by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment today opens with news that key oil-producing countries have agreed to stop boosting output as the risk of a global glut becomes more evident. We next review several other international and US developments that could affect the financial markets today, including news that China will again allow the export of some Nexperia computer chips to avoid the risk of major disruptions to world auto production, while President Trump has said that China has promised not to attack Taiwan as long as he’s president.

Global Oil Market: The Organization of the Petroleum Exporting Countries and its Russia-led allies said they will hike oil production by another 137,000 barrels per day on December 1. However, they said they would then hold output steady to address the risk of an oil glut as global economic activity is set to slow in 2026. The announcement apparently aims mostly to keep oil prices from falling much further. However, we see no indication that the announcement will boost oil output and spur even greater OPEC+ output in the coming months.

China-Netherlands: The Chinese Ministry of Commerce on Saturday said it may exempt some Nexperia orders from an export ban that it imposed after the Netherlands seized control of the Chinese-owned Dutch chipmaker in October. In particular, global automakers were facing the prospect of having to shut down production due to a lack of Nexperia’s legacy semiconductors. China’s move to exempt at least some exports is evidently part of the framework of the US-China trade deal announced last week. News of the exemption should help buoy global stock prices today.

United States-China-Taiwan: In an interview over the weekend, President Trump said General Secretary Xi and other Chinese officials have assured members of the US administration that China will take no action to seize control of Taiwan as long as Trump is president, ostensibly “because they know the consequences.” It’s not clear if the Chinese have offered a formal commitment regarding Taiwan, but to the extent that they have, it would likely reduce the risk of a disruptive US-China military clash and be supportive of both countries’ stock markets.

China: New data shows the third-quarter earnings of China’s mainland-listed companies were up 11.6% from the same period one year earlier, accelerating from annual gains of just 1.2% in the second quarter and 3.2% in the first quarter. The figures suggest the government is having some success with its policies to rein in excess capacity and fierce price competition while also pumping up corporate and consumer stimulus. The recovery in profit growth is probably a key reason why Chinese stocks continue to appreciate strongly.

Japan-South Korea: Underscoring the positive comments from Japan’s newly installed Prime Minister Sanae Takaichi after meeting South Korea’s leader last week, South Korean President Lee Jae Myung on Saturday said he also “had a very good feeling [about Takaichi]. All my worries vanished.” The mutually laudatory remarks from Takaichi and Lee suggest that Japanese-Korean relations remain on track and are unlikely to be disrupted in a way that would weigh on either country’s economy or stock market.

United States-Nigeria: President Trump on Saturday said he has ordered the Pentagon to prepare for a possible US military intervention in Nigeria to protect its Christians from ongoing attacks by the country’s Islamist militants.

• US attacks on the militants don’t appear to be imminent, but the rhetoric may unsettle many isolationists in the president’s political coalition because it would likely remind them of the US’s long wars in Iraq and Afghanistan.
• The statement might be especially unsettling after the US’s recent participation in Israel’s attack on Iranian nuclear sites.

US Dollar: According to the Financial Times, officials at the White House, the Treasury Department, and other federal agencies are looking for ways to encourage more foreign countries to use the dollar as their main currency. The effort reportedly aims to push back against China’s effort to undermine the dollar and boost usage of the renminbi.

• Nevertheless, we see no evidence that any major economy is considering a shift to using the dollar, so the effort seems unlikely to change the greenback’s developing bear market.
• Since foreign stocks typically outperform US stocks when the dollar is weak or depreciating; any continued trend in that direction is likely to be positive for foreign stock returns versus US stock returns.

Czech Republic: After winning the most votes in last month’s elections, but not a majority, the ANO party of Eurosceptic billionaire Andrej Babiš today will sign a coalition deal with two far-right parties, allowing Babiš to become prime minister. The inclusion of the far-right parties will likely make the Czech Republic another source of irritation and policy resistance for European Union leaders in Brussels. For example, the country will now be more likely to resist aid to Ukraine, greater EU integration, and rule-of-law mandates from Brussels.

Note: Due to the federal government shutdown, we were unable to update the Business Cycle Report this month. The report will return as soon as we are able to once again access government data.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment begins with an examination of the US push for a digital free-trade economy. We then assess the ongoing government shutdown and its implications. Further coverage includes the Senate’s movement on tariff-repeal bills, the role of corporate earnings in bolstering tech sector sentiment, and the EU’s development of a new trade strategy to counter China. We also include our regular summary of critical international and domestic data releases.

