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Tag: National/Public Security

  • House speaker election: Jim Jordan racks up endorsements before vote at noon Tuesday

    House speaker election: Jim Jordan racks up endorsements before vote at noon Tuesday

    Rep. Jim Jordan made progress Monday in his push to become the next speaker of the House of Representatives, winning endorsements from some fellow Republicans who just last week had refused to back him.

    The narrowly divided chamber of Congress is expected to vote around noon Eastern Tuesday to select a speaker, with the move coming after former Speaker Kevin McCarthy was ousted two weeks ago and after No. 2 House Republican Steve Scalise ended his bid for the post last week.

    GOP Rep. Ann Wagner of Missouri, who previously said a Jordan speakership was a non-starter for her, switched her stance on Monday. She said in a post on X that her colleague from Ohio “has allayed my concerns about keeping the government open with conservative funding, the need for strong border security, our need for consistent international support in times of war and unrest … as well as the need for stronger protections against the scourge of human trafficking and child exploitation.”

    Similarly, GOP Rep. Mike Rogers of Alabama, who chairs the House Armed Services Committee, announced in a post on X that he was backing Jordan after saying last week that there was nothing that Jordan could do to win his support. Rogers pointed to an accord on an annual Pentagon bill, the National Defense Authorization Act, saying he and Jordan had “agreed on the need for Congress to pass a strong NDAA, appropriations to fund our government’s vital functions, and other important legislation like the Farm Bill.”

    Republican Rep. Vern Buchanan of Florida offered his support for Jordan as well on Monday, though he noted that he’s “deeply frustrated by the way this process has played out.” Another endorsement came from GOP Rep. Ken Calvert of California, who chairs the House Appropriations Committee’s defense subpanel.

    Jordan — who has been endorsed by former President Donald Trumpsent a letter to his colleagues in which he called for coming together after a chaotic two weeks, saying: “It is time we unite to get back to work on behalf of the American people.” The congressman, a co-founder of the hardline House Freedom Caucus and chairman of the House Judiciary Committee, also told CNN that he was confident about Tuesday’s vote, saying: “I feel good about it.”

    Analysts have been warning that the process of finding a replacement for McCarthy is preventing the House from addressing crucial matters, such as avoiding a government shutdown next month and supporting Israel in its war against Hamas.

    House Republicans made Jordan their nominee for speaker on Friday, but he drew just 124 votes while 81 lawmakers backed another candidate for speaker, GOP Rep. Austin Scott of Georgia. In another round of voting on Friday, Jordan still had 55 colleagues voting against him, but he now appears to be flipping some of them to his side.

    One betting market, Smarkets, was giving Jordan a 33% chance of becoming speaker. 

    Spending cuts and shutdown coming?

    Having Jordan as speaker could mean a 1% cut in defense
    ITA
    and non-defense spending, noted Philip Wallach, senior fellow at the American Enterprise Institute, a conservative think tank. That’s because this year’s debt-limit deal includes a provision that calls for such reductions if there aren’t bipartisan agreements on a dozen funding bills before Jan. 1 and instead a reliance on short-term measures known as continuing resolutions, or CRs.

    “It is now clear,” Wallach said during an AEI event on Monday, that Jordan’s “plan is to have us live off continuing resolutions and implement this 1% cut.”

    “That’s a concrete thing where he could say, ‘Well, we’re moving in the right direction. We’ve taken a hard stand,’” the AEI expert added.

    The CEO of one financial advisory firm also sees standoffs in the future.

    “We expect the next U.S. speaker will be less inclined to make deals than McCarthy; in many ways it makes more sense for them, politically, not to be a deal-maker in the current environment,” said deVere Group’s Nigel Green in a statement.

    “We believe that a U.S. government shutdown is now more likely with a new speaker of the House, and this has the potential to create a domino effect in global financial markets
    SPX.

    BTIG analysts Isaac Boltansky and Isabel Bandoroff said the speaker drama suggests that next year’s election will also be full of twists and turns.

    “We have followed every twist and turn of the speakership race, and there is only one takeaway we can share with absolute certainty: This confirms that the 2024 election cycle will be exhausting, volatile, and just downright weird from beginning to end,” they wrote in a note.

    U.S. stocks
    DJIA

    COMP
    closed higher Monday, as investors looked ahead to earnings season and unwound the flight-to-safety trades seen last week on fears the Israel-Hamas war could escalate into a wider conflict.

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  • Biden to ask Congress for ‘urgent action’ to help Israel after ‘sheer evil’ Hamas attacks

    Biden to ask Congress for ‘urgent action’ to help Israel after ‘sheer evil’ Hamas attacks

    President Joe Biden on Tuesday said he would ask Congress to take “urgent action” to aid Israel after what he called “sheer evil” attacks by Hamas.

    “When Congress returns we’re going to ask them to take urgent action to fund the security requirements of our partners,” the president said from the White House. He said the U.S. is already surging extra military aid including ammunition to replenish Israel’s Iron Dome defense system.

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  • 1970s-style stagflation may be at risk of repeating itself, Deutsche Bank warns

    1970s-style stagflation may be at risk of repeating itself, Deutsche Bank warns

    A major Wall Street bank is warning about the risk that inflation expectations could become unanchored in a fashion similar to the 1970s stagflation era.

    Weekend attacks on Israel by Hamas illustrate how geopolitical risks can suddenly return — adding to the surprise shocks of the current decade, such as the COVID-19 pandemic and Russia’s invasion of Ukraine, said macro strategist Henry Allen and research analyst Cassidy Ainsworth-Grace of Frankfurt-based Deutsche Bank
    DB,
    -1.40%
    .

    Read: Questions emerge over how Israeli intelligence missed Hamas attack

    Oil prices settled more than 4% higher on Monday as traders weighed the impact of the war in the Middle East on crude supplies. The spike in energy prices is adding to the growing list of similarities to the 1970s era — which also includes consistently above-target inflation across major economies and repeated optimism about how quickly it would fall; strikes by workers; and even increasing chances that this winter will be dominated by the El Niño weather pattern, similar to what took place in 1971 and which is historically tied to higher commodity prices, according to Deutsche Bank.

    Inflation remains above central banks’ targets in every G-7 country — the U.S., Canada, France, Germany, Italy, Japan, and the United Kingdom. How long it will remain high is one of the most important questions facing financial markets, and a destabilization of expectations would make it even harder for policy makers to restore price stability.

    “So given inflation is still above its pre-pandemic levels, it is important not to get complacent about its path,” Allen and Ainsworth-Grace wrote in a note released on Monday. “After all, if there is another shock and inflation remains above target into a third or even a fourth year, it is increasingly difficult to imagine that long-term expectations will repeatedly stay lower than actual inflation.”

    History indicates that the last mile of inflation is often the hardest. One of the key lessons of the 1970s was that inflation failed to return to previous levels after the first oil shock of 1973 and U.S. recession of 1973-1975, and went even higher following a second oil shock in 1979. Now that inflation has been above target for the last two years, “a fresh inflationary spike could well lead expectations to become unanchored,” according to the Deutsche Bank note.


    Source: Bloomberg, Deutsche Bank

    For now, the public’s inflation expectations, as measured by a New York Fed survey of consumers in August, remain largely stable, though still above the Federal Reserve’s 2% target.

    The current period differs from the 1970s era in a number of ways, the Deutsche Bank team also points out. Long-term inflation expectations remain “impressively” well-anchored, commodity prices have fallen substantially from their peaks over the past 12 to 18 months, and supply-chain disruptions that emerged during the pandemic have “broadly healed.” In addition, the U.S. is less energy intensive than in the past and less susceptible to damage from a 1970s-style energy shock.

    Even so, “it is vitally important to avoid complacency,” Allen and Ainsworth-Grace wrote. “Indeed, with the benefit of hindsight, one of the mistakes of the 1970s was that policy was eased up too early, which contributed to a resurgence in inflation.”

    Risk-off sentiment prevailed in financial markets during the early part of Monday, before stocks turned higher during the New York afternoon. All three major U.S. stock indexes
    DJIA

    SPX

    COMP
    finished higher in a volatile session. Trading in U.S. government-debt futures reflected greater demand and gold rallied as a flight to safety took hold. The cash market for Treasurys was closed for Columbus Day and Indigenous Peoples Day.

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  • Will Israel-Gaza war sink stocks and shake the global economy? Watch oil prices.

    Will Israel-Gaza war sink stocks and shake the global economy? Watch oil prices.

    Wall Street on Monday shook off a bout of selling sparked by the Israel-Gaza war.

    That’s in keeping with the historical tendency of investors to look past geopolitical conflict and human tragedy, but it isn’t necessarily the last word. That last word will likely belong to oil traders.

    “Oil rallied today yet remains below the near-term peak from last month. If oil prices rise higher for longer, the global economy could feel a resurgence of inflation during a period when investors are hoping inflation is clearly decelerating,” said Jeffrey Roach, chief economist for LPL Financial, in emailed comments.

    Roach also noted that, in general, markets tend to have difficulty pricing the difference between a temporary shock and a permanent shock.

    For now, however, the jump in oil prices isn’t signaling a permanent shock. Sure, Brent crude
    BRN00,
    +0.11%
    ,
    the global benchmark, jumped 4.2% on Monday to end at $88.15 a barrel, while West Texas Intermediate crude
    CL.1,
    +0.07%

    CL00,
    +0.07%

    surged $3.59, or 4.3% to $86.38 a barrel — the biggest one-day jump for both grades since April 3.

    See: Here’s what Israel-Gaza war means for oil prices as fighting continues

    The jump was impressive, but it comes after a big pullback last week that saw both WTI and Brent retreat from 2023 highs near $100 a barrel.

    So if crude can manage to close above those highs — $93.68 a barrel for WTI — investors across other markets will likely take notice.

    What would it take to drive crude back toward the highs? The focus is on Iran.

    The Wall Street Journal on Sunday reported that Iranian security officials helped plan the attack by Hamas. The Israeli military has said there is no concrete evidence of Iranian involvement, according to news reports.

    A direct role by Iran, a longtime ally of Hamas, would raise the threat of a broader conflict.

    Some analysts have put Iranian crude production at more than 3 million barrels a day and exports above 2 million barrels a day — the highest levels since the Trump administration pulled the U.S. out of the Iranian nuclear accord in 2018, according to the Wall Street Journal. Sales fell to around 400,000 barrels a day in 2020 as the U.S. reimposed sanctions.

    “If Israel discovers that Iran played a role in Hamas’ attack, it could retaliate militarily. At the very least, any warming of relations between Iran and the West is now on hold and this will limit incremental oil supply,” said Nicholas Colas, co-founder of DataTrek Research, in a Monday note.

