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
West Texas Intermediate crude for November delivery CL00, +3.80%
BRNZ23, +3.46%,
the global benchmark, was up $3.54, or 3.2%, at $88.11 a barrel on ICE Futures Europe.
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.
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.
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.
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.
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 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.
RABAT, Morocco (AP) — A rare, powerful earthquake struck Morocco late Friday night, killing hundreds of people and damaging buildings from villages in the Atlas Mountains to the historic city of Marrakech.
Morocco’s Interior Ministry said Saturday morning that at least 632 people had died, mostly in Marrakech and five provinces near the quake’s epicenter. Another 329 people were injured. Casualty figures were expected to rise more as the search continues and as rescuers reach remote areas.
Moroccan television showed scenes from the aftermath, as many stayed outside fearing aftershocks.
Anxious families stood in streets or huddled on the pavement, some carrying children, blankets or other belongings.
Emergency workers looked for survivors in the rubble of buildings, their reflective yellow vests illuminating the nighttime landscape. The quake ripped a gaping hole in a home, and a car was nearly buried by the chunks of a collapsed building.
Baskets, buckets and clothing could be seen amid scattered stones in the remains of one building.
Moroccan media reported that the 12th century Koutoubia Mosque in Marrakech, one of the city’s most famed landmarks, suffered damage, but the extent was not immediately clear. Its 69-meter (226-foot) minaret is known as the “roof of Marrakech.”
Moroccans also posted videos showing damage to parts of the famous red walls that surround the old city in Marrakech, a UNESCO World Heritage site.
The head of a town near the earthquake’s epicenter told Moroccan news site 2M that several homes in nearby towns had partly or totally collapsed, and electricity and roads were cut off in some places.
Abderrahim Ait Daoud, head of the town of Talat N’Yaaqoub, said authorities are working to clear roads in Al Haouz Province to allow passage for ambulances and aid to populations affected, but said large distances between mountain villages mean it will take time to learn the extent of the damage.
Local media reported that roads leading to the mountain region around the epicenter were jammed with vehicles and blocked with collapsed rocks, slowing rescue efforts.
President Joe Biden got a look Saturday from the sky at Hurricane Idalia’s impact across a swath of Florida before setting out on a walking tour of a city recovering from the storm.
Notably absent from his schedule was any time with Gov. Ron DeSantis, a Republican presidential candidate who suggested a meeting could hinder disaster-response efforts.
“Our teams worked collectively to find this area. This was a mutually agreed upon area because of the limited impact,” Deanne Criswell, the head of the Federal Emergency Management Agency, told reporters as the president flew from Washington. She said her teams “have heard no concerns over any impact to the communities that we’re going to visit today.”
“ On Friday, hours after President Biden indicated he would be meeting with Gov. DeSantis, the Republican’s office issued a statement saying there were no plans for such a get-together. ”
Air Force One landed at the airport in Gainesville, where the president and first lady Jill Biden boarded Marine One for a helicopter flight to Live Oak, about 80 miles east of Tallahassee, the capital. He awaited a briefing on response and recovery efforts and a session with federal and local officials and first responders before his walk.
On Friday, hours after Biden said he would be meeting with DeSantis, the governor’s office issued a statement saying there were no plans for such a get-together.
“In these rural communities, and so soon after impact, the security preparations alone that would go into setting up such a meeting would shut down ongoing recovery efforts,” DeSantis spokesman Jeremy Redfern said in a statement.
Criswell said aboard the flight that power is being restored and the road are all open in the area where Biden was going. “Access is not being hindered,” she said, adding that her team had been in “close coordination” with the governor’s staff.
Idalia made landfall Wednesday morning along Florida’s sparsely populated Big Bend region as a Category 3 storm, causing widespread flooding and damage before moving north to drench Georgia and the Carolinas.
As Biden left Washington on Saturday morning, he was asked by reporters what happened with that meeting. “I don’t know. He’s not going to be there,” the president said. He later said the federal government would “take care of Florida.”
Gov. Ron DeSantis looks on in 2021 as President Joe Biden speaks during a Miami Beach briefing on the partial condominium collapse in Surfside, Fla.
AP/Susan Walsh
The political disconnect between both sides is a break from the recent past, since Biden and DeSantis met when the president toured Florida after Hurricane Ian hit the state last year, and following the Surfside condo collapse in Miami Beach in summer 2021. But DeSantis is now running to unseat Biden, and he only left the Republican presidential primary trail with Idalia barreling toward his state.
Putting aside political rivalries following natural disasters can be tricky, meanwhile.
