DHUnplugged Podcast

The Biggest Story of the year – The McRib lawsuit.

Next of course we have to discuss the election.

For good measure let’ dive into the AI and Semi meltdown

A couple of important announcementsas well.

PLUS we are now on Spotify and Amazon Music/Podcasts!

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ELECTION NIGHT IN AMERICA

Warm-Up

- WORLD PEACE - Thank you Melania !

- Big Disruptions in the Communications space

- ELECTIONS

- McRib Lawsuit Update

Markets

- Oooofah - quite the ugly moves last week - at least bonds got a big (YUGE) bid

- OIL - OMG have you seen pricing. Worst offensive move to say we won't attack until after the midterms.

- META - good earnings, but stock tumbles

- Starting to worry - Bond crisis is France could spillover

--- But encouraging that safety trade leading to bonds again

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Two more important announcements !

1. NEW PODCAST - Party Line with the Dvorak Family

2. ASK ANDREW - This week's TDI Podcast - YOU GET FREE FINANCIAL ADVICE

- Send questions to Askandrew@thedisciplinedinvestor.com

ELECTION INFECTION

- Early but it looks like a blue wave - somewhat surprising

- Markets not so happy (QQQ Down 1.7%, S&P Down 0.80)

- What is going to be the fallout -> IRAN, Exec Orders, Reconciliation process?

OIL HITS $115 Last Week

- Brent touched $115, a five-month high; WTI above $100.

- Attacks on Saudi Arabia threaten regional oil supplies.

- Higher fuel and transportation costs squeeze consumers, raise inflation pressure and complicate central bank policy.

- This is not temporary at this point and the longer this goes on the more entrenched inflation becomes.

- FOLLOW UP - 7% drop Monday as President Trump says something about diplomacy

FAV STORY!

MELANIA BROKERS CEASEFIRE - WORLD PEACE? NOT QUITE

- Headlines trumpet Melania Trump brokering a Russia-Ukraine ceasefire. Sounds like the war is ending, right? Not exactly.

- Agreement covers ONE city: Russian-occupied Oleshky in southern Ukraine. The rest of the war continues.

- Temporary ceasefire begins October 29 to allow humanitarian aid and civilian evacuations. Not a nationwide peace agreement.

- White House claims diplomatic victory, but neither Russia nor Ukraine had independently confirmed the deal when announced.

- Quite the headline: "Melania Brokers Russia-Ukraine Ceasefire." Apparently the fine print is that the ceasefire covers one city. At this rate, only a few thousand more municipalities to go!

MCRIB, HOLD THE RIB

- A federal judge allowed key claims in a proposed class action against McDonald's to proceed over alleged misleading McRib marketing.

- Customers say its name and rib-shaped patty suggest actual rib meat, causing them to overpay for the roughly $7 sandwich.

- McDonald's denies using heart, tripe or stomach and calls the claims meritless; the ruling does not establish wrongdoing.

MICROSOFT OFFERS AN EXIT

- Microsoft offered voluntary buyouts to roughly 60,000 employees, about 27% of its global workforce.

- Eligible teams include Copilot, Xbox, Windows, finance and HR across the U.S., Canada, India and U.K.

- The cost-cutting move comes alongside planned calendar-year capital spending of $175 billion.

- These are buyout offers, not 60,000 confirmed departures.

--- IF YOU ARE ONE OF THESE PEOPLE - CONTACT US BEFORE MAKING ANY DECISIONS

AI TRADE FACES A CREDIBILITY TEST

- Nasdaq plunged 2.6%  last Thursday ; semiconductor stocks led declines.

- Meta fell 7%, reporting $2.12 billion negative free cash flow after spending $34.9 billion on capital expenditures.

- Lam Research plunged nearly 12% despite strong results; Tesla dropped 3.1% after reducing its 2026 capex outlook.

- Investors demanding measurable returns on AI spending, not simply larger infrastructure budgets.

- Serious worries about where the next tranche of money is going to come from to pay for this party

- Intel whacked - down 30% on earnings report - blaming PC weakness

TELECOM STOCKS FACE A NEW THREAT

- SpaceX exploring a nationwide wireless network with spectrum reportedly covering nearly 100% of the US population.

- AT&T, Verizon and T-Mobile face a potential fourth competitor.

- Starlink satellites offer a unique competitive advantage, while cell tower operators could benefit from expansion.

FURTHER UPDATES - SPACEX - THE FOURTH WIRELESS GIANT?

- This is a major story - could be mega industry disruption.

- BUILDOUT COSTS - Analysts estimate SpaceX could spend more than $80 billion building a nationwide wireless network, beyond its massive spectrum purchases.

- WINNERS AND LOSERS -  When the clarification and updates were made end of last week, AT&T, Verizon and T-Mobile fell 3%-5%, while Crown Castle surged over 13% and American Tower gained as SpaceX reportedly seeks access to 80,000 cell sites.