    It’s a reminder that “while neither Israel nor Gaza are major oil producers, everything that happens geopolitically in the Middle East invariably ends up affecting oil prices,” he said.

    The potential for a broader conflict could lead to a “sharp market correction,” argued Olivier d’Assier, head of applied research, APAC, at Axioma.

    The scale of the conflict, the largest since the Yom Kippur War 50 years ago, renders comparisons with how markets have shaken off past geopolitical incidents, but they may be irrelevant in terms of stress testing, he argued.

    “The closest historical scenarios we could use would be 9/11 and the start of the Ukraine war. But because both took place on Western soil, they might not be adequate,” d’Assier said.

    On Monday, however, remarks by Federal Reserve officials ultimately trumped the rise in crude prices and jitters over the Middle East. Dallas Fed President Lorie Logan and Fed Vice Chair Philip Jefferson both noted the rise in long-term Treasury yields and their role in tightening financial conditions, which investors took as a signal the Fed may not be as likely to further raise interest rates.

    See: An Israel-Hamas war could change what the Fed does about interest rates

    Stocks turned north after a morning dip, with the Dow Jones Industrial Average
    DJIA
    rising nearly 200 points, or 0.6%, while the S&P 500
    SPX
    also advanced 0.6% and the Nasdaq Composite
    COMP
    gained 0.4%.

    For now, market participants appear set to look ahead to economic data later this week, including September consumer-price index and producer-price index readings.

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  • 1970’s-style stagflation may be at risk of repeating itself, bank warns

    1970’s-style stagflation may be at risk of repeating itself, bank warns

    A major Wall Street bank is warning about the risk that inflation expectations could become unanchored in a fashion similar to the 1970s stagflation era.

    Weekend attacks on Israel by Hamas illustrate how geopolitical risks can suddenly return — adding to the surprise shocks of the current decade, such as the COVID-19 pandemic and Russia’s invasion of Ukraine, said macro strategist Henry Allen and research analyst Cassidy Ainsworth-Grace of Frankfurt-based Deutsche Bank
    DB,
    -1.45%
    .

    Read: Questions emerge over how Israeli intelligence missed Hamas attack

    Oil prices jumped by more than 4% on Monday as traders weighed the impact of the war in the Middle East on crude supplies. The spike in energy is adding to the growing list of similarities to the 1970s era — which also includes consistently above-target inflation across major economies and repeated optimism about how quickly it would fall; strikes by workers; and even increasing chances that this winter will be dominated by the El Niño weather pattern, similar to what took place in 1971 and which is historically tied to higher commodity prices, according to Deutsche Bank.

    Inflation remains above central banks’ targets in every Group-of-7 country — the U.S., Canada, France, Germany, Italy, Japan, and the United Kingdom. How long it will remain high is one of the most important questions facing financial markets, and a destabilization of expectations would make it even harder for policy makers to restore price stability.

    “So given inflation is still above its pre-pandemic levels, it is important not to get complacent about its path,” Allen and Ainsworth-Grace wrote in a note released on Monday. “After all, if there is another shock and inflation remains above target into a third or even a fourth year, it is increasingly difficult to imagine that long-term expectations will repeatedly stay lower than actual inflation.”

    History indicates that the last mile of inflation is often the hardest. One of the key lessons of the 1970s was that inflation failed to return to previous levels after the first oil shock of 1973 and U.S. recession of 1973-1975, and went even higher following a second oil shock in 1979. Now that inflation has been above target for the last two years, “a fresh inflationary spike could well lead expectations to become unanchored,” according to the Deutsche Bank note.


    Source: Bloomberg, Deutsche Bank

    For now, the public’s inflation expectations, as measured by a New York Fed survey of consumers in August, remain largely stable, though still above the Federal Reserve’s 2% target.

    The current period differs from the 1970s era in a number of ways, the Deutsche Bank team also points out. Long-term inflation expectations remain “impressively” well-anchored, commodity prices have fallen substantially from their peaks over the past 12 to 18 months, and supply-chain disruptions that emerged during the pandemic have “broadly healed.” In addition, the U.S. is less energy intensive than in the past and less susceptible to damage from a 1970s-style energy shock.

    Even so, “it is vitally important to avoid complacency,” Allen and Ainsworth-Grace wrote. “Indeed, with the benefit of hindsight, one of the mistakes of the 1970s was that policy was eased up too early, which contributed to a resurgence in inflation.”

    Risk-off sentiment prevailed in financial markets on Monday, with all three major U.S. stock indexes
    DJIA

    SPX

    COMP
    down in New York afternoon trading. Trading in U.S. government-debt futures reflected greater demand and gold rallied as a flight to safety took hold. The cash market for Treasurys was closed for Columbus Day and Indigenous Peoples Day.

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  • U.S. stocks lose ground after Hamas attacks Israel

    U.S. stocks lose ground after Hamas attacks Israel

    U.S. stocks were slightly lower Monday as investors edged away from equities and other assets perceived as risky in favor of traditional havens after a surprise attack by Hamas on Israel over the weekend raised geopolitical alarms.

    What’s happening

    • The Dow Jones Industrial Average
      DJIA
      was down 26 points, or 0.1%, at 33,382.

    • The S&P 500
      SPX
      fell 11 points, or 0.3%, to 4,295.

    • The Nasdaq Composite
      COMP
      was down 102 points, or 0.8%, at 13,329.

    Stocks bounced Friday after a stronger-than-expected September jobs report, allowing the S&P 500 to rise 0.5% for the week and break a streak of four straight weekly declines. The Dow saw a 0.3% weekly decline, while the Nasdaq Composite rose 1.6%.

    What’s driving markets

    The attack by Hamas on Israel raised fears of a broader conflict.

    “Such geopolitical tension is traditionally and unsurprisingly negative on sentiment, with investors likely to be unsettled by the prospect of further uncertainty,” said Richard Hunter, head of markets at Interactive Investor.

    The price of Brent crude
    BRN00,
    +3.80%
    ,
    the global energy benchmark, jumped nearly 4% amid concerns oil supplies from the region may be compromised.

    Need to Know: From $150 oil to no impact at all: What the surprise attack on Israel means to markets

    “The shocking attacks in Israel have sent the price of oil soaring, as investors assess the potential for the conflict to disrupt supply in the Middle East, if other countries are drawn in,” said Susannah Streeter, analyst at Hargreaves Lansdown.

    U.S. stock futures dived as bourses in much of Europe and Asia sold off, while traders moved into the perceived havens of gold
    GC00,
    +1.17%
    ,
    the U.S. dollar
    DXY
    and government bonds, such as the German bund
    BX:TMBMKDE-10Y.

    See: Gold, U.S. dollar rally as investors flock to havens as Israel-Hamas war escalates

    The U.S. Treasury market is closed on Monday for Columbus Day and Indigenous Peoples’ Day, but futures
    TY00,
    +0.80%

    are trading and these indicate falling benchmark yields.

    “Geopolitical risk doesn’t tend to linger long in markets but there are many second order impacts that could come through in the weeks, months and years ahead from this weekends’ developments,” said Jim Reid, strategist at Deutsche Bank.

    Indeed, traders may find their focus soon switches this week back to monetary and corporate issues. Markets ultimately reacted positively to what on the surface was a strong nonfarm payrolls report published Friday, as traders believed it was not so hot it would move the needle on Fed policy.

    With that in mind, the U.S. producer and consumer prices data for September will be published on Wednesday and Thursday, respectively, with further evidence of easing price pressure required to cement no more rate increases by the Federal Reserve this year.

    Then Friday sees the start proper of the third-quarter company-earnings season, when big banks such as JPMorgan Chase
    JPM,
    -0.69%
    ,
    Citigroup
    C,
    -0.97%
    ,
    and Wells Fargo
    WFC,
    -0.93%

    present their results.

    Earnings Watch: Q3 earnings are here: S&P 500 heads toward year of profit declines as JPMorgan, and Delta report this week

    Forecasts suggest analysts have become less confident about corporate profitability in recent weeks. Aggregate S&P 500 earnings are expected to decline by 0.3% for the year to Q3 2023, which would mark the fourth consecutive quarter of falling earnings, according to John Butters, senior earnings analyst at FactSet.


    Source: FactSet

    Read: Good for stocks? Why Tom Lee says the attack on Israel could help equities.

    Companies in focus

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  • Oil prices jump 4% after Hamas attack on Israel

    Oil prices jump 4% after Hamas attack on Israel

    Oil futures opened with strong gains late Sunday as traders reacted to an attack by Hamas on Israel, raising Middle East tensions and stoking worries about the outlook for crude supply.

    Price action

    Market drivers

    Oil traders were focused on Iran after a weekend attack on multiple fronts by Hamas militants, who are backed by Tehran. The Wall Street Journal reported that Iranian security officials helped Hamas plan the attack, which has left more than 700 Israelis dead and saw dozens of Israeli citizens and soldiers abducted. Israel pounded Gaza in retaliation, where the death toll was also reported in the hundreds.

    Analysts said that if Iranian involvement is affirmed, it could lead the U.S. to increase enforcement of sanctions on the country’s crude exports, which have moved back toward pre-2018 levels in recent months.

    “Historical analysis suggests that oil prices tend to experience sustained gains after the Middle East crises,” said Stephen Innes, managing director at SPI Asset Management, in a note.

    Oil fell last week, retreating after Brent moved within a few dollars of the $100-a-barrel threshold last month and WTI briefly topped $95 a barrel for the first time in more than a year.

    Some analysts have put Iranian crude production at more than 3 million barrels a day and exports above 2 million barrels a day — the highest levels since the Trump administration pulled the U.S. out of the Iranian nuclear accord in 2018, according to the Wall Street Journal. Sales fell to around 400,000 barrels a day in 2020 as the U.S. reimposed sanctions.

    See: U.S. stock futures tumble after Hamas attack on Israel

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  • ‘Fear trade’: What Israel-Hamas war means for oil prices and financial markets

    ‘Fear trade’: What Israel-Hamas war means for oil prices and financial markets

    Oil traders on Sunday said crude prices were likely to remain supported in the near term, as investors assessed the fallout from the surprise attack by Hamas on Israel and focused on the role played by Iran and the potential impact on that country’s petroleum exports.

    The conflict may also hold market-moving consequences for talks aimed at normalizing relations between Saudi Arabia and Israel.

    “While in the short term there is no impact directly on supply, it’s obvious how things play out over the next 24 to 48 hours could change that,” Phil Flynn, an analyst at Price Futures Group in Chicago, told MarketWatch.

    Brent crude futures
    BRN00,
    +4.17%
    ,
    the global benchmark, and West Texas Intermediate oil futures
    CL00,
    +4.35%

    CL.1,
    +4.35%

    jumped more than 3% when the market opened Sunday night. U.S. stock-index futures
    ES00,
    -0.66%

    traded lower, while traditional havens, including gold
    GC00,
    +0.98%

    and the U.S. dollar
    DXY
    rose.

