Zero Rss

Moscow Swarmed By 600+ Ukrainian Drones In Massive Overnight Barrage

Ukraine has launched another massive overnight drone wave on Russia. While this is nothing new or unusual, the number of drones concentrated specifically on the Moscow region was much larger than prior attacks.

Over 600 drones were sent on Moscow and the surrounding region overnight into Tuesday morning, Mayor Sergei Sobyanin said. It ranks among the single largest assaults on the capital of the war. Regional reports say it's the largest drone attack on Moscow of the last two years.

Moscow on Tuesday. @exilenova_plus/Telegram, The Moscow Times

At least 180 of the drones were confirmed downed over the Moscow region alone - possibly more - with emergency crews responding to several crash sites, including at another Wildberries warehouse near Moscow.

Authorities cited that at least three people were injured in the assault, including a 10-year old girl. Smoke has been seen rising over residential and construction areas in social media photographs.

At least 5,000 homes or businesses are reported to be without power in the wake of the overnight strikes, regional energy provider Mosoblenergo has said.

The Associated Press has cited at least 800 Ukrainian drones launched across the whole country, as part of the same broader attack. The report further indicated:

The overnight attack started a fire at a warehouse of Wildberries, Russia’s biggest online retailer, in an industrial zone. Ukraine has repeatedly targeted the company, which it says helps supply the Russian military, an allegation Moscow denies.

Wildberries said its facility sustained "insignificant damage."

The online retailer, widely seen as the 'Russian Amazon', has seen its logistics hubs frequently targeted over the past month.

Purported video of military & security outposts desperately trying to repel the inbound drone attack:

It's crazy in Moscow.
All four airports are currently closed.

It's also incredibly loud in various districts as Russia's air defence tries to land a few more drones on its people. pic.twitter.com/qMz1JRadF5

— Tim White (@TWMCLtd) August 18, 2026

EuroNews observes that seven out of ten of the company's biggest warehouses have been it and suffered serious damage, enough to take them offline: "Seven logistics hubs belonging to Wildberries, Russia's largest online retailer, have now been struck and knocked out of action since the campaign began in July."

While none of this has substantially changed Russian forces' ground momentum along the front lines, the Institute for the Study of War has said that the aerial campaign is effectively pressuring the Kremlin, given the steady economic setbacks and devastation.

The Kyiv Independent

"Moscow simply does not have enough air-defense coverage to shield every piece of infrastructure in its rear, even ten of its most valuable commercial sites," the ISW assessment concluded. However, nothing has indicated that President Putin is ready to change course - instead we are seeing things steadily escalate on both sides.

Tyler Durden Tue, 08/18/2026 - 12:15

NSA Blocked Reports Of China Interference In US Elections From Reaching Trump: Declassified Docs

Authored by Travis Gillmore via The Epoch Times,

Newly declassified intelligence emails reveal that decisions were made by National Security Agency (NSA) leadership to block reports of Chinese influence in American elections from reaching President Donald Trump.

Four pages of emails, all dated March 13, 2020, were released on Aug. 18 by the White House Government Transparency Task Force.

According to one email—written by an unidentified NSA employee following a meeting about intelligence reporting foreign efforts to target the 2016 and 2020 presidential elections in the United States beginning in 2014—internal concerns were raised about the agency’s suppression of the reports.

“We did not know why we were here, trying to defend the election and identify threats to it, if we were unable to actually report what those threats were because of issues like this,” the NSA employee wrote.

According to another email, NSA analysts had proposed releasing the reports in 2018.

Task force officials are digging through files to determine why evidence of the Chinese Communist Party’s attempts to influence the elections was not passed on to the president, Congress, and some intelligence leaders, including then Director of National Intelligence John Ratcliffe, now CIA director.

Certain aspects of the reports on the Chinese election influence were censored because “it was judged that some of the details regarding the 2016 election were ‘sensational’ and so required a limited distribution [redacted],” an NSA analyst wrote, noting that colleagues tried for 16 months to get the information published.

“People higher in the chain than us—including but not limited to people at ODNI [Office of the Director of National Intelligence]—time and again failed to make real decisions in a timely manner,” they said.

Intelligence officers were told in February 2020 that the office approved the report, and analysts prioritized its delivery, but the NSA deputy director blocked its release, according to the documents.

George Barnes served as NSA deputy director from 2017 to 2023.

“[The deputy director] explained that he was concerned that releasing the [redacted] at this time—in the current political climate, with an acting [director of national intelligence (DNI)] who had been tasked … to ‘clean house’ in the intelligence community, and with an administration that is suspicious of the [intelligence community] and aggressive in removing anyone who stand in their way—would damage NSA’s credibility,” the analyst wrote, referring to Trump appointee Richard Grenell, who became acting DNI on Feb. 20, 2020.

The analyst said the deputy director was concerned that releasing the information could be viewed as political in nature because of the two-year delay.

“I lacked the courage to point out that we, [redacted], had processed the information in a timely manner, and the delay in releasing it was due in part to decisions and inaction on the part of people in the room,” the analyst wrote.

According to the analyst, the deputy director also sought to keep the NSA’s reputation separate from the CIA, FBI, and ODNI—agencies he perceived “had been tarred as hosting or being part of the ‘deep state.’”

The analyst said the deputy director thought publishing the report would “destroy that trust.”

“He felt the questioning of NSA that would ensue would have ramifications on the credibility of NSA reporting overall and would result in morale problems among the broader NSA workforce, a la when the [redacted],” the analyst wrote.

Other elements of the gathered intelligence were excluded from reporting because it would have been impossible to conceal the identity of members of Congress, the analyst said. Such cases require special approval, as dictated by the “Gates Procedures,” established by Robert Gates, former director of Central Intelligence, in 1992.

Newly declassified National Security Agency documents include emails between intelligence officers about decisions made at higher levels to not share information with President Donald Trump, released by the White House Government Transparency Task Force on Aug. 18, 2026. Courtesy of the White House

Given the circumstances of the discussion, the other analyst deduced that disclosure was unlikely, writing in the memo: “In light of our experience with the [redacted], we would consider ourselves lucky” if new intelligence reporting regarding the 2020 election was distributed before election day.

The meeting concluded with the deputy director suggesting “exploring maybe a ‘crazy idea’ like using” an unidentified redacted process to share intelligence “so that the analysts there who needed to see this information could have access to it without it having to be serialized.”

Politicized Intelligence

A senior White House official briefed a small group of reporters, including The Epoch Times, on Aug. 16 about the upcoming release, emphasizing the politicization of intelligence gathering and reporting revealed by the documents.

“It shows that a very high-ranking official, a deputy director of the NSA at the time, made clear he wasn’t intending on sharing some of the intelligence about China and other election threats because of various political statements,” the official said.

“That’s the highest official thus far we have seen mentioned, who seemed to have some awareness that information would not be being sent to the president and to Congress and to policymakers about election interference or election security and election vulnerabilities.”

The internal emails came to light because they were forwarded to a civilian ombudsman tasked with overseeing intelligence community shortcomings.

Investigations Continue

More documents are under scrutiny by task force members, and new releases are expected soon, according to the administration official.

He said that in a few months, the task force is expected to release a “full body of evidence” detailing that there was “extensive intelligence about the vulnerabilities of the election system” gathered by U.S. intelligence agencies during the period between 2019 and 2021-22.

“But for some reason … the intelligence agencies just made a decision not to brief it to the people who could potentially implement policies that would address the vulnerabilities,” the official said.

Voting machine integrity was also of concern to the intelligence community, according to the official, with five foreign nations found to be capable of hacking U.S. election machines.

“The notion that we would go six years without fixing a known vulnerability is something that we’re all eager to solve,” he said.

The task force expects to release more details about some of the vulnerabilities in the coming weeks.

Prior revelations related to the suppression of intelligence reports include evidence that information was intentionally kept out of presidential daily briefings and declassified FBI documents. Then-FBI agent Nikki Floris wrote to a colleague that she “was basically running a shadow government across the FBI at one point” after successfully blocking the release of certain reports.

The Epoch Times reached out to the NSA for comment but did not receive a response by publication time.

Tyler Durden Tue, 08/18/2026 - 11:55

The US Is Forcing Others To Take Sides, As Is China

By Michael Every of Rabobank

The Heat You Feel Isn't Just The Summer Sun

There is a lot of geopolitical heat out there right now; and markets may get burned by it.

The 60-day US-Iran Memorandum of Misunderstanding has lapsed, with Trump and Iran both rejecting any extension while claiming control of Hormuz. In our view, the US is unlikely to restart major military action until after the November midterms. (Note the US just awarded a $23bn contract to Raytheon to accelerate annual Tomahawk missile production to over 1,000 from the current 60 alongside a $59bn Lockheed Martin deal to ramp up Patriot interceptor output from 600 to 2,000.)

Trump’s threat to bomb Oman is public diplomacy matching what Tehran threatens privately to ensure Muscat doesn’t close off the southern Hormuz passage allowing ship-to-ship oil shuttling that, according to the US, is seeing significant flows. The Saudis are now offering to sell oil near Oman; a sign they may be copying the UAE. That doesn’t help with refined products, where the US will announce steps to boost refiners’ throughput: by running at 120% of capacity?

Diesel crack hits record $102. This is absolutely unprecedented.

Industrial economy either grinds to a halt or consumers about to be hit with the biggest energy pass through in history pic.twitter.com/OtAdgrCvb3

— zerohedge (@zerohedge) August 17, 2026

However, as previously argued, relative energy calm incentivises Iran to escalate sooner. Israeli intel claims Tehran has achieved a remarkable recovery in its ballistic missile production by ignoring the needs of the civilian economy; the Wall Street Journal reports Iran is preparing to foment unrest in the Gulf, cut undersea internet cables, further destabilize the Red Sea via the Houthis, and move troops into Kuwait to force the US into a boots-on-the-ground game. Despite US efforts to stabilize Lebanon (by disarming Hezbollah) and Gaza (by disarming Hamas), the above dynamic could destabilize the entire Greater Middle East region.  

Meanwhile, tensions remain high on the Russia-Ukraine front. Speculation is that after the Duma elections on September 18-20, Putin may escalate via mobilization and closing the border; far less likely, a tactical nuclear strike; or a move vs. a Baltic state. The latter would aim to test NATO’s Article 5 resolve within Europe and from the US. This could be coordinated with Iran.