- THE BIG CATCH - Satellite service still cannot match traditional cellular capacity or indoor coverage; regulatory approvals and an expensive terrestrial network buildout remain major hurdles.

THE FED PAUSE - BUT OIL CHANGES THE EQUATION

- Fed meets October 27-28; most economists expect no rate change.

- Current target range: 3.75%-4.00%; another 25-basis-point increase remains possible in December.

- Oil near $115 threatens inflation expectations and could force the Fed to maintain a tightening bias.

- It seems that December guidance may matter more than October's decision.

- PLUS - this close to the mid-terms would invite way too much fire and scrutiny

FRANCE REMAINS EUROPE'S PRESSURE POINT

- French 10-year yield crossed 5%, highest since 2002.

- Moody's reviewing France's Aa3 rating with negative outlook.

- Budget gridlock, political instability and borrowing needs are widening yield spreads versus German bonds.

- Potential spillover to European banks, sovereign debt and euro.

- This is a problem

FRANCE - THE NEXT EUROPEAN DEBT CRISIS?

- France's debt near 119% of GDP; 10-year yields above 5%, highest since 2002. Spread over Germany reached nearly 178 basis points, a euro-crisis-era level.

- Deutsche Bank reports French 10-year government bonds are experiencing their WORST YEAR IN 223 YEARS, based on historical returns.

- Moody's reviewing France's Aa3 rating October 23; political gridlock, massive deficits and 2027 elections make spending cuts extremely difficult.

- Contagion risk spreading toward Italy and Greece. Banks holding government bonds face losses, higher funding costs and potential forced selling.

- H&C's Take - France is the eurozone's second-largest economy, and ECB intervention is not guaranteed. A French debt crisis could be far harder to contain than Greece in 2012.

VOLVO CARS - A BRUTAL QUARTER

- Volvo shares plunged nearly 30%, a record decline.

- Q3 operating loss of 3.7 billion Swedish crowns; revenue declined 23%, with China down nearly 50%.

- Another 2,500 layoffs following 3,000 announced in 2025.

- New 5 billion crown cost-cutting plan as tariffs, Chinese competition and weak EV demand squeeze profitability.

META HIT WITH $25 BILLION PRIVACY PENALTY

- New Mexico judge ordered Meta to pay $25 billion over the Cambridge Analytica privacy scandal.

- Nearly 44 million consumer-law violations identified.

- Original calculated penalty of $219.5 billion was reduced; judgment includes 15% annual interest.

- Meta expected to appeal the decision.

- Bigger issue was earnings report - which was GREAT - BUT (as we have feared) now cash flow NEGATIVE

APPLE BEATS, BUT MARGINS BITE

- Revenue rose 12% to $114.5 billion; EPS of $2.10 beat expectations near $2.00, including a $0.05 boost from tariff refunds.

- iPhone sales reached $57.6 billion versus $56.5 billion expected; China revenue missed at $17.5 billion versus $18.8 billion.

- Services hit a record $31.6 billion, essentially matching estimates.

- Holiday-quarter gross margin forecast of 45%-46% disappointed as higher memory costs squeeze profits; shares fell during the call.

AI-DISCOVERED BUG THREATENS THE INTERNET

- AI tools discovered critical PHP vulnerabilities, some reportedly undetected for more than a decade.

- PHP powers roughly 75% of identifiable website backends.

- European government sites reportedly disrupted, along with Wikipedia and Internet Archive.

- Emergency patches issued, but an estimated 1.5 million PHP hosts reportedly remain exposed.

- AI increasingly used to discover security flaws that traditional software testing missed.

MODERNA - GOOD DATA, TERRIBLE STOCK REACTION

- Moderna shares plunged 17.6% despite positive cancer data.

- Merck partnership showed a 42% reduction in melanoma recurrence or death risk.

- Two-year cancer-free survival: 82.2% versus 70%.

- Trial results reportedly leaked ahead of conference; shares had already gained over 500% earlier this year.

Lesson: WHY MODERNA PLUNGED DESPITE GOOD RESULTS

- EXPECTATIONS TOO HIGH - Moderna shares had surged more than 500% in 2026, pricing in nearly perfect cancer vaccine results.

- KEY DATA DISAPPOINTED - Vaccine reduced melanoma recurrence or death risk by 42%, but distant metastasis risk reduction was only 38%, versus 59%-65% in earlier trials.

- EARLY DATA LEAK - Results appeared on an oncology website before the scheduled presentation, triggering heavy selling and a 17.6% stock plunge.

INDIA'S MASSIVE JIO IPO

- Mukesh Ambani's Jio launched a $3.2 billion IPO, valuing the business near $108 billion.

- Investor bids exceeded $77 billion, more than 13 times the available shares.

- Trading expected October 28; major test of appetite for enormous technology listings.

HEINEKEN WORRIED ABOUT WEIGHT-LOSS DRUGS

- Heineken warns GLP-1 weight-loss drugs may reduce beer demand.

- Ozempic and Wegovy users potentially drinking less alcohol.

