At The Money: Finding the Hidden Alpha in SEC filings with Michelle Leder of Footnoted (December 3, 2025)

Is there Alpha to be found hidden in SEC filings? Management does seem to hide lots of bad news by just barely complying with the law. Recent indicators are this is getting worse…

Full transcript below.

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About this week’s guest: Michelle Leder is a researcher covering Corporate SEC-filings; she founded the research service “Footnoted” focusing on uncovering material information hidden in corporate SEC filings.

For more info, see:

Footnoted *

Book: “Fine Print, Uncovering A Company’s True Value.”

LinkedIn

Twitter

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Find all of the previous At the Money episodes here, and in the MiB feed on Apple Podcasts, YouTube, Spotify, and Bloomberg. And find the entire musical playlist of all the songs I have used on At the Money on Spotify.

 

 

 

TRANSCRIPT:

 

Intro:  “Honesty is such a lonely word, Everyone is so untrue
Honesty is hardly ever heard, And mostly what I need from you”

 

Have you ever wondered what management buries in their SEC filings. Do they faithfully follow their obligations to their shareholders, or do they see how much they could get away with either not disclosing or hiding?

To help us unpack all of this and what it might mean for your portfolio, let’s speak to Michelle Leder. She is an SEC-filings wonk and specialist; she founded the research Service footnoted, focusing on uncovering material information hidden in corporate SEC filings. She’s also the author of the book, financial “Fine Print, Uncovering A Company’s True Value.”

So Michelle, let, let’s just start out with a basic definition.

What is disclosure? What are the rules that the SEC requires all companies to provide to their in investors?

Michelle Leder: Believe it or not, a lot of the main rules or the framework, if you will, it dates back to 1933. Think about that for a minute. That’s the basic framework, if you will. Like the foundation of the house is dates back to 20, 1933, which is kind of amazing.

It’s 92 years ago. Think about how much has changed in the markets. There’s the, the internet, for example, and you don’t have to call your broker and say, buy me some pork bellies or whatever. It, it’s really kind of amazing that the, the primary framework dates back over 90 years. Um, of course it’s been updated, over the years, but, this is sort of the, the foundation of the house.

This is what. Companies go back to companies and their attorneys go back to time and time again. They’ll talk about the 1933 act, which of course came after 1929 and the Great Depression.

Barry Ritholtz: So let, and that was what? Started the SEC, so let’s talk a little bit about the various filings. Most of us are familiar with the quarterlies, the 10 Qs, but there are also eight Ks and 10 Ks and merger proxies.

Tell us the broad documents that every company is either required to file with the SEC or when a specific event happens is triggered and then has to do a filing.

Michelle Leder: At a bare minimum, publicly traded companies have to file three 10 Qs a year. That’s the quarterly report and one 10 K, and that’s the annual report.

And then 8Ks are filed on an as needed basis, and those are often thought of as material events, but it’s also earnings releases or a press release. A lot of people think that press releases are equivalent to 8Ks, and that’s actually not true. Companies will often put out a press release and maybe they’ll attach it to an 8K, maybe they won’t, but there’s a difference between them.  Companies will often disclose something. In an AK that they never intend to put a press release out on.

Barry Ritholtz: To that point, I love this quote of yours. “Companies know they have to disclose bad news, but they also know they don’t have to post it on a billboard.”

Explain what, what, what other obligations, what do they have to say and when?

Michelle Leder: In general, if something is the, the, the definition is basically something that a reasonable investor would want to know, and that’s what triggers an eight k. A lot of people think that, that, the shorthand is like something material, but materiality is in the eye of be of the beholder.

Something that might be material to me may not be material to you. And there’s a lot of judgment calls. There’s no real like tests. I mean, of course, like. If the CEO resigns and he, absconds with like, $500 million, that’s a pretty easy test.

But you don’t see a lot of those, right?

There’s something a lot less, significant. And then there’s a discussion of like, well, do we need to disclose this, do we not? And I’ve seen it, quite frankly, all over the map. I mean, I’ve seen companies, for example, the most minor enforcement thing that a company can do is get a comment letter from the SEC.

And that’s basically like. Hey, we noticed this thing. Can you explain it a little bit more? And then the more serious thing is a wells notice. And I’ve seen companies like, for example, which is, pretty serious. It’s, it’s, it involves, uh, providing much more detailed information. Attorneys are involved, blah, blah, blah.

And I’ve seen some companies not disclose a wells notice, and I’ve seen some companies disclose a comment letter. So it really can be all over the map. That’s what makes it a little bit confusing and a little bit, hard to figure out. You can’t always say, if this happens, we have to disclose.

Sometimes there’s a lot of wiggle room in there

Barry Ritholtz:  For people who are just curious. The comment letters tend to be pretty minor, a wells notice. Typically gets sent to a firm when the SEC has concluded an investigation and is planning on bringing an enforcement action.

I would imagine that’s fairly material all the time. Am I wrong?

Michelle Leder: You would think, but I’ve seen companies wait instead of like, instead of putting out an 8k that they’ve received a Wells notice, they’ll say that they, uh, they’ll wait until the queue to disclose that. And, of course the Q is all focused on the earnings. So it’s like, buried in there somewhere, usually in their legal disclosure or maybe a risk factor,

Other tricky things that companies will do, all of a sudden, I’ve seen this over and over again, like instead of a subpoena. They’ll say subpoenas, they’ll suddenly make something plural. They won’t put out a press release and say, oh, hey, by the way, we got another subpoena. And companies play these kind of tricks. I mean, they do subtle changes andit’s really up to you as the investor to catch ’em.

Barry Ritholtz:  So what are some of the more common tricks you see that management uses to technically comply with the law and disclose material bad news to investors while at the same time trying to minimize attention to that?

Michelle Leder: Probably the number one thing, um, I see is like companies waiting until late on a Friday or the Wednesday before Thanksgiving with some reason they can choose when they wanna disclose. The rule is actually you have to disclose within four business days.

But of course with holidays and, and other things that can often be, stretched, it’s not as if like, the CFO suddenly resigns and you’ve gotta disclose at that minute. I’ve seen companies wait four days to disclose that, and that’s following the letter of the law.

Now, I would think that if the CFO suddenly resigns from the company as an investor, you wanna know about that right away.

Barry Ritholtz: So the Friday night data dump. After four o’clock, but before the SEC closes at 5:30 is legal, but sounds a little sketchy. How often do you find these sorts of things are disclosing information that ultimately affects the stock’s price?

Michelle Leder: I would say, pretty often, although it’s not an instantaneous thing, um, a lot of what I do is I see an early warning sign. here I’m out in LA and I often think about it as going to the dermatologist and saying, “Hey, I see this mole on my upper arm. Is that cancer? Or do I not have to worry about it?” that’s the type of thing.

It’s an early warning sign that there could be a potential problem. Rarely I would say, do you find like a, what I would call, like what someone might call a smoking gun. It’s not like, like, oh, the CEO embezzled, $500 million, whatever, and we’re filing for bankruptcyMonday morning type of thing.

Barry Ritholtz:  Tell us about the non-disclosure. Disclosure. I love that phrase.

Michelle Leder: Companies know that they have to disclose stuff, and what they often do is they’ll give you the bare minimum of facts, and that’s what they do.

They might say, like, for example, director Alan Smith resigned on a Friday. But they don’t tell you that, oh, maybe he was a member of the audit committee, or maybe he was the former CEO of the company, or maybe he was chairman of the audit committee, or any number of other information and that requires you to go to another filing the proxy statement really to figure out was he a long time director?

Had he only served on the board for three months? All of these things are, information that companies have, but they’re not providing it to their investors. So that’s like, that’s what I would call non-disclosure disclosure. It’s like they’re giving you the bare minimum, but not giving you anything more.

Barry Ritholtz:  Let’s talk about some metadata, red flags. A phrase I’ve picked up from you. I’ve read discussions about repeated amendments of, of various filings or reports that are consistently late. How much of this is just, “Hey, the world is complex and sometimes these things don’t happen on time,” and how much of this is Potentially predictive of real problems at the company?

Michelle Leder: I would say anytime a company can’t get its 10 K or 10 Q in on time, that’s a potential problem. If that happens repeatedly, that’s pattern recognition, right? Like if it goes on for a quarter for, several quarters, or longer that’s a potential problem, right? Companies know, for the most part, they have to get their queues in 40 days after the close of the quarter. And so, if they don’t, those companies that don’t get their filings, they’re 10 queues in on time. If they’re on a September quarter, that’s an indication of a potential issue.

If it’s the third time they haven’t been able to get their 10 Q in on time? And of course there’s exceptions, maybe the company’s going through a big merger, right? Like, when you saw like. For example, like the Albertsons-Kroger thing, a couple years ago, there was like problems there because they were trying to merge the company and there was all this regulatory stuff

If you can easily explain a late filing. I wouldn’t say that every single time a late filing is a problem, but I would say more often than not, it is.

Barry Ritholtz: Your website is called Footnoted. Tell us an example of what looked like a minor footnote in a company filing, or disclosure that. You spotted that later turned out to be a really big story.

Michelle Leder: There’s a couple of examples. One is like, Zoetis, the major animal pharmaceutical company. I started looking into them earlier, well late last year, I would say the, to toward, toward the tail end of 2024. And I put out some research to my clients, back in February of this year.

At the time, they were underplaying their, the dangers associated with one of their so-called blockbuster drugs.

Barry Ritholtz:  If I recall, their drug was causing seizures and deaths on in dogs that had no previous, history of that. There, there literally should not have been released to the veterinary community.

Give us another example that, that. A footnote turned out to be a big story.

Michelle Leder: Back in in 2022, Nicola had like a, uh, what I would call a seemingly minor disclosure. It was about a sudden resignation, by an executive, not the CEO or CFO, just another, like another.

Person who was a “named executive” – that’s a formal term, which is usually the five top executives of the company. Suddenly, and it seemed kind of unimportant, but then it turned out to be an early sign of like basically rats abandoning the ship. And of course we all know Nicolo wound up filing for bankruptcy.

And so it’s kind of like following those breadcrumbs and trying to figure out, figure out what’s really going on at the company. What are they disclosing? What are they trying to tell investors? How can I, try to figure out what’s going on.

Barry Ritholtz: How do you separate what’s really a material red flag and and something that might actually be tradable to just a normal CYA language? That’s in every legal document a corporation produces.

Michelle Leder: I think that’s a great question. And quite frankly, it’s kind of tricky, right? Like it’s, it’s, there is a lot of CYA language in the filings and, um, it can be problematic.

I’d like to think that. after 20 years of reading, SEC filings pretty intensively, that I’m pretty good. My BS meter is pretty well defined and I can kind of tell when something is CYA versus something is, more serious. Of course there is a lot of that language. the filings are ultimately written by lawyers. Now, maybe they’re written by lawyers. I’ve seen a lot more these days. Maybe they’re written by, chat GPT or whatever AI, whatever AI platform they wanna use to write these filings. But ultimately it’s the lawyers that are signing up and lawyers are obviously, tend to be risk averse

Barry Ritholtz: Given the ubiquity of AI these days. How significant is AI in things like corporate filings and how do you use AI to kind of figure out what’s going on with, with all these different things?