North Korea may also send another 50,000 men to Ukraine. That’s as China-friendly South Korean President Lee is proposing an end to the war with the North, arguably why Trump called to scale back scheduled joint military drills. In reality, that claim was too close to their start to make any difference, but was Trump warning Seoul or helping its bid to restart talks with the North while thinking of Ukraine? We shall see – but simplistic takes of the US ‘walking away from Asia’ are categorically wrong when looking across other news and developments - including Japan revising its national security doctrine after Putin visited the Kuril Islands, which Moscow has held since the end of WW2, to send Tokyo a warning message.

Last week, we had news that the US set ‘ideological loyalty tests’ for NATO members, including asking about stances on Iran. As Bloomberg put it, this “would upend the post-WW2 transatlantic relationship, which was built on US military guarantees that superseded many political disagreements.” Yet NATO’s website states it was created to: “Deter Soviet expansionism”; “Forbid the revival of nationalist militarism”; and “Encourage European political integration.” That is ideology – and Soviet expansionism was global. One can argue the US is -- rudely -- pushing Europe and Canada to look at new ideological threats, globally and towards integrating with it – albeit on its terms.

Matching that, last week saw a US report naming European countries among those helping China to trans-ship goods to avoid US tariffs.

As Canada braces for 50% US tariffs, the geostrategic logic is clear: either a common external tariff vs. China and trans-shipment, or a higher US tariff vs. those who refuse. Likewise, the US is now telling global partners they cannot be part of its critical minerals and chip/AI Pax Silica and also be members of China’s World Artificial Intelligence Cooperation Organization. That’s as the EU’s Mistral has adopted a Chinese AI as the core of its latest model.

As warned for years, the US looks like it’s going to force others to take sides – as will China. That includes US institutions: the Pentagon just ordered 30 US universities to scrutinise their ties with Chinese research partners; and Google just announced it will stop making its Pixel products in China from next year.

For markets, Middle East military escalation is likely to see further spikes in global energy prices; if Russia escalates in tandem, things are worse – potentially vastly more so; and throw uncertainty in Asia into the mix and things are even more volatile. As previously flagged, if the global energy complex were to see a serious crisis, pressure would build for more radical actions than anything the US is likely to announce today on refiners. Geopolitical market fragmentation would be a real risk (i.e., from NAFTA to NAPHTHA) as Bloomberg notes ‘The Americas' Challenge to Middle East Oil Won't Let Up’.

The above backdrop obviously needs massive increases in defense spending and ‘just for me’ vs. ‘just in case’ (forget ‘just in time’) thinking on top of fragmentation risk in goods trade even more evident for tech and defense-adjacent AI. That is zero-sum and inflationary before, for some, it can become more cooperative and deflationary. As one example, copper is in a new supply crunch as the realization sinks in that there isn’t enough of it physically to address the claims being made on it financially.

This is all happening when most economies are already carrying far too high a level of public debt. Against this, US 30-year bond yields today are 5.31%, the highest since July 2007; UK 30-year Gilt yields are 5.84%, the highest since May 1998; German 30-year Bunds are 3.74%, the highest since August 2007;

Japanese 30-year JGBs are at 4.12%, the highest since that maturity was introduced in 1999, and vs. around 0.65% during Covid.

At the same time, the FT reports that private credit is under strain as troubled loans swell to levels last seen in 2007 – just before the Global Financial Crisis; and the Nikkei Asia claims Japan's life insurers' have unrealized bond losses nearing $200bn (or around 4% of GDP) as yields rise.

In the old world order, it would be a matter of time until central banks stepped in to calm things, “because markets.” How can they do so now: with “rate cuts!” that steepen the curve more and an EM-style shift to bills from bonds? Or with rate hikes in an economy that needs to spend much more? Or with yield curve control? Or with rhetoric? Or with prayer?

In our new world disorder, Japan just had to lean on the US to get JPY back down temporarily to help get yields lower; yet it’s slipping again at 159.53 today. If the BOJ were to raises rates to support JPY, could its life insurers suffer even more?

Worse, the way the US helped out Japan saw a hyperbolic FT op-ed arguing the US dollar and US Treasuries are no longer the global reserve FX and reserve assets that we like to think of them being. It may not be true, but if it were, how do we price anything in a suddenly crumbling system?

Once the geopolitical situation is calmer, or has a clear winner, let’s talk again.

Until then, yes, it’s hot out there - and it’s not just the summer sun. Try not to get burned.

Tyler Durden Tue, 08/18/2026 - 11:15

US Issues Rare Condemnation Of Israeli Strikes On Syrian Airbase: 'Unnecessary Escalation'

A top regional Trump envoy has said the US is "deeply concerned" after major new Israeli airstrikes on Syria overnight, following months of an absence of such attacks, and in the context of the broader Iran conflict.

The Syrian government and US Envoy to Iraq and Syria Tom Barrack said the attacks hit Abu al-Duhur military airfield in Idlib province in northwestern Syria. Barrack blasted it as an unnecessary escalation that threatens regional stability.

Source: Aawsat

Additionally the Syrian Foreign Ministry of the new Sharaa/Jolani government blasted the "unjustified act of aggression" and "flagrant violation of Syria's sovereignty and territorial integrity."

While the Israeli government has not officially owned up to the operation, or provided any details, an unnamed senior Israeli told Fox News that "Highly sensitive intelligence was shared with the United States in advance, at the most senior levels of the various agencies and bodies."

"Al-Sharaa understands that he cannot operate like the previous Syrian regime, which maintained proxy forces. It's possible that he didn’t understand what was going on, or didn't know." Fox added that the official could not provide additional details "due to the highly classified nature of the intelligence."

The statement is odd given its suggestion is that Iran-linked forces were still operating inside Syria (based on the reference to the "previous Syrian regime" and its proxy forces). 

However, Idlib had throughout the entirety of the war been a hotbed of Sunni al-Qaeda linked activity. The post-Assad ruling faction in Damascus previously had the northwest province as its very headquarters, where Jolani got his start commanding Nusra Front which morphed into Hay'at Tahrir al-Sham.

The idea that Iran-linked militias would somehow be operating there 19 months after Assad's exit in December 2024 is strange and unlikely.

But ultimately it remains unclear why Israel conducted the strikes, and what the precise high level target may have been.

Amb. Barrack added to his statement: "The United States continues to believe that restraint and engagement offer the more constructive course. We encourage all parties to prioritize logical discourse over further military incidents."

Secondary explosions reported and filmed at the airbase location...

The site that was struck by Israel, the Abu Al Duhur military base in Idlib continues to burn and reports of secondary explosions are being reported.

Syria claims that the runway was struck only but runways don’t burn nor explode hours after the initial bombardment.
Something… https://t.co/pJVQNbJufE pic.twitter.com/oWVsVrtEpl

— Scharo Bajalan (@ScharoBajalan) August 18, 2026

Things in Syria have been mostly quiet of late; however, there's still a sporadic conflict in the south, where Israeli troops occupy territory significantly beyond even the Golan Heights.

At the same time, Israel is sure to be alarmed by a fresh statement out of Syria's foreign ministry saying it aims to keep nuclear material that was already in the country in its custody, subject to IAEA monitoring and guarantees.

Tyler Durden Tue, 08/18/2026 - 10:55

Meta Faces Unprecedented Legal Reckoning Over Youth Mental Health As Massive Multistate Trial Begins

Meta Platforms is facing a critical juncture in its battle over youth online safety. Just weeks after suffering a massive legal defeat in New Mexico, the parent company of Facebook and Instagram is now defending itself in a California federal court against a bipartisan coalition of 29 states. The states say Meta deliberately designed its platforms to addict children and harvested their data in violation of federal law.

The California Showdown

A sweeping multistate trial opens Tuesday in Oakland, California, overseen by U.S. District Judge Yvonne Gonzalez Rogers. Attorneys for Colorado, California, New Jersey and Kentucky - leading a bipartisan group of 29 states - will deliver opening statements. Those four states' claims about addictive design and deceptive marketing are what this trial tests, while all 29 states are involved over data-harvesting claims. 

Interestingly - the eight-person jury hearing the case won't actually decide it. Rogers empaneled it in a purely advisory capacity, which is rare. The jurors will answer specific questions she selects, and she is free to disregard their findings entirely when she issues her ruling after the trial concludes in October, Reuters reports.

The states argue that features like infinite scroll were purposely engineered to keep young users hooked, that Meta misled the public about the safety of its platforms for adolescents, and that the company improperly collected and monetized children's personal data in violation of federal law.

The financial exposure is the largest of any case Meta has faced. The company has warned that maximum statutory penalties could theoretically reach $1.4 trillion, while the attorneys general have indicated they may seek around $200 billion.

A Reuters/Ipsos poll released last week found that 85 percent of Americans believe social media can be addictive for children.

Beyond money, the coalition wants nationwide structural changes: age restrictions, deletion of algorithms and AI models built with children's data, elimination of infinite scroll and notifications, strict time limits for young users, and an algorithm retuned to prioritize well-being over engagement. Meta CEO Mark Zuckerberg and Instagram head Adam Mosseri are both expected to testify, alongside former employees and outside experts.

What Happened In New Mexico

The multistate trial arrives on the heels of a devastating legal blow in New Mexico. On Aug. 6, State Judge Bryan Biedscheid ruled that Meta had created a public nuisance and ordered the company to pay $567 million into a youth mental health fund, allocating $420 million to treatment, $90 million to screening and assessment, $33 million to prevention and awareness, and $15 million to referrals and care coordination over five years. The award followed a $375 million penalty a New Mexico jury imposed in March for violations of the state's Unfair Practices Act.

The award fell well short of New Mexico's request. The state had sought $1 billion toward a $3.7 billion plan to expand children's mental health services.

"The Court finds that the weight of the evidence presented demonstrates that Meta's platforms are a cause of and substantial contributing factor to the youth mental health crisis in New Mexico."

Biedscheid compared the platforms to a polluting factory, writing that the harms "do not stay contained" but migrate "to the real world" and burden families, schools, hospitals and law enforcement.

The order, a win for New Mexico Attorney General Raul Torrez, also imposes five years of operational changes: monthly limits on teen use of Facebook and Instagram, restrictions on notifications, tighter controls on adult contact with minors, safeguards for AI chatbots, and enhanced review of child sexual abuse reports. Meta must file written progress reports twice a year. The template is now sitting in front of the 29-state coalition.