    Movements in oil prices, meanwhile, will also serve as a gauge for broader market worries around the conflict, analysts said.

    See: Israeli stocks slump in first day of trade since Gaza attack

    Hamas, the Iran-backed, Palestinian militant group that controls the Gaza Strip, staged a sweeping attack on southern Israel early Saturday. News reports put Israeli deaths at more than 700. The Gaza Health Ministry said 413 people, including 78 children and 41 women, were killed in the territory as Israel retaliated, according to the Associated Press. Injuries in Israel and Gaza were both said to be around 2,000.

    Israeli troops on Sunday were engaged in fierce fighting in an effort to retake territory in southern Israel as Hamas launched further barrages of missiles. Israeli citizens and soldiers were captured and are being held hostage in Gaza, according to the Israeli military.

    Read: Israel declares war, approves ‘significant’ steps to retaliate after surprise attack by Hamas

    The Wall Street Journal reported that Iranian security officials helped Hamas plan the attack. U.S. officials said they haven’t seen evidence of Iran’s involvement, the report said.

    “Iran remains a very big wild card and we will be watching how strongly [Israeli] Prime Minister Netanyahu blames Tehran for facilitating these attacks by providing Hamas with weapons and logistical support,” said Helima Croft, head of global commodity strategy at RBC Capital Markets, in a Sunday morning note.

    Iranian crude exports have risen in recent years, indicating the Biden administration has adopted a soft approach to sanctions enforcement, Croft said. Some analysts have put Iranian crude production at more than 3 million barrels a day and exports above 2 million barrels a day — the highest levels since the Trump administration pulled the U.S. out of the Iranian nuclear accord in 2018, according to the Wall Street Journal. Sales fell to around 400,000 barrels a day in 2020 as the U.S. reimposed sanctions.


    RBC Capital Markets

    Hedge-fund manager Pierre Andurand, one of the world’s best energy traders, said in a social-media post that a large price spike for oil isn’t likely in coming days, but emphasized the market focus on Iran.

    “Now, over the last six months we have seen a very large increase in Iranian supply due to weak enforcement of sanctions. As Iran is also behind Hamas’ attacks on Israel, there is a good probability that the U.S. administration will start enforcing those sanctions on Iranian oil exports more tightly,” he wrote. “That would further tighten the oil market. Also the probability that this will lead to direct conflict with Iran is not zero.”

    Meanwhile, the Wall Street Journal late Friday reported that Saudi Arabia had told the White House it would be willing to boost oil production next year if crude prices remained high, as part of an effort aimed at winning goodwill in Congress for a deal that would see the kingdom recognize Israel and in return get a defense agreement with the U.S.

    A Saudi production cut of 1 million barrels a day that was implemented in July and recently extended through the end of the year has been given much of the credit for a rally that took global benchmark Brent crude within a few dollars of the $100-a-barrel threshold before retreating this past week. The U.S. benchmark last week briefly topped $95 a barrel for the first time in 13 months.

    In a statement, Saudi Arabia’s foreign ministry called on both sides to halt the escalation and exercise restraint, but also recalled its “repeated warnings of the dangers of the explosion of the situation as a result of the continued occupation, the deprivation of the Palestinian people of their legitimate rights, and the repetition of systematic provocations against its sanctities.”

    With the Israeli government vowing an unprecedented response, “it is hard to envision how Saudi normalization talks can run on a parallel track to a ferocious military counteroffensive,” said RBC’s Croft.

    Beyond oil, much will depend on the potential for the conflict to widen.

    Stocks have stumbled, retreating from 2023 highs set in late July, as yields on U.S. Treasurys have jumped. The yield on the 30-year Treasury bond
    BX:TMUBMUSD30Y
    rose 23.2 basis points last week to end Friday at 4.941%, its highest since Sept. 20, 2007. The 10-year Treasury note yield
    BX:TMUBMUSD10Y
    topped 4.80% on Oct. 3, its highest since Aug. 8, 2007, and ended the week at 4.783%. Yields and debt prices move opposite each other.

    The U.S. bond market will be closed Monday for the Columbus Day and Indigenous People’s Day holiday, while U.S. stock markets will be open.

    The S&P 500 index
    SPX
    rose 0.5% last week, breaking a streak of four straight weekly declines, while the Dow Jones Industrial Average 
    DJIA
    fell 0.3% and the Nasdaq Composite
    COMP
    gained 1.6%.

    “I think there will be a negative reaction. However, I don’t see a meltdown,” Peter Cardillo, chief market economist at Spartan Capital Securities, told MarketWatch.

    Traditional haven plays, including gold, the dollar and U.S. Treasurys may see a strong move upward, with price gains for Treasurys pulling yields down.

    “Geopolitical crises in the Middle East have usually caused oil prices to rise and stock prices to fall,” said economist Ed Yardeni, president of Yardeni Research Inc., in a note. “More often than not, they’ve also tended to be buying opportunities in the stock market.”

    The broader market reaction will depend on whether the crisis turns out to be a short-term flare-up or “something much bigger, like a war between Israel and Iran,” he said. The latter is unlikely, but tensions between the two are likely to escalate.

    “The price of oil may be a good way to assess the likelihood of a broader conflict,” he said.

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  • Israeli stocks slump in first day of trade since Gaza attack

    Israeli stocks slump in first day of trade since Gaza attack

    Israeli stocks skidded Sunday, reeling one day after the surprise attack from Gaza.

    The benchmark TA-35 index
    IL:TA35
    fell 7% to 1,703.38 in Sunday morning trade, with every constituent except generic drugmaker Teva Pharmaceutical
    TEVA,
    -7.82%

    lower.

    Several companies saw double-digit losses including Newmed Energy
    NWMD,
    -0.44%
    ,
    an oil and gas explorer; Delek Group
    DLEKG,
    -4.04%
    ,
    which owns the country’s largest chain of gas stations; and Shikun & Binui
    SKBN,
    -0.10%
    ,
    an infrastructure company.

    Israeli soldiers were still battling Hamas fights in the streets of southern Israel on Sunday and has launched retaliation strikes on Gaza.

    Israeli media, citing rescue service officials, said at least 300 people were killed, including 26 soldiers, while in Gaza officials said 313 people had died. An Israeli military official said hundreds of militants had been killed and dozens captured.

    — The Associated Press contributed to this report

    Source link

  • Hamas kills 40 in unprecedented, wide-ranging incursion into Israel

    Hamas kills 40 in unprecedented, wide-ranging incursion into Israel

    The ruling Hamas militant group in the Gaza Strip carried out an unprecedented attack on Israel at daybreak Saturday, firing thousands of rockets as dozens of fighters infiltrated the heavily fortified border in several locations by air, land and sea, catching the country off guard on a major holiday.

    Several hours after the invasion began, Hamas militants were still fighting gun battles inside several Israeli communities in a surprising show of strength that shook the country.

    Israel’s national rescue service said at least 40 people have been killed and hundreds wounded, making it the deadliest attack in Israel in years.

    At least 561 wounded people were being treated in Israeli hospitals, including at least 77 who were in critical condition, according to an Associated Press count based on public statements and calls to hospitals.

    There was no official comment on casualties in Gaza, but AP reporters witnessed the funerals of 15 people who were killed and saw another eight bodies arrive at a local hospital. It was not immediately clear if they were fighters or civilians.

    Social media was replete with videos of Hamas fighters parading what appeared to be stolen Israeli military vehicles through the streets and at least one dead Israeli soldier within Gaza being dragged and trampled by an angry crowd of Palestinians shouting “God is Greatest.”

    Videos released by Hamas appeared to show at least three Israelis captured alive. The military declined to give details about casualties or kidnappings as it continued to battle the infiltrators.

    “We are at war,” Israeli Prime Minister Benjamin Netanyahu said in a televised address, declaring a mass army mobilization. “Not an ‘operation,’ not a ’round,’ but at war.”

    “The enemy will pay an unprecedented price,” he added, promising that Israel would “return fire of a magnitude that the enemy has not known.”

    At a meeting of top security officials later on Saturday, Netanyahu said the first priority was to “cleanse the area” of enemy infiltrators, then to “exact a huge price from the enemy,” and to fortify other areas so that no other militant groups join the war.

    The serious invasion on Simchat Torah, a normally joyous day when Jews complete the annual cycle of reading the Torah scroll, revived painful memories of the 1973 Mideast war practically 50 years to the day, in which Israel’s enemies launched a surprise attack on Yom Kippur, the holiest day of the Jewish calendar.

    Comparisons to one of the most traumatic moments in Israeli history sharpened criticism of Netanyahu and his far-right allies, who had campaigned on more aggressive action against threats from Gaza. Political commentators lambasted the government over its failure to anticipate what appeared to be a Hamas attack unseen in its level of planning and coordination.

    The Israeli military struck targets in Gaza in response for some 2,500 rockets that sent air raid sirens wailing constantly as far north as Tel Aviv and Jerusalem, some 80 kilometers (50 miles) away. It said its forces were engaged in gunfights with Hamas militants who had infiltrated Israel in at least seven locations. The fighters had sneaked across the separation fence and even invaded Israel through the air with paragliders, the army said.

    Israeli TV broadcast footage of explosions tearing through the Gaza-Israel border fence, followed by what appeared to be Palestinian gunmen riding into Israel on motorcycles. Gunmen also reportedly entered on pickup trucks.

    It was not immediately clear what prompted Hamas to launch the attacks, which would have likely required months of planning.

    But over the past year Israel’s far-right government has ramped up settlement construction in the occupied West Bank, Israeli settler violence has displaced hundreds of Palestinians there, and tensions have flared around a flashpoint Jerusalem holy site.

    The shadowy leader of Hamas’ military wing, Mohammed Deif, announced the start of what he called “Operation Al-Aqsa Storm.” The Al-Aqsa mosque compound in Jerusalem is the third holiest site in Islam, and is located on the holiest site for Jews, who refer to it as the Temple Mount.

    “Enough is enough,” Deif, who does not appear in public, said in the recorded message, as he called on Palestinians from east Jerusalem to northern Israel to join the fight. “Today the people are regaining their revolution.”

    In a televised address, Israeli Defense Minister Yoav Gallant warned that Hamas had made “a grave mistake” and promised that “the state of Israel will win this war.”

    Western nations condemned the incursion and reiterated their support for Israel, while others called for restraint on both sides.

    “The U.S. unequivocally condemns the unprovoked attacks by Hamas terrorists against Israeli civilians,” said Adrienne Watson, spokeswoman for the U.S. National Security Council. “We stand firmly with the government and people of Israel and extend our condolences for the Israeli lives lost in these attacks.”