US Digital Service Economy: The White House is aiming to preserve the US global trade surplus in services by championing tariff-free digital commerce. This move signifies a broader strategic shift as the US redefines its economic dominance by emphasizing global technology access over traditional consumer market access. Such tailored policy making demonstrates a clear alignment with the interests of Silicon Valley, granting those companies a significant political and economic advantage on the world stage.

• To implement this strategy, the administration has leveraged tariffs on goods to dissuade foreign governments from imposing barriers on US tech companies. The plan has already seen some success. The White House has secured commitments from nations like Malaysia, Cambodia, and Thailand that they will not impose restrictions, while also convincing major partners, including the EU, Britain, and Canada, to openly discuss loosening their digital services regulations.
• While tariff-free digital services encompass a wide range of commerce — including social media, streaming, and cloud platforms — this policy is also critical to the US ambition for global dominance in AI. As detailed in our Bi-Weekly Geopolitical Report, “The Great AI Race,” the United States is actively trying to construct a technological ecosystem where it sits at the center of the AI supply chain, ensuring that both the core technology and supporting equipment are manufactured domestically.

• The growing partnership between the White House and Silicon Valley marks a significant strategic shift in US economic policy. By leveraging tariffs on goods to push for deregulation in foreign markets, this alliance aims to secure crucial market access and vital resources for American tech giants. However, this support comes at a clear cost: companies must align their business plans with Washington’s policy initiatives.
• In the near term, this alignment should accelerate the expansion of US tech firms and boost returns. However, we project that long-term profitability may be hampered by the political friction this partnership generates. Furthermore, we anticipate other nations will resist this trend to protect and bolster their own domestic industries, reducing their reliance on the US. This resistance could, in turn, spur increased investment into their own local tech champions.

Government Shutdown: Friction is escalating within both political parties as the government shutdown extends into its fifth week, with neither side showing an immediate willingness to concede on key demands. November is shaping up as a critical inflection point as millions of vulnerable households reliant on SNAP (food stamp) benefits may begin to see those funds dry up. Furthermore, the expiration of federal funding risks a significant spike in Affordable Care Act health insurance premiums if existing COVID-era subsidies are not renewed before the deadline.

• The Democratic caucus is under increasing strain to approve a clean government funding bill proposed by Republicans. This mounting pressure is driven by key labor leaders, particularly those representing airline industry workers and government workers, whose constituents are missing paychecks. The situation is further complicated by Senators such as Jon Ossoff (D-GA) and John Fetterman (D-PA), who face competitive re-election battles and are viewed as possible defectors seeking a quick end to the political standoff.
• Simultaneously, Republicans are beginning to question their party’s strategy for resolving the impasse. They are now debating whether to allow SNAP benefits to lapse — a move that would sever a key source of funding for vulnerable households. Furthermore, there is growing concern that the prolonged shutdown will complicate efforts to pass other critical legislation.
• The White House has so far adopted a nuanced strategy during the shutdown. While the president has expressed a willingness to work with Democrats on modifying the Affordable Care Act to better serve working families, he has simultaneously urged Republicans to pursue the “nuclear option” of eliminating the legislative filibuster, which requires 60 votes for most bills to pass.
• The shutdown is not expected to severely impact near-term economic activity, but the financial toll increases daily. Our main concern is the effect on consumer sentiment, which is already low. Consequently, a prolonged shutdown could quickly reduce household spending, especially among low-income earners sensitive to financial uncertainty and payment delays.

Senate Tariff Challenges: The Senate passed bipartisan legislation to repeal the president’s use of sweeping global tariffs imposed on US allies. Although the bill is unlikely to be taken up in the House or survive a presidential veto, it represents a growing, cross-party resistance to the executive’s trade restrictions. This political maneuver is unfolding as the White House anticipates a Supreme Court hearing that will rule on the constitutional limits of the president’s authority to unilaterally impose tariffs without congressional approval.