Meta's Defense

Meta plans to appeal the New Mexico ruling and maintains that the attorneys general in the California trial are chasing an "outlandish payout" without proof of actual harm. "We remain confident in our record of protecting teens online and will continue to defend ourselves against claims that misrepresent the facts," the company said after the New Mexico decision.

The company argues it has invested heavily in creating a safe environment for teens, employing child safety experts and deploying technology to root out predators and harmful content. Company spokespeople have characterized the state lawsuits as an attempt to penalize Meta for industry-wide problems, such as the complexities of age verification.

The litigation traces back to 2021, when whistleblower Frances Haugen testified before the U.S. Senate and provided internal documents indicating Meta knew its platforms could harm young users but prioritized engagement over safety.

Meta is not alone. Alongside Snap, TikTok parent ByteDance and YouTube parent Alphabet, it faces more than 3,000 federal lawsuits consolidated before Rogers and another 3,300 pending in Los Angeles state court. Eight states, including Tennessee and Arkansas, opted out of the federal case and filed in their own courts. Tennessee's trial is already underway.

Meta has told investors that legal and regulatory blowback over youth safety "could significantly impact our business and financial results."

Tyler Durden Tue, 08/18/2026 - 10:40

Nvidia Confirms It Will Back Massive 4.25GW SoftBank Data Center In Ohio For $105 Billion

Nvidia has confirmed reports that it is financially backing SoftBank's massive data center at the Portsmouth Site in Pike County, Ohio, with up to $105 billion in financing, a securities filing revealed on Monday.

The project, led by SB Energy, is set to be fully leased to OpenAI. The facility could grow to 10GW, making it the world's largest data center, but Nvidia will initially support the first 4.25GW, DataCenterDynamics reported.

In a LinkedIn post, Nvidia CEO and founder Jensen Huang confirmed that his company would partner with SB Energy to help secure land, power, and shell (LPS) capacity at the Department of Energy (DOE) site. 

The GPU giant will provide a $105bn backstop for the project, helping lower debt costs, similar to previous SPV project financings and reusing the structure popularized by Meta in late 2025 with its Project Beignet off balance sheet structure to fund its massive Hyperion data center . It had initially planned to support as much as $250bn, but faced investor pushback over the extent of the risk.

As a reminder, META is already neck deep in off-balance sheet debt. Here is a schematic of its $27.3 billion SPV with Blue Owl "Project Beignet" for the Hyperion data center. None of this touches META's balance sheet.

Expect hundreds of billions of these in 2026 https://t.co/794EgSiiZ9 pic.twitter.com/7hMyVW6Lno

— zerohedge (@zerohedge) January 29, 2026

Nvidia will also invest $1.5bn in SB Energy, down from a reported $3bn. The SoftBank subsidiary, which is preparing for an IPO, is set to build 10GW of new power generation, including 9.2GW of natural gas generation, to power the facility. This will provide up to 8GW of total IT load.

SB Energy and SoftBank also plan to invest at least $4.2bn in new regional grid infrastructure through a partnership with AEP Ohio they say is designed to protect ratepayers.

"Nvidia is supporting the LPS infrastructure at Ports-Pike for approximately 4GW over a 20-year term, securing a site on which Nvidia compute will be exclusively deployed," Huang said.

"Our support is limited to defined portions of lease and power payments, along with a specified residual-value commitment — not the full cost of the site or all of the tenant’s obligations. The guarantee will become effective in phases as data centers are placed in service between 2028 and 2030. As OpenAI makes lease payments and capacity comes online, Nvidia's remaining exposure declines."

Huang said that most companies will secure LPS independently, and then buy Nvidia gear, but that leading AI labs are "growing faster than their balance sheets and long-term credit profiles can support.

Ports-Pike will not only exclusively feature Nvidia GPUs, but also the company's full-stack DSX AI factory platform, including CPUs, networking, and infrastructure software. Over 20 years, it is expected to feature multiple generations of Nvidia gear.

"Each generation of Nvidia AI factory systems deployed at Ports-Pike could represent approximately 1.5 million Nvidia GPUs, or approximately $150 billion to $200 billion in Nvidia revenue," he said.

The company may yet decide to secure the remaining capacity of 3.75GW at the site.

Huang claimed that the deal was not an example of circular financing, an accusation the company has increasingly faced as it has funneled its profits back into the AI companies that buy its hardware.

"Nvidia uses its scale and long-term visibility to secure Ports-Pike to host Nvidia compute," he said. "This is the same discipline we apply to supply-chain management: we secure critical inputs when we have visibility into customer demand and when doing so enables long-term productive capacity."

Tyler Durden Tue, 08/18/2026 - 10:25

US Pending Home Sales Plunge Back Near Record Lows In July

Following another disappointment in existing home sales in July, weak homebuilder sentiment, and plunging housing starts, pending home sales tumbled for the second month in a row in July (-2.3% MoM vs 0.0% exp - below thew worst forecast), dragging sales down 2.5% YoY - the biggest annual drop since April 2025...

This decline matches the second-worst reading in data back to 2001...

“The highest mortgage rates of the year hit right in the middle of summer, and that’s pulling back contract signings,” NAR Chief Economist Lawrence Yun said in a statement.

“Home prices are at record highs so houses for sale are sitting on the market longer, and fewer buyers are bidding above the asking price than a year ago, though there are large local market variations.”

All four major US regions experienced a decline in demand during the month.

An index of pending sales in the South, the nation’s biggest home-selling region, decreased 2.2% to the lowest level since January 2025. Pending sales dropped 4.7% in the West.

As a reminder, because houses typically go under contract a month or two before they’re sold, the pending home sales data tend to be a leading indicator of closings that are captured in the monthly previously owned home sales reports.

Translation - this is terrible news building on an already ugly situation in the US housing market.

Tyler Durden Tue, 08/18/2026 - 10:13

Home Depot Earnings Offer Glimmer Of Hope As Small Projects Offset Renovation Downturn

Home Depot reported stronger-than-expected second-quarter sales and profit as homeowners spent money on smaller do-it-yourself projects, giving the home-improvement retailer enough confidence to reaffirm its full-year outlook.

The frozen housing market, combined with elevated borrowing costs, has deterred homeowners from financing larger renovations, such as replacing exterior windows and doors or installing a new deck, and has also pressured Home Depot shares over the past year and a half.

However, second-quarter demand showed signs of resilience in smaller projects, including ceiling fan replacements, landscaping, gardening, and electrical upgrades.

"They are engaged in smaller projects, but we haven't yet seen that combination of factors that unlocks larger projects," CFO Richard McPhail said in an interview.

Comparable sales increased 1.7% in the quarter, beating the Bloomberg consensus estimate for a 0.94% gain. Revenue rose 5.7% to $47.86 billion, while adjusted earnings of $4.92 a share topped the $4.73 consensus estimate.

Here's a snapshot of 2Q earnings:

• Comparable sales +1.7%, estimate +0.94% (Bloomberg Consensus)
• US comparable sales +1.3%, estimate +0.85%
• Net sales $47.86 billion, +5.7% y/y, estimate $47.33 billion
• Adjusted EPS $4.92 vs. $4.68 y/y, estimate $4.73
• EPS $4.79 vs. $4.58 y/y
• Average ticket sales $92.50, +2.8% y/y, estimate $91.70
• Merchandise inventories $26.85 billion, estimate $26.29 billion
• Total location count 2,364, estimate 2,365
• SG&A expense $8.42 billion, +8.5% y/y, estimate $8.17 billion

Home Depot maintained its forecast for annual revenue growth of 2.5% to 4.5%, with comparable sales ranging from unchanged to 2% higher. The company said tariff refunds should help offset rising fuel costs.

Barclays analyst Seth Sigman told clients, "HD reported better 2Q26 results, with broad-based demand driving better sales, while EPS was well managed and benefited from tariff refunds. The sales improvement should be the key takeaway as trends continue to gradually improve despite limited progress on the housing front."

Home Depot shares are up a little more than 2% in premarket trading. Shares are flat on the year and about 21% below their 2024 peak.

DA Davidson analyst Michael Baker wrote earlier today that the earnings results "doesn't mean we're out of the woods yet with respect to home-related spending, particularly as rates continue to move back up." He noted, "But it does show that the worst of the cycle downtrend is likely behind us."

Tyler Durden Tue, 08/18/2026 - 10:05

Women Flee Ceuta After 15 Rapes Recorded Since Migrant Invasion

Via Remix News,

The Spanish Civil Guard has now confirmed there have been 15 rapes in Ceuta since the mass migrant invasion at the end of July, which has continued to shake Europe. In response, women are now reportedly fleeing the city in greater numbers as sexual violence spreads and scenes from the city portray a government unable to contain the growing chaos on the beaches and streets.

The latest rape reportedly occurred on Friday night on Lisboa Street, where three migrant brothers reportedly sexually assaulted a 10-year-old girl. An investigation is ongoing regarding the incident. Remix News reported last week that five underage Moroccan girls had reportedly been raped in Ceuta since July 30, along with one underage boy. Since then, the number has risen to 15, according to the Spanish newspaper El Mundo.

Women in Ceuta are now reportedly looking for an exit. Two sisters, Yoli and María José, say they have left the city until the crisis ends due to fear for themselves and their daughters.

"What we are going through is very hard and it is very hard to hear journalists justify this Government, justify everything. We can't take it anymore, we feel humiliated, trampled. I have had to take my daughters out of their house because the Government does nothing, because Mr. Pedro Sánchez is on vacation in La Mareta. Nobody cares about us," said Yoli to Spanish television network Cuatro.

??? JUST IN: A Spanish woman says she has only her dog to protect her on the streets of Ceuta after a mass migrant invasion.

"She is the only one who protects me! Because there are no military, no police on the street. We are terrified!"

"I feel fear in my own city! In my... pic.twitter.com/aXIMsKOUe0

— Remix News & Views (@RMXnews) August 10, 2026

There have now been dozens of videos of women, both young and old, expressing their fears over the crisis. One asked, "Why do I have to leave my city, the city where my mother gave birth to me, where I was raised, and where I want to raise my children? What we are living through is very extreme."

