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  • Kyiv calls for air defenses as Putin brings his Syria tactics to Ukraine

    Kyiv calls for air defenses as Putin brings his Syria tactics to Ukraine

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    Russian President Vladimir Putin turned back to his bloody, destructive playbook from Syria with a barrage of rocket attacks against civilian targets across Ukraine on Monday, ramping up pressure on Western allies to supply Kyiv with the air defenses it has long sought.

    Monday’s rush-hour bombardment on the streets of Kyiv, Lviv, Dnipro, Zaporizhzhia and other regions came as little surprise, given that Putin had already signaled his willingness to switch to ever more brutal tactics by appointing Sergey Surovikin, the general who oversaw Russian forces in Syria on-and-off from 2017 to 2020, as commander of his struggling war effort in Ukraine.

    In a speech at an emergency meeting of his National Security Council on Monday, Putin claimed the strikes came in response to this weekend’s attack on the Kerch Bridge linking illegally occupied Crimea to Russia. Putin said Russia had deployed “high-precision, long-range weapons from the air, sea and land” to deliver “massive attacks on targets of Ukraine’s energy, military command and communications facilities.” He added that Russia would continue to dole out retribution if Ukraine continued to strike so-called “Russian” territory.

    Ukraine’s defense ministry said 75 missiles were launched, 41 of which were shot down.

    Moscow’s claims to precision attacks on strategic targets seemed to mask the fact that the aim was clearly to kill civilians, as the missiles struck the Shevchenkivskyi district in the heart of Kyiv during peak morning traffic. Pictures and footage taken by reporters and from security cameras show cars on fire; a crater beside a children’s playground in the Shevchenko Park and a pedestrian bridge destroyed.

    Ukrainian President Volodymyr Zelenskyy said on Telegram that Russia appeared to have two targets in its assault: energy facilities throughout the country — and Ukrainians going about their daily lives.

    “They want panic and chaos,” Zelenskyy said, in a video that appeared to have been shot on his cell phone on the streets of Kyiv. Monday’s attacks came at a time “especially chosen to cause as much damage as possible … Why such strikes exactly? The enemy wants us to be afraid, wants to make people run. But we can only run forward — and we demonstrate this on the battlefield. It will continue to be so.”

    Zelenskyy also renewed his appeals to the West to provide Ukraine with additional air defenses. Kyiv has been seeking this additional firepower for weeks, arguing that Russia is likely to try to knock out Ukraine’s energy and industrial infrastructure over the winter, and it has been disappointed by the slow response.

    In tweets, Zelenskyy said he had spoken with German Chancellor Olaf Scholz and his French counterpart Emmanuel Macron in the wake of the strikes on the capital and other cities. With Macron, Zelenskyy said: “We discussed the strengthening of our air defense, the need for a tough European and international reaction, as well as increased pressure on the Russian Federation.”

    Those discussions on air defense batteries are now likely to loom large at the U.S.-led Ukraine Defense Contact Group — also known as the Ramstein format — where senior defense officials from across the globe will gather in Brussels later this week.

    Ukraine’s Defense Minister Oleksii Reznikov said on Monday: “The best response to Russian missile terror is the supply of anti-aircraft and anti-missile systems to Ukraine — protect the sky over Ukraine! This will protect our cities and our people. This will protect the future of Europe. Evil must be punished.”

    The butcher of Syria takes over

    Surovikin was only announced as the new Russian commander for Ukraine on Saturday.

    The 55-year-old general, who before his promotion had been charged with leading Russia’s Southern Military District and Russian troops in Syria, has long been an infamous figure with a reputation for being ruthless.

    He was linked to the violent suppression of the anti-Soviet 1990 Dushanbe riots in Tajikistan, and was reportedly imprisoned (before being freed without charge) after soldiers under his command killed three protesters in Moscow during the failed coup against then Soviet President Mikhail Gorbachev in August 1991. In 1995, Surovikin received a suspended sentence (which was later overturned) for participating in the illegal arms trade. Surovikin also played a role in Russia’s second Chechen war, commanding the 42nd Guards Motorized Rifle Division.

    But Surovikin is best known — and most feared — for his command of Russian forces in Syria, where Moscow intervened to prop up Bashar al-Assad’s regime. Human Rights Watch, a non-governmental organization, listed Surovikin as one of the commanders “who may bear command responsibility” for human rights violations during the 2019-2020 offensive in Syria’s Idlib province, when Syrian and Russian forces launched dozens of air and ground attacks on civilian targets and infrastructure, striking homes, schools, health care facilities and markets.

    It was not the first time Russian forces were accused of war crimes in Syria. The Kremlin’s troops, working with Syrians, undertook a month-long bombing campaign of opposition-controlled territory in Aleppo in 2016, killing hundreds of civilians, including 90 children, with indiscriminate airstrikes, cluster munitions and incendiary weapons hitting civilian targets including medical facilities.

    Now, with Russian forces on the back foot in Ukraine and Putin’s full-throated rhetoric out of step with the situation on the ground in his war, Surovikin appears to be turning to his old tactic of inflicting massive damage on civilians in an attempt to turn the tide of the war.

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    Zoya Sheftalovich

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  • Musk says Beijing doesn’t want him to sell Starlink in China

    Musk says Beijing doesn’t want him to sell Starlink in China

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    Elon Musk told the FT that Beijing doesn’t want him to sell his Starlink satellite internet service in China. In this picture, Musk speaks about Starlink at Mobile World Congress in June 2021.

    Nurphoto | Nurphoto | Getty Images

    BEIJING — Elon Musk told the Financial Times the Chinese government doesn’t want him to sell his Starlink satellite internet service in China.

    “Musk says Beijing has made clear its disapproval of his recent rollout of Starlink, SpaceX’s satellite communications system, in Ukraine to help the military circumvent Russia’s cut-off of the internet,” the newspaper said in its latest “Lunch with the FT” column published Friday.