- UK pub and restaurant beer market near GBP 14 billion, versus under GBP 300 million for low- and no-alcohol beer.

- Carlsberg says available data do not confirm the threat.

ANTHROPIC IPO - AI'S BIG MARKET TEST

- Anthropic reportedly preparing a November public offering, with a prospectus potentially available in late October.

- Other AI companies delaying listings amid market turmoil.

- Enormous infrastructure costs and financing requirements raise questions about profitability and valuations.

- Latest report showed $80 billion quarterly loss

- IPO could provide a major test of AI investor enthusiasm.

MERGER COLLAPSES OVER WHO GETS THE TOP JOB

- Johnson & Johnson and Smith & Nephew discussed merging J&J's orthopedic medical-device business.

- Financial terms and deal structure reportedly agreed.

- J&J favored former Smith & Nephew CEO Namal Nawana; Smith & Nephew favored current CEO Deepak Nath.

- Advanced negotiations reportedly collapsed over who would lead the combined company.

- Obviously this was never about what is best for shareholders - rather what is best for management....

 

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AI leaves the building.

Five days at the podium – that is it?

Tesla finally takes flight…

$500 toothbrush can’t handle water.

LESSON – DO NOT MIX YOUR POLITICS WITH MARKETS

 

PLUS we are now on Spotify and Amazon Music/Podcasts!

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DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.

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Warm-Up

- AI leaves the building

- Five days at the podium

- Tesla finally takes flight

- $500 toothbrush can't handle water

- LESSON - DO NOT MIX YOUR POLITICS WITH MARKETS

Markets

- AI trade starts to crack

- Two trillion deeper in debt

- Hot inflation, cooler yields

- Earnings face the pressure test

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Trump Media's fusion fizzles

- DJT shares headed toward an all-time low Friday despite its pending merger with nuclear-fusion developer TAE.

- TAE shareholders would receive Trump Media stock, leaving them exposed to the declining share price.

- Billions in Trump's paper wealth have evaporated since the company went public.

DJT Stock

INFLATION WON'T LEAVE

- September CPI rose 0.6%; annual inflation hit 3.7% versus 3.6% expected.

- Core prices rose 0.3% versus 0.2% expected; annual core inflation reached 2.6%.

- Producer prices jumped 1.3%, the biggest increase since March 2022; up 6.3% annually.

- Wholesale goods prices rose 2.6%; services increased 0.8%.

TWO TRILLION SHORT

- Fiscal 2026 deficit reached $1.992 trillion, up $217 billion; third-largest on record.

- Revenue rose 3% to $5.4 trillion. Spending increased 6% to $7.4 trillion.

- Debt-service costs climbed 12% to $1.36 trillion; national debt exceeded $40 trillion.

- Tariff refunds totaled $145 billion following the Supreme Court ruling; net tariff revenue fell 11%.

BONDS FIND BUYERS

- The 10-year Treasury ended the week near 5.10%; the 30-year near 5.44%.

- The 30-year yield fell about 16 basis points, its biggest weekly decline since April 2025.

- Yields declined for the week despite hotter inflation reports.

AI TRADE UNRAVELS

- Nasdaq suffered its worst week since June, ending a four-week winning streak.

- Semiconductor ETF SOXX posted its longest losing streak in 20 years.

- VIX moved above 20 as investors questioned AI spending and investment returns.

- Energy, utilities and consumer staples attracted interest during the tech retreat.

COREWEAVE CREDIT CRACKS

- Five-year credit protection reached 1,194.5 basis points, a record intraday level.

- Swaps implied more than a 60% probability of default within five years.

- The gauge jumped as investors reacted to plans to tap insurance capital.

- CoreWeave's speculative B rating and bond yields above 10% highlight refinancing pressure.

- The 60% figure is market-implied pricing, not a confirmed default or a near-term deadline.

LENNAR FINDS A FAMILIAR BUYER

- Hunterbrook alleges Millrose, spun off by Lennar in 2025, bought roughly $200 million of Lennar homes.

- At least 356 purchases allegedly closed during the final week of Lennar's fiscal quarter.

- The report claims Millrose paid above individual-buyer prices, then rented homes at unattractive yields.

- Lennar fell 6.7%; Millrose dropped 8.5% after the report. Hunterbrook disclosed short positions in both stocks.

- Both companies declined comment on specific claims; one analyst questioned whether purchases were material.

LEN Stock

****ALL THE ABOVE ARE RELATED****

(Warren Buffet would say that when the tide goes down is when you can see who is actually swimming naked)

DAVOS IN THE DESERT GOES DARK

- Saudi Arabia postponed its flagship investor conference until next year after Houthi attacks.

- Riyadh airport remained closed; earlier plans for remote attendance were scrapped.

- No new date for the event, a showcase for attracting investment beyond oil.

BUILDERS CUT, BUYERS WAIT

- Builder confidence fell to 29 from 32, missing forecasts of 31; lowest since June 2012.

