Tuesday Watch

Around X:

• @Business

• Israel’s Prime Minister Benjamin Netanyahu visited the United Arab Emirates where he held talks with the Gulf nation’s President Sheikh Mohammed bin Zayed Al Nahyan.   
• Saudi Arabia is contending with increasing pressure from Iran-backed militias in the region. 
• Pentagon policy chief says European allies have accepted `NATO 3.0,' which calls for a reduced US military presence on the continent. 
• A US ban on diesel exports that’s under consideration by President Donald Trump to combat high prices would probably backfire by impacting gasoline prices, the boss of French oil major TotalEnergies said. 
• The Pentagon awarded RTX a contract valued at $20.7 billion to nearly double production of air-to-air missiles, the latest agreement by the Trump administration as it looks to boost output of munitions strained by the war in Iran. 
• Investors should expect Lilly to strike slightly larger deals, along the lines of its $7.8 billion acquisition of Centessa Pharmaceuticals, as it casts a wide net for assets in the “white spaces” of science, CEO Dave Ricks said. 
• Executives from major AI companies are expected to appear before NYC lawmakers next week, amid growing concern about a lack of guardrails around the technology. 
• US tariffs have dealt another blow to the Canadian steel industry. Stelco says it’s suspending some operations in Hamilton, Ontario, amid a “challenging and unsustainable market.” 
• A US regulator is set to approve Tennessee Valley Authority’s proposal to build a small nuclear reactor in an important sign of progress for the fission industry. 
• Summit Therapeutics shares rose after it said AstraZeneca would make a $2 billion strategic equity investment in the cancer drugmaker to jointly develop drugs. 
• Get up to speed on what's moving global markets. 
• Here’s what you need to know to start your day: Morning Briefing Asia. 

• @ZeroHedge

• Everyone is noticing. Here's Bloomberg: "The past couple of sessions have seen a resurgence in the ‘VaR Shock’ strategy on oil, with headlines emerging right around midday ET, when liquidity tends to thin during US hours. As rates push higher along with oil, the $110 level on Brent level is a threshold of concern for escape velocity, but the verbal jawboning is showing signs of decay.
• Queens Red-Light District Booms As Prostitution Arrests Plunge 59% Under Mamdani.
• It's coming: "an AI CDS zoom hosted by my cross asset team that saw 400+ investors join within 2hrs of being announced" - Goldman's Brian Garrett.
• September tracking as the worst month for junk since 2022. Supply heavy: SoftBank's $11bn deal was the largest HY sale on record, Paramount's $12.4 junk bond will be even bigger. Recoveries have fallen: defaults returned 56 cents on average in '23–'26, versus 72 cents in '09–'22.
• What's Really Behind The AI Panic..
• Iran's Parliament Mulls 'Triple-Urgency' Bill To Withdraw From Intl Nuke Treaty.
• Oracle downgrade will singlehandedly make the entire junk bond market 10% bigger.
• Heading into month and quarter-end, the desk's model estimates $33 billion of US equities to sell from US pensions given the moves in equities and bonds. We estimate the equivalent amount of bonds to be bought: GS FICC.
• *GOLDMAN BOARD DISCUSSED NAMING WALDRON CEO AS EARLY AS 2027:WSJ.
• *ARAGHCHI: NO CHANGE HAS OCCURRED IN IRAN'S POSITIONS.
• *IRAN'S ARAGHCHI: 'STRONGLY DENY' FLEXIBILITY ON NUCLEAR ISSUE. TL/DR: we hit weapons-grade amounts of fake news today.
• Bill Maher Credits Falling Crime To Trump's 'FAFO' Image.
• Syria: gas pipeline fire between Al-Shola and Deir al-Zour caused by sabotage. Efforts are underway to extinguish fire and fire stopped gas supply from Jbeissa plant to power stations.
• Trump on truth: Axios just released a story that “Trump” offered Sanctions Relief and Frozen Funds to Iran. This is untrue. I offered them NOTHING! Axios’ story, like most others, is a HOAX, used only for purposes of satisfying their Trump Derangement Syndrome. They should withdraw this fake story, IMMEDIATELY! … because the market is closed.
• More Hospitals Are Being Bought By Private Equity; Here's How It's Changing Healthcare....
• Boeing Extends Losses After FAA Delays 737 Max 10 Approval Over Software Glitch. 
• Walmart Boss Rules Out Personal Pricing In Stores As It Rolls Out Digital Price Labels.
• Bullion Battered As Hormuz Headline Roulette Sparks Chaos Across Capital Markets.                                             

• @CNBC  

• CNBC Daily Open: From need for speed to seatbelts — AI majors focus on risk aversion. 
• Elon Musk’s SpaceX completed the 14th test flight of its massive Starship rocket early Monday.
• Anthropic's IPO prospectus shows sweeping AI vision, surging costs: Reuters.
• Samsung to inject $1 billion into Nvidia- and KKR-backed AI infrastructure firm.
• President Donald Trump announced Mesabi Metallics’ plan to invest about $15 billion in a steel plant in Iowa.
• Tuesday's big stock stories: What’s likely to move the market in the next trading session.
• OpenAI decided not to release an upcoming artificial intelligence model, GPT-6.1 Astra, after determining that it did not adequately meet the company’s safety standards, CNBC confirmed on Monday.
• Stock futures are little changed after higher yields lead to losing session: Live updates.
• Khanna to introduce AI safety bill with ban on 'recursive' technology until safeguards exist.              

Night Trading 

• Asian equity indices are -.50% to +.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 72.0 +1.0 basis point. 
• China Sovereign CDS 35.0 +1.0 basis point.
• China Iron Ore Spot 94.55 USD/Metric Tonne -.33%. 
• Crude Oil 93.55/bbl. +1.0%. 
• Gold 4,163.60 USD/t oz. -.12%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.07 -.01%.
• Bloomberg Emerging Markets Currency Index 33.72 -.03%.
• Bloomberg Global Risk-On/Risk Off Index 137.3 -.5%.
• US 10-Year Yield 5.23% unch.
• Japan 30-Year Yield 4.19% +1.0 basis point.
• Volatility Index(VIX) futures 17.8 +.5%.
• Euro Stoxx 50 futures +.38%. 
• S&P 500 futures -.15%.
• NASDAQ 100 futures -.25%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and financial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 50% net long heading into the day.