    “He says Beijing sought assurances that he would not sell Starlink in China,” the article said.

    The FT did not say whether Musk agreed to Beijing’s request. The business leader, who is CEO of Tesla and SpaceX, did not immediately respond to a CNBC request for comment.

    Musk’s electric car giant Tesla relies on China for more than 20% of its revenue and has a large factory in Shanghai.

    In contrast to the U.S. and other countries’ condemnation of Russia’s invasion of Ukraine this year, China has refused to call the attack an invasion.

    China has in recent years put greater emphasis on building up its own technology, including in aerospace.

    Domestic telecom giants, such as China Mobile and Huawei, have helped China achieve one of the highest penetrations of 5G internet in the world.

    In addition, China completed its own satellite communications system, Beidou, in 2020. The system rivals the U.S. government-owned GPS, or Global Positioning System.

    The Chinese Ministry of Commerce and Ministry of Industry and Information Technology did not immediately respond to a CNBC request for comment.

    The FT said Musk expects Tesla would be caught up in “inevitable” conflict over Taiwan, but will still be able to deliver to customers in China.

    Read more about China from CNBC Pro

    Beijing considers the democratically self-ruled island part of its territory and has repeatedly stated its aim for peaceful reunification.

    Musk said his recommendation “would be to figure out a special administrative zone for Taiwan that is reasonably palatable, probably won’t make everyone happy,” the FT reported.

    Asked to respond to Musk’s Taiwan recommendation, a spokesperson of the Ministry of Foreign Affairs in China said: “We remain committed to the basic principle of peaceful reunification and One Country, Two Systems and aim to work with the greatest sincerity and effort to achieve peaceful reunification”

    “At the same time, we will resolutely defeat attempts to pursue the ‘Taiwan independence’ separatist agenda, push back interference by external forces, and safeguard our sovereignty and territorial integrity,” the spokesperson said Saturday at a regular press briefing.

    Qin Gang, China’s ambassador to the U.S., thanked Musk for the idea in a tweet.

    Read the full FT interview here.

    — CNBC’s Arjun Kharpal contributed to this report.

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  • Allianz Chief Economic Adviser El-Erian believes core inflation ‘is still going up’

    Allianz Chief Economic Adviser El-Erian believes core inflation ‘is still going up’

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    Ahead of the release of the latest consumer price index reading this week, Allianz Chief Economic Adviser Mohamed El-Erian told CBS’ “Face The Nation” Sunday that he predicts headline inflation “will probably come down to about 8%,” but that core inflation “is still going up.”

    Core inflation is what measures the drivers of inflation and how broad they are, so El-Erian said an increase in core inflation means “we still have an inflation issue.”

    Even if core inflation is still on the rise, however, El-Erian said it will eventually come down.

    “The question is, does it come down with a slowdown in the economy or a major recession?” he said on “Face the Nation.”

    The oil producer group OPEC+ announced its largest supply cut since 2020 on Wednesday, and El-Erian said this decision “does hurt the U.S.,” as it risks causing inflation to increase again. But he said the cut did not come as a surprise since the group is looking to protect oil prices in the face of declining demand.

    “That’s what they do,” he said. “But it’s certainly not good news for the U.S. economy.”

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  • OPEC output cut ‘unhelpful and unwise,’ US Treasury chief says

    OPEC output cut ‘unhelpful and unwise,’ US Treasury chief says

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    The oil cartel OPEC’s choice to pare back oil supply will harm the global economy and especially developing countries, U.S. Treasury Secretary Janet Yellen told the Financial Times in an interview published Sunday.

    “I think OPEC’s decision is unhelpful and unwise — it’s uncertain what impact it will end up having, but certainly, it’s something that, to me, did not seem appropriate, under the circumstances we face,” Yellen said, adding that “we’re very worried about developing countries and the problems they face.”

    The cartel of 13 oil-producing countries on Wednesday agreed to reduce production by 2 million barrels a day as of November, in the context of an already tight market and rising world inflation in part caused by high energy prices.

    OPEC’s move marks a victory for Russia against the EU and the U.S. — Russia’s a major oil producer and an OPEC+ country that cooperates with the cartel. Ever since Moscow’s invasion of Ukraine, the West has been imposing economic sanctions against Russia, including on its oil sector, and encouraging other countries around the world to follow suit. Despite this effort, Moscow continues to sell its oil to countries like India, China and Turkey.

    OPEC took the decision despite a flurry of trips by EU and U.S. leaders to Saudi Arabia in recent weeks to try to convince the country’s crown prince and new Prime Minister Mohammed bin Salman to ramp up oil production to fight inflation.

    The world oil price already started to rise after the announcement on Wednesday, moving from around $86 to over $93 per barrel.

    Meanwhile, Moscow congratulated “the truly balanced, thoughtful and planned work” of OPEC countries which served to “oppose the actions of the United States,” Kremlin spokesperson Dmitry Peskov said in a TV interview broadcasted on Sunday.

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    Sarah Anne Aarup

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  • Elon Musk’s Private Messages with Billionaire Pals

    Elon Musk’s Private Messages with Billionaire Pals

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    In Musk v. Twitter, a part of the business life of the richest man in the world is revealed. 

    Private messages exchanged with his inner circle immerse us into his process when he conceives an idea.

    The messages were released by the Delaware Chancery Court as part of the proceedings between the two parties. 

    The revelation of these private messages is undoubtedly one of the reasons which led the billionaire to put back on the table his offer to acquire the platform for $44 billion. And to demand that Twitter  (TWTR)  drop its legal action in exchange.

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  • European countries face an air-conditioning Catch-22 after its red hot, record-breaking summer

    European countries face an air-conditioning Catch-22 after its red hot, record-breaking summer

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    Europe is facing a tough winter, as inflation and energy prices continue to rise. The continent also faces tough decisions following its scorching hot summer

    Heat waves in Europe broke records, sparked widespread wildfires and even damaged a busy runway at a London airport.