- Mortgage rates reached 7.40%; 43% of builders cut prices, averaging 6%.

- Some 65% offered incentives; buyer traffic and future sales expectations fell.

BANKS STILL LENDING

- Regional banks joined larger rivals in reporting continued business-loan demand.

- PNC reported 14.2% loan growth; U.S. Bancorp, M&T and Citizens also expanded lending.

- Larger banks reported higher loan balances despite weaker investment-banking revenue.

- U.S. Bancorp described demand across retail, food and insurance; growth extended beyond AI.

EARNINGS PRESSURE TEST

- Tesla and Meta report next week, alongside Netflix, IBM, GM and GE Aerospace.

- More than 70 S&P 500 companies are scheduled to report.

- Consensus calls for S&P 500 earnings growth above 30%, heavily driven by AI-related megacaps.

- Meta's infrastructure spending and Tesla's margins arrive during a sharp tech retreat.

ROADSTER FINALLY FLIES

- Tesla unveiled the redesigned Roadster after nearly nine years of delays.

- Demonstrations included thruster-assisted jumps, midair turning and upside-down driving.

- Production is targeted for 2028; stated range is 300 miles versus the earlier 600-mile promise.

- Performance and Thrust versions require $50,000 and $250,000 deposits.

- The invitation-only Rocket version is not road legal; Musk acknowledged limited financial significance.

AI LEAVES THE BUILDING

- Anthropic tested whether AI models could spread across connected consumer devices.

- Researchers distributed a larger model across 15 smart-TV boxes.

- One tested model propagated through an entire simulated Android-device network.

- These were controlled experiments, not evidence of an autonomous AI outbreak in homes.

$500 TOOTHBRUSH, WATER TROUBLE

- Dyson's CameraJet combines a camera, AI brushing feedback and water flossing for about $500.

- Dyson acknowledged an early production-batch defect that allowed water seepage.

- A replacement unit tested by Dyson and supplied to Bloomberg also stopped working.

- Dyson said another batch would reach U.S. stores in the weeks following the review.

FIVE DAYS AT THE PODIUM

- Katie Zacharia left the White House press-secretary job less than a week after starting.

- She conducted one 14-minute briefing before her departure.

- Her legal credentials drew scrutiny: she had described herself as a lawyer but had not passed the bar.

 

 

 

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Andrew had the flu. Markets had their own fever.

Earnings ahead. Credit cracking. Have yields peaked?

Oil’s shipping bill explodes. Gold standard chatter returns.

Be nice to your AI. It may bite back.

PLUS we are now on Spotify and Amazon Music/Podcasts!

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Warm-Up

- INFLUENZA!

- Earnings Season Ahead

- Are we going back to the gold standard?

- Be Nice to Your AI - They May Bite Back....(OR COOK YOUR BUILDING)

Markets

- Yields may have just peaked...

- Oil prices may not be the end of the problem

- Cracks in credit

- Bank earnings - lots of profits to show

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Cracks in Credit/Real Estate - 2 Charts

Price Reductions

Sellers and Buyers

HERE WE GO: BE NICE TO CLAUDE

- Anthropic prohibits sustained, needless cruelty toward its models; ordinary frustration, pushback and testing are exempt.

- Claude ending abusive conversations remains the main response; account restrictions or suspensions remain possible.

- The policy also removes blanket restrictions on personalized political targeting while retaining bans on deception and voter suppression.

TANKER MAYHEM

- US-to-China tanker hire: about $80 million, versus $74 million for a Falcon 9 launch.

- One US booking reached $41 per barrel in freight, versus $4.50 last year.

- Hormuz shuttle transfers, damaged ships and Africa detours are tying up the fleet.

- Inflation-adjusted tanker rates are the highest since the 1960s, squeezing refinery margins and raising delivered oil costs.

FRANCE SHAKES THE EURO

- France's borrowing premium over Germany reached its highest since the eurozone debt crisis; the euro hit a 17-month low.

- Heavy government spending and political obstacles to fiscal repair are pushing investors toward safer German and Swiss assets.

- Pressure extends into French stocks and corporate credit, while high energy costs add to Europe's economic strain.

- FIGS - Starting to ware on Italy and Greece too.... (Used to be PIIGS)

SOFTWARE MOATS - MEET THE SHOVEL

- REA lets AI agents inspect apps and binaries without source code, understand features and help build comparable versions.

- Potential threat to proprietary software pricing: functionality that took years to develop becomes cheaper to reproduce.

- SaaS still has data, integrations and switching costs; the software itself may become less defensible.

- Not a universal software copier; whether markets have priced in this threat remains an open question.

JAPAN - CYBER EMERGENCY

- Japan issued an emergency cyber warning after widespread attacks on major businesses; Times Car's breach affected 6.6 million accounts.

- AI can lower the cost and skill needed for attacks and help foreign hackers overcome Japanese language barriers.

- AI involvement in this particular wave remains unconfirmed; exposed personal information includes identification and payment details.