Michelle Leder: Well, I think AI is pretty significant in corporate filings. You’re seeing it, more and more, and I’ve certainly, I think I read a journal story like, two or three weeks ago that talked about filings in quarterly work. Or it’s an even conference call, trans, conference call scripts are being written by AI and being used to kind of train, um, executives on how to answer questions, whereas before it used to be sort of in person and, kind of that thing.

I think like AI is of course, becoming much more common in this type of thing. And then of course there’s the tools that are being used to uncover what’s going on in the filings.

I do use AI. There’s a tool that I been using, um, a lot lately. It’s called Fin Tool. And, it’s, interesting because it’s really AI definitely designed around SEC filings as opposed to a more generic AI like a Chat or like, Claude or, pick your AI tool of choice. This one’s strictly focused on SEC filings and, and financial disclosures. And I find it to be pretty good.

Of course, AI is not perfect and so you have to kind of, figure things out. It’s not gonna get everything. But I think, increasingly it can be a helpful tool in trying to detect patterns.

So, like, for example, if I wanted to know, like, how many CFOs, let’s just say, company X has had in the past 10 years. in the past I would’ve had to dug through different filings, I mean, Bloomberg would of course have that information on the terminal, but, that’s the type of thing that AI can really help you with.

Things like that —  going through and, and putting the pieces together.

Barry Ritholtz: To wrap up, if you’re an active trader or if you buy speculative stocks or. Even if you have questions about the management of some of the companies you own, it might be useful to pay attention to their SEC filings, especially the things they may not want you to see items they’re dumping on a Friday evening.

Or barely meeting the minimum disclosure requirements. There’s a, there’s gold in them. There are hills if  where to look, and if  how to interpret it. I’m Barry Ritholtz. You are listening to Bloomberg’s At the Money.

 

Outro:  “Honesty is such a lonely word, Everyone is so untrue
Honesty is hardly ever heard, And mostly what I need from you”

 

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Find our entire music playlist for At the Money on Spotify.

 

The post At The Money: Finding the Hidden Alpha in SEC filings appeared first on The Big Picture.

This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the November 2025 seasonally adjusted annual sales rate (SAAR) of 367 thousand.

Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."

Click on graph for larger image.

Heavy truck sales were at 367 thousand SAAR in November, up from 339 thousand in October, and down 25.2% from 491 thousand SAAR in November 2024.
Year-to-date (NSA) sales are down 13.2% in 2025 compared to 2024 through November.
Usually, heavy truck sales decline sharply prior to a recession, and sales have collapsed recently.  

Spending Slowdown Hits Apple App Store In Major Markets

Apple App Store spending cooled in November, dragged down by weakening demand across several of Apple's largest global markets, which together account for more than half of all App Store revenue.

Goldman analysts led by Michael Ng published a note Tuesday citing Sensor Tower data showing Apple App Store spending last month rose just 6% YoY, down from 9% in October and half the growth rate seen in July.

Sensor Tower data showed that Games, the App Store's largest category (44% of revenue), drove most of the slowdown, falling 2% YoY after growing 3% the previous month.

"Weakening consumer demand for products and services. Apple's products and services are typically sold to consumers, and any weakness in the macroeconomic environment could reduce demand for Apple products and services," Ng said.

There was no definitive explanation beyond the softer "macroeconomic environment" for the App Store slowdown.

By geography, four of Apple's top five markets - the US, Japan, the UK, and Canada - experienced a broad-based slowdown in App Store spending. This raises near-term downside risk and could weigh on App Store revenue.

However, despite slowing App Store spending growth rates, Ng still expects Apple's F1Q26 Services revenue to meet guidance (14% YoY) because other Service lines - including iCloud+, AppleCare+, Apple Music, Apple Pay, and broader subscriptions - continue to perform well.

Here are the key takeaways from the App Store spending slowdown:

• November 2025 App Store net revenue grew +6% YoY, decelerating from +9% in October. November marks the slowest month of 2025 and sits below the 2022–2024 average November growth rate of +10% YoY.

• By category, the slowdown was primarily driven by Games (-2% YoY vs. +3% YoY in October), which represent ~44% of total revenue. Among the next largest categories: Entertainment (15% of total) accelerated to +5% YoY (from +4%), while Photo & Video (8% of total) decelerated slightly to +16% YoY (from +17%).

• By geography, spending slowed across Apple's largest markets: the US (36% of total) cooled to +3% YoY (from +8%), Japan (10%) fell to -2% (from +4%), while China (20%) improved slightly to -1% (from -2%).

Notice that the App Store spending slowdown has persisted for much of the year.

Whoops.

Not good.

The question of why consumers are cutting back on gaming apps is a big one. It's happening across Apple's major markets, which could point to more financially pressured consumers, smartphone fatigue, or competitive app stores soaking up market share. Whatever the cause, the drop in demand signals Tim Cook will have to take corrective measures heading into 2026.

Tyler Durden Wed, 12/03/2025 - 13:45

The BEA reported that light vehicle sales were at 15.6 million in November on a seasonally adjusted annual basis (SAAR). This was up 2.0% from the sales rate in October, and down 5.6% from November 2024.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) through October (red from Omdia).
Vehicle sales were over 17 million SAAR in March and April as consumers rushed to "beat the tariffs".
Then sales were depressed in May and June. 
Sales were boosted in August and September due to the termination of the EV credit at the end of September.

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Sales in November were slightly above the consensus forecast of 15.4 million SAAR.

"Deckchairs" On The Titanic?

By Michael Every of Rabobank

The conclusion to yesterday’s Global Daily was that we are still in a systemic metacrisis. True, many market metrics don’t show it - but how many deckchairs told the Titanic’s passengers they were heading for the iceberg? Markets have a vital role, as do chairs, but expecting them to reflect the potential enormity of what’s going on could end up with you being in very cold water.

Here are two recent headlines to send a shiver down spines: ‘Fear and loathing come for Bitcoin as big investors ponder selling’ (Australian Financial Review); and, ‘It’s time to sound the alarm on growing fiscal and financial risk’ (Financial Times) as “Rising public debt is one concern - another is how it is being financed.” Of course, things look healthier in other areas.

Let’s continue with central banking. The RBA Governor said rates might have to go back up if inflation does. Who knew? Not the RBA or the markets reassured by its projections. Trump says he’ll nominate the next Fed Chair in early 2026’: it seems Hassett is frontrunner. That opens the door to new Fed purpose as well as personnel. Markets are slow to grasp the full implications.

Russia said talks with the US about a Ukraine peace plan were “constructive”, but “no compromise” had been reached on territorial issues. However, we see serious concerns this ends up in an ugly --and expensive-- deal which weakens Europe. Pressure is also increasing for NATO to spend more, faster: but with whose money? The European Commission is making a late offer to win Belgian backing for its Russian asset loan scheme, which the ECB is refusing to back - critics argue it’s a de facto asset confiscation that could damage Europe’s reputation as well as ensuring there’s no peace deal. It is, in effect, ‘victor’s terms’ when Europe has won nothing.

Worse, in response to Europe’s hardline political rhetoric and slimline actions, Putin warned that he doesn’t want war, but if Europe does, Russia is ready - and will defeat it. That’s as Ukrainian drones attacked their third Russian shadow fleet ship this week and Putin stated he will retaliate against Ukrainian shipping and those countries helping it, i.e., Europeans. There’s little middle ground between those two outcomes, but markets are assuming a geopolitical median.

Meanwhile, Europe bewails it “would have given almost anything for peace, but Beijing had a different calculus” - including siding with China vs. the US (where The Economist says ‘Trumpworld thinks Europe has betrayed the West’ – watch Macron in China for more on that ahead); and India, which the EU wants to build deeper ties with as a counterbalance, just ratified a strategic defence partnership with Russia.

The Honduran election currently has the centrist candidate whom Trump didn’t want to win ahead, promising fireworks(?) We are all waiting to see what happens in Venezuela. US lawmakers say they will force a vote on the War Powers Act if Trump attacks it, but the current -anti-terror designation may be workaround – and Trump just said any country trafficking drugs into US could be attacked. That includes a few famous names.

Trump signed a bill to deepen US-Taiwan ties, as the island’s opposition party blocked government plans to increase defence spending. That’s as tensions between Japan and China over PM Takaichi’s recent comments continue to remain high. Even the 1951 San Francisco Peace Treaty between the US and Japan is being drawn in --China publicly rejecting it-- with potentially worrying parallels to the historical legalese heard around the Russia-Ukraine issue before February 2022. If peace treaties are no longer valid, borders can only be set by threat of or actual force.

That’s as a new Chinese naval flotilla, including an assault ship, is in the Philippines Sea and may be heading for Australia, the latter armed with dangerously high house prices. If you think markets are pricing for these kind of grey rhino risks --how?!-- ask your trader or broker what their view of the 1951 San Francisco Peace Treaty is. I’m sure it will be enlightening.

In the Middle East, a new Israel – Hezbollah confrontation appears worryingly close. Whether that spreads to Iran remains to be seen: ‘optimists’ suggest it’s a story for 2026. Markets are better at pricing those kind of oil risks and seem relaxed so far.

In geoeconomics, floods in Thailand have paralyzed IT goods trade flows globally; US Treasury Secretary Bessent praised Bank Santander for pulling its credit lines from oil trader Gunvor following US claims that the firm, now with new leadership, was a ‘Kremlin Puppet’; Costco is suing the Trump admin for “full refund” on its tariffs, upping the ante; Macron wants to rebalance trade with China as it floods Europe with imports --how?-- as German firms are doubling down on their investments in China; China’s state media boasted its “dirt cheap” hypersonic missiles could upend global defence markets; and Russia said it’s ready to address India's concerns over their massive bilateral trade deficit – see how trade deals and defense pacts go together?

In the (political!) economy, Michael Dell donated $6.3bn for ‘Trump Accounts’ for children – patriotism, or akin to EM billionaires whose governments ‘encouraged’ them to ‘share the load’? The Trump admin also took a $150M stake in chip startup, a once shocking headline already becoming normalized. Yet overlooked by markets, because it isn’t a number on a Bloomberg screen, China's local government debt has reportedly risen to $18.9tn, implying total public debt to GDP is far above 200% and rising, vs. the US’ ≈100% and rising, with China’s private sector debt also around 200%, as in the US. That underlines *China’s structural* necessity to maintain capital controls and a vast, neo-mercantilist trade surplus. The FT touched on that recently; then it moved on to play with the next shiny bauble rather than nailing down the ensuing logical conclusions as principles for its flow of policy recommendations. But their deckchair has a wonderful rear view.

In (economic!) politics, two former EU political heavyweights, Mogherini and Sannino, are in custody over a fraud probe. The UK is mulling a ban on crypto cash in politics, which will put Reform UK’s Farage in the firing line; the UK’s now-headless Office of Budget Responsibility said it had warned the Treasury over budget ‘misconceptions’ (like a deficit being a surplus); and UK jury trials are to be scrapped for crimes with sentences of less than three years, reversing ancient precedent, to make the trial process 20% faster. In France. ‘Macron denies 'Ministry of Truth' plan in standoff with far right’ (Euractiv). In the US, a new immigration crackdown and perhaps a global travel ban loom. India’s government is demanding the installation of state apps on all smartphones; and ‘China looks to AI and big data to guard against Western values’ (SCMP), as Xi “tells Politburo that new technology should be applied to promote socialist ideology.” How do markets price for all the above – or do none matter(?)

