enough flat in a narrow 112-25 to 112-29 band. Overnight, WSJ's Timiraos wrote that, regarding the search for the next Fed Chair, "Unofficially, the process seems to be all but over, with President Trump appearing to favour longtime adviser Kevin Hassett.".
  • Bund Dec'25 is contained in a thin 128.18-35 band this morning. Specifics light. No move in Bunds on the EZ Flash HICP for November, the headline came in hotter-than-expected and ticked up from the prior, while Services lifted from the previous rate. Overall, the hotter-than-expected series chimes with the view that the ECB's easing cycle has likely concluded.
  • Gilts underperform. If the move continues, we look to support for the Gilt Mar'26 contract at 90.53, a double-bottom from the session of and before the Budget. Currently, the low is 90.98, taking out Monday's base by a tick. A move that lifted the UK 10yr yield back above the 4.5% mark. However, this pressure proved somewhat fleeting as the benchmark bounced and has made its way back to the unchanged mark. Nothing fresh, though the OBR briefing is underway and we note remarks from BoE officials on the morning's FSR/FPC briefings.
  • Saudi National Bank is seeking a USD 1bln syndicated loan, via Bloomberg. Loan is being syndicated to the broader market, incl. Asia, according to sources cited.
  • JGB's led overnight after a strong 10yr auction and in a bit of a breather from the largely Ueda-induced selling seen at the start of the week. To a 134.72 peak with gains of just over 20 ticks at best.
  • UK sells GBP 1bln 0.125% 2031 I/L Gilt: b/c 3.88x (prev. 3.49x), real yield 0.949% (prev. 0.889%)
  • Germany sells EUR 3.563bln vs exp. EUR 4.5bln 2.00% 2027 Schatz: b/c 1.7x (prev. 1.7x), average yield 2.05% (prev. 1.98%), retention 20.82% (prev. 24.68%)

Commodities

  • WTI and Brent continue to trade within Monday's post-OPEC range of USD 58.83-59.97/bbl and USD 62.69-63.82/bbl, respectively, as a pause in output hike and rising geopolitical concerns continue to support crude prices in the near term. WTI and Brent peaked at the start of the APAC session at USD 59.67/bbl and 63.36/bbl before falling to troughs of 59.09/bbl and 62.88/bbl.
  • XAU and XAG traded muted at the start of the European session. Oscillated in a tight USD 4201-4236/oz and USD 56.60-58/oz band, respectively. More recently, the yellow metal has fallen to make fresh session troughs of USD 4,181/oz - a move which lacked catalysts, but technicians highlight accelerating selling pressure after spot gold slipped below USD 4.2k/oz.
  • 3M LME Copper gapped lower and fell to a trough of USD 11.12k/t before rebounding to a session high of USD 11.27k/t as global risk tone slightly turns around following Monday's selloff.

Geopolitics: Middle East

  • Arab media reported new Israeli attacks in Khan Yunis and Rafah, according to Iran International.

Geopolitics: Ukraine

  • European Commission proposals for the Ukraine reparation loan should be distributed to member states tomorrow, and likely first discussion by EU ambassadors on Friday, according to Radio Liberty journalist
  • Russian Foreign Minister Lavrov is to meet with Chinese Foreign Minister Wang Yi on Tuesday.
  • Russia's Kremlin Spokesperson Peskov says US Special Envoy Witkoff and President Putin will discuss the understanding reached between the US and Ukraine, in a meeting at 14:00GMT/09:00EST, via TASS. S-400 and SU-57 fighter jets will be on the agenda.

Geopolitics: Other

  • Venezuelan President Maduro reportedly asked for sanction removal for more than 100 officials during a previous call with US President Trump. Furthermore, Trump gave Maduro a Friday deadline to leave Venezuela with his family, while the failure to meet the Friday deadline prompted Trump's comments on Saturday about the closure of airspace, according to sources cited by Reuters.
  • US Treasury Secretary Bessent said the Treasury is investigating allegations that Minnesota tax dollars may have been diverted to Al-Shabaab.
  • China's Coast Guard said it expelled a Japanese vessel in the waters of the Senkaku Islands on Tuesday.
  • "Turkey says oil tanker attacked in Black Sea while sailing from Russia to Georgia", according to Sky News Arabia. However, Sky News Arabia later clarifies, "Turkey says cargo ship attacked in Black Sea while sailing from Russia to Georgia".
  • Japan's Defence Minister Koizumi is considering a visit to the US as early as mid-January to hold talks with War Secretary Hegseth, via Kyodo.

US Event Calendar

  • Nov Wards Total Vehicle Sales, est. 15.4m, prior 15.32m
  • 10:00 am: Fed’s Bowman Testifies Before House Committee

DB's Jim Reid concludes the overnight wrap

Markets got December off to a rocky start yesterday, with bonds and equities losing ground, alongside a sharp slump in Bitcoin (-5.19%). The moves gathered pace right from the open, as hawkish remarks from BoJ Governor Ueda had already pushed 10yr JGB yields up to a post-GFC high. But that then cascaded across global markets, with bond yields moving sharply higher in the US and Europe too. In the meantime, matters weren’t helped by the latest data, as the ISM manufacturing print leant in a stagflationary direction, whilst higher oil prices only exacerbated those fears. So with all said and done, the S&P 500 (-0.53%) slipped back, whilst 10yr Treasury yields (+7.2bps) saw their biggest daily jump in nearly four weeks.

Those developments in Japan were critical for yesterday’s moves, because Ueda’s comments had led investors to price in a December rate hike from the BoJ as a near-certainty. So that meant bond yields hit a whole bunch of new records, and by the close in Japan yesterday, the 10yr yield (+5.8bps) was at a post-2008 high of 1.86%, whilst the 30yr yield (+4.1bps) was at 3.37%, and the highest since that maturity was first issued in the late-1990s. Similarly at the front end, the 2yr yield closed above 1% for the first time since the GFC. This morning yields on 2yr and 10yr JGBs are both down a basis point after a decent 10yr auction has provided some respite to the bond sell-off. The bid-to-cover ratio was recorded at 3.59, compared to 2.97 at the previous sale in November, and a 12-month average of 3.20.

US futures are also fairly flat, indicating that the sell-off has paused for now. The KOSPI (+1.81%) is leading the way in Asia after rebounding from yesterday and after the US announced that the general tariff rate on imports from South Korea, including automobiles, will decrease to 15% retroactively effective from November 1. In other markets, the Nikkei (+0.24%) is recovering a little this morning after a near two percent decline yesterday, while the S&P/ASX 200 (+0.11%) is also experiencing modest gains. Meanwhile, the Hang Seng (+0.13%) is maintaining small gains, in contrast to the CSI (-0.61%) and the Shanghai Composite (-0.55%), which are lower after a stronger session on Monday.  

The moves in Japan echoed around the world yesterday, with a sharp bond selloff on both sides of the Atlantic. For instance, Treasury yields rose across the curve, with the 2yr yield (+4.0bps) up to 3.53%, the 10yr yield (+7.2bps) rose to 4.09%, and 30yrs (+7.4bps) to 4.74%. Moreover, those moves got further support from several inflationary indicators, including the ISM manufacturing survey. Admittedly, the headline index unexpectedly fell back to 48.2 (vs. 49.0 expected), but the prices paid component ticked up to 58.5 (vs. 57.5 expected) after a run of 4 consecutive monthly declines. So that exacerbated concerns about tariff-driven inflation persisting. And with oil prices rising (+1.27% for Brent) after Ukraine’s weekend attack against an oil terminal in the Black Sea, the 1yr inflation swap (+1.7bps) also posted a 4th consecutive increase to 2.64%.

That downbeat tone was seen for equities too, where the S&P 500 (-0.53%) fell back after a run of 5 consecutive gains, and the small-cap Russell 2000 (-1.25%) saw an even bigger slump. Nearly three quarters of the S&P constituents were lower on the day, though the index did recover some ground after futures in Asia had suggested an even larger fall. The Mag-7 (-0.10%) outperformed as Nvidia (+1.65%) rebounded from Friday’s -1.81% decline. By contrast, crypto assets suffered, with Bitcoin (-5.19%) falling to $86,446 by the close, and trading below $84k intra-day. Unsurprisingly, that meant there were sizeable losses for crypto-related stocks like Coinbase (-4.76%). Overnight Bitcoin has bounced a little.

Earlier in Europe, markets had followed a very similar pattern, with bonds and equities selling off together. So the STOXX 600 (-0.20%) also fell back after 5 consecutive gains, and there was a particularly sharp decline for the German DAX (-1.04%). And there wasn’t much data capable of boosting the mood either, with the Euro Area manufacturing PMI revised down a tenth from the flash reading to 49.6, so still in contractionary territory. Meanwhile, yields on 10yr bunds (+6.1bps), OATs (+7.5bps) and BTPs (+6.9bps) all moved higher.

Here in the UK, we also heard yesterday that the head of the OBR budget watchdog had resigned, which comes after their analysis of the budget’s contents went live on its website ahead of the Chancellor’s announcement. However, that wasn’t a market moving story, and the rise in 10yr gilt yields (+4.1bps) was more muted than in other countries yesterday, whilst the FTSE 100 (-0.18%) largely matched the STOXX 600. We did get a bit of UK data too, with October mortgage approvals down to 65.0k (vs. 64.5k expected), but that very much kept them within their 60-70k range that they’ve been in for the last 18 months.