    In the kibbutz of Nahal Oz, just 4 kilometers (2.5 miles) from the Gaza Strip, terrified residents who were huddled indoors said they could hear constant gunfire echoing off the buildings as firefights continued even hours after the initial attack.

    Watson said Jake Sullivan, the national security adviser, has spoken with his Israeli counterpart, Tzachi Hanegbi.

    Cars are seen on fire following a rocket attack from the Gaza Strip in Ashkelon, southern Israel, on October 7, 2023.


    Ahmad Gharabli/Agence France-Presse/Getty Images

    Saudi Arabia, which has been in talks with the U.S. about normalizing relations with Israel, released a statement calling on both sides to exercise restraint. The kingdom said it had repeatedly warned about ” the dangers of the situation exploding as a result of the continued occupation (and) the Palestinian people being deprived of their legitimate rights.”

    The attack comes at a time of historic division within Israel over Netanyahu’s proposal to overhaul the judiciary. Mass protests over the plan have sent hundreds thousands of Israeli demonstrators into the streets and prompted hundreds of military reservists to avoid volunteer duty — turmoil that has raised fears over the military’s battlefield readiness and raised concerns about its deterrence over its enemies.

    The infiltration of fighters into southern Israel marked a major escalation by Hamas that forced millions of Israelis to hunker down in safe rooms. Cities and towns emptied as the military closed roads near Gaza. Israel’s rescue service and the Palestinian Health Ministry in Gaza appealed to the public to donate blood.

    “We understand that this is something big,” Lt. Col. Richard Hecht, an Israeli army spokesman, told reporters. He said the Israeli military had called up the army reserves.

    Hecht declined to comment on how Hamas had managed to catch the army off guard. “That’s a good question,” he said.

    Ismail Haniyeh, the exiled leader of Hamas, said that Palestinian fighters were “engaged in these historic moments in a heroic operation” to defend the Al-Aqsa Mosque in Jerusalem and the thousands of Palestinian prisoners held by Israel.

    “With rockets we somehow feel safer, knowing that we have the Iron Dome (missile defense system) and our safe rooms. But knowing that terrorists are walking around communities is a different kind of fear,” said Mirjam Reijnen, a 42-year-old volunteer firefighter and mother of three in Nahal Oz.

    Israel has built a massive fence along the Gaza border meant to prevent infiltrations. It goes deep underground and is equipped with cameras, high-tech sensors and sensitive listening technology.

    The escalation comes after weeks of heightened tensions along Israel’s volatile border with Gaza, and heavy fighting in the Israeli-occupied West Bank.

    Saturday’s wide-ranging assault threatened to undermine Netanyahu’s reputation as a security expert who would do anything to protect Israel. It also raised questions about the cohesion of a security apparatus crucial to the stability of a country locked in low-intensity conflicts on multiple fronts and facing threats from Lebanon’s Hezbollah militant group.

    Hezbollah congratulated Hamas on Friday, praising the attack as a response to “Israeli crimes” and saying the militants had “divine backing.” The group said its command in Lebanon was in contact with Hamas about the operation.

    Israel has maintained a blockade over Gaza since Hamas seized control of the territory in 2007. The bitter enemies have fought four wars since then. There have also been numerous rounds of smaller fighting between Israel and Hamas and other smaller militant groups based in Gaza.

    The blockade, which restricts the movement of people and goods in and out of Gaza, has devastated the territory’s economy. Israel says the blockade is needed to keep militant groups from building up their arsenals. The Palestinians say the closure amounts to collective punishment.

    The rocket fire comes during a period of heavy fighting in the West Bank, where nearly 200 Palestinians have been killed in Israeli military raids this year. In the volatile northern West Bank, scores of militants and residents poured into the streets in celebration at the news of the rocket barrages.

    Israel says the raids are aimed at militants, but stone-throwing protesters and people uninvolved in the violence have also been killed. Palestinian attacks on Israeli targets have killed over 30 people.

    The tensions have also spread to Gaza, where Hamas-linked activists held violent demonstrations along the Israeli border in recent weeks. Those demonstrations were halted in late September after international mediation.

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  • Five American captives have flown out of Iran, U.S. officials say

    Five American captives have flown out of Iran, U.S. officials say

    DUBAI, United Arab Emirates (AP) — Five prisoners sought by the U.S. in a swap with Iran flew out of Tehran on Monday, officials said.

    Flight-tracking data analyzed by the AP showed a Qatar Airways flight take off at Tehran’s Mehrabad International Airport, which has been used for exchanges in the past. Iranian state media soon after said the flight had left Tehran.

    Two people, including a senior Biden administration official, said that the prisoners had left Tehran. They both spoke on condition of anonymity because the exchange was ongoing.

    Context: Iran and U.S. set to exchange prisoners as $6 billion in once-frozen Iranian assets reaches Qatar

    Also see: Iran identifies prisoners it wants freed by U.S. even as President Raisi voices view of unfrozen funds at odds with Washington’s

    In addition to the five freed Americans, two U.S. family members flew out, according to the Biden administration official. of Tehran.

    The cash represents money South Korea owed Iran — but had not yet paid — for oil shipments. U.S. House Democrat Jason Crow said Monday that the Biden administration’s recent negotiations led to a situation in which those funds have more, rather than fewer, strings attached.

    Earlier, officials said that the exchange would take place after nearly $6 billion in once-frozen Iranian assets reached Qatar, a key element of the planned swap.

    Rep. Jason Crow, a Colorado Democrat, observed early Monday on MSNBC that the funds were available to Iran, and that South Korea could unilaterally have transferred them to Tehran, under terms of an arrangement struck by the Trump administration. The Biden administration’s recent negotiations led to a situation, he said, in which those funds have more, rather than fewer, strings attached.

    The U.S. Treasury holds the power to reject any requested fund transfers to Iran, U.S. officials have said, even as Iranian President Ebrahim Raisi claimed last week in an NBC interview that he was free under the deal’s terms to define the term humanitarian as he chose.

    Observers, seeking to reconcile those positions, noted that Raisi likely had a domestic audience in mind and was expressing a view that he knew did not comport with reality.

    Despite the exchange, tensions are almost certain to remain high between the U.S. and Iran, which are locked in various disputes, including over Tehran’s nuclear program.

    Iran says the program is peaceful, but it now enriches uranium closer than ever to weapons-grade levels.

    Iranian Foreign Ministry spokesman Nasser Kanaani was the first to acknowledge the swap would take place Monday. He said the cash sought for the exchange that had been held by South Korea was now in Qatar.

    Kanaani made his comments during a news conference aired on state television, but the feed cut immediately after his remarks.

    “Fortunately Iran’s frozen assets in South Korea were released and God willing today the assets will start to be fully controlled by the government and the nation,” Kanaani said.

    “On the subject of the prisoner swap, it will happen today and five prisoners, citizens of the Islamic Republic, will be released from the prisons in the U.S.,” he added. “Five imprisoned citizens who were in Iran will be given to the U.S. side.”

    He said two of the Iranian prisoners will stay in the U.S.

    Mohammad Reza Farzin, Iran’s Central Bank chief, later came on state television to acknowledge the receipt of over 5.5 billion euros — $5.9 billion — in accounts in Qatar. Months ago, Iran had anticipated getting as much as $7 billion.

    The planned exchange comes ahead of the convening of world leaders at the U.N. General Assembly this week in New York, where Iran’s hard-line President Ebrahim Raisi will speak.

    A Qatar Airways plane landed Monday morning at Mehrabad International Airport in Tehran, according to flight-tracking data analyzed by the AP. Qatar Airways uses Tehran’s Imam Khomeini International Airport for its commercial flights, but previous prisoner releases have taken place at Mehrabad.

    The announcement by Kanaani comes weeks after Iran said that five Iranian-Americans had been transferred from prison to house arrest as part of a confidence-building move. Meanwhile, Seoul allowed the frozen assets, held in South Korean won, to be converted into euros.

    The planned swap has unfolded amid a major American military buildup in the Persian Gulf, with the possibility of U.S. troops boarding and guarding commercial ships in the Strait of Hormuz, through which 20% of all oil shipments pass.

    The deal has also already opened U.S. President Joe Biden to fresh criticism from Republicans and others who say that the administration is helping boost the Iranian economy at a time when Iran poses a growing threat to American troops and Mideast allies. That could have implications in his reelection campaign as well.

    On the U.S. side, Washington has said the planned swap includes Siamak Namazi, who was detained in 2015 and was later sentenced to 10 years in prison on spying charges; Emad Sharghi, a venture capitalist sentenced to 10 years; and Morad Tahbaz, a British-American conservationist of Iranian descent who was arrested in 2018 and also received a 10-year sentence. All of their charges have been widely criticized by their families, activists and the U.S. government.

    U.S. official have so far declined to identify the fourth and fifth prisoner.

    The five prisoners Iran has said it seeks are mostly held over allegedly trying to export banned material to Iran, such as dual use electronics that can be used by a military.

    The cash represents money South Korea owed Iran — but had not yet paid — for oil purchased before the U.S. imposed sanctions on such transactions in 2019.

    The U.S. maintains that, once in Qatar, the money will be held in restricted accounts and will only be able to be used for humanitarian goods, such as medicine and food. Those transactions are currently allowed under American sanctions targeting the Islamic Republic over its advancing nuclear program.

    Iranian government officials have largely concurred with that explanation, though some hard-liners have insisted, without providing evidence, that there would be no restrictions on how Tehran spends the money.

    Iran and the U.S. have a history of prisoner swaps dating back to the 1979 U.S. Embassy takeover and hostage crisis following the Islamic Revolution. Their most recent major exchange happened in 2016, when Iran came to a deal with world powers to restrict its nuclear program in return for an easing of sanctions.

    Four American captives, including Washington Post journalist Jason Rezaian, flew home from Iran at the time, and several Iranians in the U.S. won their freedom. That same day, then-President Barack Obama’s administration airlifted $400 million in cash to Tehran.

    The West accuses Iran of using foreign prisoners — including those with dual nationality — as bargaining chips, an allegation Tehran rejects.

    Negotiations over a major prisoner swap faltered after then-President Donald Trump unilaterally withdrew America from the nuclear deal in 2018. From the following year on, a series of attacks and ship seizures attributed to Iran have raised tensions.

    Meanwhile, Iran’s nuclear program now enriches closer than ever to weapons-grade levels. While the head of the United Nations’ nuclear watchdog has warned that Iran now has enough enriched uranium to produce “several” bombs, months more would likely be needed to build a weapon and potentially miniaturize it to put it on a missile — if Iran decided to pursue one.

    Iran maintains its nuclear program is peaceful, and the U.S. intelligence community has kept its assessment that Iran is not pursuing an atomic bomb.