To conclude, even if some deckchairs are collapsing, we can continue to sit comfortably on most of them for now. However, that doesn’t mean we shouldn’t be thinking about the direction of travel and what may lie ahead of us. It isn’t an iceberg per se, and there will be both upsides and downsides. Just don’t assume it will be plain sailing.

Tyler Durden Wed, 12/03/2025 - 13:25

Fed Regime-Change: Groupthink May Be Ending

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

Starting in the aftermath of the 2008 financial crisis, a profound change to the Fed’s liquidity-providing role in the capital markets was underway.  We can sum up the Fed regime change with a popular quip: The Fed has shifted from lender of last resort to the lender of only resort!

In our articles QE Is Coming and its follow-up, How The Fed Deals Liquidity, we discuss why the Fed has become the primary provider of liquidity since 2008 and the tools it uses to maintain ample liquidity in the markets. While that Fed regime change has been incredibly impactful on the financial markets, there is a growing possibility of another meaningful regime change that could prove equally impactful.

This article, like the two linked above, is dry. Still, investors today must understand that monetary policy has become a primary driver of liquidity, which in turn significantly influences asset prices. Without a clear understanding of what the Fed is doing and how it functions, your investment ideas, no matter how solid, can be flawed.

Groupthink Has Been The Fed Norm

The Fed’s monetary policy-setting group, the Federal Open Market Committee (FOMC), meets every six weeks to discuss the economy, financial markets, liquidity, and a host of other factors that help the Fed set monetary policy to meet its inflation and employment objectives.

After two days of data analysis, conversation, and debate, the FOMC’s voting members vote on whether to adjust monetary policy. Most often, the policy changes involve the Fed Funds Rate and or the monthly pace of QE or QT.

The committee is comprised as follows:

• Seven members of the Board of Governors- including the Chairman

• Four rotating regional Fed Presidents

• The President of the New York Fed

While there are debates and many divergent views expressed at the FOMC meetings, the published results always give the impression of agreement. This is evident in the meeting statement, which lists the members who voted for the monetary policy actions and those who dissented. The example below from the October 29, 2025, meeting shows that two of the twelve members dissented or voted against the prescribed policy actions.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Alberto G. Musalem; and Christopher J. Waller. Voting against this action were Stephen I. Miran, who preferred to lower the target range for the federal funds rate by 1/2 percentage point at this meeting, and Jeffrey R. Schmid, who preferred no change to the target range for the federal funds rate at this meeting.

Historical Dissents

As we shared above, there were two dissenting votes at the last meeting. On average, since 1936, 5% of members have cast dissenting votes per meeting. Since 2000, the most dissenting votes at a single meeting were three. On average, over the last 25 years, the odds are 50/50 that one member will dissent at each meeting.

The bottom line is that dissents occur with some regularity, but the votes for or against policy action are always a strong consensus. More simply, the Fed has been in a groupthink regime fro the last 100 years!

Consensus At The Fed

In the FOMC minutes, released three weeks after the meeting, we gain a better understanding of the debates that took place. It’s clear from these minutes that there are many divergent opinions. This should not be surprising, as the members come from different regions across the country and have diverse economic views. This has been the case since 1936, when the Fed began sharing the minutes.

While there may be many views on the economy and the right course for monetary policy, the graph above clearly shows that almost all Fed members coalesce around a single policy action. 

Quite often, the Fed Chair steers the FOMC toward presenting a consensus view.

Politics At The Fed

We argue that, despite its supposed independence from the executive branch, the Fed has always been political to some degree. Furthermore, we must assume that every Presidential nomination of a Fed member is primarily based on the nominee’s alignment with the President’s views.

Thus, it’s not shocking that Stephen Miran, Trump’s latest appointee, is arguing for aggressive rate cuts. Furthermore, Trump’s possible appointee to replace Lisa Cook and Chairman Powell when his term ends in May will most likely also hold dovish views.

While there is an infusion of dovish voters to join existing dovish members, there also remains a camp of hawkish voters. It appears that most of the dovish-hawkish standoff is a function of whether members are more concerned about keeping a lid on inflation (hawkish) or about preventing a worsening of the labor market (dovish).

However, we offer that the debate may be becoming political as well. Is the Fed morphing into entities like the Supreme Court or Congress that are politically motivated?

In other words, are some dovish members not as concerned about the labor markets as they appear, and instead pushing for a more accommodative policy to help Trump achieve his economic goals? Conversely, might some hold hawkish opinions, not because they fear inflation, but because they disagree with the President’s policies?

Is Consensus Dead?

If, as we postulate, the Fed is becoming more politically divided, might the Fed Chairman be losing the ability to present a group consensus? Interestingly, the odds of a rate cut at the next Fed meeting have been floating between 25% and 85%. Those odds have been shifting as various Fed members have weighed in on whether they may cut rates at the next meeting. Currently, there is a split between those wanting to cut rates and those dissenting from another cut in December. A few members also appear undecided. If the Chairman is unable to get the members to reach a consensus, it’s quite possible there could be four, five, or even six dissenters at the next meeting.

Our Take On Dissents

Historically, as we noted earlier, the Chairman gets the FOMC to form a strong publicly facing consensus. Doing so gives investors, consumers, and business leaders a false sense of confidence that the Fed is fully aware of what is happening in the economy and that it has the right policy prescription. 

We welcome dissent at the Fed. We welcome change. Groupthink, as managed by one person, the Chair, has led to significant policy errors. While the Fed will still make errors in the future, investors, business leaders, and consumers will at least be better versed in other policy opinions. For instance, a vote with multiple dissenting votes signals that the Fed is not confident in its views or policies. While that may make some uneasy, it’s better to recognize their stance than to believe something that isn’t true. Conversely, in an era of multiple dissenting votes, a complete consensus should lead investors to think the Fed has strong confidence in its views and policies.

Summary

As we said earlier, we welcome a regime change at the Fed. We want 12 autonomous FOMC members deliberating and voting on Fed policy. We don’t like the opinion of one person, the Chairman, dictating the views and policies of the Fed.

A new Fed regime consisting of 12 voting Fed members, voicing their own opinions and casting votes on what they think, not what the Chairman wants, would be a welcome change, albeit it might introduce short-term volatility in the financial markets.

Tyler Durden Wed, 12/03/2025 - 12:45

Europe Accuses Putin Of Faking Peace Talks With Trump Envoys

After the American delegation sent by President Trump met some 5 hours with President Putin and his team in Moscow Tuesday night, but with no significant progress made (and with some observers declaring it a 'failure'), some European officials are trying to have an 'I told you so' moment.

Ukrainian and European officials on Wednesday have alleged Putin is faking a desire to achieve peace, and is intentionally wasting Washington's time while prolonging the war and intensifying strikes on the battlefield.

For example, Ukraine's Foreign Minister Andrii Sybiha declared immediately after the Moscow discussions that Putin should "stop wasting the world's time." The Zelensky government, it should be noted, has also been quietly frustrated with the White House for largely sidelining its long-running objection to territorial concessions. But the US plan is truly "new" in that it offers Russia de facto control of land in the Donbass and Crimea.

Getty Images

UK Foreign Secretary Yvette Cooper voiced similar criticism, saying Putin "should end the bluster and the bloodshed and be ready to come to the table and to support a just and lasting peace."

Baltic and northern European states have continued in their rhetoric challenging the Kremlin, with Estonian Foreign Minister Margus Tsahkna responding, "What we see is that Putin has not changed any course. He's pushing more aggressively on the battlefield." The top diplomat said, "It's pretty obvious that he doesn't want to have any kind of peace."

And Finland's Foreign Minister Elina Valtonen said similarly, "So far we haven't seen any concessions from the side of the aggressor, which is Russia, and I think the best confidence-building measure would be to start with a full ceasefire."

While the Kremlin has called the Tuesday Moscow talks "constructive" - it conceded that little actual progress was made toward a deal, given Russia is demanding nothing less than full legal and international recognition of the territories under its control. 

NATO Secretary-General Mark Rutte meanwhile is calling on allies to ensure Ukraine is in its strongest possible position as negotiations proceed. Of course this involves flooding Kiev with more money and weapons. "The peace talks are ongoing. That's good," Rutte said.

"But at the same time, we have to make sure that whilst they take place and we are not sure when they will end, that Ukraine is in the strongest possible position to keep the fight going, to fight back against the Russians. But also in the strongest possible position when peace talks really get to a point where they sit at the table," he added.

More allegations of feigning interest in a peace process out of Western pundits:

Putin Meets With Witkoff and Kushner for Nearly Five Hours and the two sides did not reach any specific compromises, an aide to President Vladimir V. Putin said, as the United States pushes a plan to end the war in Ukraine.

Let me translate for you what this means. There was… https://t.co/0z7KAlRF5t

— Sir William Browder KCMG (@Billbrowder) December 3, 2025

Meanwhile mutual strikes on energy infrastructure continues to escalate. President Putin has also warned his military is readying to expand strikes on Ukrainian ports, in retaliation for a spate of drone attacks on tankers transporting Russian oil to global markets.

Tyler Durden Wed, 12/03/2025 - 12:25

DOJ Charges Afghan National Over Online Threats To Build Bomb, Kill Americans

Authored by Arjun Singh via The Epoch Times,

The Department of Justice has indicted an Afghan national residing in Fort Worth, Texas, for allegedly making online threats to construct an explosive and kill U.S. citizens using it.

Mohammad Dawood Alokozay, 30, was arrested by the FBI’s Joint Terrorism Task Force and the Texas Department of Public Safety on Nov. 30. A statement from the Department of Justice indicated that he was charged with “transmitting a threatening communication in interstate commerce,” which violates 18 U.S. Code, Section 875(c), for making threats on social media platforms, specifically TikTok, Facebook, and X.

“We have zero tolerance for violence and threats of violence to kill American citizens and others like those allegedly made by this individual,” said Ryan Raybould, the U.S. Attorney for the Northern District of Texas, whose office is prosecuting the case.

Alokozay on Nov. 23, while speaking in the Dari language, allegedly told two other men during a video stream on social media that he would build a bomb in his vehicle. He also allegedly described in detail bomb making techniques used by the Taliban in Afghanistan, who he described as “dear” to him. During his remarks, Alokozay allegedly stated that he intended to conduct a suicide attack on Americans, and that he was “not afraid of deportation or getting killed.”

The Epoch Times was unable to obtain a copy of Alokozay’s indictment, which is currently under seal in the U.S. District Court for the Northern District of Texas. If convicted, Alokozay faces a maximum of five years in prison for the crime.

Alokozay’s immigration status in the United States, and whether the federal government will place him in removal proceedings, has not been publicly disclosed. Currently, Afghanistan is ruled by the Taliban, a designated foreign terrorist organization, to which the United States has not conducted any publicized removal operations.

Normally, in cases where the country of origin of a deportee may present a risk to the deportee’s life, that person may apply for “withholding of removal” under Section 241(b)(3) of the Immigration and Nationality Act, and protections under the Convention Against Torture. These statuses, if granted by an immigration judge, prevent a person from being removed to their home country, though they may be removed to a willing third country.