"I need someone to walk me to my front door at 29 years old. I never thought I would have to live through this situation we're facing - never."

???JUST IN: 15 rapes have now been reported in Ceuta since the mass migrant invasion at the end of July, including a 10-year-old girl, according to Spanish newspaper El Mundo.

Spanish women are now reportedly fleeing the city.

"Why do I have to leave my city, the city where my... pic.twitter.com/mgN9HVN64k

— Remix News & Views (@RMXnews) August 17, 2026

Another woman said she woke up to find a Moroccan migrant in his underwear in her bed after he climbed up multiple stories to slip into her room through the balcony window early in the morning.

???BREAKING: A Moroccan migrant wearing only his underwear snuck into a sleeping Spanish woman's bed early in the morning in Ceuta.

"I live in the center on the fifth floor, mind you... He jumped onto my bedroom balcony. He came into my bedroom and got into my bed. I thought... pic.twitter.com/8cs7rasXSv

— Remix News & Views (@RMXnews) August 10, 2026

The sexual assault of the 10-year-old girl has also shocked residents, with one local woman saying she was now afraid to let her children go outside.

???A local woman said a 10-year-old girl was raped in Ceuta.

She said she is now locking her children inside, while other families are sending their children to mainland Spain for safety reasons.

Spanish authorities confirmed that neighbors reported that several Moroccan... pic.twitter.com/zGwkz2hiPb

— Remix News & Views (@RMXnews) August 14, 2026

The Civil Guard has already identified approximately 1,800 minors, who have all been issued an identification bracelet. Sources cited by El Mundo indicated that these minors are simply released back to the streets since they cannot be returned to Morocco.

Beyond the threat of rape and sexual assault, daily life has also come to a halt in many respects. Many areas of the beach remain occupied by thousands of migrants, while health services speak of a catastrophe due to the influx of patients, many carrying and transmitting diseases like tuberculosis.

???Tourists and locals should be enjoying pristine Ceuta beaches. Instead, the coastline has been turned into a massive garbage heap after hundreds of migrants erected tent camps.

"Wow! Here we are in Spain...Look at the shoes! The world is full of shoes!"

Follow: @RMXnews pic.twitter.com/ExXsTYb3V6

— Remix News & Views (@RMXnews) August 14, 2026

The government has tried to present a picture of calm but an announcement that tents would start being erected for the migrants has fueled fears that many of the migrants could be in the area for some time to come. Meanwhile, 1,500 agents of the Civil Guard and the National Police, along with military personnel, continue to operate in the area.

Police sources have also pointed out deficiencies in border controls, among them problems with air conditioning and identification systems.

??? A young Spanish woman is fleeing Ceuta because she no longer feels safe.

"I don't want to feel anxious every time I step outside... It seems awful to me that all this is allowed to happen and nobody can close the border or do anything."

However, she also claims that the... pic.twitter.com/o6KVfhR7p8

— Remix News & Views (@RMXnews) August 10, 2026

During controls, Spanish police have also detained an immigrant with history of terrorism and other crimes, who also had an arrest warrant from Interpol. The detainee remains in Ceuta while the procedures for his extradition are completed. The case raises fears that during the chaos, migrants with terrorist motives may have made their way to European territory.

They told us Ceuta was back to normal after the invasion of 70 000 illegal migrants 3 weeks ago.

This is how the streets of Ceuta look like now pic.twitter.com/sczsrC48eu

— Visegrád 24 (@visegrad24) August 17, 2026

Read more here...

Tyler Durden Tue, 08/18/2026 - 09:50

Agricultural Commodity Prices Break Out As JPMorgan's Food Crisis Warning Gets Louder

JPMorgan analyst Nora Szentivanyi's warning last week that the next global food crisis could begin as early as next year has been a major wake-up call for some, adding to the growing voices on institutional desks warning that food inflation is poised to re-accelerate. 

Remaining extra watchful about agricultural prices, Bloomberg reported earlier that US corn futures moved higher after preliminary results from the Pro Farmer Crop Tour indicated weaker-than-expected yields in parts of critical growing belts across the Midwest.

Corn yield estimates were about 3% below last year in Ohio and 14% lower in South Dakota. Soybean pod counts also declined, while severe storms and flooding in Indiana and Ohio added to concerns about further crop damage."

“The crop tour has somewhat buoyed markets so far, considering the expected lower yields and unfavorable weather,” said Eliza Redfern, Senior Manager Industry Insights for Bendigo Bank Agribusiness.

Chicago corn futures are approaching their 2026 highs, while wheat futures are closing in on levels last seen in 2023.

Meanwhile, and perhaps most alarming, the broader agricultural complex is confirming the move in soft commodities. The Bloomberg Agriculture Spot Index rose to about 406, its highest level since early 2023 and roughly 27% above its 2024 low.

The benchmark remains below the extreme peaks reached during the 2008-10 Arab Spring crisis and 2021-22 food crises, but its accelerating upside momentum suggests inflationary pressure is building across the broader food complex.

The latest moves provide further evidence that Szentivanyi's global food-crisis scenario may become a higher-probability outcome in 2027.

Meanwhile, the diesel crack spread is blowing out, a key indication of a "perfect storm" brewing in the refined products market that will certainly add to inflationary forces in the food complex. 

Tyler Durden Tue, 08/18/2026 - 09:20

Buy-Now-Pay-Later Klarna Crashes As Outlook Cut Exposes Consumer Growth Cracks

Klarna, the Swedish fintech firm best known for its buy now, pay later services, crashed in premarket trading in New York after it lowered its full-year revenue and gross merchandise value forecasts following a second-quarter active-user miss, overshadowing stronger-than-expected earnings.

The buy-now, pay-later firm now expects 2026 revenue of $4.08 billion to $4.16 billion, down from a previous forecast exceeding $4.34 billion. Gross merchandise value is projected to be $149 billion to $151 billion, compared with earlier guidance of above $155 billion.

Third-quarter revenue is expected to range from $940 million to $980 million, well below the $1.11 billion consensus estimate. The company forecast gross merchandise value of $35 billion to $36 billion, versus expectations of $39.26 billion.

Second-quarter revenue was a bright spot, rising 27% to $1.04 billion and beating estimates, while gross merchandise value reached $36.6 billion. Earnings were 1 cent per share, compared with an expected 6 cent loss. But active users totaled 120 million for the quarter, missing the 122 million estimate.

Klarna cited about $600 million of currency headwinds and a more cautious view of Germany, its largest market by volume. The company left its US outlook unchanged, with US gross merchandise value rising 27% during the quarter.

Klarna noted that "the U.S. remains Klarna's fastest-growing large region."

Klarna also said CFO Niclas Neglén will step down in early 2027 after six years in the role.

Nordea analyst Thomas Nilsson provided clients with his first take on the earnings:

Klarna Group plc – Buy/USD 30: Strong Q2 overshadowed by FY26 guidance cut

Klarna delivered a strong Q2 with accelerating growth and improving profitability. GMV rose 18% y/y to USD 36.6bn, revenue increased 27% to USD 1.04bn, and transaction margin dollars grew 42% to USD 446m. Adjusted operating income increased to USD 91m, 100% above Visible Alpha consensus, corresponding to a margin of 9%.

The main negative was guidance. FY26 GMV guidance was cut to USD 149-151bn from >USD 155bn, mainly due to FX headwinds and softer volumes in Europe, particularly Germany. Klarna now expects FY26 adjusted operating income of USD 280-300m, compared with previous guidance of >USD 299m. Conclusion: A strong Q2 report that is overshadowed by the GMV guidance cut. Q3 adjusted operating income guidance is only USD 5-15m due to heavy investments ahead of the peak season. With FY26 guidance lowered by ~7% at the midpoint, we expect negative revisions to consensus estimates in the high single digits. In light of this, we view a negative share price reaction of a similar or greater magnitude as warranted today.

Klarna shares are down 18.5% in premarket trading.

The most staggering figure from Klarna's earnings report is that more than 120 million consumers now use its payment network for everyday purchases, ranging from groceries and gasoline to airline tickets.

Management identified the US as its fastest-growing market, but that bright spot carries a darker macro warning: increasingly stretched US consumers are turning to short-term financing to cover routine expenses.

Tyler Durden Tue, 08/18/2026 - 08:50

US Housing Starts Plummet In July, Near COVID Lows

After Housing Starts exploded higher in June (driven by a massive rebound in multi-family units), July was expected to see a reflexive decline of 5.9% MoM...

...things were considerably worse, with US Housing Starts plunging 12.4% MoM (the third major monthly drop in four months)...

On the other hand, the more forward-looking Building Permits (preliminary for July) rose 5.0% MoM (well above the 0.6% MoM expected), after two months in a row of declines.

On a SAAR basis, Starts at back near post-COVID lows while Permits are holding in a four year range...

Under the hood, both Single-Family and Multi-Family movements were stroinger for Permits abut weaker for Starts (after multi-family starts soared last month)...

This shouldn't be a total surprise after yesterday's decline in builder sentiment (confidence among US homebuilders dropped for a second month to the lowest level of the year, dragged lower by elevated borrowing costs and higher material and land prices).

It seems recent rises in the mortgage rate (and inventories already at over-stuffed levels, given the slowness of sales) has finally dented the homebuilders' self-satisfying confidence... and the lack of affordability leaves the American Dream fading into Renter Nation...