    Unlike the U.S., European countries don’t rely on air conditioning to cope with high temperatures. Fewer than 10% of households in Europe owned air conditioners as of 2016, according to the International Energy Agency.

    “If we were looking at the beginning of this summer, it was fairly quiet. We were getting typically 20 inquiries a day maybe for people interested in air conditioning,” said Richard Salmon, director of The Air Conditioning Co., which is based in central London.

    Demand for air conditioners spiked as temperatures crossed 100 degrees Fahrenheit in the United Kingdom.

    “I’ve been here for 15 years and I’ve never seen anything quite like it,” Salmon said.

    As countries around the globe rapidly adopt ways to cool their homes and businesses, it becomes more important to install cooling technology that doesn’t contribute to higher temperatures in the future via carbon emissions.

    “It is clear that if no effective mitigation strategies will be put in place on a global scale to cut emissions then this kind of summer and these kinds of events will become the new norm,” said Andrea Toreti, senior climate researcher at the European Commission, the executive body of the EU.

    Watch the video to learn more about why large parts of Europe don’t have air conditioning, how ACs contribute to climate change, and new kinds of efficient cooling technologies that can mitigate carbon emissions.

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  • Rocket builder Astra Space gets delisting warning from Nasdaq

    Rocket builder Astra Space gets delisting warning from Nasdaq

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    A close up look at Astra’s LV0008 rocket at LC-46 in Cape Canaveral, Florida.

    John Kraus / Astra

    Embattled small rocket-builder Astra revealed Friday that it received a delisting warning from the Nasdaq after its stock spent 30 consecutive days below $1 per share, a violation of the exchange’s requirements.

    The company has 180 days to lift its share price or face delisting, according to a regulatory filing.

    Astra stock closed Friday at 59 cents per share, down more than 90% this year and more than 95% off its 52-week high of $13.58. The company debuted on the Nasdaq in July 2021 via a merger with a special purpose acquisition company.

    Astra did not immediately return request for comment Friday on the delisting warning.

    The rocket builder has been saddled with quarterly losses and in August said it was pausing flights for the remainder of the year.

    “Whether we’ll be able to commence commercial launches in 2023 will depend on the success of our test flights” for a new rocket system, CEO Chris Kemp said during the company’s second-quarter conference call.

    Astra is also facing a Federal Aviation Administration investigation into a failed rocket launch in June that was carrying a pair of satellites for NASA’s TROPICS-1 mission. The company was unable to deliver the satellites to orbit, and NASA put the remaining two launches it had contracted from Astra on hold.

    — CNBC’s Michael Sheetz contributed to this report.

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  • Here’s why good jobs news is bad news for the Fed and the stock market

    Here’s why good jobs news is bad news for the Fed and the stock market

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    The good-news-is-bad-news theme was an overarching reason behind Friday's sharp sell-off in stocks and the sharp increase in bond yields.

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  • The shaky stock market is barreling towards key tests with bank earnings, inflation data on deck

    The shaky stock market is barreling towards key tests with bank earnings, inflation data on deck

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  • September job gains affirm that the Fed has a long way to go in inflation fight

    September job gains affirm that the Fed has a long way to go in inflation fight

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    The Go! Go! Curry restaurant has a sign in the window reading “We Are Hiring” in Cambridge, Massachusetts, July 8, 2022.

    Brian Snyder | Reuters

    September’s jobs report provided both assurance that the jobs market remains strong and that the Federal Reserve will have to do more to slow it down.

    The 263,000 gain in nonfarm payrolls was just below analyst expectations and the slowest monthly gain in nearly a year and a half.

    But a surprising drop in the unemployment rate and another boost in worker wages sent a clear message to markets that more giant interest rate hikes are on the way.

    “Low unemployment used to feel so good. Everybody who seems to want a job is getting a job,” said Ron Hetrick, senior economist at labor force data provider Lightcast. “But we’ve been getting into a situation where our low unemployment rate has absolutely been a significant driver of our inflation.”

    Indeed, average hourly earnings rose 5% on a year-over-year basis in September, down slightly from the 5.2% pace in August but still indicative of an economy where the cost of living is surging. Hourly earnings rose 0.3% on a monthly basis, the same as in August.

    No ‘green light’ for a Fed change

    Fed officials have pointed to a historically tight labor market as a byproduct of economic conditions that have pushed inflation readings to near the highest point since the early 1980s. A series of central bank rate increases has been aimed at reducing demand and thus loosening up a labor market where there are still 1.7 open jobs for every available worker.

    Friday’s nonfarm payrolls report only reinforced that the conditions behind inflation are persisting.

    To financial markets, that meant the near certainty that the Fed will approve a fourth consecutive 0.75 percentage point interest rate hike when it meets again in early November. This will be the last jobs report policymakers will see before the Nov. 1-2 Federal Open Market Committee meeting.

    “Anyone looking for a reprieve that might give the Fed the green light to start to telegraph a pivot didn’t get it from this report,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “Maybe the light got a little greener that they can step back from” two more 0.75 percentage point increases and only one more, Sonders said.

    In a speech Thursday, Fed Governor Christopher Waller sent up a preemptive flare that Friday’s report would do little to dissuade his view on inflation.

    “In my view, we haven’t yet made meaningful progress on inflation and until that progress is both meaningful and persistent, I support continued rate increases, along with ongoing reductions in the Fed’s balance sheet, to help restrain aggregate demand,” Waller said.

    Markets do, however, expect that November probably will be the last three-quarter point rate hike.

    Futures pricing Friday pointed to an 82% chance of a 0.75-point move in November, then a 0.5-point increase in December followed by another 0.25-point move in February that would take the fed funds rate to a range of 4.5%4.75%, according to CME Group data.