Looking forward to today, we’ll see some focus on geopolitics as Trump’s envoy Witkoff is due to meet Russia’s President Putin in Moscow to discuss US proposals to end the war in Ukraine. The visit comes as US-led peace talks intensified over the past couple of weeks with “productive” meetings between US and Ukrainian officials but Kyiv staying resistant to territorial demands that have been made by Moscow.

In terms of the rest of the day ahead, data releases include the Euro Area flash CPI print for November, with Friday’s country-level releases suggesting that headline and core inflation should be unchanged at 2.1% and 2.4% respectively. We'll also see the Euro area unemployment rate for October. Otherwise, central bank speakers include the Fed’s Bowman but with the blackout on it won't be about monetary policy.

Tyler Durden Tue, 12/02/2025 - 08:43

Futures Rebound As Bitcoin Halts Plunge

Futures Rebound As Bitcoin Halts Plunge

After Monday's dismal start to December, US equity futures are higher (if only for the time being), although lacking conviction with few major catalysts on deck today. As of 8:15am, S&P 500 futures are up 0.3% and Nasdaq 100 contracts add 0.4%. Pre-market, Mag 7 are mostly higher led by META (+0.6%) and AMZN (+0.4%). Bond yields are unchanged and the USD is flat. Commodities are mostly mixed: Oil is flat; base metals are all higher (aluminum +0.9%), while precious metals are lower. After the latest post-BOJ bloodbath, bitcoin has managed to hold a modest bid and was trading above $87,000. The US economic calendar is blank for scheduled data releases.

In premarket trading, Mag 7 stocks are mostly higher (Meta +0.6%, Alphabet +0.5%, Nvidia +0.8%, Amazon +0.7%, Tesla +0.3%, Microsoft +0.05%, Apple -0.1%). 

  • Cloudflare Inc. (NET) gains 2% after Barclays launched coverage on the infrastructure software company with an overweight rating and a $235 price target.
  • Credo Technology (CRDO) rises 18% after the communications equipment company’s second-quarter results came in much stronger than expected. It also gave a strong forecast. Shares of competitor Astera Labs (ALAB) gain 5%.
  • MongoDB (MDB) rallies 23% after the database software company reported stronger-than-expected results. It also raised its full-year forecast.
  • Six Flags Entertainment (FUN) gains 3% after Truist Securities upgraded the theme park operator’s stock to buy from hold.
  • Solaris Energy Infrastructure Inc. (SEI) rises 4% after the data center power generator was initiated at Morgan Stanley with a recommendation of overweight on power supply demand.
  • Warner Bros. Discovery Inc. (WBD) inches 1.1% higher. The company was fielding a second round of bids on Monday, including a mostly cash offer from Netflix Inc., in an auction that could wrap up in the coming days or weeks, according to people familiar with the discussions.

In corporate news, The Information reported that Amazon is planning a new ultrafast grocery delivery offering in major US urban areas, sending shares of Instacart lower. Warner Bros. Discovery was said to be fielding a second round of bids on Monday, including a mostly cash offer from Netflix. The Commerce Department agreed to invest as much as $150 million in xLight, a chip technology startup tied to former Intel CEO Pat Gelsinger. 

With the market stuck in a holding pattern until the next leg higher or lower, investors are awaiting eco data later this week, and the Fed is now in a blackout period. Black Friday and Cyber Monday offered some clues on the economy, with Bloomberg describing “anxious but still active” consumers, and Salesforce data showing Cyber Monday spending grew more slowly in the US than Europe for the first time as tariffs stung American shoppers.

“For long-only investors like we are, I’d say in the absence of any major catalyst, it’s very much wait-and-see until the Fed meeting, while keeping an eye on US jobs and inflation data,” said Karen Georges, a fund manager at Ecofi Investissements in Paris.

Much now depends on the Fed’s decision at next week’s meeting. Disappointment would pose a risk for equities, though confidence in a cut is virtually certain, with market odds of a cut at 100% following softer labor and inflation data and a run of dovish comments from officials.

“Dips continue to present attractive buying opportunities,” wrote Michael Brown, senior research strategist at Pepperstone. “The narrative behind that bull case remains an attractive one, with earnings growth solid, the underlying economy resilient, a calmer tone on trade continuing to prevail, and the monetary backdrop growing looser.”

Bitcoin is steady today after a more than 5% plunge on Monday which saw almost $1 billion of leveraged crypto positions liquidated. Crypto retail investors who piled into exchange-traded funds tracking Strategy’s volatile stock have paid a heavy price. Both MSTX and MSTU - which offer double the daily return - have dropped more than 80% this year, among the 10 worst-performing funds in the entire US ETF market.

While bitcoin longs were hammered again, so were stock short sellers: they were down $80 billion in mark-to-market losses in the final week of November, wiping out the bulk of what had been nearly $95 billion in month-to-date profits prior to last week, per data compiled by S3 Partners. “Being short here requires high confidence in a much weaker economic backdrop or a significant change in the outlook for AI capex,” said Dennis Debusschere, co-founder and chief market strategist at 22V Research.

Ahead of next week’s Fed decision, Barclays strategists noted that S&P 500 implied moves ahead of FOMC meetings have declined since early 2023, with realized moves hovering near zero recently. It’s a trend that underscores the fading influence of monetary policy, they wrote. 

After hitting a record high just shy of $60, silver pulled back modestly with a technical gauge showing that a six-day rally had pushed the metal into overbought territory. Copper also retreated amid signs that softer Chinese demand heading into winter might help to ease a looming global supply crunch.

Elsewhere, Bloomberg found that among the 14 largest markets, the US currently ranks 5th from last in local-currency terms and 4th from last in dollar terms this year. That raises questions about whether the AI theme will lead it to victory or whether volatility tied to nascent tech exposure is doing more harm than good.

European stocks and US equity futures hold modest gains; the Stoxx 600 rises 0.2%, led by gains in banks, utilities and construction. Bayer soars after the Trump administration urged the Supreme Court to take up the company’s appeal of the Roundup case. Here are some of the biggest movers on Tuesday:

  • Bayer shares surge as much as 15% after the US solicitor general urged the high court to consider the German company’s appeal targeting thousands of lawsuits blaming its Roundup weedkiller for causing cancer.
  • Bilfinger shares rise as much as 6% after the German company said it aims to achieve an advanced average revenue growth of 8% to 10% annually, elevate its Ebita margin to 8% to 9%, and ensure a cash conversion rate of at least 90% until 2030.
  • Victrex shares jump as much as 11% after JPMorgan said the thermoplastic maker cleared a low bar by beating expectations in the second half. Jefferies noted that a feared dividend cut hasn’t materialized.
  • Biotalys shares rise as much as 8.8% after the Belgian agricultural technology company received regulatory approval from the US Environmental Protection Agency for its first biofungicide, called Evoca.
  • Compagnie des Alpes rises as much as 6.9% following 2025 results from the French ski resort and theme park operator, which CIC Market Solutions describes as “excellent.”
  • Swissquote shares tumble as much as 8.6% after one of its investors offered shares at a discount to the last closing price. Shares fell below the offer price before paring losses.
  • Scandic Hotels drops as much as 8.8% as Morgan Stanley downgrades to underweight from equal-weight, saying the country’s acquisition of Dalata’s hotel operation may not be as profitable as previously expected.
  • Foresight Group shares decline as much as 8.2% after the UK infrastructure and private equity investment management services company’s interim results, with Peel Hunt noting impact from margin compression.
  • Pantheon Resources shares drop as much as 28% after the company’s update on work at the Dubhe-1 well. Canaccord Genuity said markets are still waiting for representative flow rates and that the cost of the work has come in higher than previously forecast.

Earlier in the session, Asian stocks gained, snapping a two-day decline, helped by a rally in tech-heavy markets of South Korea and Taiwan. The MSCI Asia Pacific Index rose as much as 0.5%, before paring gains. TSMC, Samsung Electronics and SK Hynix were among the biggest boosts to the gauge’s climb. Shares eked out small gains in Japan as banks extended advances on speculation of a Bank of Japan interest-rate hike this month. Growing expectations of an interest rate cut in the US is aiding risk-on in the region. A stabilization in bitcoin also helped sentiment after a selloff in cryptocurrencies led declines in global risk assets on Monday. Shares drop in India, as the rupee hit a record low. Concerns over the lack of a trade deal with the US is weighing on the currency. Benchmarks in China also traded lower. 

In FX, the yen is the weakest of the G-10 currencies, falling 0.4% against the dollar and pushing USD/JPY above 156. The euro loses a few pips with little reaction to a surprise uptick in euro-area CPI. The pound is down 0.2%.

In rates, treasury yields are higher, within two basis points of Monday’s close with 10-year trading around 4.11%. Bund and gilts are little changed. In Asia, JGBs were supported after Tuesday’s 10-year auction drew solid demand. The corporate issuance slate is expected to grow following a heavy day on Monday. The IG dollar bond issuance slate is empty so far. Tuesday is expected to bring more US investment-grade bond issuance after around $16 billion of new deals on Monday, led by Merck’s acquisition-related $8 billion eight-part offering.