Tyler Durden Tue, 08/18/2026 - 08:42

"Sea Of Red": Futures Slide As Market Wakes Up To Soaring Bond Yields And Diesel Prices

US futures are a "sea of red" (as Bloomberg describes it) in early trading as thin summer volumes persist, with the wrong kind of inflation coming to the fore and Monday’s tech selloff weighing on sentiment despite bullish AI news. The recent stock-bonds disconnect is finally being reappraised with US futures lower across the board. As of 8:00am ET, S&P 500 futures fell 0.4% with Nasdaq 100 contracts down 1.1% with Semis, Mag7, and Memory all under pressure, while Software is bid. Nvidia dropped 1.8% as the cost of protecting its debt against default closed in on a high reached last month. Defensives and Energy are leading as investors continue to de-gross / de-lever. Tech stocks drove declines across global markets equities as long-dated bond yields pushed further into multidecade highs and oil prices extended their climb, draining traders’ appetite for risky assets.  Yields on 30-year Treasuries rose 2bps to 5.33%, the highest since 2007 as "yields seem to be reacting to a combination of energy prices, the deteriorating US fiscal situation, elevated credit issuance, and BOJ/JPY dynamics which are all driving term premia higher", per JPM.  US crude neared $85 a barrel with Brent trading above $91, while the Diesel crack spread rose above $100 for the first time ever, as tensions in the Middle East showed no sign of easing. The dollar was little changed while gold declined. Price pressure concerns are hardly new. But with long-term yields around the globe hitting multi-decade highs, the debate may be shifting toward whether the set-up reflects persistent “sticky” inflation or an AI-driven “growth” dynamic. For the former, the signals are clear to see: persistently elevated oil prices, soaring diesel costs, “Dr. Copper” dynamics and the effects of El Niño. Today’s macro data focus is weekly ADP, Import / Export prices, Housing Starts, Mfg measures, and Pending Home Sales. Tomorrow’s Fed Minutes are likely more impactful as he bond market focuses on next week’s Jackson Hole mtg / Warsh speech

In premarket trading, Mag 7 stocks are mostly lower: Meta Platforms (META) slips 1% as the company heads to court Tuesday for a high-stakes showdown with a coalition of state attorneys general over claims that the company deliberately designed Facebook and Instagram to encourage compulsive use among young users (Apple +0.6%, Microsoft +0.7%, Amazon -0.4%, Alphabet -0.5%, Tesla -1.3%, Nvidia -1.9%)

• Chipmakers and other AI-related firms slide, weighing on US stock futures, as risk-off sentiment sets in.
• Abercrombie & Fitch (ANF) is down 2% after Raymond James downgraded the clothing company to market perform following the stock’s recent rally.
• Amylyx Pharmaceuticals (AMLX) rises 26% after saying a late-stage trial of its experimental drug met its primary endpoint for patients who experience low blood sugar levels following bariatric surgery.
• Aon (AON) slips about 1% on light trading after saying CFO Edmund Reese is leaving after two years in the post.
• Baidu ADRs (BIDU) drop 6% after the Chinese search-engine operator reported its fifth quarter of free cash outflow in the past six, thanks to soaring capital expenditures. Its revenue was shy of analyst estimates, dragged by underperformance at its subsidiary iQiyi.
• Bath & Body Works (BBWI) climbs 3% after Citi raised the recommendation on the company to buy, with analyst Paul Lejuez noting a second quarter EPS beat and positive tone about recent product launches.
• Fabrinet (FN) slides 9% after the process engineering and manufacturing services firm’s Datacom sales disappointed investors.
• Home Depot (HD) climbs 2% after results beat estimates in the latest quarter, a sign that spending on improvement projects is holding up despite high borrowing and housing costs.
• Norwegian Cruise (NCLH) falls 2% as Mizuho downgrades the company to neutral, saying cash requirements may pressure the balance sheet.

August’s rebound in chipmakers faltered in premarket trading, with semiconductor stocks sliding 3.4% and Nvidia down almost 2% as its CDS push wider. Equity markets are struggling under the weight of rising borrowing costs as bond investors demand higher premiums to finance spendthrift governments and shield against persistently sticky inflation. Elevated oil prices have also reinforced expectations that central banks will need to tighten monetary policy.

“The Middle East is clearly re-escalating again and long-term interest rates are rising, and these are things that end up corroding the value of equities,” said Emma Moriarty at CG Asset Management. “And in a market where it’s summertime, liquidity is a little bit thinner, it’s a bit more prone to volatility.

In Europe, French 30-year yields hit their highest since 2008, while their UK peers were approaching 6%. Germany’s borrowing costs hit a 15-year high in a major sale of long-dated bonds.  Yardeni Research warned investors are becoming more concerned about the surge in borrowing by AI hyperscalers and questioning whether the Fed will remain sufficiently vigilant on inflation if oil prices climb again.

“We aren’t pushing the panic button,” strategists led by Ed Yardeni noted. “However, we are closely monitoring whether the bond vigilantes might do so.

Events in the Middle East will remain a key point of focus as both the US and Iran show less willingness to compromise. President Donald Trump said he won’t try to revive a stalled truce with the Islamic Republic, dimming prospects for a swift reopening of the Strait of Hormuz. 

For Mohit Kumar at Jefferies, there is “no easy way out” and “further pain in the near term” for energy costs. “We have stayed away from the long end of the curve and rates duration and instead focus on steepeners,” he wrote. “We see no reason to change our portfolio.”

Traders expect tech-stock volatility to continue as investors shift their focus back and forth between robust earnings and worries over whether debt-fueled infrastructure investment will deliver sufficient returns to justify the spending. “You are going to get winners and losers and you’re going to get a lot of wasted capex,” said Justin Onuekwusi, chief investment officer at  St. James’s Place. “That, to me, is a huge future challenge.”

The Stoxx 600 equity index headed for a fifth straight day of losses, the longest such stretch this year. Here are the biggest movers Tuesday:

• H&M climbed as much as 4.6%, the most in almost 11 months, as Citi places the Swedish fashion retailer on a 90-day positive catalyst watch ahead of its third-quarter results
• Coloplast shares gained as much as 3.6% after the Danish medical-products maker reported better-than-expected revenue for the third quarter
• Hemnet Group shares surged as much as 13%, to the highest in more than three months, after JPMorgan double-upgraded the Swedish online property portal to overweight and said it’s “worth revisiting” following a period of underperformance
• Skan shares rose as much as 8.5% to the highest level in almost a year after the pharma equipment supplier reported first-half results
• Basilea shares jumped as much as 8.1%, the most in more than a year, after the Swiss biopharmaceutical company reported an increase in revenue for the first half-year and upgraded its outlook for the full year
• 1&1 shares soared as much as 6.5% as its parent United Internet plans to buy as many as 6 million shares in the telecom company
• Schott Pharma shares advanced as much as 7.6%, to the highest in almost a year, after Barclays said the German pharma packaging company is leaving its issues “in the rear-view mirror” and is set for growth acceleration
• Huber+Suhner shares dropped as much as 12%, the most since 2020, after the maker of antenna systems and fiber-optic cables reported weak results that missed expectations in the first half
• Royal Unibrew fell as much as 9.1%, the most since April, on weak second-quarter earnings because of a soft performance in Northern Europe
• Scor shares fell as much as 3.1%, the most in eight weeks, as UBS downgrades the reinsurer to sell from neutral

Asian stocks were set to snap a four-session winning streak as gains in oil prices fueled inflation concerns, while rising global bond yields also dimmed the appeal of equities. The MSCI Asia Pacific Index erased an early advance to trade 1% lower. Tech and industrials were the biggest drags on the benchmark while subgauges of healthcare and energy stocks advanced. Japan’s Nikkei led losses among key national indexes in the region, dropping 2.5%. South Korea’s Kospi also reversed early gains and finished lower as trading resumed after a holiday. Asia’s stock benchmark is up more than 2% so far in August following two straight months of losses. Traders will be studying minutes from the Fed’s July policy meeting, due for release later this week, for clues to the central bank’s rate path. Globally, investors are taking profit and reducing exposure, said Jung In Yun, chief executive officer at Fibonacci Asset Management Global in Singapore. “Seems like a short-term issue, not a major catalyst for another steep fall.” Elsewhere, Indonesia’s benchmark index rose to the highest in three months after President Prabowo Subianto’s 2027 budget speech on Friday eased some investor concerns over fiscal discipline.

In rates, treasuries drift lower into the early US session, with futures near lows of the day and the curve extending a steepening move. Longer-dated bond yields have continued to carve out fresh peaks alongside persistently higher energy prices. US yields cheaper by up to 2bp across the long end, with 2s10s and 5s30s steeper by 1bp and 1.4bp on the day, respectively. US 10-year yields trade around 4.74%, cheaper by 1bp, with bunds and gilts lagging by an additional 2bp and 1bp in the sector.  Germany long-end lags, following a €4 billion ($4.6 billion) August 2056 syndicated bond sale at highest yield since 2011. US session focus includes a busy data slate, while another large day for corporate issuance is also expected. IG dollar issuance slate includes a few deals already. Twelve issuers priced $9.1 billion on Monday, pushing monthly volume above $145 billion for a new August record. Issuers paid about 5bps in new issue concessions on deals that were 2 times covered. Another busy session for corporate deals is expected for Tuesday. Treasury auctions this week include $16 billion 20-year bonds (Wednesday) and $8 billion 30-year TIPS (Thursday)

In commodities, Brent crude hit a fresh month-to-date high during European trade against the backdrop of dwindling expectations of an immediate resolution to the US-Iran conflict. Focus is moving beyond crude benchmarks with the widening in crack spreads garnering attention. The Nymex heating oil and ICE gasoil cracks both hit fresh records on Monday, with the former topping $100 a barrel. US gasoline also gained, with the Nymex prompt spread the strongest since 2022. 

Diesel crack hits record $102. This is absolutely unprecedented.

Industrial economy either grinds to a halt or consumers about to be hit with the biggest energy pass through in history pic.twitter.com/OtAdgrCvb3

— zerohedge (@zerohedge) August 17, 2026

This adds further ammunition to the inflation angst surrounding geopolitical disruptions and in Europe serves to raise scrutiny over government balance sheets. France is a standout with short bets on French paper continuing to ratchet higher ahead of upcoming budget negotiations. The recent ascent of precious metals is faltering. Spot gold down 0.5%. 