    What concerns investors more than anything now is whether the Fed can do all that without dragging the economy into a deep, prolonged recession.

    Pessimism on the Street

    September’s payroll gains brought some hope that the labor market could be strong enough to withstand monetary tightening matched only when former Fed Chairman Paul Volcker slew inflation in the early 1980s with a fund rate that topped out just above 19% in early 1981.

    “It could add to the story of that soft landing that for a while seemed fairly elusive,” said Jeffrey Roach, chief economist at LPL Financial. “That soft landing could still be in the cards if the Fed doesn’t break anything.”

    Investors, though, were concerned enough over the prospects of a “break” that they sent the Dow Jones Industrial Average down more than 500 points by noon Friday.

    Commentary around Wall Street centered on the uncertainty of the road ahead:

    • From KPMG senior economist Ken Kim: “Typically, in most other economic cycles, we’d be very happy with such a solid report, especially coming from the labor market side. But this just speaks volumes about the upside-down world that we’re in, because the strength of the unemployment report keeps the pressure on the Fed to continue with their rate increases going forward.”
    • Rick Rieder, BlackRock’s chief investment officer of global fixed income, joked about the Fed banning resume software in an effort to cool job hunters: “The Fed should throw another 75-bps rate hike into this mix at its next meeting … consequently pressing financial conditions tighter along the way … We wonder whether it will actually take banning resume software as a last-ditch effort to hit the target, but while that won’t happen, we wonder whether, and when, significant unemployment increases will happen as well.”
    • David Donabedian, CIO at CIBC Private Wealth: “We expect the pressure on the Fed to remain high, with continued monetary tightening well into 2023. The Fed is not done tightening the screws on the economy, creating persistent headwinds for the equity market.”
    • Ron Temple, head of U.S. equity at Lazard Asset Management: “While job growth is slowing, the US economy remains far too hot for the Fed to achieve its inflation target. The path to a soft landing keeps getting more challenging. If there are any doves left on the FOMC, today’s report might have further thinned their ranks.”

    The employment data left the third-quarter economic picture looking stronger.

    The Atlanta Fed’s GDPNow tracker put growth for the quarter at 2.9%, a reprieve after the economy saw consecutive negative readings in the first two quarters of the year, meeting the technical definition of recession.

    However, the Atlanta Fed’s wage tracker shows worker pay growing at a 6.9% annual pace through August, even faster than the Bureau of Labor Statistics numbers. The Fed tracker uses Census rather than BLS data to inform its calculations and is generally more closely followed by central bank policymakers.

    It all makes the inflation fight look ongoing, even with a slowdown in payroll growth.

    “There is an interpretation of today’s data as supporting a soft landing – job openings are falling and the unemployment rate is staying low,” wrote Citigroup economist Andrew Hollenhorst, “but we continue to see the most likely outcome as persistently strong wage and price inflation that the Fed will drive the economy into at least a mild recession to bring down inflation.”

    Job openings data suggest the economy and labor market are still growing, says Goldman's Hatzius

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  • $570 million worth of Binance’s BNB token stolen in another major crypto hack

    $570 million worth of Binance’s BNB token stolen in another major crypto hack

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    Binance is the world’s largest crypto exchange by trading volume.

    Jakub Porzycki | Nurphoto | Getty Images

    Cryptocurrency exchange Binance temporarily suspended its blockchain network late Thursday after hackers made off with around $570 million worth of its BNB token.

    Binance said a cross-chain bridge linking with its BNB Chain was targeted, enabling hackers to move BNB tokens off the network. So-called cross-chain bridges are tools that allow the transfer of tokens from one blockchain to another.

    The company said it had worked with transaction validators to pause creation of new blocks on BSC, suspending all transaction processing while a team of developers investigates the breach.

    Binance is the world’s largest crypto exchange by trading volume.

    “An exploit on a cross-chain bridge, BSC Token Hub, resulted in extra BNB. We have asked all validators to temporarily suspend BSC,” Changpeng Zhao, Binance’s CEO, said in a tweet Thursday evening.

    “The issue is contained now. Your funds are safe. We apologize for the inconvenience and will provide further updates accordingly.”

    BNB Chain has since resumed operations.

    In total, hackers drained 2 million BNB tokens — about $570 million at current prices — from the network, Binance’s BNB Chain said in a blog post on Friday.

    The exploit was enabled “through a sophisticated forging of the low level proof into one common library,” BNB Chain said.

    An earlier estimate from the company placed the total amount withdrawn in a range of $100 million to $110 million.

    The company said it managed to freeze $7 million of funds with the help of its security partners..

    The value of BNB sank more than 3% Friday morning to $285.36 a coin, according to CoinMarketCap data.

    BNB Chain, originally known as Binance Chain, was first developed by Binance in 2019. Like other blockchains, it features a native token, called BNB, that can be traded or used in games and other applications.

    It is the latest in a series of major hacks targeting cross-chain bridges, with instances of sloppy engineering making them a prime target for cybercriminals.

    A total of around $1.4 billion has been lost to breaches on cross-chain bridges since the start of 2022, according to data from blockchain analytics firm Chainalysis.

    The crypto industry has had a rough year, with roughly $2 trillion in value being erased since the peak of a blistering rally from 2020 to 2021. The implosion of $60 billion blockchain venture Terra and a worsening macroeconomic environment have severely impacted market sentiment.

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  • What Cramer is watching Thursday — OPEC+ surprise, Corona beer maker beat, Costco’s sales

    What Cramer is watching Thursday — OPEC+ surprise, Corona beer maker beat, Costco’s sales

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    OPEC+'s 2 million barrels-per-day oil production cut to boost prices. U.S. delivers an angry rebuke.

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  • Investors with a 60/40 portfolio may want to shift focus into fixed income now

    Investors with a 60/40 portfolio may want to shift focus into fixed income now

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  • Global crypto markets face tougher rules under G20 plan

    Global crypto markets face tougher rules under G20 plan

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    Crypto’s Wild West era may be coming to an end.