Tech Sentiment Strong: Tech sector sentiment received a necessary boost following strong outlooks from Amazon and Apple. Amazon Web Services (AWS) beat cloud revenue estimates, while Apple, despite a current revenue dip due to soft China sales, announced expectations for its best-ever December quarter revenue. Given the ongoing market headwinds and policy uncertainty, we maintain our view that corporate earnings remain the single most critical factor for judging the sustainability of the current market rally.

EU Trade Strategy: To address Chinese import dumping, the European Union is devising a novel toolkit that moves beyond traditional tariffs. Key proposals include “in-kind” tariffs that require Chinese exporters to directly supply the EU’s strategic reserves of critical raw materials or mirroring China’s own tactics by restricting exports of key goods. This delicate balancing act highlights the EU’s primary objective to reform China’s unfair trade practices without jeopardizing the very mineral resources essential to its own green and digital transitions.

More Oil: Exxon and Chevron surpassed market earnings expectations as new oilfield acquisitions boosted their crude output. This production increase comes amid signs of a supply glut, driven by the OPEC+ alliance flooding the market to retain market share. The situation suggests that oil prices may face downward pressure as major players compete for dominance in an increasingly competitive global market.

Note: Due to the federal government shutdown, we were unable to update the Business Cycle Report this month. The report will return as soon as we are able to once again access government data.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment begins with our key takeaways from the October 28-29 FOMC meeting. We then assess concerns over elevated tech spending and explain why it is unlikely to derail near-term sector momentum. Additional analysis covers the newly agreed US-China trade truce and the implications of stronger-than-expected economic growth in Europe. We conclude with our regular summary of critical international and domestic data releases.

Fed Division: The FOMC’s widely anticipated 25 basis point rate cut at its October meeting laid bare a deepening rift on the committee. The vote revealed a sharp division, with dissents coming from both sides of the debate. Kansas City Fed President Jeff Schmid argued for no cut at all, while Governor Stephen Miran championed a deeper 50-point reduction. This rare public split underscores the central bank’s fundamental challenge of navigating the conflicting demands of its dual mandate to foster both maximum employment and price stability.

• The division was further reinforced at the press conference when Fed Chair Jerome Powell bluntly stated that a December rate cut was not a “foregone conclusion.” This clear, direct remark — a contrast to his usual guardedness and hedged approach regarding policy — suggested he intended to aggressively rein in market expectations as Fed officials themselves still grapple with the proper direction for monetary policy.
• Investor sentiment shifted decisively following the Fed’s announcement as the S&P 500 relinquished its advances and the dollar strengthened. This market move was a direct response to the hawkish undertones of the rate cut, underscored by internal dissent and Chair Powell’s uncharacteristically blunt communication, which together signaled a potential extended pause in the easing cycle.
• Adding significant risk to the policy outlook, the government shutdown is effectively blinding the Federal Reserve, undermining its commitment to being data dependent. The halt to official statistical releases means the central bank must now operate without its most reliable economic indicators. Though Fed officials are referencing private and survey data, these sources are demonstrably less robust and statistically noisier than timely government reports.
• That said, Wednesday’s market decline likely reflects growing conviction that the Fed will not cut rates in December. This shift is clear in the CME FedWatch Tool, which now shows a 70% probability of rates holding steady through year-end, up sharply from 30% just a week ago. Should these rate expectations reverse, it would likely boost equity prices broadly, with particularly significant gains for interest-rate-sensitive sectors.

Big Tech Tests Investors: While this year has seen a surge in AI-related capital expenditures, firms expect this high level of spending to continue into next year. The trend is driven by continued heavy investment in data centers and infrastructure from tech giants like Meta, Microsoft, and Alphabet. Although these companies maintain that the spending is necessary to meet rising demand, there are growing concerns that it could be fueling a market bubble.

• Investor anxiety over soaring capital outlays sparked an immediate pre-market retreat in tech stocks. The trigger seemed to be the staggering scale of AI-related investment: Alphabet, Meta, and Microsoft collectively poured $78 billion into capital expenditures last quarter, an 89% jump from a year earlier. Meta’s guidance for “notably higher” spending further fueled bubble concerns, especially since it is not a major cloud provider serving external clients, making its investments appear riskier.