    Iran has taken steps in recent months to settle some issues with the International Atomic Energy Agency. But the advances in its program have led to fears of a wider regional conflagration as Israel, itself a nuclear power, has said it would not allow Tehran to develop the bomb. Israel bombed both Iraq and Syria to stop their nuclear programs, giving the threat more weight. It also is suspected in carrying out a series of killings targeting Iran’s nuclear scientists.

    Iran also supplies Russia with the bomb-carrying drones Moscow uses to target sites in Ukraine in its war on Kyiv, which remains another major dispute between Tehran and Washington.

    MarketWatch contributed.

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  • Heineken is the latest Western corporate giant to exit Russia

    Heineken is the latest Western corporate giant to exit Russia

    Beer giant Heineken N.V. is the latest Western company to exit Russia, announcing Friday the sale of its Russian operations to Arnest Group for one euro.

    Under the terms of the deal, all of Heineken’s
    HEIA,
    +0.77%

    remaining assets, including seven breweries in Russia, will transfer to the new owners, the beer giant said in a statement. The Russian Arnest Group has also taken over responsibility for Heineken’s 1,800 employees in Russia.

    Heineken began the process of exiting Russia in March 2022, following that country’s invasion of Ukraine. The company said it expects to incur a total cumulative loss of €300 million ($324.1 million) as a result of its exit.

    “We have now completed our exit from Russia. Recent developments demonstrate the significant challenges faced by large manufacturing companies in exiting Russia,” Heineken CEO Dolf van den Brink said in a statement. “While it took much longer than we had hoped, this transaction secures the livelihoods of our employees and allows us to exit the country in a responsible manner.”

    Related: Unilever CEO vows to look at Russian operations with ‘fresh eyes’ as pressure to exit the country mounts

    A number of major Western corporations, including U.S. giants Apple Inc.
    AAPL,
    +1.26%
    ,
     Alphabet Inc. 
    GOOGL,
    +0.08%

    GOOG,
    +0.21%
    ,
     Amazon.com Inc.
    AMZN,
    +1.08%
    ,
     International Business Machines  Corp. 
    IBM,
    +1.25%

    and McDonald’s Corp. 
    MCD,
    +0.79%
    ,
    have left Russia in response to Moscow’s February 2022 invasion of Ukraine.

    Earlier this week, DP Eurasia, the master franchiser of the Domino’s Pizza Inc.
    DPZ,
    +0.49%

    brand in Turkey, Russia, Azerbaijan and Georgia, also announced its exit from Russia.

    But Heineken is “no hero,” according to Mark Dixon, the founder of the Moral Rating Agency, an organization set up after the invasion of Ukraine to examine whether companies were carrying out their promises of exiting Russia. “It failed to leave Russia for a year and a half,” he told MarketWatch via email. “The explanation that it took longer than expected doesn’t hold water, because of course it’s difficult to find a buyer if you remain so long a pariah state.”

    The Ukraine Solidarity Project said that Heineken’s move should increase the pressure on companies that remain in Russia, such as consumer-goods giant Unilever PLC
    ULVR,
    +0.44%
    .
    “The point here is that major companies, like @Heineken, are and have taken loses of hundreds of millions and billions in leaving the Russian market. It is possible,” the Ukraine Solidarity Project tweeted Friday. “We’re sure @Unilever can do it, too.”

    Related: WeWork, Carl’s Jr., Unilever and Shell among companies slammed by Yale over operations in Russia

    The Ukraine Solidarity Project recently launched a high-profile campaign urging Unilever to get out of Russia, using images of Ukrainian veterans injured in the war with Russia. Last month, activists from the Ukraine Solidarity Project held up a giant poster featuring the veterans outside Unilever’s London headquarters.

    The Moral Rating Agency has also reiterated its calls for Unilever to end its Russian operations. 

    “We have always said we would keep our position in Russia under close review,” a Unilever spokesperson told MarketWatch earlier this month. The spokesperson also directed MarketWatch to a statement on the war in Ukraine that the company released in February 2023.

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  • Trump pleads not guilty in Jan. 6 case

    Trump pleads not guilty in Jan. 6 case

    Former President Donald Trump entered pleas of not guilty Thursday at an arraignment in Washington, D.C., giving his formal response to his four-count indictment over his efforts to overturn the 2020 presidential election, including his role in the Jan. 6, 2021, attack on the U.S. Capitol.

    Trump, the frontrunner in polls for the 2024 Republican presidential nomination, has denied wrongdoing, and earlier Thursday he continued to criticize the legal proceedings as largely about helping President Joe Biden, a Democrat, in next year’s election.

    “The Dems don’t want to run against me or they would not be doing this unprecedented weaponization of ‘Justice.’ BUT SOON, IN 2024, IT WILL BE OUR TURN,” Trump said in a post on his Truth Social platform.

    In Tuesday’s 45-page indictment, Trump was hit with charges that included conspiracy to defraud the U.S. and conspiracy to obstruct an official proceeding.

    Related: Bill Barr says Jan. 6 indictment is ‘legitimate’ and that Trump knew he lost the election

    The former president’s appearance in Washington is just one step in a legal battle that will likely take months or even years to play out.

    Special counsel Jack Smith on Tuesday said his office “will seek a speedy trial” in the Jan. 6 case, but Trump defense attorney John Lauro has pushed back repeatedly on Smith’s statement, telling NPR on Wednesday that his side wants “a just trial, not simply a speedy trial,” and that the trial itself “could last six months or nine months or even a year.”

    Trump’s legal team looks likely to make change-of-venue requests, with the former president talking up West Virginia in a Truth Social post late Wednesday. He said the Jan. 6 case “will hopefully be moved to an impartial Venue, such as the politically unbiased nearby State of West Virginia! IMPOSSIBLE to get a fair trial in Washington, D.C., which is over 95% anti-Trump.”

    The next hearing in the case was reportedly scheduled for Aug. 28, which would be five days after the first GOP presidential primary debate.

    Trump also entered pleas of not guilty earlier this year in a Manhattan case over hush-money payments and in a Miami case over classified documents. Another investigation, in Georgia’s Fulton County, centers on efforts by Trump and his allies to undo that state’s 2020 election result. The county prosecutor said over the weekend that she will announce charging decisions by Sept. 1 in that probe.

    Biden told CNN Thursday that he was not planning to follow Trump’s arraignment, responding with an emphatic “no” when asked about it during a bike ride in Rehoboth Beach, Del., where he is vacationing this week.

    Now read: ‘You’re too honest’: Donald Trump’s alleged Jan. 6 conspiracies, explained

    And see: Trump indictment: What does arraignment mean, and what happens next?

    Plus: How DeSantis is leading Trump in cash on hand, even as the former president dominates in polls

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  • ‘You’re too honest’: Donald Trump’s alleged Jan. 6 conspiracies, explained

    ‘You’re too honest’: Donald Trump’s alleged Jan. 6 conspiracies, explained

    Once is an accident, twice is a coincidence and three times is a conspiracy.

    Former President Donald Trump is accused by federal prosecutors of engaging in three major conspiracies ahead of the Jan. 6, 2021, Capitol riot to subvert the process of counting and certifying the vote before Congress in his bid to hold on to power despite having lost the 2020 election.

    While spreading lies about how votes had been illegally cast, tampered with or miscounted in order to build mistrust among the public about the election’s outcome, special counsel Jack Smith says Trump and a group of six unnamed lawyers and advisers plotted to illegally meddle with the very basis of how presidential elections have been run in the U.S since its founding.

    A four-count indictment unsealed in federal court in Washington on Tuesday alleges that the group worked unrelentingly to tamper with how several states counted their ballots and the process by which states sent electors to Washington to finalize their vote. The indictment also accused Trump of pressuring the Justice Department and Vice President Mike Pence to intervene even though they had no standing to do so.   

    “Each of theses conspiracies — which built upon the widespread mistrust the defendant was creating through pervasive and destabilizing about election fraud — targeted a bedrock function of the United States federal government: the nation’s process of collecting, counting, and certifying the results of the presidential election,” the indictment read.

    Trump has dismissed the charges as being purely politicized.

    “The lawlessness of these persecutions of President Trump and his supporters is reminiscent of Nazi Germany in the 1930s, the former Soviet Union, and other authoritarian, dictatorial regimes,” a statement released by his campaign read. “President Trump has always followed the law and the constitution, with advice from many highly accomplished attorneys.”

    The charges allege three acts of conspiracy and one of obstructing an official proceeding. Here are the main legal arguments Smith makes against the former president:

    ‘We have lots of theories’

    Prosecutors say that starting almost immediately after the election on Nov. 3, 2020, Trump began a campaign to get officials in key states like Arizona, Nevada, New Mexico, Pennsylvania, Michigan, Wisconsin and Georgia to overturn the election results.

    Trump pressured state officials to throw the vote out based on allegations ranging from dead people voting to non-citizens casting ballots, and from voting machines being tampered to ballot-box stuffing, despite there being no evidence any of it had occurred. 

    “We don’t have evidence, but we have lots of theories,” one of Trump’s co-conspirators allegedly told the speaker of the house of Arizona, a Trump-backer, when asked what proof they had about electoral malfeasance.

    When officials in the states refused to go along with Trump’s request to decertify the results, the president continued to publicly trumpet false claims about voter fraud and attack local officials as “terrible people” who were in on the fraud, the indictment said.

    Smith said that Trump continued to make the claims despite having been told repeatedly by numerous people in multiple agencies — many of them his own supporters — that there was no truth to it and having lost case after case in court. 

    “When our research and campaign team can’t back up any of the claims made by our Elite Strike Force Legal Team, you can see why we’re 0-32 on our cases,” one senior campaign advisor said, according to the indictment. “It’s tough to own any of this when it’s all just conspiracy s*** beamed down from the mothership.”

    Smith argues that this effort amounted to using deceit to subvert the election’s result, which is against the law. 

    Phony electors

    One key component of the conspiracy case against Trump revolves around efforts to create a competing slate of electors from each challenged state.

    As part of the presidential electoral process, every state sends electors to Washington to deliver the vote to congress. It’s a mostly ceremonial procedure, but Trump’s legal team is accused of hatching a plot to send a second group of electors who backed Trump from several states in order to create confusion in Congress and force legislators in Washington to have to debate the election’s outcome.  

    No matter that the second slate of electors hadn’t been approved by officials in the states they purported to represent and were not authorized in any way, the indictment says. The effort was so patently bogus that Trump’s team even referred to the group as “phony electors” in their own correspondence, the indictment stated. 

    In the indictment, Smith said the effort amounted to a conspiracy to commit fraud.  

    ‘You’re too honest’

    A third leg of the conspiracy allegedly involved pressuring officials at the Justice Department and Pence to intervene in the election even though they had no standing to do so.  