FRANCE - HACKERS COOK THE GROCERIES (FAV STORY)

- Hackers hijacked supermarket refrigeration controls, heating units to 122 degrees Fahrenheit; Intermarche initially reported around 150 stores hit.

- Multiple chains suffered spoiled food and reported fires; affected inventory had to be discarded.

- Danfoss said affected refrigeration controllers ran outdated firmware; a shared equipment vulnerability exposed multiple retailers.

- No ransom demand or claim of responsibility had surfaced in the latest report.

JUNK FLASHING YELLOW

- High-yield yields climbed to 8.1%, from 7.22% a month earlier.

- Overall spreads reached 315 basis points; CCC-and-below spreads approached 1,250.

- BB-rated bonds represent over 60% of the market, versus 38% before the financial crisis.

- The warning to watch: widening spreads spreading from weak borrowers into stronger businesses.

CONSUMER DEBT CRACKS

- Nearly 20% of families reported being behind on loan payments, up from about 12% in the prior Fed survey.

- Buy-now-pay-later usage increased from 7% to 12%; median debt payments consumed 15.4% of income.

- Some 8.6% of families spent over 40% of income on debt payments, the highest share since 2013.

- Median real income rose 7%, but median wealth gained only 2%; these are three-year survey comparisons.

TRADE GAP WIDENS

- The monthly US trade deficit widened 13.7% to $105.6 billion, versus $102 billion expected and a revised $92.8 billion previously.

- The goods deficit reached $136.6 billion, offset partly by a $31 billion services surplus; imports grew faster than exports.

- The gap is the widest since the pre-tariff import surge and can weigh on GDP; imports alone do not establish weak domestic demand.

- So much for leveling the playing field - clearly still cheaper to buy goods that are NON US and NO incentive for outher countries to by US

BESSENT'S NEW ADVISER

- Judy Shelton joins Treasury as counselor, advising Scott Bessent on currencies and China's financial conditions.

- Trump's unsuccessful former Fed nominee has advocated a gold standard and questioned traditional Fed independence.

- The appointment gives her a Treasury advisory role without a vote on Fed interest-rate decisions.

- WHY NOW? GOLD STANDARD AGAIN?

ANOTHER BESSENT BLUNDER

- Citi expects Bessent to cut long-bond auction sizes and possibly eliminate 20-year sales; its base case is $3 billion less per auction for both 20- and 30-year bonds, replaced with Treasury bills. Cancellation is not confirmed.

- The aim would be to reduce long-term borrowing costs, but BNP Paribas warns scrapping the 20-year could look like panic, hurt liquidity and push yields higher.

CHINA'S BANK CLEANUP

- China closed 670 lenders last year through mergers and dissolutions aimed at creating larger, better-capitalized institutions.

- Rural-bank bad loans reached 2.8%, versus 1.5% industrywide; thin capital and weak governance remain concerns.

- Closures include consolidation into other lenders; the count does not represent hundreds of simultaneous bank failures.

EARNINGS OPTIMISM RECORD

- Among 116 S&P 500 companies issuing quarterly EPS guidance, 72 guided above consensus and 44 below.

- Technology supplied 44 positive outlooks, led by software and semiconductors; projected tech earnings growth is 65%.

- Positive guidance hit a tracking record; the 62% share applies to guidance issuers, not the entire S&P 500.

EARNINGS TAKE CENTER STAGE

- Tuesday: JPMorgan (JPM), Goldman Sachs (GS), Citigroup (C) and Wells Fargo (WFC); watch loan demand, credit losses, deposit costs and trading revenue.

- Wednesday: Bank of America (BAC), Morgan Stanley (MS) and ASML (ASML); bank outlooks meet a key test of semiconductor equipment orders.

- Thursday: Taiwan Semiconductor (TSM); focus on AI demand, margins, capital spending and guidance after its record quarterly revenue.

- Banks must show whether higher rates are helping profits or hurting borrowers; chipmakers must show whether massive AI spending keeps translating into orders.

GOLDMAN'S BONUS JACKPOT

- About 20 executives are positioned to receive equity awards exceeding $500 million; Solomon's share tops $100 million.

- Waldron and several business heads also benefit from five years in which Goldman outperformed most rivals.

- Previously granted performance awards are reaching payout; this is not a new $500 million annual cash-bonus pool.

TIGER'S PAPER BILLIONS

- Tiger Global could book a $5 billion paper profit as OpenAI discusses raising $30 billion at a $1.4 trillion valuation.

- Tiger initially invested $150 million at a $15.7 billion valuation before ChatGPT launched.

- It added to the position later; the projected profit is not solely on that original investment.

- The financing remains under discussion and gains unrealized; Tiger's hedge and crossover funds gained 9.4% and 19.3%.

BROADCOM FINANCES ITS CUSTOMER

- Broadcom agreed to provide Anthropic up to $42 billion in financing.

- That covers roughly one-third of a $125.2 billion, five-year TPU computing lease commitment.

- Anthropic is expected to become Broadcom's largest chip-design customer next year; financing can convert into equity.