• That said, drawing a comparison to the tech bubble of the1990s may be premature, given fundamental differences in corporate health. Crucially, the major companies driving the current AI boom — unlike their dot-com predecessors — possess verifiable profits, diversified revenue streams, and massive cash reserves. This robust financial foundation provides a strong buffer against any sharp market downturn, lending momentum and stability to these stocks, at least over the immediate horizon.

US-China Trade Deal: The US and China have agreed to a one-year trade truce, though it falls short of the comprehensive deal many anticipated. The agreement includes a suspension of new trade and investment restrictions. Key concessions included the US agreeing to reduce fentanyl tariffs to 10% and lift certain corporate restrictions, while China committed to resuming soybean purchases and rare earths exports. While this alleviates immediate pressure, it sets the stage for potential renewed tensions next year.

• Although this falls short of the comprehensive deal that markets were anticipating, it serves as a strategic pause. This interim period will likely be used by the US to accelerate the diversification of its critical mineral supply chains away from China, and by Beijing to advance its campaign for technological self-reliance, particularly in chips.
• The truce is likely to sustain equity market support, as it alleviates supply chain strains and safeguards the resilient earnings trajectory seen in recent quarters. However, the underlying uncertainty in US-China trade relations is expected to re-emerge as a major investor concern in 2026.

 Eurozone Resiliency: Third-quarter GDP for the eurozone came in stronger than forecast, growing by 0.2% against a 0.1% consensus. The outperformance was largely due to a surprisingly strong 0.5% expansion in France — its fastest pace since 2023 — which more than offset a stagnation in Germany. France’s resilience amid political uncertainty is likely to bolster investor confidence, supporting the view that the region’s strong equity performance can continue.

Centrist Win in Netherlands: The centrist-liberal D66 party is projected to win the most seats in the Netherlands, narrowly defeating the far-right Freedom Party. This outcome represents a rare setback for right-wing populists in Europe, a movement that has largely gained popularity in recent years. While some speculate this result could inspire similar shifts across Europe, we believe the Dutch vote reflects a deeper trend of rising income inequality eroding loyalty to any specific parties, creating a more volatile political landscape.

Nuclear Testing: The White House has announced plans to resume nuclear weapons testing, a move aimed at modernizing US defenses and countering advancements by strategic competitors China and Russia. This decision follows the recent authorization for South Korea to build nuclear submarines and reflects a broader pivot in the administration’s foreign policy. Despite a stated agenda of conflict resolution, President Trump is simultaneously adopting a more hawkish stance to address rising global tensions.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment begins with our analysis of why the Federal Reserve’s balance sheet may now be more critical than its rate decision. We then examine the surge in tech deals as a potential signal of a longer-term trend. Additional topics will include the growing corporate focus on efficiency-driven earnings, progress in US-China trade talks, and a possible setback in the Israel-Gaza truce. We also provide a summary of key international and domestic data releases.

Fed Meeting Primer: While rate cuts have dominated headlines, the market’s focus appears to be shifting to the Fed’s quantitative tightening. A severe liquidity crunch is underway, fueled by a perfect storm of factors: interbank rates breaching the Fed’s target, the Treasury’s rapid refilling of its General Account, and the depletion of the reverse repo facility (RRP). This aggressive drain on system-wide cash is driving up funding costs and threatens to become the primary headwind, structurally undermining the supportive liquidity environment that has powered the recent equity rally.

• The Fed’s signal to conclude quantitative tightening (QT) aligns with its goal of preempting liquidity stress. A key preparatory dynamic has been the drawdown of the RRP. As the Fed’s overnight repurchase agreement rate became less attractive, investors were incentivized to deploy cash into higher-yielding private markets. This process naturally drains liquidity from the RRP and, by doing so, helps the Fed identify the true, underlying level of demand for bank reserves within the system.

• Furthermore, the Fed had already begun to slow the pace of its balance sheet reduction in April. This deliberate slowdown is intended to extend the tightening cycle, allowing reserves to gradually decline from “abundant” to “ample” levels. The central bank’s objective is to execute this transition smoothly to avoid the kind of market disruptions that characterized the September 2019 repo crisis.
• Foreshadowing the current market stress, Fed Chair Jerome Powell had already signaled earlier this month that the central bank was looking to end its quantitative tightening program, which is likely to reduce much of the funding stress and could potentially pave the way for more rate cuts.
• It’s important to note that even with the tightening of liquidity, market stability has held up comparatively well. This resilience is a result of the Fed’s creation of robust liquidity backstops, encouraging banks to increase reliance on the standing repo facility (SRF) and, to a lesser extent, the discount window for immediate funding. As long as there is no abrupt loss of confidence triggering systemic bank runs, we expect the market impact to remain manageable.