Since Nov. 26, when one National Guard service member was shot and killed and another critically wounded in Washington, allegedly by Afghan national Rahmanullah Lakanwal, the U.S. government has increased scrutiny of existing Afghan nationals and other citizens of “high-risk” nations who reside within the country.

Tyler Durden Wed, 12/03/2025 - 12:05

James Boasberg Snubs Senate Hearing On 'Rogue Judges'

Authored by Luis Cornelio via Headline USA,

Two of the federal judges facing impeachment threats refused to attend a Wednesday Senate Judiciary subcommittee hearing on “rogue judges.” 

James Boasberg and Deborah Boardman, district judges in Washington and Maryland, respectively, told the Senate Judiciary Subcommittee on Courts that they would not appear over concerns about the separation of powers and judicial ethics. 

Their refusal was delivered through a Nov. 12 letter sent by U.S. Judge Robert Conrad, the director of the Administrative Office of the U.S. Courts, to Sen. Ted Cruz, who chairs the subcommittee. 

Conrad claimed that allowing the judges to testify could violate ethics rules and “encroach upon the separation of powers,” according to the Daily Caller. 

He cited judicial rule Canon 3A(6), which forbids judges from testifying about matters they have decided or that may be pending before them. 

“The commentary to this provision explains that the ‘admonition against public comment about the merits of a pending or impending matter continues until the appellate process is complete,’” Conrad added. 

Director of the Administrative Office of the U.S. Courts Judge Robert Conrad cited part of the code of conduct stating a judge "should not make public comment on the merits of a matter pending or impending in any court."

— Katelynn Richardson (@katesrichardson) December 2, 2025

Cruz scheduled the hearing to examine possible impeachment proceedings against federal judges accused of overstepping their authority.

Boasberg is one of those judges, Republicans argue. He is facing impeachment threats from Rep. Brandon Gill, R-Texas,  

Gill filed the articles of impeachment accusing Boasberg of abusing his “judicial authority” for approving Biden-era search warrants targeting Republican lawmakers and other conservative organizations part of the Jan. 6 investigation. 

“Judge Boasberg was an accomplice in the egregious Arctic Frost scandal where he equipped the Biden DOJ to spy on Republican senators,” Gill wrote in a statement. 

“His lack of integrity makes him clearly unfit for the gavel.” 

Boardman is also facing impeachment efforts, this time from Rep. Chip Roy, R-Texas, over her lenient eight-year sentence for the convicted would-be assassin of Supreme Court Justice Brett Kavanaugh.  

Boardman cited the attacker’s declared transgender identity to justify sparing him from a harsher penalty. 

“Boardman unequivocally based this weak sentence on the attempted assassin’s ‘gender identity,’ as the attempted assassin expressed that he views himself as a woman,” Roy wrote in a separate statement. “Instead of doing what the Judiciary calls for and sentencing this man to the base 30-year sentence recommended by the Department of Justice, Judge Boardman purposefully allowed this man off easy.”

Tyler Durden Wed, 12/03/2025 - 11:25

WTI Holds Gains As Cushing 'Tank Bottoms' Loom; US Crude Production At Record High

Oil prices are higher this morning after API's report showed crude inventories fell last week, while negotiations to end Russia's war on Ukraine failed to reach an agreement.

Prices have stuck in a narrow range in recent weeks as geopolitical concerns have countered rising supply as OPEC+ returned 2.6-million barrels of production cuts to market amid increasing production outside of the cartel.

But, a lack of progress in U.S.-led negotiations to reach a peace deal between Ukraine and Russia and the Trump Administration's military build up off Venezuela continue to command a risk premium for the commodity.

"Traders weighed prospects for an end to the war in Ukraine while watching for Trump's next moves on Venezuela. Ahead of today's EIA report, the API said US crude stockpiles rose by 2.5 million barrels last week. Overall, Brent and WTI remain confined to tight ranges as ample global supply continues to offset geopolitical risk," Saxo Bank noted.

Will the official data confirm API's draw?

API

• Crude -2.48mm

• Cushing -89k

• Gasoline +3.1mm

• Distillates +2.88mm

DOE

• Crude +574k

• Cushing -457k

• Gasoline +4.518mm - biggest build since May

• Distillates +2.059mm

The official report was delayed but once it hit, it showed a small crude build (as opposed to API's reported draw). Products saw big builds (Gasoline largest weekly add since May) and Cushing stocks fell for the 4th straight week...

Source: Bloomberg

Cushing's ongoing draws leave stocks near 'tank bottoms' once again...

Source: Bloomberg

US Crude production hovers near record highs despite the rapid decline in rig counts...

Source: Bloomberg

WTI is holding gains after the delayed data...

Source: Bloomberg

Geopolitical tensions are keeping the market jittery and adding a risk premium to prices, partly countering concerns about a surplus. That includes US rhetoric against Venezuela, with President Donald Trump suggesting the Pentagon will soon start targeting drug cartels with strikes on land.

Senate hawks calling for a complete Venezuelan overthrow further fuel oil’s upside risk. Eschewing the term “regime change”, Rick Scott (R–Fla.) told ZeroHedge that he’d like to Venezuelan President Maduro in handcuffs.

”I’d like [Maduro] to be arrested for selling drugs into this country,” Scott said today. “That’s not ‘regime change’. He is not the president of Venezuela… there was an election. He lost the election.”

On the Russian front, Goldman sees little change in markets following the peace talks.

“The Brent crude price remained roughly unchanged in the low $60s over the last week as Russia-Ukraine peace talks continue,” Goldman Sachs Group Inc. analysts including Yulia Grigsby said.

“Oil markets and prediction markets do not appear to price a large probability of a near-term peace agreement and removal of the sanctions on Russia oil.”

Grigsby also noted that overall levels of Russian oil exports have remained robust, even after US penalties on Lukoil and Rosneft, as sales rapidly pivoted to non-sanctioned producers.

On the bright side, the broadly weaker trend on crude oil prices has dragged gas (pump) prices down to their lowest since May 2021...

Source: Bloomberg

While it's not exactly 'drill, baby, drill', it's certainly what Trump wanted (the question is, will the lower price push shale producers to cut production... and round and round we go).

Tyler Durden Wed, 12/03/2025 - 11:18

Today, in the Real Estate Newsletter: Asking Rents Soft Year-over-year

Brief excerpt:

Another monthly update on rents.

Tracking rents is important for understanding the dynamics of the housing market. Slower household formation and increased supply (more multi-family completions) has kept asking rents under pressure.

More recently, immigration policy has become a negative for rentals.

Apartment List: Asking Rent Growth -1.1% Year-over-year ...

The national median rent fell 1.0% in November, and now stands at $1,367. This was the fourth consecutive month-over-month decline, as we’re now in the midst of the rental market’s off-season. It’s likely that we will close out the year with an additional modest rent decline in December.

Realtor.com: 27th Consecutive Month with Year-over-year Decline in Rents

October 2025 marks the 27th straight month of year-over-year rent decline for 0-2 bedroom properties since trend data began in 2020. Asking rents dipped by $29, or -1.7%, year over year.

There is much more in the article.

Trump Confirms Biden's Autopen Documents, Orders, & Pardons Are Void

Authored by Jill McLaughlin via The Epoch Times,

President Donald Trump said on Tuesday that he has nullified all documents, proclamations, executive orders, memorandums, and contracts signed by autopen during President Joe Biden’s term.

“Any and all Documents, Proclamations, Executive Orders, Memorandums, or Contracts, signed by Order of the now infamous and unauthorized ‘AUTOPEN,’ within the Administration of Joseph R. Biden Jr., are hereby null, void, and of no further force or effect,” Trump wrote in a social media post.

“Anyone receiving ‘Pardons,’ ‘Commutations,’ or any other Legal Document so signed, please be advised that said Document has been fully and completely terminated, and is of no Legal effect. Thank you for your attention to this matter!”

The declaration follows Trump’s Nov. 28 announcement that he was revoking all executive orders signed by autopen during the Biden administration.

“The Autopen is not allowed to be used if approval is not specifically given by the President of the United States,” Trump wrote on Truth Social.

Trump alleged the documents were signed illegally.

“The Radical Left Lunatics circling Biden around the beautiful Resolute Desk in the Oval Office took the Presidency away from him,” Trump posted. “Joe Biden was not involved in the Autopen process and, if he says he was, he will be brought up on charges of perjury.”

The autopen, which uses a real pen and ink to mechanically replicate a president’s signature, can be used to sign official documents, but the president must direct the signing of each document or bill, according to the Office of Legal Counsel.

According to some legal scholars, U.S. presidents may revoke previously issued executive orders. However, revoking pardons may be unconstitutional and could face roadblocks, experts told the Epoch Times.

The U.S. House Committee on Oversight, led by Rep. James Comer (R-Ky.) published a report in October detailing an investigation into the Biden administration’s use of autopen signatures.

The federal probe found senior White House officials “abused the autopen and a lax chain-of-command policy to effect executive actions” and failed to provide documentation to prove the documents were authorized.

The committee stated it found evidence that Biden’s White House staff concealed his diminishing mental and physical condition intentionally.

“The Committee has found that there was, in fact, a cover-up of the president’s cognitive decline and that there is no record demonstrating President Biden himself made all of the executive decisions that were attributed to him,” the committee wrote in the report. “The authority to grant pardons is not provided to the president’s inner circle.”

Several senior advisors and staff refused to provide testimony during the investigation for fear of incriminating themselves.

A photo of former President Biden's autopen signature (C) on the new White House Presidential Wall of Fame on Sept. 26, 2025. Madalina Kilroy/The Epoch Times

In a Truth Social post, Trump claimed 92 percent of documents signed during Biden’s presidency were signed by autopen.

During his presidency, Biden issued 4,245 acts of clemency—more than any other president—and 162 executive orders.

Biden’s acts of clemency consisted of 80 pardons and 4,165 commutations. While the commutation total topped all other presidents since McKinley, who left office in 1901, the 80 pardons were topped by several other presidents including Trump in his first term (144), President Barack Obama (212), and President George W. Bush (189).

Tyler Durden Wed, 12/03/2025 - 10:15

'Sustained Resilience': US Services Surveys Mixed In November

Following the disappointment on the Manufacturing PMI side (both S&P Global and ISM seeing their surveys decline in November), US Services surveys were more mixed in the face of 'strong' hard data (that has been largely absent due to the shutdown).

• S&P Global US Services PMI dropped from 54.8 to 54.1 in November (lowest since June and notably worse than the flash print of 55.0)

• ISM US Services PMI rose from 52.4 to 52.6, solidly better than the 52.0 expected.

Source: Bloomberg

Under the hood was also mixed (completely opposite) news with ISM seeing Prices Paid dropping bigly (S&P Global seeing it rise), ISM seeing new orders decline (S&P Global seeing improvement) and ISM seeing employment still contracting (S&P Global sees 'solid increase' in employment)...

The S&P Global US Composite PMI posted 54.2 in November. That was little changed overall on October’s 54.6 and consistent with trend growth of the US private sector economy.