    The indictment says Trump and his co-conspirators repeatedly communicated with then acting attorney general Jeffrey Rosen and insisted that he declare ahead of the Jan. 6 certification of the election by Congress that there had been evidence of fraud.

    When Rosen said he would not do that because there was no such evidence, Trump allegedly threatened to replace him with one of the unnamed co-conspirators included in the indictment. 

    At one point, a deputy White House counsel told the co-conspirator that “there is no world, there is no option in  which you do not leave the White House,” and warned that there would be “riots in the streets” if Trump attempted to remain in office, to which the co-conspirator allegedly said: “That’s why there is an Insurrection Act.”

    For weeks ahead of the Jan. 6 certification hearing in Congress, Trump and his cohorts pressured Pence to refuse to certify the vote tally, a purely ceremonial task the vice president has presided over since the country’s founding. 

    Pence steadfastly refused to do so, saying his legal team had told him there was no constitutional basis for the vice president to be able to overturn an election at the last minute. In a phone call less than a week before Jan. 6, Trump allegedly berated Pence and told him, “You’re too honest.”

    When a senior White House advisor told one of the unnamed co-conspirators that if Pence tried to overturn the election it would lead to violence in the streets, the co-conspirator allegedly said that there had been times in the country’s history where violence was necessary to protect the Republic, the indictment said.

    In the days and hours leading up to the Jan. 6 riot, Trump posted several messages on Twitter stating that Pence had the authority to overturn the election and continuing to pressure him to do so. 

    Exploiting the chaos

    On Jan. 6, after Pence issued a statement saying he did not have the authority to not certify the vote, protests outside Congress turned violent, with hundreds of rioters clashing with police and storming the building, delaying the proceedings.

    During the standoff, some of Trump’s co-conspirators tried to reach members of Congress and the Senate to convince them to further delay the certifying process in order to buy Trump more time to convince state legislatures to nullify the already-approved votes, the indictment says.

    Later that afternoon, Trump tweeted: “See, this is what happens when they try to steal an election. These people are angry. These people are really angry about it. This is what happens.” 

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  • Trump indicted by special counsel over efforts to overturn 2020 election

    Trump indicted by special counsel over efforts to overturn 2020 election

    Former President Donald Trump on Tuesday was indicted by a grand jury in Washington, D.C., in connection with the Justice Department’s probe into efforts to overturn the 2020 presidential election, including the Jan. 6, 2021, attack on the U.S. Capitol.

    Special counsel Jack Smith has been examining Trump’s actions leading up to the Jan. 6 attack. On that day, a mob of Trump supporters stormed the Capitol building in an attempt to disrupt the congressional certification of the election results.

    In Tuesday’s 45-page indictment, Trump was hit with four charges: conspiracy to defraud the U.S., conspiracy to obstruct an official proceeding, obstruction of and attempt to obstruct an official proceeding and conspiracy against rights.

    “The attack on our nation’s capitol on Jan. 6, 2021, was an unprecedented assault on the seat of American democracy,” Smith said at a news conference.

    “As described in the indictment, it was fueled by lies — lies by the defendant targeted at obstructing a bedrock function of the U.S. government, the nation’s process of collecting, counting and certifying the results of the presidential election.”

    Trump is expected to be arraigned on Thursday in Washington.

    “In this case, my office will seek a speedy trial so that our evidence can be tested in court and judged by a jury of citizens,” Smith also said.

    The indictment said Trump had six co-conspirators, and it indicated that four of the individuals were attorneys, one was a political consultant and another was a Justice Department official.

    Trump has denied wrongdoing and is the overwhelming favorite in polls for the GOP nomination for the 2024 presidential race, far ahead in a crowded field that includes Florida Gov. Ron DeSantis, former Vice President Mike Pence, former New Jersey Gov. Chris Christie and entrepreneur Vivek Ramaswamy. The former president on July 18 said he’d gotten a letter informing him he is a target of that probe. He said he anticipated being indicted.

    Read: Trump says he’s a target of special counsel Jack Smith’s Jan. 6 case

    The indictment ratchets up legal pressure for Trump as he seeks the 2024 GOP nomination and aims to challenge Democratic President Joe Biden. The former president is already facing federal charges in Florida that he mishandled classified documents after leaving the White House, and criminal charges in New York over a hush-money case. A separate election-interference investigation is underway in Georgia.

    Read more: Trump has now been indicted in a third case. Here’s where all the investigations stand.

    “This is nothing more than the latest corrupt chapter in the continued pathetic attempt by the Biden crime family and their weaponized Department of Justice to interfere with the 2024 presidential election, in which President Trump is the undisputed frontrunner, and leading by substantial margins,” said Trump’s 2024 campaign in a statement.

    “The lawlessness of these persecutions of President Trump and his supporters is reminiscent of Nazi Germany in the 1930s, the former Soviet Union, and other authoritarian, dictatorial regimes,” the statement also said.

    In addition, Trump’s campaign made an effort to raise money off the latest indictment, sending an email from the 45th president that asked supporters to “make a contribution to show that you will NEVER SURRENDER our country to tyranny as the Deep State thugs try to JAIL me for life.”

    Trump’s former vice president, Mike Pence, who’s also seeking the GOP presidential nomination, said in a statement late Tuesday: “Today’s indictment serves as an important reminder: anyone who puts himself over the Constitution should never be president of the United States,” adding he will have more to day after reviewing the indictment.

    An indictment does not disqualify Trump from mounting a White House campaign. The only requirements to run for president, as laid out in the Constitution, are being a natural-born citizen at least 35 years old and a resident of the U.S. for 14 years.

    Washington Watch: Donald Trump indicted again. Can he still run for president?

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  • China Controls Minerals That Run the World—and It Just Fired a Warning Shot at U.S.

    China Controls Minerals That Run the World—and It Just Fired a Warning Shot at U.S.

    China Controls Minerals That Run the World—and It Just Fired a Warning Shot at U.S.

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  • Americans are now being advised to reconsider travel to China

    Americans are now being advised to reconsider travel to China

    BEIJING (AP) — The U.S. recommended Americans reconsider traveling to China because of arbitrary law enforcement and exit bans and the risk of wrongful detentions.

    No specific cases were cited, but the advisory came after a 78-year-old U.S. citizen was sentenced to life in prison on spying charges in May.

    It also followed the passage last week of a sweeping Foreign Relations Law that threatens countermeasures against those seen as harming China’s interests.

    China also recently passed a broadly written counterespionage law that has sent a chill through the foreign business community, with offices being raided, as well as a law to sanction foreign critics.

    “The People’s Republic of China (PRC) government arbitrarily enforces local laws, including issuing exit bans on U.S. citizens and citizens of other countries, without fair and transparent process under the law,” the U.S. advisory said.

    “U.S. citizens traveling or residing in the PRC may be detained without access to U.S. consular services or information about their alleged crime,” it warned.

    Similar U.S. advisories issued for the semiautonomous Chinese regions of Hong Kong and Macao.

    The advisory also said that Chinese authorities “appear to have broad discretion to deem a wide range of documents, data, statistics, or materials as state secrets and to detain and prosecute foreign nationals for alleged espionage.”

    It listed a wide range of potential offenses from taking part in demonstrations to sending electronic messages critical of Chinese policies or even simply conducting research into areas deemed sensitive.

    Exit bans could be used to compel individuals to participate in Chinese government investigations, pressure family members to return from abroad, resolve civil disputes in favor of Chinese citizens and “gain bargaining leverage over foreign governments,” the advisory said.

    Similar advisories were issued for the semiautonomous Chinese regions of Hong Kong and Macao. They were dated Friday and emailed to journalists on Monday.

    The U.S. had issued similar advisories to its citizens in the past, but those in recent years had mainly warned of the dangers of being caught in strict and lengthy lockdowns while China closed its borders for three years under its draconian “zero-COVID” policy.

    China generally responds angrily to what it considers U.S. efforts to impugn its authoritarian Communist Party–led system. It has issued its own travel advisories concerning the U.S., warning of the dangers of crime, anti-Asian discrimination and the high cost of emergency medical assistance.

    From the archives (June 2020): Hong Kong bans insults to China’s national anthem

    Also (August 2021): Biden signs order to allow thousands of Hong Kong residents to stay in the U.S. amid Beijing’s crackdown

    China had no immediate response to the travel advisory on Monday.

    Details of the accusations against the accused spy John Shing-Wan Leung are not available, given China’s authoritarian political system and the ruling Communist Party’s absolute control over legal matters. Leung, who also holds permanent residency in Hong Kong, was detained in the southeastern city of Suzhou on April 15, 2021 — a time when China had closed its borders and tightly restricted movement of people domestically to control the spread of COVID-19.

    The warnings come as U.S.-China relations are at their lowest in years, over trade, technology, Taiwan and human rights, although the sides are taking some steps to improve the situation. U.S. Secretary of State Antony Blinken made a long-delayed visit to Beijing last week and Treasury Secretary Janet Yellen is making a much-anticipated trip to Beijing this week. China also recently appointed a new ambassador to Washington, who presented his credentials in a meeting with President Joe Biden at the White House.

    Other incidents, however, have also pointed to the testiness in the relationship. China formally protested last month after Biden called Chinese leader Xi Jinping a “dictator,” days after Blinken’s visit.

    From the archives (February 2021): Biden says China faces ‘extreme competition’ from U.S. under his administration

    Also see (June 2020): Bolton book adds urgency to Trump bid to depict himself as a China hawk and to paint Biden as a Beijing apologist

    Capitol Report (June 2020): Trump asked China’s Xi to buy U.S. farm products to help him win re-election, Bolton book says

    Biden brushed off the protest, saying his words would have no negative impact on U.S.-China relations and that he still expects to meet with Xi sometime soon. Biden has also drawn rebukes from Beijing by explicitly saying the U.S. would defend self-governing Taiwan if China, which claims the island as its own territory, were to attack it.

    The White House’s John Kirby discusses President Joe Biden’s priorities when it comes to Ukraine, China and other national-security matters. Kirby, who will be interviewed by MarketWatch’s Victor Reklaitis, is the strategic-communications coordinator for Biden’s National Security Council.

    Biden said his blunt statements regarding China are “just not something I’m going to change very much.”

    See: Biden says he plans to meet with China’s Xi even after calling him a dictator

    Also: ‘Extremely absurd and irresponsible’: China fires back after Biden labels Xi a dictator

    From the archives (March 2023): Xi says U.S. is trying to hinder China in its quest for global influence

    The administration is also under pressure from both parties to take a tough line on China, making it one of the few issues on which most Democrats and Republicans agree.

    Along with several detained Americans, two Chinese-Australians, Cheng Lei, who formerly worked for China’s state broadcaster, and writer Yang Jun, have been held since 2020 and 2019, respectively, without word on their sentencing.