Tech Boost: The AI merger and partnership trend continues to affirm the tech rally’s staying power in the equity market. The most notable deal on Monday was OpenAI’s restructuring, which granted Microsoft a 24% stake in the company. This move will make the company more attractive to investors as it shifts to a for-profit entity. Additionally, Nvidia announced a 2.9% equity stake in Nokia, a deal valued near $1 billion. Recent high-profile deals underscore a new era of resource consolidation and strategic alignment across the tech industry.

• These strategic investments have become critical for tech firms aiming to accelerate growth and secure essential resources. They are primarily driven by the need to quickly improve operational synergies and gain rapid access to proprietary technology and specialized talent.
• Through its strategic partnership with OpenAI, Microsoft has secured a pathway to advancements in artificial general intelligence (AGI) — a transformative step beyond current AI. In a similar vein, NVIDIA’s collaboration with Nokia positions it at the forefront of next-generation wireless technology by involving it in the development of 6G cellular services.
• This flurry of activity is driven by the White House’s agenda to spur AI-driven reindustrialization and build a robust US industrial ecosystem. While this initiative fosters unprecedented collaboration, the inherent structure of the AI sector means it simultaneously risks accelerating market concentration, likely cementing the dominance of a few key technology giants.
• We believe tech stocks maintain significant momentum, a trend likely to persist through 2026. Deal-making is expected to shift into higher gear, fueled by tax incentives such as the interest rate deduction provision from the landmark bill passed in July. Although concerns of an AI bubble are valid, we see little evidence suggesting it will burst in the near term.

Jobs and Earnings: The trend of corporate workforce reduction continues as executives prioritize profitability. This week, UPS beat earnings forecasts, crediting its recent layoffs for boosting margins, while Amazon announced further job cuts to drive efficiency through restructuring and AI. These moves confirm our thesis that in an era of sustained pressure from tariffs and rising costs, aggressive headcount reduction has become a primary corporate strategy for stabilizing and growing earnings.

US Al Alliance: The United States and South Korea are expected to finalize an agreement to strengthen their collaboration in key technologies, including artificial intelligence, quantum computing, and 6G. The deal will establish aligned export controls and reduce regulatory burdens for tech companies. This move reinforces our view that the US is seeking to supplement traditional trade relationships with strategic technology alliances as a primary means of maintaining its global leadership.

US-China Trade: In a sign of easing tensions between Washington and Beijing, China has purchased its first cargoes of soybeans this year, indicating a potential recovery in bilateral trade flows. This move follows President Trump’s announcement that he would allow China to have access to Nvidia’s advanced Blackwell chips. These developments reinforce our view that the two sides are moving toward a broader “grand bargain” agreement, a prospect that is likely to provide crucial support to the market.

Canada Looks for Friends: Canadian Prime Minister Mark Carney is following through on his promise to reduce Canada’s economic dependency on the United States by strengthening ties with Asia. During the ASEAN conference in Malaysia, he pursued a free trade agreement between Canada and the 11-nation bloc. This push comes as Canada faces mounting job losses resulting from a trade dispute with the US, which imposed 10% tariffs after the province of Ontario released an anti-tariff advertisement in American markets.

Israel and Gaza: The ceasefire between Israel and Hamas has been severely tested in recent days. On Tuesday, Israeli Prime Minister Netanyahu ordered strikes on Gaza, accusing Hamas of violating the agreement by attacking Israeli soldiers. Although tensions have since cooled, significant concerns remain that the truce may collapse. A renewed escalation in the region could exert upward pressure on global oil prices.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment today opens with a few notes on the recent pullback in global gold prices. We next review several other international and US developments with the potential to affect the financial markets today, including two new deals in the red-hot areas of artificial intelligence and nuclear energy and another high-profile expression of concern that bad loans in the private-credit industry could lead to wider financial problems.