Similar rates of expansion were recorded across the manufacturing and service sectors. Latest data showed the strongest growth in new work for three months, which helped support a solid increase in employment. Meanwhile, input price inflation accelerated to a four-month high whilst output charges also rose at a stronger pace.

“The US service sector has reported another strong expansion in November, with demand for services rising at the fastest rate seen so far this year," according to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.

"Together with a robust increase in output reported by the manufacturing sector, the survey indicates that the economy is so far expanding at a 2.5% annualized GDP growth rate in the fourth quarter."

Supportive financial conditions, including lower interest rates and the equity market gains seen this year, are helping drive the sustained resilience of the economy, with Williamson noting a further surge in financial services activity reported in November.

Tariff fears remain top of mind...

“Consumer and business services are also continuing to expand, but report pressure on customer demand from affordability issues in particular. Worryingly, prices charged for services rose at an increased rate in November as firms sought to pass on higher costs, in turn often linked to tariffs.

“The concern is that rising prices could deter further rate cuts, in turn dampening the financial services expansion which has been doing much of the heavy lifting in terms of the sustained economic expansion in recent months.

But there is some optimism...

“More encouragingly, November saw an upturn in business expectations of growth over the year ahead compared to October, though this in part merely reflected some relief at the ending of the government shutdown, and some of this improved sentiment appears to have already faded towards the end of November.”

Overall, it's choose your own adventure...

...with something for both the doves (weakening survey headline data) and the hawks (economy still expanding and tariff-driven inflation fears high).

Tyler Durden Wed, 12/03/2025 - 10:07

(Posted with permission). The ISM® Services index was at 52.6%, up from 52.4% the previous month. The employment index increased to 48.9%, up from 48.2%. Note: Above 50 indicates expansion, below 50 in contraction.

From the Institute for Supply Management: Services PMI® at 52.6% November 2025 ISM® Services PMI® Report

Economic activity in the services sector continued to expand in November, say the nation’s purchasing and supply executives in the latest ISM® Services PMI® Report. The Services PMI® registered at 52.6 percent and is in expansion territory for the ninth time in 2025.

The report was issued today by Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: “In November, the Services PMI® registered a reading of 52.6 percent, 0.2 percentage point higher than the October figure of 52.4 percent. The Business Activity Index continued in expansion territory in November, registering 54.5 percent, 0.2 percentage point higher than the reading of 54.3 percent recorded in October. The New Orders Index also remained in expansion in November, with a reading of 52.9 percent, 3.3 percentage points below October’s figure of 56.2 percent but 0.9 percentage point above its 12-month average of 51.7 percent. The Employment Index contracted for the sixth month in a row with a reading of 48.9 percent, a 0.7-percentage point improvement from the 48.2 percent recorded in October — the fourth consecutive monthly increase since a reading of 46.4 percent in July.

“The Supplier Deliveries Index registered 54.1 percent, 3.3 percentage points higher than the 50.8 percent recorded in October and 2.2 percentage points above its 12-month average of 51.9 percent. This is the 12th consecutive month that the index has been in expansion territory, indicating slower supplier delivery performance. (Supplier Deliveries is the only ISM® PMI® Reports index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.)

“The Prices Index registered 65.4 percent in November, its lowest reading since hitting 65.1 percent in April 2025. The November figure was a 4.6-percentage point drop from October’s reading of 70 percent. The index has exceeded 60 percent for 12 straight months.
emphasis added

Employment was in contraction for the 6th consecutive month, and prices paid remained high.

Maduro Could Be Exiled To Qatar As Trump Warns Land Strikes On Venezuela Coming "Very Soon"

President Trump reportedly issued Venezuelan strongman Nicolas Maduro a deadline of last Friday to of his own volition step down as president and accomplish a peaceful transition of power, or else face possible direct military action.

The New York Post is freshly reporting that the White House has offered that Maduro could be exiled to Qatar, where he would live out his days in luxury in one of the world's wealthiest countries.

"A senior Trump administration source said Secretary of State Marco Rubio has floated allowing Maduro, 63, to relocate to Qatar as the gas-rich emirate helps mediate the conflict," NY Post writes Wednesday. "Three current and two former administration officials described the scenario as plausible."

Qatar, image via Remote Lands

A source close to the administration described that "Qatar, Saudi Arabia and the UAE love to do stuff like this. It helps build chits with the US." The person further said, "All three compete against each other — in the region and for the ultimate affection of the US."

So far Maduro has resisted Trump's call to immediately step down, and the last Friday deadline came and went. If it were to suddenly happen - and by looks of it Maduro doesn't seem prepared to go anywhere - this scenario would quickly lead to lower oil prices as Washington's crude embargo would be dropped and US firms move to pump oil out of the Latin American country, which has the world's largest proven oil reserves.

As for the supposed exile to Qatar plan, there's been no immediately forthcoming confirmation from the White House that this is accurate, but Maduro would have to go somewhere after all.

The large military presence in the southern Caribbean has persisted for months at this point, and the clock is ticking, especially given President Trump's Tuesday remarks of land attacks possibly beginning "very soon". He said as follows:

President Trump said Tuesday his administration could attack accused drug traffickers who traverse Latin America by land "very soon," which would mark an escalation in the U.S. military's campaign of lethal strikes on alleged drug boats. 

"We're going to start doing those strikes on land, too," Mr. Trump told reporters during a Cabinet meeting when asked about the administration's strikes at sea. "You know, the land is much easier ... And we know the routes they take. We know everything about them. We know where they live. We know where the bad ones live. And we're going to start that very soon, too."

It's unknown whether such strikes would just be limited to known cartel and trafficking locations and routes, or whether government buildings or military bases could be hit.

What’s quite surprising for me is the silence of Brazil, Qatar, and Turkey, the countries said to have brokered the Trump–Maduro call. They usually love to publicize their peace efforts. But when it comes to Venezuela, they’re barely saying a word. Why are they so silent? pic.twitter.com/hv32yIDXT2

— Imdat Oner (@imdat_oner) December 2, 2025

The administration has already effectively labeled the whole government a 'narco-terror' organization, with its dubious and sweeping "Cartel of the Suns" recent terror designation. "Based in Venezuela, the Cartel de los Soles is headed by Nicolás Maduro and other high-ranking individuals of the illegitimate Maduro regime who have corrupted Venezuela’s military, intelligence, legislature, and judiciary," the mid-November official designation indicated. "Neither Maduro nor his cronies represent Venezuela’s legitimate government."

Could American military action soon commence in Venezuela? Will Maduro find himself in a luxury high-rise in Qatar by month's end?

Tyler Durden Wed, 12/03/2025 - 09:35

US Industrial Production Sees Biggest Annual Gain In 3 Years Despite Slowing Capacity Utilization

First things first, this is data for September. But we would given this morning's Industrial Production and Manufacturing Output data a 'meh' ranking.

Industrial Production rose just 0.1% MoM (as expected) up from the downwardly revised 0.3% MoM decline in August. On a YoY basis, production rose 1.62% - its best since Nov 2022...

US Manufacturing output was unchanged in September (slowing from the 0.1% MoM rise in August), but, like IP, that supported a 1.5% YoY rise in output, its highest level since April 2022...

But the big headline of this (admittedly lagged) report is the weakness in Capacity Utilization at just 75.9% in September (well below the 77.4% print for August, which was revised down to 75.9%, and a big miss versus the 77.2% exp)

Source: Bloomberg

Just as we have seen with the employment data, it appears the US Manufacturing economy has flatlined for much of Q3. Certainly supportive of a cut next week and trend toward more cuts (which are not priced in for now).

Tyler Durden Wed, 12/03/2025 - 09:27

From the Fed: Industrial Production and Capacity Utilization

Industrial production (IP) increased 0.1 percent in September after moving down 0.3 percent in August; for the third quarter as a whole, IP increased at an annual rate of 1.1 percent. In September, the indexes for manufacturing and for mining were unchanged relative to August, and the output of utilities moved up 1.1 percent. At 101.4 percent of its 2017 average, total IP in September was 1.6 percent above its year-earlier level. Capacity utilization was unchanged relative to August at 75.9 percent, a rate that is 3.6 percentage points below its long-run (1972–2024) average.
emphasis added

Click on graph for larger image.

This graph shows Capacity Utilization. This series is up from the record low set in April 2020, and close to the level in February 2020 (pre-pandemic).

Capacity utilization at 75.9% is 3.6% below the average from 1972 to 2023.  This was below consensus expectations.

Note: y-axis doesn't start at zero to better show the change.

The second graph shows industrial production since 1967.

Industrial production increased to 101.4. This is below the pre-pandemic level.

Industrial production was below consensus expectations (with revisions).

Zelensky's Meeting With US Envoy Cancelled After No Real Progress In 5-Hour Moscow Talks

The Russian-US negotiations on the Ukraine conflict concluded in the Kremlin after some five hours of intense negotiations, which had reportedly gone late into the night. Russian presidential aide Yury Ushakov indicated the US side of Steve Witkoff and Jared Kushner presented four more documents concerning the peace settlement during the Kremlin talks; however, a sticking point remains territory.

"Some American proposals are acceptable to Russia, while others are not," the aide stated bluntly. Crucially he at one point responded to a question of whether peace had become closer or further following these talks, to which Ushakov responded, "Definitely not further."

"Territorial issues were discussed specifically, without which we do not see a resolution of the crisis," Ushakov told reporters immediately after the meeting. "Of course, the enormous prospects for future economic co-operation between the two countries were also discussed."

Via Sputnik/NYT

This latter point of cooperation between the US and Russia has "vast potential" - Ushakov said, suggesting the Kremlin doesn't see the peace deal as where it wants it to be in terms of territorial settlement. The US-backed draft peace plan offers that Crimea, Luhansk and Donetsk would be recognized "as de facto Russian, including by the United States." However, Ukraine and other countries would not need to recognize Russian control by law, but Moscow legally sees them as part of the Russian Federation after the wartime 'popular referendums' held in the fall of 2022.

The draft also calls to freeze the front lines of fighting where they are in the southern oblasts of Kherson and Zaporizhzia, with Russia having relinquish other areas such as the Kharkiv and Sumy regions in the northeast, as well the Mykolaiv region in the south. Overall the lengthy session was deemed by the Russian side as "productive" - with Ushakov also saying "We discussed the substance, not specific wording and solutions. The parties see enormous potential for cooperation."

"As for a possible meeting at the presidential level, that will depend on the progress we’re able to make through the persistent work carried out by our aides and representatives," Ushakov said. And more on US-Russia relations: "But this time, we emphasized that if we genuinely want to work together — and there are enormous opportunities — then it’s time to show some real commitment," the Kremlin official said.

While the negotiations were happening or about to proceed, President Trump in Washington had admitted it's not "an easy situation" to settle, but that "Our people are over in Russia right now to see if we can get it settled. Not an easy situation, let me tell you. What a mess." He reiterated in a cabinet meeting: "It’s a war that never would have happened if I were President."

As for the initially announced firm deadline of Thanksgiving Day for Ukrainian President Volodymyr Zelensky to accept the US 28-point peace plan, President Trump appears to have backed down from that, given all of this back-and-forth is still proceeding.