In FX markets, the Bloomberg Dollar Spot Index snapped a three-day losing streak to climb 0.1%; oil prices extended gains after prospects for a peace deal between the US and Iran dimmed. USD/JPY rose as much as 0.2% to 159.78, highest since July 31; one-week risk reversals trade at 193bps, puts over calls, compared to Monday’s high of 248bps. GBP/USD slipped as much as 0.2% to 1.3520; data showed UK employers shed more workers in July and job vacancies hit a fresh five-year low. EUR/USD was modestly lower at 1.1575; one-month options sentiment turned bullish for the first time since early March. Kiwi led G-10 losses; NZD/USD fell 0.5% to 0.5872

Looking at the US economic data calendar, we get ADP weekly employment change (8:15am), August New York Fed services business activity, July import/export price index, housing starts, building permits (8:30am), industrial production (9:15am) and pending home sales (10am). No Fed speakers scheduled for the session

Market Snapshot

Top Overnight News

• Iran will shift to a "fully offensive" military posture because efforts to negotiate a permanent end to the war with the U.S. have stalled, a senior Iranian official told Reuters on Monday, as Washington ruled out extending ‌a temporary ceasefire agreement. RTRS
• Yemen’s Iranian-allied Houthi rebels are escalating attacks along the country’s Red Sea coast, shutting down operations at a strategic seaport and pushing closer to the Bab al-Mandeb Strait, an important global shipping chokepoint. WSJ
• Long-term borrowing costs across major economies hit multi-decade highs on Tuesday as inflation concerns, deficit fears and surging AI bond issuance put pressure on government debt around the world. FT
• US investment-grade bond sales have set a third straight monthly record, continuing the market’s fastest pace of issuance as spending on the artificial-intelligence buildout fuels corporate borrowing. August’s high-grade debt supply reached $145.2 billion, topping 2020’s total of $136 billion for the month. BBG
• Chinese AI companies are building systems that perform almost as well as leading models without the most powerful hardware, challenging their US rivals. One measure of China’s long AI push is its dominance in 2023 patent applications. BBG
• China’s economy showed across-the-board weakness in July and growth likely slipped further below the government’s annual target, sparking a call from Premier Li Qiang on officials to ramp up supportive measures. BBG
• Apple has acknowledged for the first time that regulatory changes forcing it to loosen control of its App Store are weighing on its more than $100bn services business, a rare concession that antitrust action is beginning to dent one of the company’s most profitable divisions. FT
• Unemployment in the U.K. was unchanged in the three months through June, while wage growth edged up slightly, likely not moving the dial for Bank of England policymakers who are expected to leave interest rates on hold next month. WSJ
• Canada faces a new round of 50% U.S. tariffs this week that businesses said could cause job losses in some already struggling industries, while complicating broader negotiations over the future of North America's free trade agreement. RTRS
• Anthropic PBC is on track to generate annualized revenue of more than $65 billion based on its current performance, up more than sevenfold from its pace at the end of last year. BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks mostly declined following the weak lead from Wall Street, where all major indices declined amid higher oil prices and yields due to ongoing geopolitical uncertainty following the expiry of the US-Iran MoU and with Trump rejecting a truce extension, while he also threatened to bomb US ally Oman. ASX 200 eked out slight gains amid a slew of earnings, as results from BHP and CSL helped keep the index afloat, although gains were capped by weakness in telecoms, financials and the consumer sectors.
Nikkei 225 retreated beneath the 68,000 level with underperformance in Japan amid upside in yields, higher oil prices, fears of a faster pace of BoJ rate hikes, and the recent weak GDP data. KOSPI initially rallied on return from the long weekend, but then faltered as the early tech resilience waned, and with some suggesting that US President Trump's decision to reduce military drills with South Korea could partly be due to frustration regarding the pace of South Korea's investment pledge. Hang Seng and Shanghai Comp were subdued following the recent disappointing economic data, in which Industrial Production and Retail Sales missed forecasts, although the downside in the mainland was somewhat cushioned after China's MOFCOM and eight other ministries announced measures to boost consumption in lower-tier cities and counties.

Top Asian News

• China’s Ministry of Commerce and eight other ministries issued guidance aimed at boosting consumption in lower-tier cities and counties, with fiscal support a key focus. Measures include upgrading retail channels, encouraging new consumption formats, improving local service efficiency and expanding eldercare, childcare, education, healthcare and sports facilities, while eligible personal consumer loans and loans to service-sector operators may receive fiscal interest subsidies.
• PBoC plans to expand Yuan offshore market and is backing the creation of a new model for real estate developments, adding they will intensify review of macroeconomic and financial efforts.

European bourses are softer across the board, with the recent bond selloff causing risk aversion. Persisting inflationary pressures, increased government spending and shifting investor demographics are hitting bonds globally. Political uncertainty, especially in the US ahead of the midterms, is also putting pressure on bonds. Its impact on equities is that higher yields would weigh on profits as it would require larger payouts. Higher yields would also mean higher discount stock valuations. Sectors highlight the negative bias. Retail and Energy are the only sectors posting decent gains while Tech, Industrial Goods & Services and Basic Resources are the sector laggards.

Top European News

• UK Unemployment Rate (Jun) 4.9% vs. Exp. 4.8% (Prev. 4.9%).
• UK Employment Change (Jun) 83k (Prev. 147k).
• UK Average Earnings excl. Bonus (Jun 3MYr) 3.5% vs. Exp. 3.4% (Prev. 3.4%).
• UK Average Earnings incl. Bonus (Jun 3MYr) 4.1% vs. Exp. 4.1% (Prev. 4.4%).
• UK Claimant Count Change (Jul) -11.0k vs. Exp. 11.2k (Prev. -6.4k).
• UK HMRC Payrolls Change (Jul) -13k (Prev. -13k).
• German ZEW Economic Sentiment Index (Aug) 34.2 vs. Exp. 30 (Prev. 26.3).
• German ZEW Current Conditions (Aug) -61.1 vs. Exp. -68.8 (Prev. -77.6).
• European ZEW Economic Sentiment Index (Aug) 31.4 vs. Exp. 25.4 (Prev. 23.4).

FX

• DXY is modestly firmer today with headline catalysts light; the latest reporting optimistic from Pakistan but not reflected by Iran and the US. All-in-all, the market is viewing the latest updates as both sides in stalemate, and with Hormuz traffic low oil it looks like Crude could stay elevated and continue to weigh on the risk tone. Absent tier-1 data and headlines should keep focus on yield moves with US supply tomorrow potentially the most expensive for the Treasury in 25 years. DXY is within a narrow 99.52-99.69 range.
• UK Jobs: The strong wage figures were caveated by a 6.1% rise in public sector pay helped by NHS pay awards, while the unemployment rate unexpectedly remained at the prior 4.9% level (exp. 4.8%) and the 3M employment change printed below the prior; sparking a modest dovish reaction with Cable falling 15 pips; action which has persisted two hours later. Now, Wednesday’s CPI is in focus, and with GBP having had a strong run vs. the USD, it could see a decent move should figures rise at a slower than expected pace.
• Action elsewhere is quiet. NZD dipped below 0.59 to a 0.5870 trough amid the risk tone, USD/JPY looks towards 160.00 as oil prices hit its terms of trade, action which also fails to help energy exporters NOK and CAD, the latter which is flat against the USD, while NOK is weaker against the Buck (USD/NOK +0.2%), but firmer vs. SEK after it strengthened on Monday.

Fixed Income

• Global fixed benchmarks continue to move lower, in a continuation of the action seen last week. Yields continue to trudge higher; the steepening seen in the last few sessions appears to have taken a breather this morning, with yields across the curve moving higher to a similar magnitude.
• Yields continue to hold at multi-decade highs; the US 30yr (5.32%) sits at levels not seen since 11 June 2007, with the next peak going back to 2004 (5.53%). As for the yield spread, the US2s30s continues to widen, now at 113bps (vs 98bps at the start of the month). To remind, front-end rates were pressured after recent soft US data which led to a dovish Fed repricing, whilst long-end rates have been impacted by fiscal/geopolitical/political uncertainty.
• USTs (-3 ticks) are off by a handful of ticks and trade within a 108-10 to 108-15+ range. Domestic newsflow has been light this morning, and will likely remain so for the remainder of the day given the lack of Tier 1 data and the summer lull. Bunds (-35 ticks) and Gilts (-30 ticks) also follow the bearish tone, but UK paper has its own data to digest this morning.
• Overall, the UK’s jobs data doesn't show a significant change in the labour market, a point that was expected heading into the release. Initial focus on the hotter-than-expected wage metrics, including the upward revision to the measure with bonuses. Additionally, the claimant count unexpectedly declined and the prior was revised down. However, this is offset by the unemployment rate unexpectedly remaining at the prior 4.9% level (exp. 4.8%) and the 3M employment change printing below the prior.
• The UK sells GBP 4bln 4.875% 2036 Gilt: b/c 3.65x (prev. 3.13x), average yield 5.155% (prev. 5.040%), tail 0.1bps (prev. 0.1bps).
• Japan sells JPY 1.9tln 5-year JGBs; b/c 4.15x (prev. 3.43x), average yield 2.020% (prev. 2.163%), tail in price 0.02 (prev. 0.03).

Commodities

• WTI and Brent Oct futures hold a positive bias as constructive geopolitical headlines are trumped by escalatory rhetoric (see below). WTI trades towards the upper end of USD 84.64-85.68/bbl after topping yesterday’s USD 85.04/bbl high (vs low 81.50/bbl). Brent eyes USD 92/bbl in a current USD 90.64-91.85/bbl range after notching a USD 88.01-91.21/bbl range yesterday. Dutch TTF resides around recent ranges with gains of some 1.5% intraday, testing EUR 63/MWh to the upside in recent trade.
• Metals are subdued as elevated energy prices keep the USD underpinned and thus weigh on the complex. Spot gold pulled back to around USD 4,400/oz and earlier hit lows close to its 100 DMA (USD 4,385/oz) in a USD 4,386-4,436/oz intraday range at the time of writing. Spot silver remains within yesterday’s USD 64.75-66.56/oz range. Base metals are lower across the board. 3M LME copper tested support around the 14k/t mark this morning to trade in a current USD 13,996.18- 14,174.00/t range at the time of writing.
• In terms of the main geopolitical updates, US President Trump reiterated that the US remains in control of the Strait of Hormuz and said Iran wants to reach a deal, although he does not believe Tehran will agree to the terms, he considers necessary and stressed that he is not seeking an extension of the Iran MoU. Trump also criticized US-ally Oman, saying he does not think the country “behaves very well” and that the US could handle it very easily. Meanwhile, Pakistani journalist Anas Malick reported that an understanding to extend the US-Iran ceasefire under the Islamabad MoU has been reached and agreed in principle. Separately, UKMTO reported an incident in the Strait of Hormuz in which a vessel conducting an outbound transit was struck by an unknown projectile. This morning, Houthi rebels said they used multiple drones to attack an Aramco refinery in Saudi Arabia's Jazan region, although it is unclear if this is referring to a fresh attack or last week’s attack.
• Libya is seeking investment of up to USD 40bln to develop oil resources, according to FT.
• India is reportedly considering cutting its 100% tax on imported sugar to help curb domestic prices, according to Bloomberg.