Another 2024 presidential candidate, former Republican New Jersey Gov. Chris Christie, has long been widely criticized in GOP circles for embracing then-President Barack Obama during a tour of damage 2012’s Hurricane Sandy did to his state. Christie was even asked about the incident last month, during the first Republican presidential debate.
Both Biden and DeSantis at first suggested that helping storm victims would outweigh partisan differences. But the governor began suggesting that a presidential trip would complicate response logistics as the week wore on.
“There’s a time and a place to have political season,” the governor said before Idalia made landfall. “But then there’s a time and a place to say that this is something that’s life threatening, this is something that could potentially cost somebody their life, it could cost them their livelihood.”
By Friday, the governor was telling reporters of Biden, “one thing I did mention to him on the phone” was “it would be very disruptive to have the whole security apparatus that goes” with the president “because there are only so many ways to get into” many of the hardest hit areas.
“What we want to do is make sure that the power restoration continues and the relief efforts continue and we don’t have any interruption in that,” DeSantis said.
Biden joked while delivering pizzas to workers at FEMA’s Washington headquarters on Thursday that he’d spoken to DeSantis so frequently about Idalia that “there should be a direct dial” between the pair.
Homeland Security adviser Liz Sherwood-Randall pointed to the experiences after Ian and Surfside collapse in saying earlier this week that Biden and DeSantis “are very collegial when we have the work to do together of helping Americans in need, citizens of Florida in need.”
The post-Idalia political consequences are high for both men.
As Biden seeks re-election, the White House has asked for an additional $4 billion to address natural disasters as part of its supplemental funding request to Congress. That would bring the total to $16 billion and highlight that wildfires, flooding and hurricanes have intensified during a period of climate change, imposing ever higher costs on U.S. taxpayers.
DeSantis has built his White House bid around dismantling what he calls Democrats’ “woke” policies. The governor also frequently draws applause at GOP rallies by declaring that it’s time to send “Joe Biden back to his basement,” a reference to the Democrat’s Delaware home, where he spent much of his time during the early lockdowns of the coronavirus pandemic.
But four months before the first ballots are to be cast in Iowa’s caucuses, DeSantis still lags far behind former President Donald Trump, the Republican primary’s dominant early frontrunner. And he has cycled through repeated campaign leadership shakeups and reboots of his image in an attempt to refocus his message.
The super PAC supporting DeSantis’s candidacy also has halted its door-knocking operations in Nevada, which votes third on the Republican presidential primary calendar, and several states holding Super Tuesday primaries in March — a further sign of trouble.
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.”
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.”
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.
“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.
Hawaiian Electric Industries Inc.’s stock added to losses Tuesday, tumbling 26% after S&P Global Ratings downgraded its rating on the utility company to junk.
S&P Global Ratings cut its rating on the company HE to BB- and placed it on CreditWatch negative, meaning the rating agency could downgrade it again in the near term.
Food prices rose 0.2% on the month in July after remaining unchanged in June, and they rose 4.9% on the year, while the cost of food at home rose 3.6% on the year, government data released Thursday showed. Prices of fresh fruits and vegetables rose just 1.2% year over year.
However, there were some big — even alarming — outliers: Frozen fruit and vegetable prices increased by 11.8% in July over last year, frozen vegetable prices rose 17.1% and frozen noncarbonated juice and drink prices rose 16.3%.
Those price rises are at odds with overall inflation figures. U.S. consumer prices rose to 3.2% in July from 3% in the prior month, the Bureau of Labor Statistics said this week. It was the first increase in 13 months.
Why have the prices of frozen fruits and vegetables shot up over the past 12 months, while the cost of fresh fruits and vegetables has increased so little?
Climate change and extreme weather conditions — from heavy rainfall to drought, particularly in California — have led to big problems for farmers. This has been compounded by issues related to the war in Ukraine and an ongoing increase in the cost of labor, experts said.
As a result, a large proportion of the fruits and vegetables grown were destined to be sold as fresh produce — which led to a shortage of ingredients for frozen goods, said Brad Rubin, sector manager at Wells Fargo Agri-Food Institute. “Because of the late crop, lots of produce is being pushed to the fresh market to keep up with demand,” he said.
California weather
California has experienced some drastic weather conditions over the last 12 months. Some 78 trillion gallons of water fell in California during winter 2022 and early spring 2023, according to data from the National Weather Service, delaying planting. And all that snow and rain was followed by a months-long drought in the region.
What happens in California is felt by consumers across the country.
“California produces nearly half of U.S.-grown fruits, nuts and vegetables,” according to estimates from the Sciences College of Agriculture, Food & Environmental Sciences at California Polytechnic State University in San Luis Obispo. “California is the only state in the U.S. to export the following commodities: almonds, artichokes, dates, dried plums, figs, garlic, kiwifruit, olives, pistachios, raisins and walnuts,” it says.