    According to the Financial Stability Board (FSB), a global financial standard-setter, most of the cryptocurrency market should be subject to the same tough rulebook that governs traditional finance.

    The FSB, which was born in the wake of the 2008 financial meltdown to stave off further shocks, will propose the plan to rein in crypto to finance ministers and central bankers from the Group of 20 industrialized countries gathering in Washington next week, the plan’s chief architect, Steven Maijoor, told POLITICO.

    “A lot of the activities in crypto assets and crypto assets markets resemble activities in the traditional financial system and therefore we take the approach: Same activity, same risk, same regulation,” Maijoor, who sits on the Dutch central bank’s governing board and oversees banking supervision, said in Prague in early September.

    The move is set to put major crypto trading platforms on red alert, coming as the U.S. Securities and Exchange Commission seeks to impose securities regulation on cryptocurrencies and as the EU prepares its own rules for digital markets.

    More broadly, the FSB’s work on digital assets is likely to act as a cold shower for crypto currencies that seek to expand their services without complying with regulations.

    Regulators fear the lack of investor safeguards could see volatility in cryptocurrency markets spilling over into the traditional finance sector, as banks and money managers venture into the market.

    Some $2 trillion of the market’s value has evaporated since its highs of November last year, triggering corporate collapses and exposing scams that left millions of crypto investors penniless. Risks within the crypto markets are still contained. But that could quickly change and threats could spill over to financial markets from various channels, according to the European Securities and Markets Authority.

    Maijoor will present G20 policymakers with draft recommendations that he’s been developing with a team of global regulators within the FSB since April with the view of securing financial stability as crypto goes mainstream. Countries around the world will need to decide whether new rules are needed for novel arrivals within the crypto market, such as digital wallets. The rest should be captured by new or existing financial rules.

    “This is not only related to securities,” said the 58-year-old, who used to lead the EU’s securities regulator before getting a job at De Nederlandsche Bank. “There are also already some crypto activities that are captured by anti-money laundering laws and regulations and we can observe that also, in that case, there is non-compliant behavior.”

    The example of companies skirting around dirty money safeguards is an easy one for the Dutchman to give. His central bank in late April fined the world’s biggest crypto exchange, Binance, €3 million for offering services to Dutch citizens without having cleared the required Dutch safeguards against dirty money — gaining a competitive advantage against its rivals. Binance objected to the fine in June.

    The Financial Stability Oversight Council, chaired by U.S. Treasury Secretary Janet Yellen, said the crypto industry needs to be brought to heel in several areas | Alex Wong/Getty Images

    Ministers and governors will also get updated recommendations on how to regulate global stablecoins, digital tokens that are tied to national currency or a reserve of financial products to keep their value steady. The stablecoin update is separate from the crypto recommendations and came in response to Facebook’s failed bid to introduce a virtual currency for some 2.9 billion social media users around the world.

    Maijoor’s work will be subject to consultation, so companies and countries will be able to suggest changes to what will become the global blueprint for supervising the market.

    Locking horns

    The recommendations could embolden U.S. banking and markets regulators, which are increasingly taking the position that digital asset trading platforms and brokerages should follow existing regulations.

    The Financial Stability Oversight Council, which is chaired by U.S. Treasury Secretary Janet Yellen and counts SEC Chair Gary Gensler and the heads of other federal agencies among its members, on Monday released a report that identified several areas where the crypto industry needs to be brought to heel. 

    “Crypto cannot exist outside of our public policy frameworks. That’s regardless of what [Bitcoin’s pseudonymous creator] Satoshi Nakamoto might have initially thought, or what market participants might say today,” Gensler said during Monday’s FSOC meeting. 

    Ripple and Coinbase, both major crypto exchanges that have locked horns with Gensler, will be hoping for a different outcome that involves new rules.

    Coinbase has argued that crypto assets are more akin to commodities and that the SEC classifying them as securities is like putting a straitjacket on how the market could develop, especially considering those rules were developed in the 1930s. The Commodity Futures Trading Commission would be a far better fit, according to the exchange.

    “I think it is reasonable to assume that none of the authors who drafted these securities statutes from the 1930s … did so while thinking of a day when a decentralized, cryptographically-based, automated financial instrument would be adopted en masse by millions of people in the United States and around the world,” Coinbase’s chief policy officer, Faryar Shirzad, wrote in a blog in July.

    Sam Sutton contributed reporting from New York.

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    Bjarke Smith-Meyer

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  • Liz Truss has U-turned. Will it be enough?

    Liz Truss has U-turned. Will it be enough?

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    BIRMINGHAM, England — So in the end, Liz Truss was for turning. But the damage to her faltering administration may already have been done.

    On Monday, Truss’ Chancellor Kwasi Kwarteng bowed to pressure from Conservative Party colleagues and dumped his flagship cut to the top rate of tax from 45p to 40p — a central component of last month’s so-called mini-budget.

    “We get it, and we have listened,” Kwarteng said as he announced the dramatic U-turn on Twitter.

    Later it emerged he will also bring forward an announcement on how the tax cuts will be funded, having initially insisted the public — and the markets — must wait until November 23.

    A parliamentary insurrection, which was rapidly gaining pace as MPs met for their annual party conference in Birmingham on Sunday, appears to have been quelled, for now.

    Asked if he would now support the mini-budget in parliament following the abandonment of its most controversial measure, rebel ringleader Michael Gove said: “Yeah I think so, on the basis of everything that I know. There were lots of good things that they announced … The debate over the 45p tax increase obscured that.”

    The market reaction was also mildly positive, with the bond and currency markets rallying somewhat following the announcement.

    But most MPs and delegates in Birmingham believe it will take significantly more than a single U-turn to rebuild the political and fiscal credibility of the fledgling Truss administration, with some MPs fearful a revival is already out of reach.