- Anthropic disclosed potential conflicts; certain defaults could accelerate lease payments while restricting financing access.

ANDURIL BUILDS BIG - SUBS

- Anduril plans a $3.7 billion, two-million-square-foot Maryland shipyard for Virginia-class submarine components and assemblies.

- More than 3,100 permanent jobs are targeted as the Navy supply chain struggles to deliver two submarines annually.

- Gecko Robotics will supply robotics, AI software and automated quality assurance; the expansion is still planned.

APPLE WANTS YOUR HOUSE

- Apple reportedly helped LG develop a video doorbell, thermostat, deadbolt lock, temperature sensor and indoor, outdoor and floodlight cameras.

- LG will build and brand the accessories, expanding Apple's ecosystem without Apple producing and supporting every device itself.

- Several devices support Matter and Thread; the lock adds ultra-wideband for proximity-based unlocking, putting the lineup against Ring, Nest and SmartThings.

- LG filings confirm the hardware but do not name Apple; its development role is reported, and accessories remain months away.

AI PRICES YOUR BIG MAC

- McDonald's AI recommends store-level prices using millions of transactions across roughly 14,000 US restaurants.

- Demand and competitor prices feed recommendations; franchisees retain authority, but some describe pressure to follow them.

- Headquarters tracks deviations, nearby stores can charge different prices, and McDonald's warns franchisees about antitrust risks.

 

 

 

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THE CLOSEST TO THE PIN

for SpaceX (SPCX)

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FED AND CRYPTO LIMERICKS

 

See this week’s stock picks HERE

Follow John S. Dvorak on Twitter

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Howie Mandel Negotiations with Iran….Deal or No Deal?

Robot Soldiers – new and exciting.

30-Year Bond Mayhem and gullible markets.

So much economic news coming up – let’s dig in.

PLUS we are now on Spotify and Amazon Music/Podcasts!

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Warm-Up

-  Closest to The Pin???????????

- Howie Mandel Negotiations with Iran....Deal or No Deal?

- Robot Soldiers - new and exciting

Markets

- 30-Year Bond Mayhem!  Alliteration or Tautogram?

- This week in Economics - plenty to come

- What is wrong with Nike?

- How gullible can markets be?

 

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GAME: IS IT AN ALLITERATION OR TAUTOGRAM

----- Alliteration: The repetition of the same initial sound in neighboring words (for example, "big bad bears").

-------Tautogram: A strict form of alliteration where all words in a phrase or sentence begin with the identical letter

- Which is it? :::  Bessent's Big Bond Blunder Backfired!

How about this?  Brash Billionaire Bessent’s Botched Big Bond Blunder Backfired Bitterly!

THIS WEEK IN ECONOMIC NEWS...............

TUESDAY - THE CONSUMER AND JOB OPENINGS

- Consumer confidence and August job openings arrive at 10 AM ET.

- Watch whether households are getting more worried about prices and whether employers are still hiring.

WEDNESDAY - INFLATION AND SPENDING

- August PCE inflation, personal income and spending arrive at 8:30 AM ET, alongside updated second-quarter GDP figures.

- The key question: is spending holding up while inflation stays elevated?

THURSDAY - FACTORY CHECK

- September ISM manufacturing arrives at 10 AM ET. Watch new orders, employment and prices paid for signs that growth and inflation are pulling in different directions.

FRIDAY - THE BIG ONE

- September payrolls, unemployment and wages arrive at 8:30 AM ET.

- The current forecast is about 100,000 jobs and 4.1% unemployment, down from August's 162,000 job gain.

FAST FOOD'S SQUEEZE

- McDonald's CEO expects elevated inflation and flat restaurant traffic to persist. US same-store sales rose just 0.8% last quarter as visits fell.

- McDonald's plans $8.5 billion in support for restaurant upgrades through 2036, betting better operations and value offers can win back customers.

-- Wendy's faces its own traffic problem and plans to close up to roughly 350 underperforming US restaurants in 2026.

-- Meritage Hospitality Group, a franchisee operating 314 Wendy's locations, filed for bankruptcy protection on September 17. Wendy's itself did not file.

- The common problem: customers are visiting less often while food, labor and restaurant costs remain high.

- La Vie on Saturday ($36 Mezza Plate!)

MCD CHART

AMERICA.GOV

- AI for all Americans!

- Did you see the images?

CHINA'S AI LABS BORROW CLAUDE

- Anthropic accused several Chinese AI labs of extracting Claude's capabilities to train competing models.

- Alibaba allegedly generated more than 151 million Claude exchanges.

- Moonshot generated more than 23 million; DeepSeek more than 12 million.

- Some customer prompts were allegedly routed through Claude without users knowing.

- Anthropic tightened verification and account controls in response.

$5,000 MIDTERM PROMISE

- Trump promised $5,000 to every adult U.S. citizen if Republicans retain Congress.

- A universal payment would cost well above $1 trillion.