The subsequent price rises hit ingredients like strawberries and raspberries especially hard, Rubin added. Inventories of frozen berries are “near five-year lows” after winter storms in Watsonville flooded agricultural fields, damaging and delaying the strawberry crop. Most of the strawberries in the U.S. are grown in California.
Labor costs
Frozen fruits and vegetables have a longer supply chain than fresh produce, which can make them more vulnerable to disruptions in inventory, experts say. Rising energy prices are also pushing up the cost of cold storage.
In addition to those issues, U.S. farmers are dealing with increased labor costs and fewer migrant workers, partly due to changes in government policies and the closure of borders during the COVID-19 pandemic, according to a February 2023 report from the Federal Reserve Bank of San Francisco.
“Immigration has traditionally provided an important contribution to the U.S. labor force,” the report said. “The flow of immigrants into the United States began to slow in 2017 due to various government policies, then declined further due to border closures in 2020-21 associated with the COVID-19 pandemic. This decline in immigration has had a notable effect on the share of immigrants in the U.S. labor force.”
Russia’s invasion of Ukraine also continues to affect agricultural production in the U.S., said Curt Covington, senior director of institutional business at AgAmerica Lending, a financial-services company providing agricultural loans. Because the war disrupted supplies of commodities like wheat and corn — also pushing up prices for those goods — farmers have been prioritizing planting those crops over vegetables.
“These escalating frozen-vegetable prices present a challenge for farmers as they grapple with increased production costs and labor pressures,” and that presents a long-term challenge for farmers, “potentially impacting their profitability,” Covington said.
All of these factors — from international supply chains to extreme weather conditions — will have an effect on the cost of frozen goods in U.S. supermarkets. Ultimately, experts said, consumers will end up paying the price.
LAHAINA, Hawaii — A search of the wildfire devastation on the Hawaiian island of Maui on Thursday revealed a wasteland of obliterated neighborhoods and landmarks charred beyond recognition, as the death toll rose to at least 53 and survivors told harrowing tales of narrow escapes with only the clothes on their backs.
A flyover of historic Lahaina showed entire neighborhoods that had been a vibrant vision of color and island life reduced to gray ash. Block after block was nothing but rubble and blackened foundations, including along famous Front Street, where tourists shopped and dined just days ago. Boats in the harbor were scorched, and smoke hovered over the town, which dates to the 1700s and is the biggest community on the island’s west side.
“Lahaina, with a few rare exceptions, has been burned down,” Hawaii Gov. Josh Green told The Associated Press. More than 1,000 structures were destroyed by fires that were still burning, he said.
The death toll will likely rise as search and rescue operations continue, Green added, and officials expect it will become the state’s deadliest natural disaster since a 1961 tsunami killed 61 people on the Big Island.
“We are heartsick,” Green said.
Tiffany Kidder Winn’s gift store Whaler’s Locker, which is one of the town’s oldest shops, was among the many businesses destroyed. As she assessed the damage Thursday, she came upon a line of burned-out vehicles, some with charred bodies inside them.
“It looked like they were trying to get out, but were stuck in traffic and couldn’t get off Front Street,” she said. She later spotted a body leaning against a seawall.
Winn said the destruction was so widespread, “I couldn’t even tell where I was because all the landmarks were gone.”
Fueled by a dry summer and strong winds from a passing hurricane, the fire started Tuesday and took Maui by surprise, racing through parched growth covering the island and then feasting on homes and anything else that lay in its path.
The official death toll of 53 as of Thursday makes this the deadliest U.S. wildfire since the 2018 Camp Fire in California, which killed at least 85 people and laid waste to the town of Paradise. The Hawaii toll could rise, though, as rescuers reach parts of the island that had been inaccessible due to the three ongoing fires, including the one in Lahaina that was 80% contained on Thursday, according to a Maui County news release. More than 270 structures have been damaged or destroyed, and dozens of people have been injured, including some critically.
“We are still in life preservation mode. Search and rescue is still a primary concern,” said Adam Weintraub, a spokesperson for Hawaii Emergency Management Agency.
Search and rescue teams still won’t be able to access certain areas until the fire lines are secure and they’re sure they’ll be able to get to those areas safely, Weintraub added.
The flames left some people with mere minutes to act and led some to flee into the ocean. A Lahaina man, Bosco Bae, posted video on Facebook from Tuesday night that showed fire burning nearly every building on a street as sirens blared and windblown sparks raced by. Bae, who said he was one of the last people to leave the town, was evacuated to the island’s main airport and was waiting to be allowed to return home.