    “She started very poorly, and in my experience, what you see is what you get. People aren’t mysteriously really shit, and then become really good,” one senior Tory MP said. 

    Pissed-off

    While a Tory rebellion appears to have been averted for now, few MPs believe it will be the last Truss faces in the difficult weeks and months ahead.

    Even before Kwarteng’s now-infamous ‘fiscal event,’ Truss had plenty of detractors on Conservative benches. Only around a third of her own MPs backed her in the leadership contest, and after taking office she almost exclusively chose loyalists for her ministerial ranks. Those who backed her opponent Rishi Sunak were left out in the cold. 

    “Her party management has pissed people off,” the senior Tory MP quoted above said, with many of what they described as talented MPs questioning whether it was even worth backing the government in the long-term. 

    But while the “lightning rod” of the 45p tax rate had now been “neutralized,” according to one minister, backbenchers could soon find another hot topic and “push on that next.”

    Chancellor Kwasi Kwarteng | Ian Forsyth/Getty Images

    Two potential major flashpoints will be the new government’s approach to welfare payments, and funding public services. Ministers are currently undecided over whether to uprate benefits in line with inflation — as pledged by Boris Johnson’s administration — while also dropping heavy hints that cuts to the state are on their way. 

    The opposition Labour Party, now surging ahead in the polls, see political capital too in Truss’ stated plans to lift the cap on bankers’ bonuses and abandon a hike to corporation tax.

    “They’ve still got a totally unfunded £17 billion [corporation] tax giveaway for the wealthiest businesses at a time when people and businesses are struggling with the cost of living.” one Labour official said, in a taste of the messaging Tory MPs will likely be up against at the next election.

    Few Tory MPs are optimistic Truss can turn things around.

    “Politics works as a pendulum. If it swings towards the middle it’s possible to pull it back. But if it swings too far it can become irreversible,” the minister quoted above said.

    Writing for POLITICO, Boris Johnson’s former No. 10 comms chief Lee Cain said it was “unlikely” Truss’ reputation would ever recover.

    “It didn’t need to be this way,” he wrote. “Many of the unforced errors could have been avoided if the PM had understood how to talk to the audience that matters most — the electorate.:

    Benefit of the doubt

    But voters may yet be more forgiving than some of Truss’ critics in the party, according to pollsters and focus group experts keeping a close eye on public opinion.

    “We consistently find voters don’t mind a U-turn on an unpopular policy,” said Luke Tryl, director of the More in Common consultancy, which regularly hosts focus groups across the country.

    “In fact one of the things we found during the leadership contest was that people quite liked the fact that Liz Truss changed her mind, because they felt that’s what normal people do,” he said.

    But he cautioned that while voters don’t mind U-turns as one-offs, “a series of them starts to look chaotic and will worry voters about whether the government knows what it is doing to see the country through the turmoil.”  

    Fiscal credibility

    Crucially, reversing just £2 billion of the proposed £45 billion of unfunded tax cuts seems insufficient, in isolation, to restore trust in the U.K. economy and bring down spiraling interest rates.

    “When market trust has been shattered, as we saw last week, the uphill task of restoring credibility is extremely hard and even harder when strategies shift,” Charles Hepworth, investment director at GAM, said.

    “The market currently has little faith that the prime minister and chancellor can restore credibility in the short term, and this puts further renewed pressure on U.K. risk assets.”

    Neil Birrell, chief investment officer at Premier Miton Investors, agreed the U-turn would not solve the turmoil in financial markets.

    “High inflation and high interest rates are not going away quickly, and economic growth is under severe threat,” he said.

    “Markets still need to hear how the package will be funded,” added Iain Anderson, executive chairman at H/Advisers Cicero, who said the next fiscal statement planned for November 23 must be brought forward as a matter of urgency. 

    The first senior Tory MP quoted above lamented that the market turmoil following the mini-budget meant the Tory party would now “own interest rate rises — a lot of which were going to happen anyway.” 

    “I cannot remember in my life when any politician has recovered from such a savage self-inflicted wound,” Giles Wilkes, a senior fellow at the Institute for Government and partner at Flint Global, said. 

    “Gordon Brown recovered somewhat from the multiple slip-ups of 2007-08 with his commanding response to the global financial crisis, but even that wasn’t enough.”

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  • Jim Cramer says 3 things are preventing the market from having a sustained rally

    Jim Cramer says 3 things are preventing the market from having a sustained rally

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    CNBC’s Jim Cramer on Monday said that Monday’s rally won’t last because none of the headwinds to the economy have abated.

    Stocks rebounded on Monday after an ugly end to the month and quarter on Friday, notching the best day since June for the Dow Jones Industrial Average and the S&P 500′s best day since July.

    Cramer pointed out that the market has seen some sporadic one-day rallies recently, but they’ve always been felled by three things. Wednesday’s rally will likely face a similar fate, he added.

    Here are three things preventing the market from having a sustained rally, according to Cramer

    1. Russia’s invasion of Ukraine is ongoing. Cramer pointed out that the two countries are still at war, and that it’s looking likely that the energy crisis it’s fueling could have serious consequences during the winter months.
    2. China’s still under Covid lockdown. While tech stocks rallied on Monday, many of them are dependent on China, which is still beholden to Covid lockdowns with no end in sight.
    3. Inflation driven by work-from-home is still up. Wage, food and housing prices are still too high, Cramer said, adding that he doesn’t have high expectations for the release of the nonfarm labor report Friday.

    He also said that the market is still incredibly oversold.

    “The most impressive thing about today’s rally is that it happened at all. My feeling is that today’s bounce is all about sentiment getting too negative,” he said.

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  • Stocks making the biggest moves midday: Peloton, Tesla, Viasat, Wells Fargo, Box and more

    Stocks making the biggest moves midday: Peloton, Tesla, Viasat, Wells Fargo, Box and more

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    A Tesla electric vehicle at a supercharger station in Hawthorne, California, on Aug. 9, 2022.