I think we might take a minute to ask why the American government has sent a real estate developer and the president's son in law to negotiate directly with Vladimir Putin, rather than - say - the secretary of state, or a professional diplomat, or indeed anyone with training. https://t.co/6GoRkeMNUR

— Shashank Joshi (@shashj) December 2, 2025

One interesting development is Axios reported that Witkoff was slated to meet with Zelensky and brief him on the talks with Putin. Zelensky has demanded this much, also given Kiev feels largely cut out of the US plan and negotiations. Trump also last week made clear he's not ready to meet with either Zelensky or Putin until a peace deal is in the final stages.

The expected Witkoff meeting with Zelensky has been canceled, and the US delegation is en route back home to Washington instead, in perhaps another slap in the face to Zelensky which further sidelines him once again. According to the UK Times:

A meeting between President Zelensky and a US delegation planned for Wednesday has been cancelled after talks in Russia on the war in Ukraine concluded without a breakthrough.

Steve Witkoff, President Trump’s special envoy, and his son-in-law, Jared Kushner, spoke to President Putin and other Russian officials in Moscow for five hours on Tuesday but failed to make any headway on a peace deal.

The US negotiators were due to debrief Zelensky in Brussels after the talks. However, Witkoff and Kushner left Moscow on Tuesday night for Washington, the Kremlin said.

Meanwhile the Kremlin on Wednesday has followed up with further explanation of its stance. "We proceed from the fact that in this case it is better for these negotiations to be conducted in silence," Putin spokesman Dmitry Peskov has been quoted in state media as saying. He added that Russia is "not a supporter of megaphone diplomacy."

Some aspects of the US plan are likely welcomed by Moscow...

Peskov explained that "it would be wrong" to say Putin had turned down the American proposals after the talks in Moscow. He described the first direct exchange on the plan as being that "some things were accepted, some were marked as unacceptable," and that this is part of a "normal negotiation process” and “a search for compromise." 

Having just announced it's taken military control of Pokrovsk, amid a string of steady advances in the east, Moscow knows it is firmly in the driver's seat - yet the proxy war continues its dangerous path of escalation.

Tyler Durden Wed, 12/03/2025 - 08:45

Futures Rise As Bitcoin Extends Rally For 2nd Day, Copper Hits Record

US equity futures are higher again, led by small cap stocks. As of 8:20am ET, S&P futures are up 0.2% (they dropped following a very ugly ADP print at 8:15am), the same as Nasdaq 100 futs, with Mag 7 stocks mostly higher premarket led by NVDA (+0.4%) and AMZN (+0.3%); MRVL is up +10% post-earnings given the robust long-term guidance. Europe's Stoxx 600 is also higher led by tech and energy sectors.  Bond yields are lower, the move accelerating after the ADP print; the USD is also lower. Commodities are mixed: Oil higher, while copper hit a fresh record high above $11,350/ton following the largest surge in orders since 2013. Bitcoin extended a tentative rebound on Wednesday, rising as high as $94,000, though sentiment remains fragile. On the news front, increment updates were relatively muted overnight except for MRVL’s positive earnings that trigger the rebound in global tech. The US economic calendar includes November ADP employment change (8:15am), September import/export price index (8:30am), September industrial production (9:15am), November final S&P Global US services PMI (9:45am) and November ISM services (10am).

In premarket trading, Mag 7 stocks are mostly higher (Nvidia +0.8%, Amazon +0.4%, Alphabet +0.3%, Tesla +0.1%, Microsoft -0.1%, Apple +0.04%, Meta +0.06%)

• Acadia Health (ACHC) slumps 29% after the psychiatric-hospital chain cut its adjusted earnings per share guidance for the full year.
• American Eagle (AEO) surges 12% after the apparel retailer raised its comparable sales guidance for the full year and reported net revenue for the third quarter that topped the average analyst estimate.
• Astera Labs (ALAB) rises 7% as analysts note that Amazon’s AWS Trainium artificial intelligence chip is a positive for the semiconductor manufacturing company. Amazon’s cloud unit raced to get the latest version of its AI chip Trainium3 to market and unveiled Trainium4.
• GitLab (GTLB) falls 8% after the software company’s results and forecast were seen as underwhelming. Bloomberg Intelligence wrote that the report reinforces concerns about AI.
• Marvell Technology (MRVL) rises 9% after the chipmaker’s CEO assuaged investor concerns with positive trends at its custom chip-design unit. The company also announced plans to acquire startup Celestial AI for about $3.25 billion.
• Microchip (MCHP) is up 2% after the semiconductor device company forecast adjusted earnings per share for the third quarter that beat the average analyst estimate.
• Oracle (ORCL) gains 1.6% as Wells Fargo starts coverage of the tech giant with a recommendation of overweight, describing the firm as an “emerging leader in the AI super-cycle.”
• Okta (OKTA) is down 4% after the software company’s results and forecast were seen as underwhelming.
• Pharvaris (PHVS) jumps 18% after the drug developer said a late-stage trial of its investigative therapy for hereditary angioedema (HAE) — a rare genetic condition that causes severe swelling — met its main goal
• Pure Storage (PSTG) declines 14% after the computer hardware and storage company reported higher operational expenditure in the third quarter.

Stocks rose for a second day, but eased back after ADP reported that US companies shed payrolls in November by the most since early 2023, adding to concerns about a more pronounced weakening in the labor market. Private-sector payrolls decreased by 32,000, according to ADP Research data released Wednesday. Payrolls have now fallen four times in the last six months. The median estimate in a Bloomberg survey of economists called for a 10,000 gain.

The data may add some support for the December rate-cut case, although markets are already treating a cut as a sure thing. Trump said he plans to announce his selection to lead the Fed in early 2026 and teased chief economic adviser Kevin Hassett as his possible choice. Traders are piling into bets that a new chair will support Trump’s calls for lower rates.

As Fed policymakers gather next week, the debate among officials will largely center on the job market and whether rates should be reduced for a third straight time. While the latest government report showed a larger-than-expected rise in payrolls, the gain was concentrated in just a few industries. The unemployment rate ticked up to an almost four-year high, and there’s been a steady drumbeat of layoff news from companies.

“Right now, the data argues for additional Fed funds rate cuts. US labor demand is weak, consumer spending is showing early signs of cracking, and upside risks to inflation are fading,” said Elias Haddad at Brown Brothers Harriman.

Also due today are ISM services data for November, as well as delayed import price index and industrial production numbers for September.

Elsewhere, traders continue to weigh conflicting signals in the AI story. The AI story and how much further it can power the market, continues to be top of mind. Marvell shares are soaring after its prediction for data center revenue to grow 25%, with further fuel to bulls coming from AI-power darling Vistra, which was raised to investment grade by S&P.

At the same time, Oracle credit default swaps closed at the highest level since the financial crisis. And Sam Altman seems to be worried about competition — he was said to declare a ‘code red’ to speed up improvements to OpenAI’s ChatGPT. 

The SEC is said to have issued a flurry of warning letters to nine providers of highly-leveraged ETF plans, effectively blocking the introduction of such products. CME is working to improve client communications after Friday’s outage that disrupted multiple financial markets. Crypto giant Binance appointed co-founder Yi He as co-CEO. 

European stocks are broadly firmer with the Stoxx 600 index up 0.2%. The FTSE 100 is lagging, trading lower by 0.2% alongside a firmer pound and losses in index-heavyweight HSBC. Here are some of the biggest movers on Wednesday:

• Stellantis gains as much as 8.4% after UBS analyst Patrick Hummel raised his recommendation on the carmaker to buy from neutral and following a report that the White House will announce new fuel efficiency standards for automobiles.
• European semiconductor stocks with data‑center and 5G exposure advance after US peer Marvell Technology reassured investors that its custom chip-design unit is winning repeat orders, signaling continued growth as the company benefits from runaway spending on AI computing.
• European defense stocks rise on Wednesday morning. The Kremlin said President Vladimir Putin held “very useful” talks with US envoys Steve Witkoff and Jared Kushner, though the sides failed to reach agreement on a plan to end Russia’s war in Ukraine.
• Inditex rises as much as 8.9% after releasing third-quarter results that beat consensus estimates.
• Cosmo Pharmaceuticals shares soar as much as 24% after the company said two late-stage studies of its experimental treatment for male hair loss reached statistically significant endpoints.
• Tomra shares advance as much as 6.3% as Pareto Securities flagged that the Norwegian recycling equipment company’s upcoming fourth-quarter earnings due on Feb. 13 “could be the inflection point,” with current consensus overlooking margin effects from recent changes.
• Bloomsbury Publishing shares rise as much as 5.2% after the firm struck a new strategic collaboration with Google on AI-powered learning and core publishing infrastructure. Berenberg said this is another example of the benefits AI is having on the publisher.
• Hugo Boss slumps as much as 11% after the luxury branded-clothes retailer announced its strategy plan through 2028.
• Eutelsat shares slump as much as 9.6% after Softbank, the satellite firm’s fifth biggest shareholder, offered rights at a discount as it opts not to take up more shares in the French company.
• Spire Healthcare shares drop as much as 15% after the private UK hospital operator gave a forecast for 2026 adjusted Ebitda that RBC called a “substantial” profit warning.
• Trainline falls as much as 12% as the online train ticketing platform receives its only sell-equivalent rating following a JPMorgan downgrade to underweight from neutral.

Earlier in the session, Asian stocks traded in a narrow range as investors awaited key data that will provide clues on the global economic outlook. The MSCI Asia Pacific Index edged down 0.1%, weighed by Alibaba and Tencent. TSMC and some Japanese tech firms were among the biggest boosts for the gauge. Stocks advanced in South Korea and Taiwan, while benchmarks in Hong Kong and India declined. The MSCI Asia gauge has been trading sideways over the past week, though it is still on track to cap its best year since 2017. The outlook for the artificial intelligence trade that has contributed much to the region’s gains in 2025 got a fresh tailwind from Marvell’s upbeat projections. Tech investors also digested details of Amazon.com’s new chip and continued to be enthusiastic over Apple’s AI advances.

In FX, the pound sits near the top of the pile with an upward revision to final UK PMIs giving the currency an additional boost. The Bloomberg Dollar Spot Index is down 0.3%.

In rates, 10Y Treasuries are a touch firmer extending Tuesday’s advance and outperforming European bond markets with no real bias on the US curve. Yields are richer by 2bp-3bp, keeping curve spreads within a basis point of Tuesday’s closing levels. 10-year is near 4.06%, about 2bp richer on the day and outperforming bunds by 1.5bp. Gilts are marginally outperforming US and German peers.  IG dollar bond issuance slate empty so far and expected to slow following a strong start to the week. Eight firms sold a combined $5.65 billion Tuesday — the second-straight session with that many borrowers — taking the weekly haul past dealers’ forecasts of around $20 billion. Focal points of US session include November ADP employment and services PMI gauges, along with anticipation of US government labor-market data releases that were held up by the shutdown and US President Trump’s announcement of Fed Chair Powell’s successor. In commodities,

In commodities, copper has hit a fresh record high above $11,350/ton following the largest surge in orders since 2013. Spot gold trades flat around $4,200/oz. WTI crude oil futures are up 1.4% as traders weigh continued talks between the US and Russia that have so far failed to end the war in Ukraine. Bitcoin extended a tentative rebound on Wednesday, rising as high as $94,000. 