Marlon Vasquez, a 31-year-old cook from Guatemala who came to the U.S. in January 2022, said that when he heard the fire alarms, it was already too late to flee in his car.
“I opened the door and the fire was almost on top of us,” he told The Associated Press on Thursday from an evacuation center at a gymnasium. “We ran and ran. We ran almost the whole night and into the next day, because the fire didn’t stop.”
Vasquez and his brother Eduardo escaped via roads that were clogged with vehicles full of people. The smoke was so toxic that he vomited. He said he’s not sure his roommates and neighbors made it to safety.
Lahaina residents Kamuela Kawaakoa and Iiulia Yasso described their harrowing escape under smoke-filled skies. The couple and their 6-year-old son got back to their apartment after a quick dash to the supermarket for water, and only had time to grab a change of clothes and run as the bushes around them caught fire.
“We barely made it out,” Kawaakoa, 34, said at an evacuation shelter, still unsure if anything was left of their apartment.
As the family fled, they called 911 when they saw the Hale Mahaolu senior living facility across the road erupt in flames.
Chelsey Vierra’s grandmother, Louise Abihai, was living at Hale Mahaolu, and the family doesn’t know if she got out. “She doesn’t have a phone. She’s 97 years old,” Vierra said Thursday. “She can walk. She is strong.”
Relatives are monitoring shelter lists and calling the hospital. “We got to find our loved one, but there’s no communication here,” said Vierra, who fled the flames. “We don’t know who to ask about where she went.”
Communications have been spotty on the island, with 911, landline and cellular service failing at times. Power was also out in parts of Maui.
Tourists were advised to stay away, and about 11,000 flew out of Maui on Wednesday with at least 1,500 more expected to leave Thursday, according to Ed Sniffen, state transportation director. Officials prepared the Hawaii Convention Center in Honolulu to take in the thousands who have been displaced.
In coastal Kihei, southeast of Lahaina, wide swaths of ground glowed red with embers Wednesday night as flames continued to chew through trees and buildings. Gusty winds blew sparks over a black and orange patchwork of charred earth and still-crackling hot spots.
The fires were fanned by strong winds from Hurricane Dora passing far to the south. It’s the latest in a series of disasters caused by extreme weather around the globe this summer. Experts say climate change is increasing the likelihood of such events.
Wildfires aren’t unusual in Hawaii, but the weather of the past few weeks created the fuel for a devastating blaze and, once ignited, the high winds created the disaster, said Thomas Smith an associate professor in Environmental Geography at the London School of Economics and Political Science.
Hawaii’s Big Island is also currently seeing blazes, Mayor Mitch Roth said, although there were no reports of injuries or destroyed homes there.
With communications hampered, it was difficult for many to check in with friends and family members. Some people were posting messages on social media. Maui officials opened a Family Assistance Center at the Kahului Community Center for people looking for the missing.
Maj. Gen. Kenneth Hara, of the Hawaii State Department of Defense, told reporters Wednesday night that officials were working to get communications restored, distribute water and possibly add law enforcement personnel. He said National Guard helicopters had dropped 150,000 gallons of water on the fires.
The Coast Guard said it rescued 14 people who jumped into the water to escape the flames and smoke.
Maui County Mayor Richard Bissen Jr. said Wednesday that officials hadn’t yet begun investigating the immediate cause of the fires.
President Joe Biden declared a major disaster on Maui. Traveling in Utah on Thursday, he pledged that the federal response will ensure that “anyone who’s lost a loved one, or whose home has been damaged or destroyed, is going to get help immediately.” Biden promised to streamline requests for assistance and said the Federal Emergency Management Agency was “surging emergency personnel” on the island.
KAHULUI, Hawaii — A wildfire tore through the heart of the Hawaiian island of Maui in darkness Wednesday, reducing much of a historic town to ash and forcing people to jump into the ocean to flee the flames. At least six people died, dozens were wounded and 271 structures were damaged or destroyed.
Flyovers Wednesday of the town of Lahaina by US Civil Air Patrol and the Maui Fire Department showed the extend of the devestation, said Mahina Martin, a spokesperson for Maui County.
The fires continued to burn Wednesday afternoon, fueled by strong winds from Hurricane Dora as it passed well south of the Hawaiian islands. Officials feared the death toll could rise.
As winds diminished somewhat, some aircraft resumed flights, enabling pilots to view the full scope of the devastation. Aerial video from coastal Lahaina showed dozens of homes and businesses flattened, including on Front Street, where tourists gathered to shop and dine. Smoking heaps of rubble lay piled high next to the waterfront, boats in the harbor were scorched, and gray smoke hovered over the leafless skeletons of charred trees.