Trade/Tariffs

• US President Trump and Canadian PM Carney spoke late on Monday after several days of trade negotiations between the countries, according to a Bloomberg reporter citing sources.

Central Banks

• ECB's Lane said inflation will hover around 3% for the rest of the year but it depends on whether there is a resolution to the crisis. Lane added that food inflation is relatively low.

Geopolitics: Iran

• Iranian Parliamentary Speaker Ghalibaf said the Strait of Hormuz will not open until the blockade and oil embargo are lifted. He added that "Iran is ready to inflict a heavier defeat on the enemy than before, in proportion to his actions and encroachments."
• UKMTO said it received a report of an incident in the Strait of Hormuz, where a vessel was struck by an unknown projectile while conducting an outbound transit of the Strait of Hormuz, causing damage to the engine room and crew casualty
• Yemen's Houthis attacked Saudi Aramco's Jazan refinery with drones, according to Saba news citing sources.
• Airstrikes targeted the Abu al-Duhur military airport in eastern Idlib countryside, Syria, with a Jerusalem Post stating that Israeli fighter jets were responsible for the attack on the Abu al-Duhur Airbase in northwest Syria. There were also reports of Israeli warplanes targeted the areas of Mansouri and Deir Saryan in southern Lebanon, while Lebanese media reported intermittent Israeli shelling on the high ground of Jabal al-Rafie on the outskirts of Nabatieh al-Fawqa in southern Lebanon.
• An explosion was reported at the Shaddadi gas pipeline in the outskirts of Hasakah, Syria.
• UAE's Foreign Minister discussed the latest regional developments in a phone call with the Kuwaiti Foreign Minister.
• COSCO Shipping (1919 HK) and CMES have reportedly stopped sending oil tankers through the Strait of Hormuz and Bab al-Mandeb, sources suggest.
• Saudi Aramco resumed oil loadings from inside the Strait of Hormuz last week, Reuters reported.

Geopolitics: Ukraine

• Moscow mayor said Russia shot down 180 drones in the Moscow region overnight.
• Western diplomatic source said an increasing number of European politicians are advocating for a resumption of dialogue with Russia, TASS reported.

Geopolitics: Other

• Russian Foreign Minister Lavrov said Russia and North Korea are fighting to establish a new, righteous world order, according to KCNA.

US Event Calendar

• 8:30 am: Jul Import Price Index MoM, est. 0.1%, prior 0.3%
• 8:30 am: Jul Housing Starts, est. 1345k, prior 1427k
• 8:30 am: Jul P Building Permits, est. 1375k, prior 1374k
• 9:15 am: Industrial Production MoM, est. 0.3%, prior 0.1%
• 9:15 am: Jul Capacity Utilization, est. 76.3%, prior 76.1%
• 10:00 am: Jul Pending Home Sales MoM, est. 0%, prior -5.4%

DB's Jim Reid concludes the overnight wrap

Markets have seen growing weakness over the last 24 hours, with bonds and equities slipping thanks to negative geopolitical headlines from the Middle East. There wasn’t a single catalyst for the declines, but with few signs of the US and Iran coming to any sort of a deal, that meant investors priced in a more extended closure of the Strait of Hormuz. Indeed, Brent crude oil (+2.65%) closed above $90/bbl yesterday for the first time in two weeks, and this morning we’ve seen a further +0.72% rise to $91.52/bbl. So that’s led to pressure across the board, with the S&P 500 (-0.52%) slipping back, and futures are pointing to another -0.32% decline today. Moreover, inflation concerns helped send long-end bond yields up to fresh multi-year highs, with the 30yr Treasury yield (+4.7bps) closing at a post-2007 high of 5.31%, whilst Germany’s 30yr yield (+1.8bps) hit a post-2011 high of 3.74%. And that trend has shown no sign of letting up overnight either, with the 30yr Treasury yield up another +1.0bps to 5.32%.

In terms of the latest from the Middle East, yesterday’s headlines made clear that the US and Iran were still far apart from any sort of deal. For instance, President Trump told reporters he had no interest in extending the 60-day memorandum of understanding agreed in June, which technically expired yesterday, even if it effectively collapsed back in July. He also threatened to bomb Oman if they got in the way of the US, and in a Fox News interview earlier in the day, Trump said there was a back channel with officials from Iran’s Revolutionary Guard, but that he was in “no hurry”. Meanwhile, Iran denied Trump’s assertions of a back channel, saying “There are no talks taking place between IRGC officials and the Americans”. US Energy Secretary Chris Wright also didn’t sound in any rush either for a deal, saying that the US is playing the long game with Iran.

With both sides still far apart, investors grew pessimistic that the Strait of Hormuz would properly reopen any time soon. So that meant Brent crude oil prices (+2.65%) rose to $90.87/bbl by the close, their highest level since late July. And there were sizeable increases further out the oil futures curve, with the 12-month Brent future (+2.00%) jumping to a two-month high of $78.01/bbl. In other words, investors are pricing in a more protracted period of higher oil prices again.

As investor concern mounted about a longer closure for the Strait of Hormuz, that put pressure on fixed income, particularly longer-dated sovereign bonds. In fact, 30yr yields hit multi-year highs across several countries, which showed how the fiscal pressures on governments aren’t going away either. Indeed, in the US, the 30yr Treasury yield (+4.7bps) closed at a post-2007 high of 5.31%, whilst the US 30yr real yield (+5.7bps) hit a post-2008 high of 3.08%. Then in Europe, we also saw Germany’s 30yr yield (+1.8bps) hit a post-2011 high of 3.74%, and France’s 30yr yield (+2.2bps) hit a post-2008 high of 4.87%.

For shorter maturities, the jump in yields wasn’t quite as big, but they also moved consistently higher. The 10yr Treasury yield (+3.0bps) was up to 4.72%, and in Europe, 10yr bund yields (+1.8bps) hit a post-2011 high of 3.22%, whilst the 10yr OAT yield (+2.0bps) hit a post-2008 high of 4.06%. However, there were more limited moves in central bank expectations and for front-end yields, with market pricing for a September Fed rate hike only inching up from 32% to 35%.

For equities, the stagflationary impulse from higher oil prices meant it was a similar story of declines on both sides of the Atlantic. So by the close, the S&P 500 (-0.52%) posted its worst day of August so far, and it would have been worse had it not been for a rebound in chip stocks, as the Philly semiconductor index closed up +1.64% on the day. Otherwise though, the S&P 500 saw the most daily decliners (367) since early July as all major sector groups except energy fell on the day, and the equal-weighted index (-0.92%) also had its worst day in over a month. Over in Europe, markets closed before the weakening fully played out, but the STOXX 600 (-0.22%) still posted a 4th consecutive decline, alongside bigger losses for the DAX (-0.38%) and the CAC 40 (-0.66%).

That negative trend has been clear overnight in Asia, where most of the major indices have lost ground this morning, including the Nikkei (-1.64%), the KOSPI (-0.60%), the Hang Seng (-0.65%), CSI 300 (-0.79%) and the Shanghai Comp (-0.39%). Those moves also follow on from the latest batch of China’s economic data yesterday, which generally surprised on the downside. For instance, retail sales were only up +0.6% year-on-year in July (vs. +1.5% expected), whilst industrial production only grew by +4.5% year-on-year (vs. +5.0% expected). Otherwise, the pressure on long-end bond yields has also continued in Asia, with Japan’s 10yr yields (+1.5bps) at a post-1996 high of 2.92% this morning. Meanwhile in Australia, the 30yr yield (+5.6bps) is at 5.59% this morning, the highest since that maturity was first issued in 2016.

Finally, there wasn’t much data yesterday, although it did generally lean in a hawkish direction and kept up the pressure on bond yields. First, the Empire State manufacturing survey unexpectedly jumped to a 4-year high of 20.6 in August (vs. 10.0 expected). Separately in Canada, the headline CPI increased by more than expected to +3.0% in July (vs. +2.9% expected). Moreover, the core measures were also above consensus, with the median core measure up to +2.0% (vs. +1.9% expected), and the trim core measure at +1.9% (vs. +1.8% expected). So investors dialled up the chance of a rate hike by the Bank of Canada’s December meeting, with the probability rising to 68% on the day, up from 58% on Friday.

Looking at the day ahead, data releases include US industrial production, capacity utilisation, housing starts, building permits, and pending home sales for July. Meanwhile in Europe, there’s the German ZEW survey for August, and the latest UK labour market data. From central banks, we’ll hear from the ECB’s Lane. Finally, today’s earnings releases include Home Depot.

Tyler Durden Tue, 08/18/2026 - 08:30

Uber Eyes 1 Million Daily Drone Deliveries With Zipline Partnership

Authored by Bill Pan via The Epoch Times,

Uber is investing in and partnering with drone-delivery startup Zipline as it bets on growing demand for ultra-fast air delivery of takeout and groceries.

Lucid, Nuro, and Uber unveil a robotaxi during Nvidia Live at CES 2026 ahead of the annual Consumer Electronics Show in Las Vegas, Nevada, on Jan. 5, 2026. Patrick T. Fallon / AFP via Getty Images

Zipline drones will begin making deliveries through the Uber Eats platform in Dallas and Houston by the end of this year, the companies announced Monday.

The service will initially launch in markets where Zipline already operates, with the companies ultimately aiming to expand to "dozens of U.S. cities."

The companies aim to reach 1 million Uber Eats deliveries per day using Zipline drones by the end of 2029.

With Zipline's drones, Uber expects orders to be delivered within five to 10 minutes.

"Our goal is for millions of people to be able to order lunch, dinner, snacks and more through the Uber Eats app and have them delivered by Zipline in minutes," the companies said in a statement.

Uber is also investing an undisclosed amount in Zipline.

Uber Expands Drone Delivery Network

The deal marks Uber's biggest commitment to drone delivery yet. It is also the first time the ride-hailing giant has set a long-term delivery target for the technology.

Uber first tested drone deliveries in 2019 through its aviation division, Uber Elevate, but sold the unit the following year as the company sought to cut costs amid a decline in ridership during the COVID-19 pandemic.

More recently, the company has offered drone deliveries in Dallas through a partnership with Israeli startup Flytrex and has reached an agreement to work with Irish drone operator Manna in Europe.