In commodities, spot gold falls $45 and back below $4,200/oz. US crude futures are treading water at $59.30 a abrrel. 

The US economic calendar is blank for scheduled data releases. Fed members are in external communications blackout ahead of the Dec. 10 policy announcement

Market Snapshot

  • S&P 500 mini +0.2%
  • Nasdaq 100 mini +0.3%
  • Russell 2000 mini +0.5%
  • Stoxx Europe 600 +0.2%
  • DAX +0.5%
  • CAC 40 +0.2%
  • 10-year Treasury yield unchanged at 4.09%
  • VIX -0.4 points at 16.85
  • Bloomberg Dollar Index little changed at 1219.09
  • euro little changed at $1.1604
  • WTI crude little changed at $59.34/barrel

Top Overnight News

  • Trump's schedule noted he will host a Cabinet meeting on Tuesday at 11:30am and will make an announcement at 2:00pm. Some expect he could announce Kevin Hassett as next Fed Chair (Hassett's odds are up to 79% on Polymarket). 
  • Senators have about a week before they’re set to vote on soon-to-expire Affordable Care Act subsidies. Most of them already believe the chances for a bipartisan breakthrough by then are roughly zero. Politico
  • US envoy Steve Witkoff is set to meet Vladimir Putin to discuss a Ukraine peace plan as Russia claimed its forces seized Pokrovsk on the Donetsk frontline. A fourth Russia-connected tanker in less than a week was attacked today. BBG
  • Officially, the search for a new Federal Reserve chair is still under way. A handful of finalists are scheduled to sit down for interviews beginning this week with Vice President JD Vance and senior White House staff. Unofficially, the process seems to be all but over, with President Trump appearing to favor longtime adviser Kevin Hassett. If Hassett does end up the nominee, it will be because he met Trump’s two key criteria: loyalty, and credibility with the markets. WSJ
  • OpenAI Chief Executive Sam Altman told employees Monday that the company was declaring a “code red” effort to improve the quality of ChatGPT and delaying other products as a result. OpenAI plans to launch a new reasoning model next week that the company claims outperforms Gemini 3. WSJ
  • The world economy is weathering Trump’s trade tariffs better than expected, the OECD said. It raised its US and euro-area growth forecasts. Still, it continues to predict global growth will slow to 2.9% in 2026, from 3.2% in 2025. BBG
  • China is expected to ramp up US soybean purchases this month to meet a pledge to buy at least 12 million tons by year-end, led by state firms like Cofco, traders said. So far, only about 3 million have been booked. BBG
  • Strong demand for Japanese government bonds helped to steady Asian markets on Tuesday, a day after hawkish comments from the central bank governor sparked a global selloff. FT
  • Europe’s headline CPI for Nov ran a bit warmer than anticipated at +2.2% (vs. the Street +2.1% and up from +2.1% in Oct) while the core number was inline at +2.4% (and steady vs. Oct). BBG
  • Members of the House of Representatives are quitting Congress at a record rate, with Republican retirements and resignations outpacing Democrats by a nearly 2-to-1 ratio in the first 11 months of the year. In previous cycles, the party with more departures tends to lose seats — if not the majority. Axios
  • Apple plans not to follow the order by the Indian government to preload phones with a state-run cyber safety app, according to Reuters, citing sources; Co. to voice its concerns around privacy and security following new app order

Trade/Tariffs

  • Chinese rare-earth magnet companies are reportedly finding workarounds to their government’s export restrictions, as they seek to keep sales flowing to Western buyers, according to WSJ.
  • China reportedly issues first rare earth magnet general export licence after the Trump-Xi meeting, according to Reuters sources
  • Exxon (XOM) is reportedly in talks with Iraq over purchasing Lukoil's stake in the West Qurna 2 oilfield, via Reuters citing sources.
  • Russia's Kremlin Spokesperson Peskov says that Russia continues to be an important supplier of energy to India on a competitive basis. Looking at possibilities to increase imports from India. A decrease in oil trade volumes can be decreased for a brief period of time.

A more detailed look at global markets courtesy of Newsqsuawk

APAC stocks were predominantly in the green as the region shrugged off the weak lead from Wall Street, but with the upside capped amid quiet macro catalysts and in the absence of any tier-1 data. ASX 200 eked mild gains with the help of outperformance in energy, resources and mining, but with gains limited by underperformance in tech and utilities, while data was uninspiring with a larger-than-expected contraction in building approvals. Nikkei 225 nursed some of the prior day's losses but with the rebound contained amid risks of a BoJ December hike. Hang Seng and Shanghai Comp mostly traded mixed as participants reflected on a slew of monthly auto sales updates, while the mainland lagged after the PBoC's open market operations resulted in a net daily drain of CNY 146bln.

Top Asian News

  • RBNZ Governor Breman said she will discuss with the MPC the possibility of being more transparent with how members vote, while she added that the mandate is very clear that we should focus on keeping inflation low and stable. Breman said that they aim to support a healthy, strong and growing economy, but keep inflation low and stable. It was separately reported that the RBNZ is to begin weekly open-market operations from December 4th and will update changes to the format in Q1 2026.
  • Samsung Electronics (005930 KS) has completed development of its 6th-gen HBM4 and is entering full-scale mass production, via AJUNews.

European bourses (STOXX 600 +0.2%) started the session flat/incrementally firmer before then catching a bid as the morning progressed; no clear driver for the upside, but a move which has sustained as indices reside near peaks. European sectors hold a slight positive bias. Banks take the top spot, with gains broad-based across the UK and Europe, but traders may also be digesting the latest update via the BoE, where it lowered capital requirements for UK banks as they pass stress tests. Media is found at the foot of the pile, joined closely by Travel & Leisure.

Top European News

  • Confederation of British Industry said Britain's private sector expects output to decline during the next three months in the gloomiest outlook since May as cautious consumer spending and cost pressures continue to weigh on businesses.
  • BoE Financial Policy Committee Record: System-wide level of Tier 1 capital requirements is now around 13% of risk-weighted assets, 1ppt lower than its previous benchmark of around 14%. CCyB maintained at 2%. "The Committee has also identified areas for further work, including on buffer usability, the implementation of the leverage ratio in the UK, and initiatives by the Bank to respond to feedback on interactions, proportionality, and complexity. Committee supports the Bank’s plans for a private markets system-wide exploratory scenario (SWES)".
  • OECD sees global growth of 3.2% in 2025 (maintained from prev. forecast), 2.9% in 2026 (maintained), 3.1% in 2027 (new forecast).
  • UK OBR's Miles says it was not misleading for Chancellor Reeves to have said that the situation with public finances was very challenging. 
  • BoE Governor Bailey says he expects banks to support the economy through lending following recent capital changes. 

FX

  • DXY and most G10 FX are uneventful in relatively quiet trade, with a similar lack of macro drivers seen during APAC hours. Specifically, DXY resides in a narrow 99.38-99.52 parameter, with ING calling for a lower dollar this week - "we expect that the remainder of the week will validate the market’s dovish pricing for next week’s Fed meeting". As it stands, the index trades at the upper end of the mentioned ranges, with recent strength thanks to some pressure seen in the GBP.
  • EUR traded flat ahead of the EZ HICP metrics, and then was little moved on the release itself. Headline printed a touch above expected at 2.20% (exp. 2.10%) whilst the Services figure also ticked higher from the prior month. Overall, given the figures were near enough in line with expectations, there was little follow-through into the single-currency and held within a 1.1604 to 1.1616 range, before then touching 1.1600 as the USD picked up a touch.
  • USD/JPY outperforms amid a pick-up in risk sentiment and after the pair's volatile Monday session, which saw a slump to 154.66 lows before bouncing back up and clear of 155.50 and then 156.00, with the pair eyeing yesterday's 156.15 peak as the near-term resistance level, and thereafter Black Friday's 156.58 high.
  • GBP traded flat against the USD, before then moving lower in recent trade. Nothing behind the latest bout of pressure, but it does come after Cable breached 1.3200 to the downside, and then continued to tumble to make a fresh trough at 1.3180 (though it is a moving target).
  • AUD outperforms after ANZ removed its call for an RBA cut in H1-2026, now sees the RBA on an "extended pause" through 2026. As a reminder, CBA and NAB also expect the RBA to be on hold for an extended period of time/foreseeable future. Westpac continues to expect two 2026 cuts, touting May and August for those. AUD/NZD marginally eclipsed 1.1450, from a 1.1418 trough.