“It’s horrifying. I’ve flown here 52 years and I’ve never seen anything come close to that,” said Richard Olsten, a helicopter pilot for a tour company. “We had tears in our eyes, the other pilots on board and the mechanics, and me.
Acting Gov. Sylvia Luke said the flames “wiped out communities,” and urged travelers to stay away.
“This is not a safe place to be,” she said.
The exact cause of the blaze couldn’t be determined, but a number of factors, including high winds, low humidity and dry vegetation, likely contributed, said Maj. Gen. Kenneth Hara, adjutant general for Hawaii State Department of Defense. Experts also said climate change is increasing the likelihood of more extreme weather.
“Climate change in many parts of the world is increasing vegetation dryness, in large part because temperatures are hotter,” said Erica Fleishman, director of the Oregon Climate Change Research Institute at Oregon State University. “Even if you have the same amount of precipitation, if you have higher temperatures, things dry out faster.”
The wind-driven conflagration swept into the area with alarming speed and ferocity, blazing through intersections and leaping across wooden buildings in the Lahaina town center that dates to the 1700s and is on the National Register of Historic Places.
“It was apocalyptic from what they explained,” Tiare Lawrence said of 14 cousins and uncles who fled the town and took refuge at her home in Pukalani, east of Lahaina.
Lahaina resident Keʻeaumoku Kapu was tying down loose objects in the wind at the cultural center he runs in Lahaina when his wife showed up Tuesday afternoon and told him they needed to evacuate. “Right at that time, things got crazy, the wind started picking up,” said Kapu, who added that they got out “in the nick of time.”
Two blocks away they saw fire and billowing smoke. Kapu, his wife and a friend jumped into his pickup truck. “By the time we turned around, our building was on fire,” he said. “It was that quick.”
Crews were battling three fires in Maui: in Lahaina, south Maui’s Kihei area and the mountainous, inland communities known as Upcountry, said Mahina Martin, spokesperson for Maui County.
In the upcountry Kula area, at least two homes were destroyed Tuesday in a fire that engulfed about 1.7 square miles, County of Maui Mayor Richard Bissen Jr. said.
There have been no reports of injuries or homes lost to three wildfires burning on Hawaii’s Big Island, Mayor Mitch Roth said Wednesday. Firefighters did extinguish a few roof fires.
The National Weather Service said Hurricane Dora, which was passing to the south of the island chain at a safe distance of 500 miles, was partly to blame for gusts above 60 mph that knocked out power, rattled homes and grounded firefighting helicopters on Maui.
The Coast Guard on Tuesday rescued 14 people, including two children, who had fled into the ocean to escape the fire and smoky conditions, the county said in a statement.
Fires killed six people on Maui, but search and rescue operations continued and the number could rise, Bissen said.
Six patients were flown from Maui to the island of Oahu on Tuesday night, said Speedy Bailey, regional director for Hawaii Life Flight, an air-ambulance company. Three of them had critical burns and were taken to Straub Medical Center’s burn unit, he said. The others were taken to other Honolulu hospitals. At least 20 patients were taken to Maui Memorial Medical Center, he said.
Authorities said earlier Wednesday that a firefighter in Maui was hospitalized in stable condition after inhaling smoke.
Luke issued an emergency proclamation on behalf of Gov. Josh Green, who is traveling, and activated the Hawaii National Guard to assist.
“Certain parts of Maui, we have shelters that are overrun,” Luke said. “We have resources that are being taxed.”
President Joe Biden said in a statement Wednesday evening that he has ordered “all available Federal assets” to help Hawaii. The president said the Coast Guard and Navy are supporting response and rescue efforts, while the Marines are providing Black Hawk helicopters to fight the fires.
There was no count available for the number of people who have evacuated, but officials said there were four shelters open housing 2,100 people.
Kahului Airport, the main airport in Maui, was sheltering 2,000 travelers whose flights were canceled or who recently arrived on the island, the county said. Officials were preparing the Hawaii Convention Center in Honolulu to take in up to 4,000 displaced tourists and locals.
“Local people have lost everything,” said James Tokioka, director of the Department of Business, Economic Development and Tourism. “They’ve lost their house, they’ve lost their animals.”
Kapu, the owner of the Na Aikane o Maui cultural center in Lahaina, said he and his wife didn’t have time to pack up anything before being forced to flee. “We had years and years of research material, artifacts,” he said.
Alan Dickar said he’s not sure what remains of his Vintage European Posters gallery, which was a fixture on Front Street in Lahaina for 23 years. Before evacuating with three friends and two cats, Dickar recorded video of flames engulfing the main strip of shops and restaurants frequented by tourists.
“Every significant thing I owned burned down today,” he said.