Today's US economic calendar includes November ADP employment change (8:15am), September import/export price index (8:30am), September industrial production (9:15am), November final S&P Global US services PMI (9:45am) and November ISM services (10am).

Market Snapshot

• S&P 500 mini +0.2%
• Nasdaq 100 mini +0.1%
• Russell 2000 mini +0.3%
• Stoxx Europe 600 +0.3%
• DAX +0.3%
• CAC 40 +0.3%
• 10-year Treasury yield -1 basis point at 4.08%
• VIX -0.1 points at 16.51
• Bloomberg Dollar Index -0.3% at 1214.12
• euro +0.3% at $1.1657
• WTI crude +1.5% at $59.54/barrel

Top Overnight News

• Trump posted that "Any and all Documents, Proclamations, Executive Orders, Memorandums, or Contracts, signed by Order of the now infamous and unauthorized “AUTOPEN,” within the Administration of Joseph R. Biden Jr., are hereby null, void, and of no further force or effect. Anyone receiving “Pardons,” “Commutations,” or any other Legal Document so signed, please be advised that said Document has been fully and completely terminated."
• Marathon Russia-U.S. Meeting Yields No Ukraine Peace Deal: WSJ
• Kremlin says Putin accepted some US proposals on Ukraine and is ready to continue talking: RTRS
• Republican Wins Closely Watched House Special Election in Tennessee: WSJ
• US paused all immigration applications filed by immigrants from 19 countries it restricted from travel to the US earlier this year: NYT.
• Trump’s Aides Cancel Fed Chair Interviews as President Homes In on Pick: WSJ
• Trump Says He Doesn’t Want Somali Immigrants in U.S. as ICE Plans Operation: WSJ
• US judge blocked the Trump admin from enforcing a law depriving Planned Parenthood of Medicaid funding in 22 states.
• Airbus Sees Setbacks and Boeing Rebounds as Script Quickly Flips: BBG
• The AI frenzy is driving a new global supply chain crisis: RTRS
• A Newly Confident China Is Jockeying for More Global Clout as Trump Pulls Back: WSJ
• HSBC Names Chairman After Yearlong Search: WSJ
• Harvard’s Big Wager on Bitcoin Came Right Before the Bust: WSJ
• Nvidia’s Fat Margins Are Google and AMD’s Opportunity: WSJ
• BofA Total Card Spending (w/e Nov 29th) +0.2% (prev. +2.4% avg. in October); highlights that the slowdown was broad based and higher core goods inflation meant real spending was ever weaker.

Trade/Tariffs

• US President Trump said they will give refunds out of the tariffs and believes they won't have income tax to pay in the near future.
• US President Trump thanked Chinese President Xi for soybean purchases. It was separately reported that at least six shipments of US soybeans for China are to load at Gulf Coast terminals through mid-December, while the first US sorghum cargo to China since March is also loading at the Gulf Coast terminal, and a second cargo is due next week.
• US President Trump posted that he had a very productive call with Brazilian President Lula and "Among the things discussed were Trade, how our Countries could work together to stop Organized Crime, Sanctions imposed on various Brazilian dignitaries, Tariffs, and various other items." Trump added he believes "it set the stage for very good dialogue and agreement long into the future... Much good will come out of this newly formed partnership!"
• EU is said to be pushing for 70% of critical goods to be made in Europe, according to FT.
• Annual negotiations between Chinese copper smelters and Antofagasta (ANTO LN) have not progressed, as Chinese smelters remain determined to avoid negative fees, via Bloomberg citing sources

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mixed, with the region only partially sustaining the positive momentum from Wall St, where tech and crypto rebounded. ASX 200 traded marginally higher but with gains limited as participants also reflected on disappointing Australian GDP data. Nikkei 225 rallied to back above the 50k level as it benefitted from tech-related momentum. Hang Seng and Shanghai Comp declined after the Chinese tech giants failed to join in the spoils seen in global peers and after the PBoC continued to drain liquidity through its daily open market operations, while participants also digested the latest Chinese RatingDog Services and Composite PMI data, which continued to show an expansion in activity, albeit at a slower-than-previous pace.

Top Asian News

• China was reported to unveil a plan to boost tourism and aviation sectors and will strengthen inbound tourism air routes, while it will continue to ease entry and travel for foreign tourists and will boost tourism through coordinated consumption policies.
• DigiTimes reports that memory spot prices surged in November, despite Samsung Electronics' (005930 KS) RDIMM release marginally easing shortages, as suppliers hiked contract prices significantly. "Some industry insiders reveal that after Samsung halted pricing quotes in October, it resumed DRAM chip quotations mid-November with average contract price increases of 30-40%." "Sources indicate US-based NAND giants raised prices repeatedly, with November quotes 100-150% above October." "Expectations point to even steeper hikes in the first quarter of 2026."
• "Samsung Electronics' (005930 KS) final HBM4 samples are scheduled to undergo 2.5D packaging and finished product testing starting this month," via zdnet citing sources
• China is reportedly likely to maintain the annual growth target of around 5% in 2026, via Reuters citing sources; some advisors cited proposed a 4.5-5.0% target
• India's Chief Economic Adviser says he's not losing sleep over the INR weakening

European bourses (STOXX 600 +0.4%) opened with modest gains, following on from a positive session on Wall St. in Tuesday's session. Price action this morning has been mixed, with a few indices trading rangebound whilst others have gradually edged higher. European sectors are split down the middle. Retail leads the pile (buoyed by Inditex +8.50% post-earnings), whilst Energy and Tech complete the top three. Sentiment for the latter has been boosted after positive results from Marvell, which gains in pre-market trade. To the downside resides Insurance, and Optimised Personal Care.

Top European News

• French Parliamentary debate on the increases to the General Social Contribution on capital income, part of the Social Security Financing Bill (PLFSS), will be discussed later this week after the revenue component, Politico reports.
• ECB's Lane says they have a clear orientation for monetary policy conduct. On inflation "...a sufficiently large and persistent deviation from the target requires a monetary policy response, regardless of its origin". "In summary, this discussion has emphasised that the appropriate monetary policy response to an inflation deviation from the target is context specific and requires a careful analysis of a broad set of considerations. Of course, the capacity to consider “looking through” some types of inflation deviations depends on a strong institutional commitment to delivering the symmetric inflation target over the medium term, underpinning firmly-anchored medium-term inflation expectations".

FX

• DXY is softer today and trades towards the lower end of a 98.99 to 99.30 range. G10s are mostly stronger vs the Dollar, albeit to varying degrees. For the USD specifically, all focus has been on Fed developments, and in particular, President Trump hinting that White House NEC Director Hassett as the “potential” next Fed Chair. Moreover, it was reported in the WSJ that Trump aides have cancelled a number of Fed Chair interviews, after the POTUS said he had made up his mind. JD Vance was reportedly scheduled to meet with more candidates today, though those were cancelled, with the WSJ sources suggesting that it was currently unclear if they would be rescheduled. Odds of a Hassett chair nomination currently reside around 86% vs 75% earlier this week, on Kalshi. Ahead focus turns to US ADP National Employment and then ISM Services.
• EUR firmer and trades at the upper end of a 1.1622 to 1.1663 range. Benefiting from the weaker Dollar and softer energy prices. The single currency was little moved on EZ Final PMI metrics, which were revised slightly higher; the internal report said that the ECB will likely continue to communicate holding steady on rates. Most recently the EUR has notched fresh peaks, but without a clear catalyst; potentially a factor of a slight bounce in EUR/GBP, which gave the EUR/USD a bid.
• Elsewhere, GBP was initially gaining modestly vs the USD, before catching a recent bid, taking Cable to a fresh 1.3279 peak where it currently resides, lifting GBP/JPY closer to the key 207.20 mark and weighing on EUR/GBP. No catalyst for that upside. Thereafter, the GBP took another leg higher on the upwardly revised PMI metrics.
• Uneventful trade for USD/JPY this morning, and ultimately moving at the whim of the Dollar. Currently trading at the lower end of a relatively narrow 155.52 to 155.90 range, awaiting key US data later.
• Earlier, CHF was pressured after a cooler-than-expected inflation report which saw Y/Y printed below expected at 0.0% whilst the M/M printed in-line. In an immediate reaction, EUR/CHF lifted from 0.9332 to 0.9339; the upside was ultimately fairly muted given there were a number of analysts also expecting a 0.0% Y/Y print (which would be in-line). Moreover, traders will look towards the SNB meeting next week; policymakers have significantly raised the bar for a sub-0% policy rate, and while today’s outturn factors on the dovish side, it is unlikely to warrant a return to NIRP, focus instead on inflation forecast adjustments and FX language. Though, a move back to NIRP cannot be ruled out.

Fixed Income

• For the most part, a session of modest gains for fixed benchmarks, ranges limited, awaiting newsflow later in the session. More recently, benchmarks have reverted back to lows and are threatening a move into the red, potentially amid yield upside on continued Crude gains.
• USTs got to a 113-01+ peak, firmer by just under five ticks at best. Yields lower across the curve at first, but the long end moving higher as the morning continues and the steepening bias extends. The main driver being the WSJ reporting that the final Fed Chair interviews have been cancelled and Trump announcing that he will make an announcement early-2026, steepening began as Trump referred to Hassett as the "potential" next Fed Chair.
• Bunds off best in a 128.25-41 band. The benchmark has been firmer for the entire morning, saw some fleeting pressure on upwardly-revised Final PMIs, but for the most part has been choppy and directionless in the mentioned band, before succumbing to what appears to be energy-induced pressure in recent trade.
• A similar story for Gilts. No move to the region's own PMIs, revised higher. Internal commentary was downbeat, though we wait to see how this shakes out in the post-Budget metrics. Commentary also pointed to wage pressure, a point that factors against BoE easing in December, though a cut appears increasingly likely barring a shock in the November CPI print due just before the December announcement. Off highs but firmer by around 10 ticks in a 91.22-50 band.
• UK sells GBP 4.75bln 4.00% 2029 Gilt: b/c 3.10x (prev. 3.06x), avg. yield 3.855% (prev. 3.845%), tail 0.4bps (prev. 0.4bps)

Commodities

• WTI and Brent dipped to a low of USD 58.38/bbl and USD 62.19/bbl, respectively, in the early hours of the APAC session. They have gradually trended higher throughout the European session thus far, as traders react to the lack of significant progress from the Putin-Witkoff meeting in Moscow. Benchmarks have steadily bid c. USD 1.00/bbl from its session lows and are currently trading back above USD 59/bbl and USD 63/bbl. Brent Feb'26 currently trading at the upper end of a USD 62.18-63.37/bbl range.
• Dutch TTF has failed to bid higher following the reports that the EU have reached a deal on phasing out Russian gas imports by 2027. The deal is caveated with a possible extension to the ban implementation in case of difficulty filling gas storage. After opening the session at EUR 28.15/MWh, Dutch TTF has fallen lower and is currently trading near session lows at EUR 27.74/MWh.
• Spot XAU has traded on both sides of the unchanged mark, as the yellow metal struggled to find direction at the start of the European session. XAU followed on from the bid higher in Tuesday's US session and peaked at USD 4229/oz in the early hours of APAC trade. As the European session got underway, the yellow metal dipped back below USD 4200/oz as the market continues to digest the possibility of Kevin Hassett as the new Fed Chair.
• 3M LME Copper has started the European session on the frontfoot and is currently trading at USD 11.41k/t, extending to fresh ATHs. This comes as demand for the red metal continues to grow, shown by the spike in requests to withdraw inventories from LME warehouses. Supply disruptions and front-running of possible import tariffs into the US have been the theme in 2025 that has driven Copper to record highs.
• Ukraine has hit Russia's Druzhba oil pipeline in the Tambov region, according to Reuters sources.