    Perhaps the most notorious case of arbitrary detention involved two Canadians, Michael Kovrig and Michael Spavor, who were detained in China in 2018, shortly after Canada arrested Meng Wanzhou, Huawei Technologies’ chief financial officer and the daughter of the tech powerhouse’s founder, on a U.S. extradition request.

    They were charged with national-security crimes that were never explained and released three years later after the U.S. settled fraud charges against Meng. Many countries labeled China’s action “hostage politics.”

    Read on (May 2023): Biden national-security adviser tells Chinese diplomat that U.S. seeks to move beyond spy-balloon episode

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  • Inside Jeffrey Epstein’s final days: Extra bed sheets, secret phone calls and last-minute changes to his will

    Inside Jeffrey Epstein’s final days: Extra bed sheets, secret phone calls and last-minute changes to his will

    Less than 48 hours before being found dead in prison, Jeffrey Epstein met with his lawyers to sign a new version of his last will and testament. 

    The disgraced financier had been under psychological observation from a previous episode in which he was found hanging in his prison cell, but the provocative step of signing a new will went unnoticed by prison officials until after Epstein’s death.

    That lapse was one of many missteps and missed opportunities to stop Epstein from killing himself sometime in the early morning hours of Aug. 10, 2019, contained in an official report released Tuesday by the Department of Justice’s internal, investigative watchdog.

    The report stands by the initial determination that Epstein’s death was the result of suicide as there were no signs of foul play or that anyone had been anywhere near his cell after he was last seen alive by prison guards the night before.

    But the report also lays out in detail Epstein’s final days, including a number of curious steps he took in that time and a series of serious protocol breaches made by prison staff that would contribute to him being left unwatched long enough to kill himself.

    Epstein was arrested on July 6 of that year on federal sex-trafficking charges. He was ordered held without bail and eventually placed in the special housing unit of the Manhattan Correctional Center in New York while he awaited trial. There, inmates were kept in their cells for 23 hours a day, although Epstein spent much of his time meeting with his attorneys, the report said.

    From the beginning, Epstein had a cellmate. On the night of July 23, the cellmate began banging on the cell door and screaming for the guards. When officers arrived, they found Epstein hanging from the bunk bed ladder with an orange piece of cloth wrapped around his neck.

    The officers pulled Epstein down and managed to resuscitate him. When he later came to, he initially said he thought his cellmate had tried to kill him, but later said he could not recall what had happened. An investigation could not definitively conclude what had happened, the DOJ report said.

    Following the episode, Epstein was placed on suicide watch — in which he was continuously monitored by staff. When prison psychologists later determined that Epstein was no longer a risk to himself, they downgraded his status to “psychological observation,” meaning he could be returned to a cell and not be kept under continual watch. 

    Curiously, Epstein said he wanted his original cellmate back. When prison officials said they weren’t sure that was such a good idea, Epstein replied: “Yeah, but I don’t understand, you know, we were bunkies, everything was cool,” the report quoted him as saying.

    On July 30, prison staff were informed that Epstein needed to be assigned an “appropriate cellmate,” and he was housed with another inmate in a cell just 15 feet away from the guard station. That inmate later reported that Epstein was allowed to sleep on a mattress on the floor and was given an extra blanket, in violation of prison rules.

    On August 8, Epstein signed the new will. The following morning, Epstein’s cellmate was transferred out of the prison, leaving Epstein alone. 

    Later that day, more than 2,000 pages of documents were publicly released as part of court proceedings against Epstein’s long-time companion, Ghislaine Maxwell. The documents included extensive information that was damaging to Epstein.

    Maxwell was found guilty in 2021 of conspiring with Epstein to sexually abuse minors and sentenced to 20 years in prison.

    That evening, after meeting with his lawyers, Epstein  was allowed to place an unmonitored phone call. The report said that while Epstein claimed he was calling his mother, he actually phoned “someone with whom he allegedly has a personal relationship,” the report stated.

    Epstein was last seen alive in his cell at 10:40 p.m. and was discovered dead by prison staff at 6:30 a.m. the following morning. He was once again found hanging from the upper bunk with a cord tied around his neck.

    According to the report, prison officials discovered extra sheets and bedding in the cell. An investigation revealed that the prison guards on duty that night, failed to conduct rounds of the cell block and check on Epstein every 30 minutes like they were supposed to, meaning Epstein was unwatched for nearly eight hours.

    The guards were later charged with falsifying records to show that they had done the required rounds while they were actually sleeping and surfing the internet. The two guards later reached deferred prosecution agreements with the federal prosecutors, in which charges against them were dropped after they performed community service and kept out of trouble for six months.  

    Some of the prison cameras in the cell block also had been malfunctioning for weeks so that while they provided a live feed of the area, they failed to record. A nearby camera that was fully operational showed no one entering the area after the guards last locked Epstein in his cell at 10:40 p.m. the night before he was found dead, the report said.

    An autopsy showed no signs of foul play or that Epstein had struggled with anyone prior to his death. Officials say they believe he had hanged himself.

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  • Rebellion in Russia could trigger selloff in U.S. stocks and flight to safe assets, analysts say. Here’s what investors should know.

    Rebellion in Russia could trigger selloff in U.S. stocks and flight to safe assets, analysts say. Here’s what investors should know.

    Watch what happens over the next 36 hours.

    That was the advice from one financial analyst as U.S. investors awoke on Saturday to news of an apparent armed rebellion against Moscow led by Yevgeny Prigozhin, the owner of the powerful Russian mercenary organization Wagner Group.

    Others speculated that the crisis in Russia could drive U.S. stocks lower, as some traders were already betting on a selloff once markets reopen on Monday due to this sudden spike in geopolitical risk.

    “The developments in Russia are ultimately going to suggest President Putin’s leadership is weakening quickly and that resources may shift away from the war with Ukraine. It is too early to say how this will impact Wall Street, but the risk of desperate measures from Putin might make some investors nervous,” Edward Moya, senior market analyst at Oanda, said Saturday.

    A simmering feud between Prigozhin, the leader of the military contractor whose mercenary forces have been fighting alongside Russian military troops in Ukraine, and the Russian Defense Ministry came to a head early Saturday as Prigozhin led his troops to successfully overtake a Russian military outpost near the Ukrainian frontier, which the Kremlin has used as its command center for overseeing the war in Ukraine.

    Amid the mixture of reliable information and unfounded speculation, market analysts have scrambled to make sense of the situation and what it might mean for financial markets and the global economy.

    The main theme that has emerged so far is that U.S. stocks would suffer unless the Russian military managed to quickly suppress the rebellion, as may have occurred with reports late Saturday that Prigozhin had halted a Wagner advance on Moscow and, in fact, might be relocating to neighboring Belarus. But how would something that could potentially cut short the war in Ukraine — which has been a bugbear for markets since the full-scale invasion by Russian forces in February 2022 — be a negative for stocks?

    The answer is that chaos leads to uncertainty, and that uncertainty is anathema to markets — especially when it could disrupt global oil and food supplies.

    “I’d bet on this creating more uncertainty which is generally going to be negative for risk … in the short term at least you see higher geopolitical risk premia — longer term the risks are on both sides really: does this precipitate the collapse of the Russian front and the war ends?” said Neil Wilson, chief market analyst at Finalto, in a note to clients on Saturday.

    Others noted that the crisis is coming at a vulnerable time for U.S. markets, while Michael Antonelli, a market strategist at R.W. Baird & Co., suggested in a tweet that the crisis “has to be” bearish for U.S. stocks.

    The S&P 500 index
    SPX,
    -0.77%

    closed out its worst week since March on Friday as a series of interest-rate hikes in the U.K. and across Europe last week sparked fresh fears of a global recession. Some analysts noted that the pullback swiftly followed signs that investors are growing more bullish following a powerful rally that sent stocks to their highest levels in 14 months. There are concerns that this shift in sentiment could presage investors’ final capitulation.

    Sven Henrich, founder and lead strategist of Northman Trader, noted that the Cboe Volatility Index
    VIX,
    +4.11%
    ,
    the market’s so-called fear gauge, which measures the stock market’s expectations for volatility over the next 30 days, managed to finish last week below 13.5, its lowest level since January 2020, even as stocks pulled back.

    If stocks do continue to slide, that would mean new lows for the Vix have proved to be a reliable counterindicator, suggesting that investors had grown complacent before being walloped by a fresh shock.

    Asian markets will be the first to react to ongoing developments by Sunday evening Eastern time, but derivatives traders using CME Group’s Globex platform to trade swaps tracking the value of U.S. equity indexes are already betting on a selloff.

    Meanwhile, bitcoin
    BTCUSD,
    +0.11%
    ,
    an asset that does reliably trade 24/7, was down just 0.8% at $30,675, a slight pullback after achieving its highest level in a year late last week. By Saturday evening the leading cryptocurrency has reversed that earlier dip.

    Where might investors turn for safety if markets do become chaotic?

    Finalto’s Wilson said investors could seek shelter in the currency market, where the U.S. dollar
    DXY,
    +0.47%
    ,
    Swiss franc
    USDCHF,
    -0.02%

    and maybe the euro
    EURUSD,
    +0.32%

    and British pound
    GBPUSD,
    +0.02%

    could benefit from a spike in demand. More “de-risking” could send investors into ultrasafe government bonds like U.S. Treasurys
    TMUBMUSD10Y,
    3.741%
    ,
    which could help to push yields lower, as bond yields move inversely to prices.

    Wilson anticipated that European indexes could be “more exposed to de-risking due to makeup and proximity to Russia and the war in Ukraine.” He also noted the possibility that this latest crisis could send the S&P 500 and Nasdaq Composite
    COMP,
    -1.01%

    higher if investors decided to seek shelter in high-quality growth names like Apple Inc.
    AAPL,
    -0.17%
    ,
    Nvidia Corp.
    NVDA,
    -1.90%

    or Microsoft Corp.
    MSFT,
    -1.38%
    ,
    which have helped to drive this year’s equity-market rally.

    Whatever happens, the outcome of the crisis should be more clear within the next 35 hours, Wilson said.

    “[H]ow the market opens after the weekend will depend on what happens in the next 36 hours. … [I]t could all be over by then,” Wilson said.

    Regardless, one of the first to interpret the market’s reaction on Monday will be Melbourne-based Chris Weston, head of research at online broker Pepperstone.

    Until then, he cautioned investors against reading too much into the Wagner situation, since analysts’ visibility into a very complicated geopolitical situation is “poor.”

    “The humble market participant would simply say they have no edge in knowing how this plays out and our visibility to read this through to markets is currently poor — the information is often biased and it’s hard to truly know what is fact and what is fed to influence. … [W]ill this lead to genuine regime change, fail or perhaps inflame and lead to a market shock?” Weston said in comments provided to MarketWatch.