Lahaina is often thought of as just a Maui tourist town, Lawrence said, but “we have a very strong Hawaiian community.”
“I’m just heartbroken. Everywhere, our memories,” she said. “Everyone’s homes. Everyone’s lives have tragically changed in the last 12 hours.”
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.
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.
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.
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.”
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.
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.
“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.
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.
With hundreds of wildfires still burning in Canada, a large swath of the U.S. Northeast continues to suffer under hazy skies and compromised air into Wednesday. In fact, according to an international gauge, New York City had the second-worst air in the world early Wednesday.
As of late Tuesday, Quebec’s forest fire prevention agency reported that more than 150 blazes were active, including more than 110 deemed out of control, the Associated Press reported. A hot, dry summer is expected for the province and beyond.
The U.S. Environmental Protection Agency said its Air Quality Index registers above 151 in some areas of the northeastern U.S., spreading down into the Mid-Atlantic region. The upper Midwest reported concerning issues to start the week as well. Once an Air Quality Index reading clears 100, it’s typically a warning to people who have respiratory conditions, including asthma, to take precautions.
What is the Air Quality Index?
The EPA established an AQI for five major air pollutants regulated by the 50-year-old Clean Air Act. The agency takes readings at more than 1,000 air-quality stations around the country and includes special sensors activated by smoke in particular, for real-time readings.
Each of these pollutants measured by the EPA requires a standard deemed important to public health:
ground-level ozone
particle pollution (also known as particulate matter, including PM2.5 and PM10)
carbon monoxide
sulfur dioxide
nitrogen dioxide
Especially during wildfire season, fine particles in soot, ash and dust can fill the air. And because it’s nearly summer, the combination of smoke and hotter temperatures can generate more ozone pollution, which can aggravate respiratory issues.
The EPA says to think of the AQI as a yardstick that runs from 0 to 500. The higher the AQI value, the greater the level of air pollution and the greater the health concern.
For example, an AQI value of 50 or below represents good air quality for essentially all the population. A reading above 100 typically means that the outdoor air remains safe for most, but seniors, pregnant people and children are at increased risk. Those with heart and lung disease may also be at greater risk. And an AQI value over 300 represents hazardous air quality that will impact to some degree nearly everyone exposed to the air, even healthy people.
Because remembering the severity of number ranges may be challenging, EPA has assigned a color to each range, with green and yellow representing the most favorable conditions, and orange, red, purple and maroon reflective of levels that are progressively worse, topping out at maroon or readings between 301 to 500.
For comparison, the record-setting wildfire years of 2020 and 2021 meant that outdoor air near Portland, Ore., on select days produced an AQI above 400.
What are the health concerns from poor air quality?
The EPA and public health officials warn citizens against regular exposure to fire-impacted air, especially for outdoor workers, even if local readings aren’t especially dangerous.
The effects of air pollution can be mild, like eye and throat irritation. But, for some, those effects turn serious, including heart and respiratory issues. And pollutants might linger longer than hazy, discolored skies persist, causing inflammation of the lung tissue and increasing vulnerability to infections.
Lingering particle measurements are picked up when the AQI tracks PM 2.5, which quantifies the concentration of particles smaller than 2.5 micrometers. When inhaled, these nearly undetectable particles can increase the risk of heart attack, select cancers and acute respiratory infections, especially in children and older adults.
Smokers, including those using vape pens, can invite added health risk with wildfire smoke exposure, say public health officials.
What precautions can be taken when there’s dangerous air outdoors? Do masks help?
Stay indoors if you can, with the windows and doors closed.
The EPA recommends eliminating outdoor exercise such as walking, jogging or cycling, once an AQI moves above 150. That includes gardening and mowing the lawn.
If you have to work outside, additional breaks out of the smoke may be necessary.
If you have air conditioning, run it continuously, not on the auto cycle. It’s also recommended to close the fresh air intake so that smoke doesn’t get inside the house.
But if you’re still worried about the outdoor air entering your home, air purifiers, often the size of table fans or smaller, can reduce indoor particulate matter in smaller spaces.
Avoid stove-top cooking that could increase indoor smoke, even if you plan to run the overhead fan.
Do masks help? An N95 respirator mask can filter out some of the particles. If fitted and worn correctly, the N95 mask filters out 95% of particles larger than 0.3 microns, so they’re very efficient with keeping out the 2.5-micron particles in wildfire smoke, say health officials. Notably, even an N95 does little to protect against harmful gases in wildfire smoke, including carbon monoxide.
KYIV, Ukraine (AP) — Ukraine on Tuesday accused Russian forces of blowing up a major dam and hydroelectric power station in a part of southern Ukraine they control, threatening a massive flood that could displace hundreds of thousands of people, and ordered residents downriver to evacuate.