Geopolitics: Middle East

• Israel's COGAT says the Rafah crossing will open in the coming days for Palestinians to exit from Gaza to Egypt.
• Russia's Kremlin says it would be wrong to say that President Putin rejected the US' peace plan, adds that Russia highly values US President Trump's political will and are trying to find a resolution.

Geopolitics: Ukraine

• Russian President Putin's envoy Dmitriev described talks with the US in Moscow as productive after Russian President Putin's meeting with US Special Envoy Witkoff and Jared Kushner lasted for five hours.
• Russian Kremlin aide Ushakov said the conversation between Russian President Putin and US Special Envoy Witkoff was useful, constructive and meaningful and that they discussed several options for Ukraine's settlement plan, although he stated that they are no closer to resolving the crisis in Ukraine, and there is much work to be done. Ushakov said Putin asked to convey a number of important political signals to Trump and they agreed with their American colleagues not to disclose the substance of the negotiations that took place with the discussion confidential. Furthermore, he said American representatives will return to the US, present their findings to President Trump and contact the Russian side, while they also discussed prospects for economic cooperation between Russia and the US.
• European Commission is to make a legal proposal this week to use Russia's frozen assets for a Ukraine loan, according to sources cited by Reuters.
• German Foreign Minister Wadephul says they are to procure an additional USD 200mln worth of military equipment for Ukraine across two packages
• EU Ambassadors meeting has been moved forward to 13:30GMT (prev. 17:45GMT), regarding the use of frozen Russian assets for a Ukraine reparation loan, via Politico. Diplomats cited say that Commission President von der Leyen intends to use Article 122, "solidarity in economic emergencies"; elaborating that this means the clause could be deployed to extend the sanctions renewal period from six months to three years, potentially bypassing the unanimity requirement.
• Belgium Foreign Minister says, re. the use of frozen Russian assets, "the texts the Commission will table today do not address our concerns in a satisfactory manner. It is not acceptable to use the money and leave us alone facing the risks".

Geopolitics: Other

• US President Trump signed into law a measure forcing the State Department to review guidelines for the country’s engagement with Taiwan, according to the White House.
• South Korean President Lee said communication is completely cut off between South Korea and North Korea, while he added that North Korea keeps refusing our efforts to talk. Lee also commented that South Korea can look into the issue of joint exercises with the US to help create grounds for dialogue between the US and North Korea, as well as stated that they will not veer off the road towards denuclearisation of the Korean peninsula.

US Event Calendar

• 7:00 am: Nov 28 MBA Mortgage Applications, prior 0.2%
• 8:15 am: Nov ADP Employment Change, est. 10k, prior 42k
• 8:30 am: Sep Import Price Index MoM, est. 0.1%, prior 0.3%
• 8:30 am: Sep Import Price Index YoY, est. 0.45%, prior 0%
• 9:15 am: Sep Industrial Production MoM, est. 0.05%, prior 0.1%, revised -0.08%
• 9:15 am: Sep Capacity Utilization, est. 77.2%, prior 77.4%, revised 75.84%
• 9:45 am: Nov F S&P Global U.S. Services PMI, est. 55, prior 55
• 9:45 am: Nov F S&P Global U.S. Composite PMI, prior 54.8
• 10:00 am: Nov ISM Services Index, est. 52, prior 52.4

DB's Jim Reid concludes the overnight wrap

Markets showed signs of stabilising yesterday, with the S&P 500 (+0.25%) posting a modest increase after its selloff at the start of the week. US futures are up around the same amount again this morning as we type. Europe’s STOXX 600 (+0.07%) also edged higher, whilst the 2yr Treasury yield (-2.1bps) inched lower as expectations that Kevin Hassett would be nominated for the Fed Chair role continued to solidify. To be honest though, signs of caution still abound, particularly given the backlog of US data. So there is some element of consolidation ahead of next week’s FOMC meeting with the equity market already having run up on the back of pricing moving from a 24.5% probability of a cut just under two weeks ago, to now well over 90%. One asset class that did see ongoing volatility was crypto, with Bitcoin (+5.97%) posting its best day since May as it recovered from Monday’s slump. It's up another couple of percent this morning.  

However, the broader lack of volatility could soon change, as we’ve got a few private US surveys that are attracting more attention than usual. That includes the ADP’s report of private payrolls today, which markets have been more reactive to since the shutdown began, not least because we won’t get the usual jobs report this Friday. Our US economists expect that to come in at +50k in November, which would imply a further 11bps deterioration in the year-on-year growth rate of private employment to 0.62%. So in their view, that would reinforce most Fed officials’ view that the labour market is still gradually cooling. Then shortly after that, we’ll get the ISM services print, where the prices paid component will be in focus given it’s been strongly correlated to US inflation with a lag. That prices paid component hit a 3-year high of 70.0 last month, so it’ll be in focus given we don’t have the official inflation data for October or November yet, and markets are proving much more sensitive to anything else that can provide a steer on what’s happening.  

Ahead of those releases, there was little for markets to react to yesterday. So the S&P 500 (+0.25%) only made a modest gain, with the Magnificent 7 (+0.52%) posting a slight outperformance. To be fair, there were some big individual movers, and Boeing (+10.15%) was the top-performer in the S&P after their CFO said they expected to generate positive free cash flow in the low-single digits next year. But more broadly, there was little to provide much positive traction, with most of the S&P constituents lower on the day and defensive sectors struggling in particular, including energy (-1.28%) and utilities (-0.72%).  

In the meantime, we did hear some news on the search for a new Fed Chair. The initial headline was the lack of news, as President Trump said they‘d be announcing the new Chair “probably early next year”, a bit later than many had anticipated as Treasury Secretary Bessent previously said that there was “a very good chance” we’d get an announcement by Christmas. However, Trump later referred to NEC Director Kevin Hassett as a “potential” Fed Chair and then last night the Wall Street Journal reported that the Trump administration had cancelled interviews with a group of finalists for the role that were set to start this week. So the Polymarket probability of Hassett getting the job moved higher after an initial drop, reaching 87%. Yesterday I published an AI generated CoTD that showed that only 2 out of 15 Fed Chairs have stayed on as Governor after their term as Chair ended. I highlighted that the most recent one to do so, Marriner Eccles, stayed on in 1948 for over 3 years as he was worried about Fed independence in a period the Fed were pegging interest rates to finance WWII debts. Once the Fed Treasury accord was signed, he resigned in the knowledge he had completed his mission. Is there a parallel this time around? If someone is appointed Chair that is perceived to threaten Fed independence could Powell stay on? See the CoTD here for more. Also see DB's Peter Hooper's take on the same topic here for additional insight.  

Back to yesterday, as expectations for Fed rate cuts inched higher, 2yr US Treasury yields were down -2.1bps to 3.51%, whilst the 10yr yield was unchanged at 4.09%. They are both another basis point lower this morning.  
Over in Europe, bonds put in a slightly stronger performance, despite the Euro Area flash CPI print for November coming in above expectations. It showed headline inflation at +2.2% in November (vs. +2.1% expected), whilst core inflation was steady at +2.4% as expected. However, there was more dovish news on the labour market, as the Euro Area unemployment rate came in at 6.4% in October (vs. 6.3% expected). So by the close, yields on 10yr bunds (-0.1bps) just about managed to inch lower, whilst yields on 10yr OATs (+0.6bps) and BTPs (-0.4bps) also saw little movement.  

That underperformance for French OATs comes as the National Assembly have now begun debating the social security bill, with the leader of “Horizons” stating that his members couldn’t approve the Social Security budget. They’re officially in the government coalition, so their lack of approval makes a difference in terms of the final outcome. As a reminder, a vote in the National Assembly is scheduled for December 9, but the previous issue remains in that the Assembly is fragmented between different political groups where no one has a majority. So investors are still keeping a close eye, with the Franco-German 10yr spread (+0.7bps) moving back up to 74bps. France’s CAC 40 (-0.28%) also lost ground yesterday, in contrast to Germany’s DAX (+0.51%) and the Europe-wide STOXX 600 (+0.07%). For more details, our economist has more on the budget process and hurdles ahead in his report on the social security bill.

In geopolitical news, yesterday saw Trump’s envoy Steve Witkoff meet Russia’s President Putin in Moscow to discuss US proposals to end the war in Ukraine. Putin’s chief foreign policy advisor Ushakov said the talks were “constructive and very informative” but that “a compromise hasn’t been reached yet” on territorial questions and that joint talks would continue. Earlier, NBC News reported that there were three points on which the Kremlin was unwilling to compromise, specifically control of all of the Donbass region, a limit on Ukraine’s armed forces and recognition of Russian-controlled territories by the US and Europe.

In Asia the Nikkei (+1.63%) is leading regional gains, driven by technology and real estate stocks, while the KOSPI (+1.18%) is also seeing a notable increase. The S&P/ASX 200 (+0.18%) is registering slight gains after the Australian economy expanded less than anticipated in the September quarter (details below), but with much stronger details below the surface which has increased expectations of rate hikes. Elsewhere the Shanghai Composite (-0.23%) is lower but with the Hang Seng (-1.10%) trading notably lower.  

Turning back to Australia, GDP increased by +0.4% quarter-on-quarter for the three months ending September 30, falling short of the +0.7% growth expectations and slowing from the revised +0.7% rise observed in the previous quarter, as weak net trade and a significant reduction in inventories counterbalanced robust domestic demand. On a year-on-year basis, GDP grew by +2.1% in Q3, compared to expectations of 2.2% and growth of 2.0% in the preceding quarter. Markets have seen it as a hawkish release due to the big inventory miss and one of the strongest final demand prints in the last 10-15 years.

Indeed, yields on the policy-sensitive 2-year government bonds have risen by +5.7bps, settling at 3.91%, while 10-year yields have increased by +3.1bps, trading at 4.64% as we prepare to publish. Elsewhere, 10 and 30yr JGBs are up by +2.8bps and 4.3bps respectively ahead of a 30yr auction tomorrow.  

Separately, in China, a private survey indicated that growth in the services sector has slowed to a five-month low in November, with the services PMI declining to 52.1 from 52.6. This slowdown is attributed to weaker new orders and ongoing job contractions, despite a modest improvement in export activity.

To the day ahead now, and US data release include the ISM services index for November, the ADP’s report of private payrolls for November, and industrial production or September. Otherwise, we’ll get the final services and composite PMIs for November from the US and Europe. Finally, from central banks, we’ll hear from ECB President Lagarde, the ECB’s Lane, and the BoE’s Mann

Tyler Durden Wed, 12/03/2025 - 08:37

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