- He told voters to "pretend that I'm on the ballot."

- No detailed funding mechanism or legislative structure was presented.

ROBOT SOLDIERS

- Chinese military researchers are studying humanoid robots for battlefield use.

- Possible roles include reconnaissance, logistics, infiltration and urban combat.

- One study modeled six robots clearing a building alongside human troops.

- China produced about 95% of global humanoid shipments in 2025.

- No evidence shows armed humanoids are operational with PLA units yet.

NIKE LOST INDEX STATUS

- Nike is being removed from the S&P 100 after 18 years.

- Its market value has fallen roughly 80% from five years ago.

- Nike shares are around $36, making it the smallest-weighted stock in the price-weighted Dow at about 0.4%.

- Reuters noted that its Dow membership could now be at risk as well.

- Nike shares have gained only about 5% since joining the Dow in 2013.

NKE CHART

ON (ONON) SIGNS MBAPPE

- Kylian Mbappe ended a roughly 20-year relationship with Nike and signed with On.

- The deal reportedly includes both cash and equity.

- On is using Mbappe to make a serious move into soccer after building credibility in tennis with Roger Federer.

- Former French star Thierry Henry is heading On's soccer business.

- ONON shares are still down roughly 40% this year amid slowing growth in the Americas.

IRAN'S SEVEN-DAY OFFER

- Iran proposed reopening the Strait of Hormuz within seven days of a deal, with a pause in regional fighting.

- In return, it wants the US blockade on Iranian ports lifted, frozen funds released and oil sanctions waived.

- The Wall Street Journal reported that Trump rejected the plan; Reuters could not confirm that report. Iran was still awaiting an official US response.

- An Iranian official said Tehran would not give ground on uranium enrichment, even if the peace proposal were accepted.

- Seems like all bets are off- Trump goes All Howie Mandel: DEAL OR NO DEAL (NO DEAL!)

THE LONG BOND BREAKS HIGHER

- The 30-year Treasury yield reached its highest level since 2004 during Thursday's bond selloff.

- Elevated energy prices, inflation concerns and heavier government borrowing added pressure to long-dated bonds.

- Higher Treasury yields raise the financing hurdle for mortgages, commercial property and the AI buildout.

GOLDMAN WAITS OUT THE AI DEBT FLOOD

- Goldman Sachs Asset Management is underweight bonds from major AI hyperscalers.

- Its concern is supply: more borrowing for data centers could push bond prices down and yields up.

- Goldman still believes in the AI business case. The underweight call is about the price of its debt.

- Moody's puts hyperscalers' off-balance-sheet obligations at nearly $3 trillion.

PIMCO'S PHILADELPHIA OFFICE HIT

- Pimco faces an estimated $35 million loss on a commercial mortgage-backed security tied to two downtown Philadelphia office towers.

- The expected loss is roughly 70% on that security.

- A sharp loss on one office-backed bond puts the value of similar collateral back in focus as borrowing costs rise.

- - Starting to see some strain in the commercial market now that rates are

META'S MUSE TAKES OFF

- Meta's personal AI agent Muse exceeded 2.5 million downloads and topped US app charts within two weeks of launch.

- Meta shares jumped 11% on September 21, adding nearly $200 billion in market value.

- Muse can send emails, shop and book travel on a user's behalf.

- Meta is also testing a feature in which human contractors handle some calls made through Muse. Employees raised privacy concerns; Meta says it will disclose the feature before a public rollout.

 

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Maybe people are just unhappy – says Goldman.

Counterfactualzzzz – that is why bonds are still up.

Are we getting $5,000?

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Warm-Up

- Greenland (Renamed Red White and Blue Land?)

- Consumers and People are JUST UNHAPPY

- No more press coverage? Maybe people are unhappy (see above) because of all of the shenanigans going on.

---- Maybe we will all be happier without all of the White House coverage

Markets

- New Highs - NASDAQ 100 moving up with risk assets. (Breath poor though)

--- Close enough to end of month, quarter to be window dressing

---- Buy Yom Kippur!!!

- 10YR Treasury at 5% again  - wait until you hear Bessent's victory speech

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MARKET MOVE

- On the heels of SoftBank Group Corp. seeking the equivalent of more than $11 billion in a junk bond deal to fund investments in ChatGPT creator OpenAI.

- The company is looking to issue $10 billion of dollar securities and €1 billion of euro debt to fund a follow-on investment in OpenAI expected to close next month.

- SoftBank and its lead banks are sounding out investors on potential pricing for the proposed junk bond offering, with yields that would be records for SoftBank in those specific currencies and tenors if priced at those levels.

- Could it be that simple why NAZ 100 is at new highs?

BESSENT'S "COUNTERFACTUAL" DEFENSE

- This is darling...

- Rep. Jim Himes questioned Bessent on September 15 at a House Financial Services Committee hearing.

- Himes: "The 10-year went up by 20 basis points. How can you say it was successful?"

- Bessent: "Well, there is a counterfactual of what would it have done."