Russian news agency Tass quoted an unspecified Russian government official as saying the dam had “collapsed” due to damage.
Ukrainian authorities have previously warned that the dam’s failure could unleash 18 million cubic meters (4.8 billion gallons) of water and flood Kherson and dozens of other areas where hundreds of thousands of people live, as well as threatening a meltdown at a nearby Russian-occupied nuclear power plant. President Volodymyr Zelenskyy called an emergency meeting to deal with the crisis.
The Ukrainian Interior Ministry wrote on Telegram that the Kakhovka dam, had been blown up, and called for residents of 10 villages on the river’s right bank and parts of the city of Kherson downriver to gather essential documents and pets, turn off appliances, and leave, while cautioning against possible disinformation.
Footage from what appeared to be a monitoring camera overlooking the dam that was circulating on social media purported to show a flash, explosion and breakage of the dam.
Oleksandr Prokudin, the head of the Kherson Regional Military Administration, said in a video posted to Telegram shortly before 7 a.m. that “the Russian army has committed yet another act of terror,” and warned that water will reach “critical levels” within five hours.
Zelenskyy moved to convene an emergency meeting of the country’s security and defense council following the dam explosion, the council’s secretary, Oleksiy Danilov, wrote on Twitter.
Ukraine and Russia have previously accused each other of targeting the dam with attacks, and last October Zelenskyy predicted that Russia would destroy the dam in order to cause a flood.
Authorities, experts and residents have for months expressed concerns about water flows through — and over — the Kakhovka dam.
In February, water levels were so low that many feared a meltdown at the Russian-occupied Zaporizhzhia nuclear power plant, whose cooling systems are supplied with water from the Kakhovka reservoir held up by the dam.
By mid-May, after heavy rains and snow melt, water levels rose beyond normal levels, flooding nearby villages. Satellite images showed water washing over damaged sluice gates.
Ukraine controls five of the six dams along the Dnipro River, which runs from its northern border with Belarus down to the Black Sea and is crucial for the entire country’s drinking water and power supply. The Kakhovka dam — the one furthest downstream in the Kherson region — is controlled by Russian forces.
THE HAGUE (AP) — The International Criminal Court said Friday it has issued an arrest warrant for Russian President Vladimir Putin for war crimes because of his alleged involvement in abductions of children from Ukraine.
The court said in a statement that Putin “is allegedly responsible for the war crime of unlawful deportation of population (children) and that of unlawful transfer of population (children) from occupied areas of Ukraine to the Russian Federation.”
It also issued a warrant Friday for the arrest of Maria Alekseyevna Lvova-Belova, the Commissioner for Children’s Rights in the Office of the President of the Russian Federation, on similar allegations.
The court’s president, Piotr Hofmanski, said in a video statement that while the ICC’s judges have issued the warrants, it will be up to the international community to enforce them. The court has no police force of its own to enforce warrants.
“The ICC is doing its part of work as a court of law. The judges issued arrest warrants. The execution depends on international cooperation.”
A possible trial of any Russians at the ICC remains a long way off, as Moscow does recognize the court’s jurisdiction — a position reaffirmed earlier this week by Kremlin spokesman Dmitry Peskov — and does not extradite its nationals.
Ukraine also is not a member of the court, but it has granted the ICC jurisdiction over its territory and ICC prosecutor Karim Khan has visited four times since opening an investigation a year ago.
The ICC said that its pretrial chamber found there were “reasonable grounds to believe that each suspect bears responsibility for the war crime of unlawful deportation of population and that of unlawful transfer of population from occupied areas of Ukraine to the Russian Federation, in prejudice of Ukrainian children.”
The court statement said that “there are reasonable grounds to believe that Mr Putin bears individual criminal responsibility” for the child abductions “for having committed the acts directly, jointly with others and/or through others [and] for his failure to exercise control properly over civilian and military subordinates who committed the acts.”
On Thursday, a U.N.-backed inquiry cited Russian attacks against civilians in Ukraine, including systematic torture and killing in occupied regions, among potential issues that amount to war crimes and possibly crimes against humanity.
The sweeping investigation also found crimes committed against Ukrainians on Russian territory, including deported Ukrainian children who were prevented from reuniting with their families, a “filtration” system aimed at singling out Ukrainians for detention, and torture and inhumane detention conditions.
But on Friday, the ICC put the face of Putin on the child abduction allegations.
President Recep Tayyip Erdoğan of Turkey said Friday that his government would move forward with ratifying Finland’s NATO application, paving the way for the country to join the military bloc ahead of Sweden.