Fixed Income

  • A lack of fresh drivers for USTs. The March contract is near-enough flat in a narrow 112-25 to 112-29 band. Overnight, WSJ's Timiraos wrote that, regarding the search for the next Fed Chair, "Unofficially, the process seems to be all but over, with President Trump appearing to favour longtime adviser Kevin Hassett.".
  • Bund Dec'25 is contained in a thin 128.18-35 band this morning. Specifics light. No move in Bunds on the EZ Flash HICP for November, the headline came in hotter-than-expected and ticked up from the prior, while Services lifted from the previous rate. Overall, the hotter-than-expected series chimes with the view that the ECB's easing cycle has likely concluded.
  • Gilts underperform. If the move continues, we look to support for the Gilt Mar'26 contract at 90.53, a double-bottom from the session of and before the Budget. Currently, the low is 90.98, taking out Monday's base by a tick. A move that lifted the UK 10yr yield back above the 4.5% mark. However, this pressure proved somewhat fleeting as the benchmark bounced and has made its way back to the unchanged mark. Nothing fresh, though the OBR briefing is underway and we note remarks from BoE officials on the morning's FSR/FPC briefings.
  • Saudi National Bank is seeking a USD 1bln syndicated loan, via Bloomberg. Loan is being syndicated to the broader market, incl. Asia, according to sources cited.
  • JGB's led overnight after a strong 10yr auction and in a bit of a breather from the largely Ueda-induced selling seen at the start of the week. To a 134.72 peak with gains of just over 20 ticks at best.
  • UK sells GBP 1bln 0.125% 2031 I/L Gilt: b/c 3.88x (prev. 3.49x), real yield 0.949% (prev. 0.889%)
  • Germany sells EUR 3.563bln vs exp. EUR 4.5bln 2.00% 2027 Schatz: b/c 1.7x (prev. 1.7x), average yield 2.05% (prev. 1.98%), retention 20.82% (prev. 24.68%)

Commodities

  • WTI and Brent continue to trade within Monday's post-OPEC range of USD 58.83-59.97/bbl and USD 62.69-63.82/bbl, respectively, as a pause in output hike and rising geopolitical concerns continue to support crude prices in the near term. WTI and Brent peaked at the start of the APAC session at USD 59.67/bbl and 63.36/bbl before falling to troughs of 59.09/bbl and 62.88/bbl.
  • XAU and XAG traded muted at the start of the European session. Oscillated in a tight USD 4201-4236/oz and USD 56.60-58/oz band, respectively. More recently, the yellow metal has fallen to make fresh session troughs of USD 4,181/oz - a move which lacked catalysts, but technicians highlight accelerating selling pressure after spot gold slipped below USD 4.2k/oz.
  • 3M LME Copper gapped lower and fell to a trough of USD 11.12k/t before rebounding to a session high of USD 11.27k/t as global risk tone slightly turns around following Monday's selloff.

Geopolitics: Middle East

  • Arab media reported new Israeli attacks in Khan Yunis and Rafah, according to Iran International.

Geopolitics: Ukraine

  • European Commission proposals for the Ukraine reparation loan should be distributed to member states tomorrow, and likely first discussion by EU ambassadors on Friday, according to Radio Liberty journalist
  • Russian Foreign Minister Lavrov is to meet with Chinese Foreign Minister Wang Yi on Tuesday.
  • Russia's Kremlin Spokesperson Peskov says US Special Envoy Witkoff and President Putin will discuss the understanding reached between the US and Ukraine, in a meeting at 14:00GMT/09:00EST, via TASS. S-400 and SU-57 fighter jets will be on the agenda.

Geopolitics: Other

  • Venezuelan President Maduro reportedly asked for sanction removal for more than 100 officials during a previous call with US President Trump. Furthermore, Trump gave Maduro a Friday deadline to leave Venezuela with his family, while the failure to meet the Friday deadline prompted Trump's comments on Saturday about the closure of airspace, according to sources cited by Reuters.
  • US Treasury Secretary Bessent said the Treasury is investigating allegations that Minnesota tax dollars may have been diverted to Al-Shabaab.
  • China's Coast Guard said it expelled a Japanese vessel in the waters of the Senkaku Islands on Tuesday.
  • "Turkey says oil tanker attacked in Black Sea while sailing from Russia to Georgia", according to Sky News Arabia. However, Sky News Arabia later clarifies, "Turkey says cargo ship attacked in Black Sea while sailing from Russia to Georgia".
  • Japan's Defence Minister Koizumi is considering a visit to the US as early as mid-January to hold talks with War Secretary Hegseth, via Kyodo.

US Event Calendar

  • Nov Wards Total Vehicle Sales, est. 15.4m, prior 15.32m
  • 10:00 am: Fed’s Bowman Testifies Before House Committee

DB's Jim Reid concludes the overnight wrap

Markets got December off to a rocky start yesterday, with bonds and equities losing ground, alongside a sharp slump in Bitcoin (-5.19%). The moves gathered pace right from the open, as hawkish remarks from BoJ Governor Ueda had already pushed 10yr JGB yields up to a post-GFC high. But that then cascaded across global markets, with bond yields moving sharply higher in the US and Europe too. In the meantime, matters weren’t helped by the latest data, as the ISM manufacturing print leant in a stagflationary direction, whilst higher oil prices only exacerbated those fears. So with all said and done, the S&P 500 (-0.53%) slipped back, whilst 10yr Treasury yields (+7.2bps) saw their biggest daily jump in nearly four weeks.

Those developments in Japan were critical for yesterday’s moves, because Ueda’s comments had led investors to price in a December rate hike from the BoJ as a near-certainty. So that meant bond yields hit a whole bunch of new records, and by the close in Japan yesterday, the 10yr yield (+5.8bps) was at a post-2008 high of 1.86%, whilst the 30yr yield (+4.1bps) was at 3.37%, and the highest since that maturity was first issued in the late-1990s. Similarly at the front end, the 2yr yield closed above 1% for the first time since the GFC. This morning yields on 2yr and 10yr JGBs are both down a basis point after a decent 10yr auction has provided some respite to the bond sell-off. The bid-to-cover ratio was recorded at 3.59, compared to 2.97 at the previous sale in November, and a 12-month average of 3.20.

US futures are also fairly flat, indicating that the sell-off has paused for now. The KOSPI (+1.81%) is leading the way in Asia after rebounding from yesterday and after the US announced that the general tariff rate on imports from South Korea, including automobiles, will decrease to 15% retroactively effective from November 1. In other markets, the Nikkei (+0.24%) is recovering a little this morning after a near two percent decline yesterday, while the S&P/ASX 200 (+0.11%) is also experiencing modest gains. Meanwhile, the Hang Seng (+0.13%) is maintaining small gains, in contrast to the CSI (-0.61%) and the Shanghai Composite (-0.55%), which are lower after a stronger session on Monday.  

The moves in Japan echoed around the world yesterday, with a sharp bond selloff on both sides of the Atlantic. For instance, Treasury yields rose across the curve, with the 2yr yield (+4.0bps) up to 3.53%, the 10yr yield (+7.2bps) rose to 4.09%, and 30yrs (+7.4bps) to 4.74%. Moreover, those moves got further support from several inflationary indicators, including the ISM manufacturing survey. Admittedly, the headline index unexpectedly fell back to 48.2 (vs. 49.0 expected), but the prices paid component ticked up to 58.5 (vs. 57.5 expected) after a run of 4 consecutive monthly declines. So that exacerbated concerns about tariff-driven inflation persisting. And with oil prices rising (+1.27% for Brent) after Ukraine’s weekend attack against an oil terminal in the Black Sea, the 1yr inflation swap (+1.7bps) also posted a 4th consecutive increase to 2.64%.

That downbeat tone was seen for equities too, where the S&P 500 (-0.53%) fell back after a run of 5 consecutive gains, and the small-cap Russell 2000 (-1.25%) saw an even bigger slump. Nearly three quarters of the S&P constituents were lower on the day, though the index did recover some ground after futures in Asia had suggested an even larger fall. The Mag-7 (-0.10%) outperformed as Nvidia (+1.65%) rebounded from Friday’s -1.81% decline. By contrast, crypto assets suffered, with Bitcoin (-5.19%) falling to $86,446 by the close, and trading below $84k intra-day. Unsurprisingly, that meant there were sizeable losses for crypto-related stocks like Coinbase (-4.76%). Overnight Bitcoin has bounced a little.

Earlier in Europe, markets had followed a very similar pattern, with bonds and equities selling off together. So the STOXX 600 (-0.20%) also fell back after 5 consecutive gains, and there was a particularly sharp decline for the German DAX (-1.04%). And there wasn’t much data capable of boosting the mood either, with the Euro Area manufacturing PMI revised down a tenth from the flash reading to 49.6, so still in contractionary territory. Meanwhile, yields on 10yr bunds (+6.1bps), OATs (+7.5bps) and BTPs (+6.9bps) all moved higher.

Here in the UK, we also heard yesterday that the head of the OBR budget watchdog had resigned, which comes after their analysis of the budget’s contents went live on its website ahead of the Chancellor’s announcement. However, that wasn’t a market moving story, and the rise in 10yr gilt yields (+4.1bps) was more muted than in other countries yesterday, whilst the FTSE 100 (-0.18%) largely matched the STOXX 600. We did get a bit of UK data too, with October mortgage approvals down to 65.0k (vs. 64.5k expected), but that very much kept them within their 60-70k range that they’ve been in for the last 18 months.

Looking forward to today, we’ll see some focus on geopolitics as Trump’s envoy Witkoff is due to meet Russia’s President Putin in Moscow to discuss US proposals to end the war in Ukraine. The visit comes as US-led peace talks intensified over the past couple of weeks with “productive” meetings between US and Ukrainian officials but Kyiv staying resistant to territorial demands that have been made by Moscow.

In terms of the rest of the day ahead, data releases include the Euro Area flash CPI print for November, with Friday’s country-level releases suggesting that headline and core inflation should be unchanged at 2.1% and 2.4% respectively. We'll also see the Euro area unemployment rate for October. Otherwise, central bank speakers include the Fed’s Bowman but with the blackout on it won't be about monetary policy.