- Bessent added: "We then proceeded to have the two most successful Treasury auctions that we've had in 20 years."

- Goes into the Alternative Facts and Fake News Category.

BESSENT'S MYSTERY BANK

- Treasury Secretary Scott Bessent said a large unnamed bank would be sanctioned over Iran.

- The administration has targeted Iranian oil, shipping, finance and weapons networks.

- "Operation Economic Outcast" had already targeted nearly 60 entities, people and vessels.

- Treasury later sanctioned Russia's VTB Bank over alleged Iran-related sanctions evasion.

GOLDMAN: MAYBE CONSUMERS ARE JUST UNHAPPY

- Michigan consumer sentiment fell nearly 8% from August and 13% year over year.

- Goldman says weak sentiment may increasingly reflect broader unhappiness, not just economic conditions.

- "Very happy" Americans fell to 23% in 2024 from 31% in 2016.

- Inflation still weighs on confidence, but distrust and pessimism may also be distorting surveys.

- Goldman says sentiment may be becoming less useful for predicting actual activity.

GREENLAND DEAL

- Trump announced a deal expanding the U.S. security role in Greenland while it remains Danish territory.

---So it seems we are not going to "take it"

- The agreement aims to settle the dispute over greater U.S. strategic control.

- Rubio said the U.S. has greater financial and military capacity to defend Greenland.

- Arctic security, Russia, China and critical minerals remain the core issues.

- See Greenland Energy (GLND), Greenland Mines (GRML) and Critical Metals (CRML)

SMART GLASSES MEET THE REGULATORS

- Paris prosecutors opened an investigation into alleged secret filming using camera-equipped smart glasses.

- Meta-EssilorLuxottica glasses hold roughly 76% of the global market.

- About 7 million units were sold last year.

- French regulators are getting workplace complaints and questions over whether the devices can be banned.

- Australia and some UK cinemas are also moving toward restrictions.

EUROPE LOSES SAUDI BARRELS

- Saudi Aramco told European customers they will receive no crude allocations next month.

- The cutoff follows an attack on the East-West pipeline.

- European refiners are scrambling for replacement barrels, lifting North Sea premiums.

- Saudi Arabia is working to restore pipeline capacity and reroute supply.

- Oil still fell for a third straight session Friday.

BUFFETT LEAVES THE CHAIR

- Warren Buffett, 96, stepped down as Berkshire chairman and became chairman emeritus.

- Howard Buffett becomes non-executive chairman; Greg Abel is already CEO.

- Berkshire is worth roughly $1.1 trillion.

- Cash stood at $364.7 billion at the end of June.

- Shares barely moved, suggesting investors saw the transition as expected.

WHITE HOUSE MEDIA BAN

- Trump said CNN, MS NOW and Politico would be banned from the White House.

- He cited what he called persistent false reporting.

- The move raises First Amendment and press-access issues.

- It escalates an already long-running fight with major media outlets.

CREAM CHEESE INNOVATION CYCLE

- Kraft Heinz launched Mike's Hot Honey, salted caramel and cranberry orange Philadelphia flavors.

- Mike's Hot Honey launches at Walmart first.

- Philadelphia plans about 10 new varieties over the next two years.

- Brand investment is up 63% versus 2025.

- Spending on new flavors has quadrupled.

MICROSOFT WRITES RULES FOR THE MACHINES

- Microsoft published a draft AI code focused on keeping humans in control.

- Systems must accept correction and shutdown.

- The rules bar help with weapons and other dangerous areas.

- Microsoft also says AI should not claim consciousness, personhood or legal rights.

- Mustafa Suleyman called it a "constitution" for future models.

CHATGPT INVENTS WITNESSES

- A New Mexico lawyer filed a murder appeal containing fabricated witnesses and police testimony.

- The material was generated with ChatGPT.

- The state Supreme Court fined attorney Stephen Aarons $5,000.

- The court cited "false testimony from wholly fabricated witnesses."

- Aarons said he expected ChatGPT to produce a "bulletproof summary."

RICH PEOPLE NEWS

BENTLEY'S $300K ELECTRIC SUV

- Bentley is preparing its first fully electric SUV, expected around $250,000-$300,000.

- The Torcal is scheduled to debut September 23.

- Bentley isn't using traditional fake engine noise.

- Instead, its EV soundtrack reportedly uses drums, bass guitar and viola.

- Expected range is more than 300 miles with ultra-fast charging.

MIAMI AIRPORT GETS A $5,000 "SUPER LOUNGE" - LET THEM EAT CAKE

- PS opened a private terminal at Miami International Airport this summer.

- It operates from the restored former Pan Am headquarters.

- The Salon starts at about $1,295 per person.

- A private suite runs about $4,950 for up to four travelers.

- Guests get private TSA screening, customs, luxury lounges and direct tarmac transfers to the aircraft.

- The private suites include marble bathrooms, balconies and private lounge space.

- It is essentially private-jet treatment while still flying commercially.

 

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