The breakthrough came as Finnish President Sauli Niinisto was in Ankara to meet with Erdoğan. Both Finland and Sweden applied to become NATO members 10 months ago in the wake of Russia’s invasion of Ukraine, abandoning decades of nonalignment.
NATO requires the unanimous approval of its 30 existing members to expand, and Turkey and Hungary are the only countries that have not yet ratified the Nordic nations’ bids. The Turkish government accused both Sweden and Finland of being too soft on groups that it deems to be terror organizations, but it has more stridently expressed its reservations about Sweden.
“When it comes to fulfilling its pledges in the trilateral memorandum of understanding, we have seen that Finland has taken authentic and concrete steps,” Erdoğan told a news conference in Ankara following his meeting with Niinisto.
“This sensitivity for our country’s security and, based on the progress that has been made in the protocol for Finland’s accession to NATO, we have decided to initiate the ratification process in our parliament,” the Turkish president added.
With Erdoğan’s agreement, Finland’s application can now go to the Turkish parliament, where the president’s party and its allies hold a majority. Ratification is expected before Turkey holds its presidential and parliamentary elections scheduled for May 14.
Erdoğan suggested Wednesday that his country might take up Finland’s accession following Niinisto’s trip.
Turkey, Finland and Sweden signed an agreement in June of last year to resolve differences over the Nordic states’ membership.
The document included clauses addressing Ankara’s claims that Stockholm and Helsinki did not take seriously enough its concerns with those it considers terrorists, particularly supporters of Kurdish militants who have waged a 39-year insurgency in Turkey and people Ankara associates with a 2016 coup attempt.
A series of separate demonstrations in Stockholm, including a protest by an anti-Islam activist who burned the Quran outside the Turkish Embassy, also angered Turkish officials.
Hungarian Prime Minister Viktor Orbán and lawmakers have repeatedly promised to ratify the two countries’ NATO membership applications. But the country’s parliament has repeatedly postponed a ratification vote and hasn’t given a firm date on when the vote would take place.
Erdoğan on Wednesday suggested that his country may soon agree to Finland’s application to join NATO. Turkish officials previously said that Finland joining ahead of Sweden was a more likely outcome.
Niinisto arrived in Turkey on Thursday and toured areas affected by a magnitude 7.8 earthquake that killed more than 52,000 people in Turkey and Syria last month. “I have known Erdogan for a long time. I am sure he has important messages,” Niinisto said Thursday while visiting Kahramanmaras, one of the provinces worst-hit by the Feb. 6 earthquake.
Before leaving Helsinki, Niinisto said Turkish officials had requested his presence in Ankara to announce Turkey’s decision on the Finnish bid. He also stressed his support for Sweden’s swift admission and in a Twitter post said he had had a “good conversation” with Swedish Prime Minister Ulf Kristersson prior to his Turkey trip. Kristersson said Sweden hoped for “a rapid ratification process” after Turkey’s May 14 presidential and parliamentary elections.
Turkey’s lira hit a record low and its stock market tumbled on Monday after a major earthquake killed nearly 1,500 people and wounded thousands of others in the country, piling on further economic hardship in a region already grappling with economic instability and geopolitical turmoil. Another 700 deaths have been reported in Syria, according to Reuters.
The Turkish lira USDTRY, +0.05%
fell to a record low of 18.83 against a strong dollar on Monday, while the country’s major stock index, the Turkey ISE National 100 XU100, -1.35%
— which tracks the performance of 100 companies selected from the National Market, real estate investment trusts and venture capital investment trusts listed on the Istanbul Stock Exchange — tumbled 1.4%.
The iShares MSCI Turkey ETF TUR, -1.88%,
which tracks several dozen Turkish equities, slumped 1.9%.
At least 1,498 people were killed and 8,533 people were injured in Turkey when a magnitude 7.8 earthquake struck central Turkey and northwest Syria early Monday morning, followed by another large quake in the afternoon, according to Yunus Sezer, the head of Turkey’s Disaster and Emergency Management Agency.
The U.S. Geological Survey estimated on Monday that there was a high probability that the economic losses from the initial earthquake could top $1 billion.
The ICE U.S. Dollar Index DXY, +0.72%,
a measure of the currency against a basket of six major rivals, jumped 0.7% on Monday.
Oil futures traded lower as of Monday morning despite news reports that Turkey has halted crude-oil flows to its export terminal in Ceyhan. Turkish pipeline operator BOTAS said there was no damage on main pipelines which carry crude oil from Iraq and Azerbaijan to Turkey, according to Reuters.
Iraq’s semi-autonomous Kurdistan Regional Government has stopped shipments through the pipeline which runs from Iraq’s northern Kirkuk fields to Ceyhan, the region’s ministry of natural resources said on Monday.