Tyler Durden Tue, 12/02/2025 - 08:43

Costco Sues For Refunds Before Supreme Court Rules On Tariff Legality

Costco Sues For Refunds Before Supreme Court Rules On Tariff Legality

Authored by Rob Sabo via The Epoch Times,

Retail giant Costco Wholesale Corporation filed a lawsuit against the U.S. government on Nov. 28 in an effort to lay the groundwork for refunds of tariffs collected since President Donald Trump enacted global tariff policies under the International Emergency Economic Powers Act (IEEPA).

The complaint filed in the U.S. Court of International Trade in Manhattan argued that the president’s invocation of the act beginning in February illegally imposed tariffs on goods imported from Mexico, Canada, and China. Trump has said that tariffs were justified as a matter of national emergency because of the amount of fentanyl making its way into the United States from those countries, and that the global levies are a necessary tool to negotiate trade deals that level the playing field between the United States and key global trade partners.

The U.S. Supreme Court heard oral arguments regarding Trump’s authorization to invoke the IEEPA in early November. The issue has been fast-tracked, but the justices have not announced when they intend to make a ruling. Costco’s complaint requests a complete refund of duties it has already paid if the Supreme Court decides that the tariffs are unlawful.

Additionally, Costco is seeking “an injunction preventing Defendants from imposing further duties on it under the executive orders challenged in this lawsuit; and full refund from Defendants of all IEEPA duties Plaintiff has already paid to the United States as a result of the executive orders challenged in this lawsuit, as well as those it will continue to pay,” its lawyers wrote.

The complaint was filed after Costco was denied a request for additional time to finalize its tariff calculations assessed on imported goods. That decision could impact the company’s ability to collect a refund in full if the tariffs are invalidated, the company’s lawyers argue.

The lawsuit does not say how much Costco has paid in tariffs; however, revenue from tariffs has soared throughout the year. For fiscal year 2025, the federal government collected nearly $196 billion in duties, taxes, and fees—a 122 percent increase from the prior fiscal year.

On Aug. 29, the U.S. Court of Appeals for the Federal Circuit ruled in a 7-4 decision that Trump’s global tariff policies were illegal, sending the case to the nation’s highest court. The tariffs remain in place while the justices consider the case.

More than a dozen states have sued the Trump Administration over the president’s tariff policies. In April, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, Oregon, and Vermont filed suit against the president, arguing that only Congress has the power to enact tariff policies. California filed a similar suit.

The states join a growing list of companies that have filed similar suits, including Revlon Consumer Products LLC, Kawasaki Motors Manufacturing Corporation, Bumble Bee, Yokohama Tire, and EssilorLuxottica.

Costco did not immediately respond to a request for comment by The Epoch Times.

Kush Desai, White House spokesperson, said in a statement sent to The Epoch Times: “The economic consequences of the failure to uphold President Trump’s lawful tariffs are enormous and this suit highlights that fact.

“The White House looks forward to the Supreme Court’s speedy and proper resolution of this matter.”

Tyler Durden Tue, 12/02/2025 - 08:40

Costco Sues For Refunds Before Supreme Court Rules On Tariff Legality

Costco Sues For Refunds Before Supreme Court Rules On Tariff Legality

Authored by Rob Sabo via The Epoch Times,

Retail giant Costco Wholesale Corporation filed a lawsuit against the U.S. government on Nov. 28 in an effort to lay the groundwork for refunds of tariffs collected since President Donald Trump enacted global tariff policies under the International Emergency Economic Powers Act (IEEPA).

The complaint filed in the U.S. Court of International Trade in Manhattan argued that the president’s invocation of the act beginning in February illegally imposed tariffs on goods imported from Mexico, Canada, and China. Trump has said that tariffs were justified as a matter of national emergency because of the amount of fentanyl making its way into the United States from those countries, and that the global levies are a necessary tool to negotiate trade deals that level the playing field between the United States and key global trade partners.

The U.S. Supreme Court heard oral arguments regarding Trump’s authorization to invoke the IEEPA in early November. The issue has been fast-tracked, but the justices have not announced when they intend to make a ruling. Costco’s complaint requests a complete refund of duties it has already paid if the Supreme Court decides that the tariffs are unlawful.

Additionally, Costco is seeking “an injunction preventing Defendants from imposing further duties on it under the executive orders challenged in this lawsuit; and full refund from Defendants of all IEEPA duties Plaintiff has already paid to the United States as a result of the executive orders challenged in this lawsuit, as well as those it will continue to pay,” its lawyers wrote.

The complaint was filed after Costco was denied a request for additional time to finalize its tariff calculations assessed on imported goods. That decision could impact the company’s ability to collect a refund in full if the tariffs are invalidated, the company’s lawyers argue.

The lawsuit does not say how much Costco has paid in tariffs; however, revenue from tariffs has soared throughout the year. For fiscal year 2025, the federal government collected nearly $196 billion in duties, taxes, and fees—a 122 percent increase from the prior fiscal year.

On Aug. 29, the U.S. Court of Appeals for the Federal Circuit ruled in a 7-4 decision that Trump’s global tariff policies were illegal, sending the case to the nation’s highest court. The tariffs remain in place while the justices consider the case.

More than a dozen states have sued the Trump Administration over the president’s tariff policies. In April, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, Oregon, and Vermont filed suit against the president, arguing that only Congress has the power to enact tariff policies. California filed a similar suit.

The states join a growing list of companies that have filed similar suits, including Revlon Consumer Products LLC, Kawasaki Motors Manufacturing Corporation, Bumble Bee, Yokohama Tire, and EssilorLuxottica.

Costco did not immediately respond to a request for comment by The Epoch Times.

Kush Desai, White House spokesperson, said in a statement sent to The Epoch Times: “The economic consequences of the failure to uphold President Trump’s lawful tariffs are enormous and this suit highlights that fact.

“The White House looks forward to the Supreme Court’s speedy and proper resolution of this matter.”

Tyler Durden Tue, 12/02/2025 - 08:40

Copper Hits Record High; Goldman Warns A "Circular Melt-Up" Is Now Driving Global Market

Copper Hits Record High; Goldman Warns A "Circular Melt-Up" Is Now Driving Global Market

Copper futures on the London Metal Exchange broke out of the post-Thanksgiving trading range and into record-high territory on a massive tariff-driven scramble for supply.

Copper jumped nearly 1% on the LME to $11,294.50/ton, while Comex futures surged 1.6%, blowing out the US-London spread as traders scramble to rush metal into the U.S. ahead of potential Trump-era import tariffs.

The arbitrage continues to pull supply from the rest of the world into the U.S., compounding a year already plagued with unexpected mine outages and tightening fears.

Goldman's commodity specialist, James McGeoch, commented on this dynamic, calling it a "circular melt-up":

Post Thanksgiving – breakout in Copper: Have been watching LME, that $11,100 level, now 3 times, it's felt like a coiled spring, we have seen it in precious this year (Gold, Silver, PGM's), so why not pivot to the Doctor. As we do just remember commodities are highly emotive, basis the touch point at all levels of life, they rarely move in linear fashion, overreact up and overreact down, look at the awakening in Rare Earths in 2025. Whilst the CESCO feedback from a bottom-up perspective was kinda meh (China -8% QTD, y/y, worth noting YTD +7% y/y to end Oct), it's the balances that matter. This wasn't a conference about mine supply, or Chinese Q4 demand, this was dominated by the traders and the desire to purchase and ship into the Comex (U.S.) arb. GS commods sales were on the ground (feedback link), outside China they note EUR demand <2019 and they suggest positioning is 5/10….

I liken this to a "circular melt-up." The tighter LME gets tighter basis US (CMX arb) pull, the stronger the LME backwardation, which in turn tightens the CMX arb as the forward curve is underpinned by stock builds….. Circular motion – LME stock contraction, CMX arb strengthens…. Those watching supply have for some time been looking at 1H26: Grasberg tightness, Kakalua stockpiles rundown, Codelco friction, Collahuasi weakness, QB sustains lower rates. China smelter utilisation rates at record lows, copper premiums at record highs, TC settlement structures are breaking… there is nothing the Chinese can do about it, and in the meantime the U.S. is sitting whistling Dixie as stocks get onshored, it's a strategic stockpile, basis the "threat" of tariffs, that they so desperately need and the traders are providing the balance sheet. Who would have thought 12 months ago that the U.S. would be the only game in town when it comes to copper. By luck or by design, Uncle Sam holds all the aces…. I think last week's move was the hangover of CESCO washing off and traders realising that near term the asymmetry is higher. … Colleagues gone reminded us daily, commodities are spot assets, they are not traded in Excel models, they are art as much as science. Go back to summer, the same traders that owned CMX at 500, sold it at 550/575, the guys that got slammed as the unwind happened were machines. It's these same buyers today stepping in.

Year-to-date, copper is up 30% on the LME as investors pile in - both on the lucrative U.S. arbitrage trade that is fueling shortages elsewhere, and on long-term structural demand from the "Next AI Trade" and major power-grid buildouts.

Commenting on copper markets, super-bull Kostas Bintas of Mercuria told Bloomberg that the U.S. tariff arbitrage is draining global inventories and is about to ignite another leg higher in prices.