Global Gold Market: As of this writing, gold prices have fallen decisively below the psychologically important $4,000-per-ounce mark for the first time since spiking above that level in early October. As we have warned previously, signs of a thaw in US-China relations have probably taken some safe-haven bid out of the yellow metal, at least temporarily. We remain bullish on gold over the longer term, but a short-term pullback would not be unusual. We see gold’s next significant support levels at about $3,730 and $3,640.

(Source: Yahoo Finance)

US Artificial Intelligence Industry: Renewable energy giant NextEra and Google have struck a deal under which NextEra will restart a 615-megawatt nuclear generating station in Iowa to sell Google electricity over the coming 25 years, mostly for its artificial-intelligence data centers. The nuclear plant, known as the Duane Arnold Energy Center, has been shuttered for the last five years; a reopening is expected to cost about $1.6 billion

• The deal is the latest in a string of such agreements designed to feed the enormous power needs of the AI industry.
• The deals involving nuclear plants are helping foster renewed interest in the technology, which in turn is helping foster strong demand for uranium and boosting the stock prices of uranium miners.

US Nuclear Energy Industry: In another, broader nuclear deal, reports today say the US government and Cameco, the owner of reactor builder Westinghouse, have struck a deal under which the US will provide $80 billion to Westinghouse for land purchases, permitting, and business development costs associated with building about eight modular reactors, a mix of large and small. The $80 billion would be part of the funds Tokyo agreed to invest in the US under its recent trade deal with Washington.

• Consistent with other recent deals, the federal government would get a 20% share of Westinghouse’s profits from the reactors once it has distributed $17.5 billion to its current owners. The US government can also require Westinghouse to go public if its value exceeds $30 billion by 2029 and then convert its profit share into a 20% equity stake in the company.
• Those features will likely keep alive concerns regarding government ownership of productive facilities and possible interference in the operations of private companies.

US Financial Industry: The chief financial officer of banking giant HSBC has issued another high-profile warning about financial risks in the burgeoning private-credit industry. The official stressed that HSBC has very little direct exposure to private-credit firms that may be facing soured loans, but he warned that second- and third-order risks could be important. His comments echo those of JPMorgan CEO Jamie Dimon, who recently warned that the few “cockroaches” seen so far probably point to a broader infestation.

US Monetary Policy: Today, the Fed’s policy committee starts its latest two-day meeting, with its decision due on Wednesday at 2:00 PM ET. Based on interest-rate futures prices, investors widely expect the policymakers to cut their benchmark fed funds rate by 25 basis points to a range of 3.75% to 4.00%. In the policy statement and Chair Powell’s news conference, investors will look for confirmation that the officials will keep cutting rates in the coming months, as we expect.

• Chair Powell also may announce that the Fed will stop shrinking its bond holdings earlier than the year-end date he has suggested previously.
• Investors have recently begun to call for a quicker end to “quantitative tightening” after bank usage of the Fed’s standby repo facility spiked to its highest level since the coronavirus pandemic, pointing to growing funding stress in the financial system.

United States-Japan: President Trump today hosted Japan’s newly installed Prime Minister Sanae Takaichi aboard the US aircraft carrier George Washington at its home port near Tokyo. Importantly, Trump heaped praise on the US-Japan alliance and on the conservative Takaichi, who has vowed to boost cooperation with the US and accelerate Japan’s defense spending hikes. Takaichi still wants to revisit the recent US-Japan trade deal, but today’s good vibes nevertheless are probably playing into investors’ growing sense of reduced geopolitical and trade tensions.

United States-Russia: In a sign that Russia’s top two energy companies are concerned about the Trump administration’s new sanctions on them, Lukoil yesterday said it will sell all its foreign business units as soon as possible. The sale would use a license granted by the US that expires on November 21. Press reports say that Lukoil’s foreign subsidiaries account for approximately 5% of the firm’s earnings before interest, taxes, depreciation, and amortization.

Jamaica: Hurricane Melissa, which spent much of the last week plodding through the Caribbean Sea as a mere tropical storm, has suddenly strengthened to a Category 5 powerhouse and is now bearing down on Jamaica today. The hurricane is expected to cause widespread flooding, intense winds, and significant damage. After striking Jamaica, the storm is expected to hit Cuba and the Bahamas before heading out into the open Atlantic Ocean. It is not expected to affect the US.

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