    “At this point we simply don’t know, but it feels like we get enough clarity on potential outcomes and even timelines in the next 24-48 hours — at this point the prospect of modest downside risk on Monday is elevated and naturally we’ll be watching crude and EU assets most closely,” he said.

    Terry Haines, founder of Pangea Policy, said in an email to clients that the ongoing uncertainty fueled by the Wagner rebellion reveals the fragility of the Putin regime, and might marginally boost chances of a Ukraine victory.

    But Haines also conceded that it’s a “developing and unstable situation with various facets that on net add to geopolitical uncertainties, to which markets usually react negatively.” Investors must also consider that, should that rebellion fail, it could be “replaced by stronger Russian control” or create further instability as “Wagner disintegrates.”

    In that same vein, Jim Bianco, head of Bianco Research, offered up a joke aimed at all the armchair geopolitical analysts suddenly flocking to Twitter.

    Markets may take a look at this crisis and view it as a “bullish development after some initial volatility, the Kobeissi Letter’s editor in chief and founder, Adam Kobeissi, told MarketWatch in Saturday comments.

    “After all, the end of the war in Ukraine is the market’s top geopolitical driver right now, and if this increases the odds of a peace agreement and/or Russia withdrawing from Ukraine, it is likely to be perceived as bullish over the next few weeks,” he said.

    He recommended that investors keep an eye on prices of oil and gold, which could be particularly sensitive to any fresh developments.

    “If this means more conflict,” he said, “then oil
    CL.1,
    +0.51%
    ,
    bonds
    TMUBMUSD10Y,
    3.741%

    and gold
    GC00,
    +0.04%

    are poised to rally.”

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  • Wagner chief says he ordered his Russian mercenaries to halt march on Moscow and return to Ukraine

    Wagner chief says he ordered his Russian mercenaries to halt march on Moscow and return to Ukraine

    The head of the private Russian military force Wagner said Saturday he has ordered his mercenaries to halt their march on Moscow and retreat to their field camps in Ukraine to avoid shedding Russian blood.

    The announcement from Yevgeny Prigozhin appeared to defuse a dramatically escalating crisis that represented the most significant challenge to President Vladimir Putin’s leadership in his more than two decades in power.

    See: Rebellion in Russia could trigger selloff in U.S. stocks and flight to safe assets, analysts say.

    Moscow had braced for the arrival of a private army led by the rebellious mercenary commander by erecting checkpoints with armored vehicles and troops on its southern edge. Red Square was shut down, and the mayor urged motorists to stay off some roads.

    Prigozhin said that while his men were just 200 kilometers (120 miles) from Moscow, he decided to turn them back to avoid “shedding Russian blood.”

    He didn’t say whether Moscow has responded to his demand to oust Defense Minister Sergei Shoigu. There was no immediate comment from the Kremlin.

    The announcement followed a statement from the office of Belarusian President Alexander Lukashenko saying that he had negotiated a deal with Prigozhin after discussing the issue with Putin.

    Prigozhin agreed to halt the advance in a proposed settlement that contains security guarantees for Wagner troops, Lukashenko’s office said. It didn’t elaborate.

    Putin had vowed harsh consequences for organizers of the armed uprising led by his onetime protege, who brought his forces out of Ukraine, seized a key military facility in southern Russia and advanced toward Moscow earlier Saturday.

    In a televised speech to the nation, Putin called the rebellion a “betrayal” and “treason.”

    “All those who prepared the rebellion will suffer inevitable punishment,” Putin said. “The armed forces and other government agencies have received the necessary orders.”

    Authorities declared a “counterterrorist regime” in the capital and its surrounding region, enhancing security and restricting some movement. On the southern outskirts, troops erected checkpoints, arranged sandbags and set up machine guns.

    Moscow Mayor Sergei Sobyanin warned that traffic could be restricted in parts of the capital and declared Monday a non-working day for most residents.

    Crews dug up sections of highways to slow the march of the Wagner mercenary army. Access to Red Square was closed, two major museums were evacuated and a park was shut.

    Prigozhin’s private army appeared to control the military headquarters in Rostov-on-Don, a city 660 miles (over 1,000 kilometers) south of Moscow that runs Russian operations in Ukraine, Britain’s Ministry of Defense said.

    Wagner troops and equipment also were in Lipetsk province, about 360 kilometers (225 miles) south of Moscow, where authorities “are taking all necessary measures to ensure the safety of the population,” said regional Gov. Igor Artamonov, via Telegram. He did not elaborate.

    The dramatic developments came exactly 16 months after Russia launched its full-scale invasion of Ukraine, Europe’s largest conflict since World War II, which has killed tens of thousands, displaced millions and reduced cities to rubble.

    Ukrainians hoped the Russian infighting would create opportunities for its army to take back territory seized by Russian forces.

    Ukrainian President Volodymyr Zelenskyy said Moscow was suffering “full-scale weakness” and that Kyiv was protecting Europe from “the spread of Russian evil and chaos.”

    The Federal Security Service, or FSB, called for Prigozhin’s arrest Friday night after he declared the armed rebellion.

    Prigozhin said earlier Saturday that his fighters would not surrender, as “we do not want the country to live on in corruption, deceit and bureaucracy.”

    “Regarding the betrayal of the motherland, the president was deeply mistaken. We are patriots of our homeland,” he said in an audio message on his Telegram channel.

    Prigozhin’s private army has been fighting alongside regular Russian troops in Ukraine. His goals weren’t immediately clear, but the rebellion marks an escalation in his struggle with Russian military leaders, whom he accused of botching the war in Ukraine and hobbling his forces in the field.

    “This is not a military coup, but a march of justice,” Prigozhin said.

    See: Who is the head of the mercenary group calling for an armed rebellion in Russia?

    Prigozhin said he had 25,000 troops under his command and urged the army not to offer resistance.

    He posted video of himself at the military headquarters in Rostov-on-Don and claimed his forces had taken control of the airfield and other military facilities in the city. Other videos on social media showed military vehicles, including tanks, on the streets.

    “We didn’t kill a single person on our way,” Prigozhin said in one of his several messages posted as the day went on, adding that his forces seized the military headquarters “without a single gunshot.” His claims could not be independently verified. The Russian authorities haven’t reported any casualties so far, either.

    The rebellion came as Russia is “fighting the toughest battle for its future,” Putin said, with the West piling sanctions on Moscow and arming Ukraine.

    “The entire military, economic and information machine of the West is waged against us,” Putin said.

    A Muscovite who gave only his first name of Khachik called the situation “scary.” Another man who didn’t want to be identified at all denounced Prigozhin’s move as a betrayal and said he supports the Defense Ministry.

    State-controlled TV networks led their newscasts with Putin’s statement and reported the tense situation in Rostov-on-Don. Some showed social media videos of residents denouncing Wagner troops. Broadcasters also carried statements from top officials and lawmakers voicing support for Putin and condemning Prigozhin.

    In announcing the rebellion, Prigozhin said he wanted to punish Defense Minister Sergei Shoigu after he accused Russian government forces of attacking Wagner field camps in Ukraine with rockets, helicopter gunships and artillery. He claimed that “a huge number of our comrades got killed.” Prigozhin said his forces shot down a Russian military helicopter that fired on a civilian convoy, but there was no independent confirmation.

    He alleged that Gen. Valery Gerasimov, chief of the General Staff, ordered the attacks following a meeting with Shoigu, where they decided to destroy the military contractor. The Defense Ministry denied attacking the Wagner camps.

    The 62-year-old Prigozhin, a former convict, has long ties to the Russian leader and won lucrative Kremlin catering contracts that earned him the nickname “Putin’s chef.”

    He gained attention in the U.S. when he and a dozen other Russian nationals were charged with operating a covert social media campaign aimed at fomenting discord ahead of Donald Trump’s 2016 presidential election victory. He formed the Wagner mercenary group, which sent military contractors to Libya, Syria, several African countries and eventually Ukraine.

    After Putin’s address, in which he called for unity, officials sought to reiterate their allegiance to the Kremlin and urged Prigozhin to back down.

    Vyacheslav Volodin, speaker of the lower house of parliament, said lawmakers “stand for the consolidation of forces” and support Putin. Foreign Ministry spokeswoman Maria Zakharova echoed that, saying in a Telegram post that “we have one commander in chief. Not two, not three. One.”

    Ramzan Kadyrov, the strongman leader of the Chechnya region who used to side with Prigozhin in his criticism of the military, also expressed his full support of Putin’s “every word.”

    “The mutiny needs to be suppressed,” Kadyrov said.

    While the outcome of the confrontation was still unclear, it appeared likely to further hinder Moscow’s war effort as Kyiv’s forces probed Russian defenses in the initial stages of a counteroffensive.

    Wagner forces have played a crucial role, capturing the eastern city of Bakhmut, an area where the bloodiest and longest battles have taken place. But Prigozhin has increasingly criticized the military brass, accusing it of incompetence and of starving his troops of munitions.

    Zelenskyy noted the rebellion in his Telegram channel and said “anyone who chooses the path of evil destroys himself.”

    “For a long time, Russia used propaganda to mask its weakness and the stupidity of its government. And now there is so much chaos that no lie can hide it,” he said.

    Prigozhin’s actions could have significant implications for the war. Orysia Lutsevych, the head of the Ukraine Forum at the Chatham House think tank in London, said the infighting will create confusion and potential division among Russian military forces.

    “Russian troops in Ukraine may well now be operating in a vacuum, without clear military instructions, and doubts about whom to obey and follow,” Lutsevych said.”This creates a unique and unprecedented military opportunity for the Ukrainian army.”

    Ukrainian soldier Andrii Kvasnytsia, attending a funeral for a comrade, said Prigozhin’s intentions toward Ukraine might be worse than Putin’s, but that the infighting would still benefit the country.

    Prigozhin, whose feud with the Defense Ministry dates back years, had refused to comply with a requirement that his forces sign contracts with the ministry before July 1. He said Friday he was ready for a compromise but “they have treacherously cheated us.”

    In Washington, the Institute for the Study of War said “the violent overthrow of Putin loyalists like Shoigu and Gerasimov would cause irreparable damage to the stability of Putin’s perceived hold on power.”

    Western countries monitored developments closely. U.S. Secretary of State Antony Blinken spoke with his counterparts in the other G7 countries and the European Union’s foreign affairs representative, his spokesman said, adding that Blinken “reiterated that support by the United States for Ukraine will not change.”

    Latvia and Estonia, two NATO countries that border Russia, said they were increasing security at their borders.

    The Kremlin said Putin spoke by phone with the leaders of Turkey, Belarus, Kazakhstan and Uzbekistan about the events.

    Although there was speculation that Putin had left Moscow, his spokesman Dmitry Peskov denied it.

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