"This is the big one," Bintas told the media outlet in an interview during an industry conference in Shanghai. "If the world keeps going like this we will be left without copper cathodes in the rest of the world."

Bintas continued, "Just looking at the facts, mathematically… What is going to happen if all of this continues? There's only one answer: there will be tightness and a higher price."

Last March, Bintas forecasted that copper prices could reach $12,000 or $13,000 a ton, driven by U.S. import drawdowns.

"China is, for now at least, not the marginal buyer," said Nick Snowdon, Mercuria's head of metals and mining research. "That role has now shifted to the US."

Bintas noted, "If we run to $12,000 or $15,000 or whatever it is, the SHFE will take time to catch up. You're going to see a lot of Chinese copper cathodes coming out. And then when the Chinese will come back from Chinese New Year, there will not be enough copper cathodes." He said more than half a million tons could arrive in the U.S. in the first quarter of 2026.

Related:

Earlier this year, Jeff Currie, who led commodities research at Goldman for nearly three decades and now serves as the chief strategy officer of the energy pathways team at Carlyle Group, told Bloomberg's Odd Lots that copper is the "most compelling trade I've seen in my 30-year trading career."

Tyler Durden Tue, 12/02/2025 - 08:20

Copper Hits Record High; Goldman Warns A "Circular Melt-Up" Is Now Driving Global Market

Copper Hits Record High; Goldman Warns A "Circular Melt-Up" Is Now Driving Global Market

Copper futures on the London Metal Exchange broke out of the post-Thanksgiving trading range and into record-high territory on a massive tariff-driven scramble for supply.

Copper jumped nearly 1% on the LME to $11,294.50/ton, while Comex futures surged 1.6%, blowing out the US-London spread as traders scramble to rush metal into the U.S. ahead of potential Trump-era import tariffs.

The arbitrage continues to pull supply from the rest of the world into the U.S., compounding a year already plagued with unexpected mine outages and tightening fears.

Goldman's commodity specialist, James McGeoch, commented on this dynamic, calling it a "circular melt-up":

Post Thanksgiving – breakout in Copper: Have been watching LME, that $11,100 level, now 3 times, it's felt like a coiled spring, we have seen it in precious this year (Gold, Silver, PGM's), so why not pivot to the Doctor. As we do just remember commodities are highly emotive, basis the touch point at all levels of life, they rarely move in linear fashion, overreact up and overreact down, look at the awakening in Rare Earths in 2025. Whilst the CESCO feedback from a bottom-up perspective was kinda meh (China -8% QTD, y/y, worth noting YTD +7% y/y to end Oct), it's the balances that matter. This wasn't a conference about mine supply, or Chinese Q4 demand, this was dominated by the traders and the desire to purchase and ship into the Comex (U.S.) arb. GS commods sales were on the ground (feedback link), outside China they note EUR demand <2019 and they suggest positioning is 5/10….

I liken this to a "circular melt-up." The tighter LME gets tighter basis US (CMX arb) pull, the stronger the LME backwardation, which in turn tightens the CMX arb as the forward curve is underpinned by stock builds….. Circular motion – LME stock contraction, CMX arb strengthens…. Those watching supply have for some time been looking at 1H26: Grasberg tightness, Kakalua stockpiles rundown, Codelco friction, Collahuasi weakness, QB sustains lower rates. China smelter utilisation rates at record lows, copper premiums at record highs, TC settlement structures are breaking… there is nothing the Chinese can do about it, and in the meantime the U.S. is sitting whistling Dixie as stocks get onshored, it's a strategic stockpile, basis the "threat" of tariffs, that they so desperately need and the traders are providing the balance sheet. Who would have thought 12 months ago that the U.S. would be the only game in town when it comes to copper. By luck or by design, Uncle Sam holds all the aces…. I think last week's move was the hangover of CESCO washing off and traders realising that near term the asymmetry is higher. … Colleagues gone reminded us daily, commodities are spot assets, they are not traded in Excel models, they are art as much as science. Go back to summer, the same traders that owned CMX at 500, sold it at 550/575, the guys that got slammed as the unwind happened were machines. It's these same buyers today stepping in.

Year-to-date, copper is up 30% on the LME as investors pile in - both on the lucrative U.S. arbitrage trade that is fueling shortages elsewhere, and on long-term structural demand from the "Next AI Trade" and major power-grid buildouts.

Commenting on copper markets, super-bull Kostas Bintas of Mercuria told Bloomberg that the U.S. tariff arbitrage is draining global inventories and is about to ignite another leg higher in prices.

"This is the big one," Bintas told the media outlet in an interview during an industry conference in Shanghai. "If the world keeps going like this we will be left without copper cathodes in the rest of the world."

Bintas continued, "Just looking at the facts, mathematically… What is going to happen if all of this continues? There's only one answer: there will be tightness and a higher price."

Last March, Bintas forecasted that copper prices could reach $12,000 or $13,000 a ton, driven by U.S. import drawdowns.

"China is, for now at least, not the marginal buyer," said Nick Snowdon, Mercuria's head of metals and mining research. "That role has now shifted to the US."

Bintas noted, "If we run to $12,000 or $15,000 or whatever it is, the SHFE will take time to catch up. You're going to see a lot of Chinese copper cathodes coming out. And then when the Chinese will come back from Chinese New Year, there will not be enough copper cathodes." He said more than half a million tons could arrive in the U.S. in the first quarter of 2026.

Related:

Earlier this year, Jeff Currie, who led commodities research at Goldman for nearly three decades and now serves as the chief strategy officer of the energy pathways team at Carlyle Group, told Bloomberg's Odd Lots that copper is the "most compelling trade I've seen in my 30-year trading career."

Tyler Durden Tue, 12/02/2025 - 08:20

The US Manufacturing Sector Wins While Net Zero Destroys Industry Elsewhere

The US Manufacturing Sector Wins While Net Zero Destroys Industry Elsewhere

Authored by Daniel Lacalle,

The US manufacturing sector clearly outperforms all its G7 peers, especially Germany, France, and the UK.

The main reason is that the United States never implemented the aggressive net zero emissions policy that has destroyed the industry by giving the reins of industrial policy to activists. In the latest S&P Global/HCOB PMI readings, the United States manufacturing sector is clearly expanding, while the UK is only slightly expanding, and Germany and France remain in contraction after years of decline.

The US also shows much stronger momentum in new orders and has better pricing power, margins, and investment plans than its European peers. Furthermore, the US has reduced CO₂ emissions and protected the environment without destroying its industrial fabric.​ According to the EIA, the United States has reduced its GHG/energy‑related CO₂ by 18% between 2010 and 2024, while the European Union is at a similar level, reducing emissions by 18–22%.

The latest flash S&P Global US Manufacturing PMI stands at 51.9 for November 2025, marking the tenth expansion reading in the past eleven months. On the other hand, Germany’s Manufacturing PMI has fallen back to 48.4, while France remains below 50, signalling a contraction and indicating disastrous manufacturing performance in the past three years. The UK has only just edged back to 50.2, barely into growth after months of contraction. There is a clear structural difference: the US is in a continued, broad-based expansion phase, while the euro area’s industry remains stuck in stagnation, and the UK has stabilised after years of a negative trend.

New orders show the trend in a clear way. In the US survey, new orders are in positive territory, supporting output and employment. In Germany, new orders are falling again, with reports of a sharp decline in export demand and renewed drops in backlogs and jobs, and France’s manufacturers continue to report falling new business after more than three years of demand weakness, according to SP Global. The UK is seeing some modest improvement in domestic orders but still faces a drag from exports, whereas US factories benefit from a large internal market and reshoring‑related demand that is largely absent in the European Union.

If we analyse prices, the US manufacturing sector is in a much better position to defend its margins. The S&P Global US survey shows a moderate input cost increase, stable margins and no negative impact on demand. In Germany and France, the PMI reports describe a context where manufacturers face weaker pricing power, with output prices often under pressure and a fragile demand environment. It is undeniable that there is evidence of a profitability and cash‑flow advantage for US manufacturers.

European business surveys and experts frequently highlight that high energy prices, complicated regulations, and climate-related policies are hurting orders, investments, and pricing, while US producers benefit from lower energy costs and more flexible regulations. Thus, US manufacturers can maintain investment and job creation plans despite slower global growth, whereas most German, UK and French firms are trying to survive in an environment of rising regulatory and tax burdens, focusing on cost cuts and capacity control.

Europe’s approach to net zero has clearly damaged the competitiveness of its energy‑intensive industries. The combination of carbon pricing, a hidden tax with no discernible positive final impact, renewable‑support surcharges, increasing regulated costs in electricity bills, and increasingly stringent wrongly called environmental restrictions are raising operating expenses for manufacturers that already face higher baseline energy prices than their US counterparts. Germany’s chemical, metal, and glass sectors are often highlighted as examples of industries whose margins and investment plans have been damaged by expensive electricity and gas, aggravated by climate-related surcharges, and the rapid phase-out of nuclear and conventional generation.