    Patrick T. Fallon | AFP | Getty Images

    Check out the companies making the biggest moves midday Monday:

    Credit Suisse — Shares of Credit Suisse rose 1.7%, reversing an earlier slump that sent the stock to a record low, after the bank over the weekend made a series of calls to calm investor fears about its financial health. In addition, the cost to insure the bank’s debt against default jumped to a new high.

    Tesla — Tesla shares dropped 8.2% after the electric vehicle maker said it delivered 343,000 vehicles in the third quarter, less than analysts expected. However, Wall Street analysts were divided over the report.

    Peloton — Peloton shares rose more than 6% after the exercise-equipment company announced it will put bikes in all 5,400 Hilton-branded hotels in the U.S. Peloton is trying to engineer a turnaround and also said last week that its bikes, treadmills and other hardware would be sold in Dick’s Sporting Goods locations.

    Roblox — Shares of the gaming platform fell slightly after MoffettNathanson initiated coverage with an underperform rating. The Wall Street firm said it’s too soon to tell whether Roblox will ever meet its metaverse ambitions.

    Viasat — Viasat jumped 28% on Monday after striking a deal with L3Harris to sell its tactical data links business. The deal is for just under $2 billion, the companies announced. Viasat said it would use the cash to reduce its leverage and increase liquidity.

    Wells Fargo – Wells Fargo’s stock gained 3% after Goldman Sachs upgraded the bank to a buy rating from neutral and said investors are underappreciating its potential.

    Livent — The lithium company dropped about half a percent after Bank of America downgraded the stock to underperform from neutral, citing “limited upside.”

    DocuSign — DocuSign dropped slid 2.4% after being downgraded by Morgan Stanley to underweight from equal weight, citing pricing pressure.

    Myovant Sciences — The biopharmaceutical company jumped 36% after it rejected a bid by Sumitovant Biopharma, its largest shareholder, to buy the shares it doesn’t already own for $22.75 per share. Myovant, which said the offer significantly undervalues the company, said it is open to considering any improved proposal.

    Box — Box’s stock rallied 7% after Morgan Stanley boosted its price target, implying the cloud storage company could surge 39% from Friday’s close. The firm also upgraded the stock to overweight from equal weight, citing solid macro positioning, strong execution and a more favorable competitive landscape.

    Freshpet — Shares of Freshpet rose 7.6% after Barron’s reported the pet-food maker has hired bankers to explore a potential sale.

    LogicBio Therapeutics — Shares of the clinical-stage genetic company skyrocketed more than 644% after it announced it was being acquired by AstraZeneca for $2.07 per share. That price tag is a whopping 666% increase from LogicBio’s closing price of 27 cents per share.

    InterDigital — InterDigital’s stock rallied 16% after the research and development company raised its guidance for third-quarter 2022 total revenue a range of $112 million to $115 million, up from $96 million to $100 million.

    Fluor Corp. — Fluor rose more than 5% in midday trading. The company announced Monday it was awarded two reimbursable engineering, procurement and construction management contracts by BASF for work in China.

    Stanley Black & Decker — The tool maker’s stock jumped more than 4% after The Wall Street Journal reported that the company has eliminated about 1,000 jobs in an effort to cut about $200 million in costs.

    Energy stocks — Oil prices jumped, pushing energy stocks higher. Marathon Oil rallied 8%. APA Corp. and Devon Energy gained about 7% each. Diamondback Energy, Halliburton and ConocoPhillips were all up more than 6%.

    — CNBC’s Alex Harring, Samantha Subin, Carmen Reinicke, Yun Li, Tanaya Macheel and Jesse Pound contributed reporting.

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  • Kim Kardashian pays over $1 million to settle SEC charges linked to a crypto promo on her Instagram

    Kim Kardashian pays over $1 million to settle SEC charges linked to a crypto promo on her Instagram

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    Reality TV star Kim Kardashian launched a private equity fund, Skky Partners, which she co-founded with Jay Sammons, a former partner at the investment firm Carlyle Group.

    Photo by James Devaney/GC Images via Getty Images

    Kim Kardashian’s crypto misadventure has landed her in hot water with federal regulators.

    The reality TV superstar and influencer has settled Securities and Exchange Commission charges that she failed to disclose a payment she received for touting a crypto asset on her Instagram feed, the agency announced Monday morning.

    “This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn’t mean that those investment products are right for all investors,” Gary Gensler, chairman of the SEC, said in a news release.

    Representatives for Kardashian didn’t immediately respond to a request for comment.

    Kardashian, who is reportedly worth $1.8 billion, agreed to pay $1.26 million to settle the charges over a promotion on Meta‘s Instagram for EthereumMax’s crypto asset, the SEC said. She will also cooperate with an ongoing investigation, and has agreed to not promote crypto securities for three years, the regulator added.

    However, Kardashian, who has built a media and lifestyle empire, neither admitted to nor denied the regulator’s findings, the SEC said.

    Kardashian has already felt regulatory heat over her EthereumMax promo, which she posted on Instagram in June of last year. She started the post by asking her millions of followers, “ARE YOU INTO CRYPTO??? THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN.”

    Investors sued her, former NBA star Paul Pierce and superstar boxer Floyd Mayweather Jr. earlier this year over their promos for EthereumMax, accusing them of artificially inflating the value of the asset.

    The SEC on Monday said Kardashian failed to report that she was paid $250,000 to publish a post about EMAX tokens, a crypto asset offered by EthereumMax. The post, which featured the hashtag “#ad,” included a link to the EthereumMax website, which gives users instructions about how to buy the tokens, the regulator added.

    Her failure to disclose the payment was a violation of federal securities laws, the SEC said. She agreed to pay $260,000, which includes the payment she received, plus interest, in addition to the $1 million penalty, the agency added.