In France, industrial firms have benefited from nuclear power and face lower energy costs than their German or UK competitors, but they still suffer from high network charges, environmental taxes, and regulatory uncertainty related to future climate policy, all of which weigh on long-term investment decisions. UK think tanks and strategy firms point out the same points, stressing that carbon prices, green levies, and planning barriers have made energy costs structurally higher than in the US, pushing some producers to relocate or scale back capacity. Across the three countries, leading business groups warn that accelerated decarbonisation timetables, combined with insufficient support for industrial transformation, have widened the gap in input costs, making some multinationals shift incremental investments to North America or other regions, according to PWC studies. ​

The net zero‑related burdens are direct causes of a weak PMI picture. When demand is weak and new orders are falling, as in Germany and France, higher regulatory and energy costs cannot be offset by higher selling prices, so firms respond by cutting investments, reducing capacity, and, in some cases, closing plants. In the UK, climate‑policy‑related costs and uncertainty add another layer of concern. The US has followed a tax-cut-driven approach to energy transition without destroying cheap alternatives, which helps PMI readings and explains stronger investment intentions than in Europe.

In the US, firms have announced ongoing investment increases related to reshoring, supply chain diversification and technology. In Germany and France, repeated references to prolonged downturns in new orders mean weaker investment plans, delays in large projects and a continued focus on efficiency rather than expansion.

US firms invest in capacity and drive productivity‑enhancing spending in digitalisation and robotics, supported by a combination of fiscal incentives, more competitive energy costs and a clearer policy environment for industrial decarbonisation, according to PWC.

The US manufacturing sector is “clearly winning” relative to Germany, France and the UK on all fronts: volume, pricing, technology, and future capacity. The US has focused its industrial policy in leaders of alternatives and proactive improvement, rather than giving all the power to ideologically motivated activists obsessed with regulation, limits, and taxes.

Unfortunately, nothing seems to be changing. Europe and the UK seemed to be handing the future of industry, automation and manufacturing investment to China and other nations under a misguided view of environmental protection based on “not in my backyard”, while other countries grow and improve their environmental protection measures without abandoning key strategic sectors.

The US manufacturing sector is winning because its future was not left in the hands of PowerPoint activist politicians. This is a warning for Americans: if you copy Germany, France or the UK, you will face the stagnation and decline they are suffering.

Tyler Durden Tue, 12/02/2025 - 08:05

The US Manufacturing Sector Wins While Net Zero Destroys Industry Elsewhere

The US Manufacturing Sector Wins While Net Zero Destroys Industry Elsewhere

Authored by Daniel Lacalle,

The US manufacturing sector clearly outperforms all its G7 peers, especially Germany, France, and the UK.

The main reason is that the United States never implemented the aggressive net zero emissions policy that has destroyed the industry by giving the reins of industrial policy to activists. In the latest S&P Global/HCOB PMI readings, the United States manufacturing sector is clearly expanding, while the UK is only slightly expanding, and Germany and France remain in contraction after years of decline.

The US also shows much stronger momentum in new orders and has better pricing power, margins, and investment plans than its European peers. Furthermore, the US has reduced CO₂ emissions and protected the environment without destroying its industrial fabric.​ According to the EIA, the United States has reduced its GHG/energy‑related CO₂ by 18% between 2010 and 2024, while the European Union is at a similar level, reducing emissions by 18–22%.

The latest flash S&P Global US Manufacturing PMI stands at 51.9 for November 2025, marking the tenth expansion reading in the past eleven months. On the other hand, Germany’s Manufacturing PMI has fallen back to 48.4, while France remains below 50, signalling a contraction and indicating disastrous manufacturing performance in the past three years. The UK has only just edged back to 50.2, barely into growth after months of contraction. There is a clear structural difference: the US is in a continued, broad-based expansion phase, while the euro area’s industry remains stuck in stagnation, and the UK has stabilised after years of a negative trend.

New orders show the trend in a clear way. In the US survey, new orders are in positive territory, supporting output and employment. In Germany, new orders are falling again, with reports of a sharp decline in export demand and renewed drops in backlogs and jobs, and France’s manufacturers continue to report falling new business after more than three years of demand weakness, according to SP Global. The UK is seeing some modest improvement in domestic orders but still faces a drag from exports, whereas US factories benefit from a large internal market and reshoring‑related demand that is largely absent in the European Union.

If we analyse prices, the US manufacturing sector is in a much better position to defend its margins. The S&P Global US survey shows a moderate input cost increase, stable margins and no negative impact on demand. In Germany and France, the PMI reports describe a context where manufacturers face weaker pricing power, with output prices often under pressure and a fragile demand environment. It is undeniable that there is evidence of a profitability and cash‑flow advantage for US manufacturers.

European business surveys and experts frequently highlight that high energy prices, complicated regulations, and climate-related policies are hurting orders, investments, and pricing, while US producers benefit from lower energy costs and more flexible regulations. Thus, US manufacturers can maintain investment and job creation plans despite slower global growth, whereas most German, UK and French firms are trying to survive in an environment of rising regulatory and tax burdens, focusing on cost cuts and capacity control.

Europe’s approach to net zero has clearly damaged the competitiveness of its energy‑intensive industries. The combination of carbon pricing, a hidden tax with no discernible positive final impact, renewable‑support surcharges, increasing regulated costs in electricity bills, and increasingly stringent wrongly called environmental restrictions are raising operating expenses for manufacturers that already face higher baseline energy prices than their US counterparts. Germany’s chemical, metal, and glass sectors are often highlighted as examples of industries whose margins and investment plans have been damaged by expensive electricity and gas, aggravated by climate-related surcharges, and the rapid phase-out of nuclear and conventional generation.

In France, industrial firms have benefited from nuclear power and face lower energy costs than their German or UK competitors, but they still suffer from high network charges, environmental taxes, and regulatory uncertainty related to future climate policy, all of which weigh on long-term investment decisions. UK think tanks and strategy firms point out the same points, stressing that carbon prices, green levies, and planning barriers have made energy costs structurally higher than in the US, pushing some producers to relocate or scale back capacity. Across the three countries, leading business groups warn that accelerated decarbonisation timetables, combined with insufficient support for industrial transformation, have widened the gap in input costs, making some multinationals shift incremental investments to North America or other regions, according to PWC studies. ​

The net zero‑related burdens are direct causes of a weak PMI picture. When demand is weak and new orders are falling, as in Germany and France, higher regulatory and energy costs cannot be offset by higher selling prices, so firms respond by cutting investments, reducing capacity, and, in some cases, closing plants. In the UK, climate‑policy‑related costs and uncertainty add another layer of concern. The US has followed a tax-cut-driven approach to energy transition without destroying cheap alternatives, which helps PMI readings and explains stronger investment intentions than in Europe.

In the US, firms have announced ongoing investment increases related to reshoring, supply chain diversification and technology. In Germany and France, repeated references to prolonged downturns in new orders mean weaker investment plans, delays in large projects and a continued focus on efficiency rather than expansion.

US firms invest in capacity and drive productivity‑enhancing spending in digitalisation and robotics, supported by a combination of fiscal incentives, more competitive energy costs and a clearer policy environment for industrial decarbonisation, according to PWC.

The US manufacturing sector is “clearly winning” relative to Germany, France and the UK on all fronts: volume, pricing, technology, and future capacity. The US has focused its industrial policy in leaders of alternatives and proactive improvement, rather than giving all the power to ideologically motivated activists obsessed with regulation, limits, and taxes.

Unfortunately, nothing seems to be changing. Europe and the UK seemed to be handing the future of industry, automation and manufacturing investment to China and other nations under a misguided view of environmental protection based on “not in my backyard”, while other countries grow and improve their environmental protection measures without abandoning key strategic sectors.

The US manufacturing sector is winning because its future was not left in the hands of PowerPoint activist politicians. This is a warning for Americans: if you copy Germany, France or the UK, you will face the stagnation and decline they are suffering.

Tyler Durden Tue, 12/02/2025 - 08:05

Three Years On, How Accurate Are AI Chatbots?

Three Years On, How Accurate Are AI Chatbots?

Three years ago, on November 30, 2022, the official release of ChatGPT marked a turning point in artificial intelligence, propelling AI chatbots (or large language models) into the mainstream.

Since then, progress has been undeniable: LLMs' ability to process complex queries, summarize vast amounts of information and even assist in coding has improved considerably.

Yet, as Statista's Tristan Gaudiat details below, hallucinations, misinterpretations of context and inaccuracies continue to plague even the most sophisticated of currently available models.

A study from the European Broadcasting Union and the BBC reveals that while the rate of inaccurate responses has declined since the end of last year, errors continue to be widespread.

How Accurate Are AI Chatbots? | Statista

You will find more infographics at Statista

Data collected between May and June 2025 and analyzed by a cohort of journalists revealed that almost half of the responses (48 percent) from popular chatbots - free versions of ChatGPT, Gemini, Copilot and Perplexity - contained accuracy issues.

17 percent were significant errors, mainly regarding sourcing and missing context.

In December 2024, the rate of inaccurate responses (observed using a smaller answers sample) was significantly higher: 72 percent for all four LLMs. 31 percent were major issues in that case.

Despite gradual improvements, these shortcomings raise critical questions about reliability, especially in high-stakes applications like healthcare, legal advice or education. While AI developers keep pushing boundaries, users must remain aware of the technology's current limitations.

Tyler Durden Tue, 12/02/2025 - 07:45

Three Years On, How Accurate Are AI Chatbots?

Three Years On, How Accurate Are AI Chatbots?

Three years ago, on November 30, 2022, the official release of ChatGPT marked a turning point in artificial intelligence, propelling AI chatbots (or large language models) into the mainstream.

Since then, progress has been undeniable: LLMs' ability to process complex queries, summarize vast amounts of information and even assist in coding has improved considerably.

Yet, as Statista's Tristan Gaudiat details below, hallucinations, misinterpretations of context and inaccuracies continue to plague even the most sophisticated of currently available models.

A study from the European Broadcasting Union and the BBC reveals that while the rate of inaccurate responses has declined since the end of last year, errors continue to be widespread.

How Accurate Are AI Chatbots? | Statista

You will find more infographics at Statista

Data collected between May and June 2025 and analyzed by a cohort of journalists revealed that almost half of the responses (48 percent) from popular chatbots - free versions of ChatGPT, Gemini, Copilot and Perplexity - contained accuracy issues.

17 percent were significant errors, mainly regarding sourcing and missing context.

In December 2024, the rate of inaccurate responses (observed using a smaller answers sample) was significantly higher: 72 percent for all four LLMs. 31 percent were major issues in that case.

Despite gradual improvements, these shortcomings raise critical questions about reliability, especially in high-stakes applications like healthcare, legal advice or education. While AI developers keep pushing boundaries, users must remain aware of the technology's current limitations.

Tyler Durden Tue, 12/02/2025 - 07:45

Tether CEO Slams S&P Ratings Agency And Influencers Spreading USDt FUD

Tether CEO Slams S&P Ratings Agency And Influencers Spreading USDt FUD

Authored by Vince Quill via CoinTelegraph.com,

Tether CEO Paolo Ardoino and market analysts pushed back against S&P Global’s downgraded rating of USDt’s ability to maintain its US dollar peg, saying that the ratings agency did not account for all of Tether’s assets and revenues.

The Tether Group’s total assets at the end of Q3 2025 totaled about $215 billion, while its total stablecoin liabilities were about $184.5 billion, according to Ardoino, who referenced Tether’s Q3 attestation report. He added:

“Tether had, at the end of Q3 2025, about $7 billion in excess equity, on top of the about $184.5 billion in stablecoin reserves, plus about another $23 billion in retained earnings as part of our Tether Group equity. 

"S&P made the same mistake of not considering the additional Group Equity, nor the roughly $500 million in monthly base profits generated by US Treasury yields alone,” Ardoino continued.

Source: Paolo Ardoino

S&P Global downgraded USDt’s dollar-peg rating to “weak”  on Wednesday, the lowest score on its scale, prompting fear, uncertainty, and doubt from some analysts about the company, which has become a critical piece of crypto market infrastructure.

Analysts debate Tether’s balance sheet fundamentals

Arthur Hayes, a market analyst and founder of the BitMEX crypto exchange, speculated that Tether is buying large quantities of gold and BTC to compensate for income shortfalls produced by falling US Treasury yields.

As the Federal Reserve slashes interest rates, the gold and BTC should go up in value, Hayes said, but he also warned that a steep correction in these assets could spell trouble for Tether.

“A roughly 30% decline in the gold and BTC position would wipe out their equity, and then USDt would be, in theory, insolvent,” he said.

Source: Arthur Hayes

Joseph Ayoub, the former lead digital asset analyst at financial services giant Citi, said he spent “hundreds” of hours researching Tether as an analyst for the company, and rebuffed Hayes’ analysis.

Tether has excess assets beyond what it reports, has an extremely lucrative business that generates billions of dollars in interest income with only 150 employees, and is better collateralized than traditional banks, Ayoub said. 

Tyler Durden Tue, 12/02/2025 - 07:20

Tether CEO Slams S&P Ratings Agency And Influencers Spreading USDt FUD

Tether CEO Slams S&P Ratings Agency And Influencers Spreading USDt FUD

Authored by Vince Quill via CoinTelegraph.com,

Tether CEO Paolo Ardoino and market analysts pushed back against S&P Global’s downgraded rating of USDt’s ability to maintain its US dollar peg, saying that the ratings agency did not account for all of Tether’s assets and revenues.

The Tether Group’s total assets at the end of Q3 2025 totaled about $215 billion, while its total stablecoin liabilities were about $184.5 billion, according to Ardoino, who referenced Tether’s Q3 attestation report. He added:

“Tether had, at the end of Q3 2025, about $7 billion in excess equity, on top of the about $184.5 billion in stablecoin reserves, plus about another $23 billion in retained earnings as part of our Tether Group equity. 

"S&P made the same mistake of not considering the additional Group Equity, nor the roughly $500 million in monthly base profits generated by US Treasury yields alone,” Ardoino continued.

Source: Paolo Ardoino

S&P Global downgraded USDt’s dollar-peg rating to “weak”  on Wednesday, the lowest score on its scale, prompting fear, uncertainty, and doubt from some analysts about the company, which has become a critical piece of crypto market infrastructure.

Analysts debate Tether’s balance sheet fundamentals

Arthur Hayes, a market analyst and founder of the BitMEX crypto exchange, speculated that Tether is buying large quantities of gold and BTC to compensate for income shortfalls produced by falling US Treasury yields.

As the Federal Reserve slashes interest rates, the gold and BTC should go up in value, Hayes said, but he also warned that a steep correction in these assets could spell trouble for Tether.

“A roughly 30% decline in the gold and BTC position would wipe out their equity, and then USDt would be, in theory, insolvent,” he said.

Source: Arthur Hayes

Joseph Ayoub, the former lead digital asset analyst at financial services giant Citi, said he spent “hundreds” of hours researching Tether as an analyst for the company, and rebuffed Hayes’ analysis.

Tether has excess assets beyond what it reports, has an extremely lucrative business that generates billions of dollars in interest income with only 150 employees, and is better collateralized than traditional banks, Ayoub said. 

Tyler Durden Tue, 12/02/2025 - 07:20

Another Russian Shadow-Fleet Tanker Hit By Drones

Another Russian Shadow-Fleet Tanker Hit By Drones

A fourth Russia-linked tanker was attacked in less than a week, marking a sharp escalation in strikes on commercial vessels tied to Moscow as the war in Eastern Europe nears its fourth year.

Bloomberg reports that the Midvolga-2, a Russian-flagged tanker hauling sunflower oil from Russia to Georgia, was hit by Ukrainian kamikaze drones about 80 miles off Turkey's northern coast. Turkish officials said the crew of 13 was unharmed in the attack.

The incident is part of Ukraine's intensifying and broadening attack on Moscow's oil/gas infrastructure and shadow tanker fleet. 

On Sunday, the Russian paper Kommersant reported that the M/T Mersin tanker, hauling Russian oil, was attacked by Ukrainian drones off the west coast of Africa. This marks the first incident of its kind in the region and suggests a further broadening of the battlefield.

Last week, two Russia-linked tankers were hit by kamikaze drone boats. Here's our reporting:

Ukraine and its Western allies have spent the past several years targeting Russia's oil and gas infrastructure with kamikaze drones and naval drones in an effort to pressure Moscow's finances. This campaign, accompanied by sanctions, has yet to collapse Russia financially.

Attacks on Russia's oil/gas infrastructure jumped to a record last month as the Trump administration rushes to end the four-year war.

With U.S. special envoy Steve Witkoff coming off negotiations with Ukrainian officials this past weekend in Miami and now in Moscow to meet Russian President Vladimir Putin about a possible peace deal, it appears Ukraine is making one final push to inflict maximum damage on Moscow.

Tyler Durden Tue, 12/02/2025 - 06:55

Another Russian Shadow-Fleet Tanker Hit By Drones

Another Russian Shadow-Fleet Tanker Hit By Drones

A fourth Russia-linked tanker was attacked in less than a week, marking a sharp escalation in strikes on commercial vessels tied to Moscow as the war in Eastern Europe nears its fourth year.

Bloomberg reports that the Midvolga-2, a Russian-flagged tanker hauling sunflower oil from Russia to Georgia, was hit by Ukrainian kamikaze drones about 80 miles off Turkey's northern coast. Turkish officials said the crew of 13 was unharmed in the attack.

The incident is part of Ukraine's intensifying and broadening attack on Moscow's oil/gas infrastructure and shadow tanker fleet. 

On Sunday, the Russian paper Kommersant reported that the M/T Mersin tanker, hauling Russian oil, was attacked by Ukrainian drones off the west coast of Africa. This marks the first incident of its kind in the region and suggests a further broadening of the battlefield.

Last week, two Russia-linked tankers were hit by kamikaze drone boats. Here's our reporting:

Ukraine and its Western allies have spent the past several years targeting Russia's oil and gas infrastructure with kamikaze drones and naval drones in an effort to pressure Moscow's finances. This campaign, accompanied by sanctions, has yet to collapse Russia financially.

Attacks on Russia's oil/gas infrastructure jumped to a record last month as the Trump administration rushes to end the four-year war.

With U.S. special envoy Steve Witkoff coming off negotiations with Ukrainian officials this past weekend in Miami and now in Moscow to meet Russian President Vladimir Putin about a possible peace deal, it appears Ukraine is making one final push to inflict maximum damage on Moscow.

Tyler Durden Tue, 12/02/2025 - 06:55

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