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  • Apple downgrade sparks tech sell-off, sending Alphabet and Microsoft to one-year lows

    Apple downgrade sparks tech sell-off, sending Alphabet and Microsoft to one-year lows

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    Shares of large technology companies suffered heavy losses on Thursday, dragging down many other U.S. stocks along with them, after analysts at Bank of America lowered Apple’s stock rating.

    Tech stocks have been pushed down all year as investors have rotated out of growth and flocked to more defensive assets to deal with higher interest rates and to get ahead of a possible recession.

    The tech-heavy Nasdaq Composite rose on Tuesday and Wednesday, but the buying came after the worst two weeks since the onset of the Covid pandemic. Now the downward trend is back, with the Nasdaq off 2.8% on Thursday — it’s steepest one-day setback since Sept. 13. The broader S&P 500 fell 2.1%.

    Apple CEO Tim Cook speaks at an Apple special event at Apple Park in Cupertino, California on September 7, 2022. – Apple is expected to unveil the new iPhone 14. (Photo by Brittany Hosea-Small / AFP) (Photo by BRITTANY HOSEA-SMALL/AFP via Getty Images)

    Brittany Hosea-small | Afp | Getty Images

    Apple shares declined nearly 5% as Bank of America analysts led by Wamsi Mohan changed their rating to neutral from buy, straying from the buy position held by a majority of analysts polled by FactSet.

    The analysts pointed to several risks, including a weaker buying cycle associated with the iPhone 14 that Apple released this month. One day earlier, a report said Apple had scrapped its plan to boost iPhone production by 6 million units in the second half of the year.

    Apple stock is now worth 20% less than it was at the end of 2021, while the Nasdaq is down 31% over the same period.

    Of the technology companies with the largest market valuations, Microsoft took the lightest blow. It ended Thursday’s trading session down about 1.5%, which was still a 52-week low. Google parent Alphabet also reached a 52-week low, dropping 2.6%. Shares of Facebook parent Meta Platforms slid 3.7%, Amazon declined 2.7% and Tesla was off 6.8%.

    Smaller growth-oriented tech companies also suffered, with Coinbase down nearly 8% after Wells Fargo initiated coverage with an underweight rating. Elsewhere, Shopify fell 8.45%, Rivian declined 7.9% and Roblox was off 7%.

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  • Cramer’s week ahead: 3 events will determine if the market’s bad momentum will continue in October

    Cramer’s week ahead: 3 events will determine if the market’s bad momentum will continue in October

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    CNBC’s Jim Cramer on Friday said that three key events next week will determine if the nightmarish month for the stock market will continue into October.

    Here are the events:

    • The release of the nonfarm labor report Friday. Cramer said he expects it to show inflated hiring and wages.
    • Two speaking engagements by Cleveland Fed President Loretta Mester, who Cramer believes is the primary inflation hawk on the Federal Open Market Committee. “She wants to protect us … from high inflation, even if that means raising interest rates into a recession,” he said.

    The S&P 500 closed out its worst month since March 2020 on Friday. The Dow Jones Industrial Average and the Nasdaq Composite fell 8.8% and 10.5%, respectively, for the month.

    While it’s likely that Mester and the report will both bring bad news, investors can protect themselves from the market wreckage if they stick to a solid game plan, according to Cramer. 

    “Own high-quality companies with good balance sheets and high dividends that will benefit from a decline in inflation, because that’s what’s going to happen,” he said.

    He also previewed next week’s slate of earnings. All earnings and revenue estimates are courtesy of FactSet.

    Wednesday: Helen of Troy, Lamb Wesson

    Helen of Troy

    • Q2 2023 earnings release before the bell; conference call at 9 a.m. ET
    • Projected EPS: $2.21
    • Projected revenue: $521 million

    Lamb Weston Holdings

    • Q1 2023 earnings release at 8:30 a.m. ET; conference call at 10 a.m. ET
    • Projected EPS: 79 cents
    • Projected revenue: $1.21 billion

    We saw this from Nike last night — all that happens is the downside gets accentuated as the upside just treads water or goes marginally higher. That’s what I expect will happen with both when they report,” Cramer said.

    Thursday: Constellation Brands, Conagra Brands, McCormick, Norwegian Cruise Line Holdings

    Constellation Brands

    • Q2 2023 earnings release at 7:30 a.m. ET; conference call at 10:30 a.m. ET
    • Projected EPS: $2.81
    • Projected revenue: $2.51 billion

    He said he expects the company’s top line to be “extraordinarily good.”

    Conagra Brands

    • Q1 2023 earnings release at 7:30 a.m. ET; conference call at 9:30 a.m. ET
    • Projected EPS: 52 cents
    • Projected revenue: $2.85 billion

    The company needs to grow its business, according to Cramer.

    McCormick

    • Q3 2022 earnings release at 6:30 a.m. ET; conference call at 8 a.m. ET
    • Projected EPS: 71 cents
    • Projected revenue: $1.6 billion

    Cramer said that the company’s earnings call will simply reinforce its preannounced weaker-than-expected third-quarter earnings and full-year outlook cut earlier this month.

    Norwegian Cruise Line

    • Investor meeting at 10 a.m. ET

    Cramer said that he expects Norwegian to be performing better than competitor Carnival, which struggled with higher costs in its latest quarter, but it’s unclear whether that will be enough to help Norwegian’s stock.

    Friday: Tilray Brands

    • Q1 2023 earnings release at 7 a.m. ET; conference call at 8:30 a.m. ET
    • Projected loss: loss of 5 cents per share
    • Projected revenue: $169 million

    He predicted that the company will make a “bold” statement about the legalization of cannabis and said he’s pondering whether this could be a great speculative stock to own during the Biden administration.

    Disclosure: Cramer’s Charitable Trust owns shares of Constellation Brands.

    Cramer's game plan for the trading week of Oct. 3

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