Uber Eats has also experimented with ground-based delivery robots through partnerships with companies including Serve Robotics and Coco Robotics.

The strategy mirrors Uber's approach to its robotaxi business, where the company has assembled a growing network of partnerships rather than developing all of the technology in-house.

That model has allowed Uber to stay involved in emerging transportation technologies despite selling off its own programs, including Uber Elevate and the Uber Advanced Technologies Group.

Investments have also become a major part of that strategy, with Uber committing more than $10 billion to autonomous vehicle companies and related partners.

The Race to Take Orders to the Skies

Uber is not alone in betting on drones as competition intensifies across the food, grocery, and retail delivery markets.

Uber Eats rival DoorDash has partnered with several drone operators and said in July that it had received air carrier certification from the Federal Aviation Administration, clearing a major regulatory hurdle for launching its own drone delivery program.

Wonder, the parent company of Grubhub, has also partnered with Zipline and plans to begin drone deliveries in Texas next year.

Major retailers are also building their drone delivery infrastructure, betting on autonomous aviation to solve the highly congested, expensive "last-mile" logistics problem.

Walmart has partnered with several drone companies, including Zipline, Flytrex, and Alphabet-owned Wing, to deliver goods by air. Amazon, meanwhile, designs its own aircraft and operates flights completely in-house.

Tyler Durden Tue, 08/18/2026 - 08:05

As Japanese Bond Yields Soar, Unrealized Losses At Life Insurers Hit $200 Billion

With Japanese bonds in freefall every day, pushing yields on 10Y JGBs to a 3 decade high, just shy of 3%...

... the time to pay the piper is fast approaching as unrealized losses on domestic bonds at Japan's major life insurers have soared to 30.86 trillion yen ($194 billion) as of the end of June, up 60% year-on-year, and trillions more since then, revealing the downside of the rising interest rates that have lifted investment income.

The total - which was compiled by Nikkei Asia from the 13 respondents out of 14 major life insurers surveyed - surpassed their unrealized gains on domestic stocks, which were up 48% to 30.03 trillion yen.

The main driver is obviously the one thing that is destroying Japan's entire financial system, rising Japanese government bond yields. Yields on 30-year JGBs, a key investment target for life insurers, climbed to the 3.9% range at the end of June, up about 2.7% points from the end of July 2023, before the combined unrealized gains among these companies flipped to losses.

The upward trend in yields has continued beyond June on expectations of further Bank of Japan rate hikes and concerns about fiscal expansion.

As the Nikkei reports, life insurers traditionally invest in ultralong-term JGBs to prepare for their future obligations to policyholders. In principle, unrealized losses disappear if the bonds are held to maturity. But under certain circumstances, they risk straining finances.

As we discussed last year, if the market value of a bond falls 50% below its acquisition cost, insurers may be required to recognize an impairment loss. Nippon Life Insurance recorded 44 billion yen in impairment losses for the April-June quarter, while Meiji Yasuda Life Insurance booked 25.3 billion yen. Some bonds purchased during the ultralow interest rate environment of the late 2010s have fallen far enough in value to reach the impairment loss threshold.

It gets far worse when instead of holding the worthless paper to maturity, insurers need to sell the bonds before maturity. Life insurers manage assets and liabilities seeking to align the duration of investment assets with the duration of future insurance obligations. When successful, rising interest rates reduce the market value of both assets and liabilities, limiting the net impact on financial strength.

But when assets have longer maturities than liabilities, rising rates can reduce net assets and increase the risk of deteriorating financial health. Insurers then may need to shorten asset duration by selling bonds, turning unrealized losses into realized ones.

Sony Life Insurance's policy lapse and surrender rate in April-June rose 0.2 points year-on-year to 1.4%, partly because a rapid depreciation in the yen prompted more customers to cancel policies denominated in foreign currency. The figure for T&D Financial Life Insurance, which has a strong presence in bank channel sales, climbed 0.88 points to 1.56%.

A surge in policy cancellations represents the greatest concern. As rates rise and stock prices climb, if many customers shift into insurance products or investment trusts offering higher yields, insurers may need to liquidate assets to fund surrender payments. Read: sell those bonds which are supposedly "held to maturity."

Though most insurers think current lapse and surrender levels can be handled with cash on hand, demand trends are difficult to forecast because they are tied closely to interest rate movements.

"Policy cancellation trends require closer monitoring than ever before," said Sadahiko Hayakawa, chief financial officer of Sony Financial Group.

The good news for now is that insurers' earnings remain strong. Core operating profit for the 14 major insurers, a measure of underlying earnings, reached 951.8 billion yen in April-June, up 37% year-on-year, with 12 of the companies reporting profit growth. Higher interest rates increased interest income from bondholdings, while dividend income from equities also rose.

To expand investment returns further, insurers are rotating into higher-yielding bonds, which however is a two-edged sword as those are the bonds who price is falling the fastest... and keeps falling every day. 

Tyler Durden Tue, 08/18/2026 - 07:45

"Absolutely Unprecedented": Diesel Crack Spread Hits Record As Refined-Products Crisis Arrives

Brent and WTI futures remain below $100 a barrel on Tuesday morning, partly suppressed by governments releasing strategic oil reserves into global markets. But the more serious issue is building downstream, where the Russia-Ukraine war, strikes against energy infrastructure, and continued disruptions around the Strait of Hormuz are fueling the refined-products "perfect storm" we have repeatedly warned about.

Oil extended gains this morning, with Brent trading around $91 a barrel after another vessel attack was reported near the Hormuz maritime chokepoint. President Trump also said he had no interest in extending the interim peace agreement with Iran, which expired Monday.

Diesel is now the biggest concern ahead of the Northern Hemisphere harvest. Rising fuel costs threaten to hit farmers, freight operators, and ultimately consumers through higher prices for food and goods. JPMorgan penned a note last week warning that a global food crisis could erupt as soon as next year (read here).

Back to diesel, the squeeze is being compounded by depleted inventories, with US diesel reserves near 23-year lows and European stockpiles approaching levels last seen during the 2022 energy crisis. 

A chart we published overnight went viral after showing the front-month US diesel crack spread (the NYMEX one-month heating-oil/WTI crack spread) hit a record $102 per barrel.

"This is absolutely unprecedented. The industrial economy either grinds to a halt, or consumers are about to be hit with the biggest energy pass-through in history," we noted.

Diesel crack hits record $102. This is absolutely unprecedented.

Industrial economy either grinds to a halt or consumers about to be hit with the biggest energy pass through in history pic.twitter.com/OtAdgrCvb3

— zerohedge (@zerohedge) August 17, 2026

Several Wall Street desks have warned about the unfolding diesel crunch:

• Goldman's Daan Struyven Shows Global Diesel Exports Crashing
• Citi's Anthony Yuen Warns: Global Diesel Inventories "Below 5YR Minimum"
• BofA's Francisco Blanch Warns: "Diesel's Perfect Summer Storm" Unfolding
• Jefferies' Sam Burwell Warns: Hormuz Shock "Manifesting Itself In Cracks, Not Crude"

Notably, diesel prices are rising far faster than crude. SPR releases may be suppressing crude prices right now, but they do little to resolve shortages of refined products. Instead, the releases are pushing emergency crude inventories, particularly in the US, toward dangerously low levels (the US SPR below 300 million barrels), while the downstream fuel shock continues to intensify - a perfect storm indeed. 

Tyler Durden Tue, 08/18/2026 - 07:20

Top Admiral Visits USS Lincoln, Suggests Reports Of Dire Conditions Are Greatly Exaggerated

The top US military commander in the Middle East has personally visited the USS Lincoln carrier, which is currently patrolling the Middle East after having long been engaged in operations against Iran.

US Central Command (CENTCOM) chief, Adm. Brad Cooper, directly inspected the ship amid widespread reports of low morale and extremely challenging conditions amid a record extended deployment.

Screenshot via CENTCOM on X.

But Cooper came away with the opposite conclusions from what the headlines and some lawmakers are saying. After the Saturday visit, Cooper said the Lincoln has "among the lowest number of cases related to mental health" out of 11 active US aircraft carriers.

Included in the litany of problems the ship has faced, reports have alleged that in some instances crew members tried to commit suicide by going overboard. 

He did say mental health is a "priority" on the warship and said that long service at sea was "uniquely challenging and tough".

"I applaud Lincoln's leadership for... stepping up and making mental health and crew resilience a leadership priority," Cooper stated, while also admitting frankly that that "all is not perfect".

The Lincoln departed its San Diego home base on Nov. 21, 2025, on what was supposed to be a seven-month deployment. That deployment is now in its ninth month, but what's far more remarkable is that the Lincoln went more than 200 days without a port call to give sailors a chance to walk on land and unwind away from the somewhat claustrophobic conditions aboard their huge ship.

On Monday, President Trump while speaking to reporters in the Oval Office also downplayed and rejected reports of a crisis on board, saying that the carrier was "beautifully maintained and beautifully taken care of"...

Reporter: Is there enough food on USS Lincoln?

Trump: There is. That was a fake CNN report.

Over the years, we had them out there much longer.

An admiral told me, “I have been on ships much longer than that, sir.” And people on the Lincoln say it’s beautifully taken care of. pic.twitter.com/qzagDUuaX6

— Clash Report (@clashreport) August 17, 2026

This was after the following high level military statement:

In a statement on Friday, Aug. 14, Acting Secretary of the Navy Hung Cao called some media reports about the ship “dishonest” but did say that “a small number of mental health cases were treated” aboard the ship. His statement was the highest-level acknowledgement of mental health incidents onboard the Lincoln.

Also, days ago War Secretary Pete Hegseth called the negative and alarming reports of poor conditions "completely misrepresented". Trump had then on Friday followed his remarks by addressing the over-extended deployment, calling the length of time at sea "not nearly long enough."

Tyler Durden Tue, 08/18/2026 - 06:55

Blasphemy Law Is Back: Retired British Police Officer Fined For Islam Joke

Authored by Steve Watson via Modernity News,

A retired British police officer has been handed a criminal conviction and more than £1,000 in fines for resharing a satirical Facebook meme poking fun at Islam.

Stephen Gray, 65, a former Police officer who served nearly three decades, was found guilty under Section 127 of the Communications Act 2003 of making a "grossly offensive" post.

The case has sparked fresh warnings that blasphemy laws, abolished in England in 2008, are being revived by the back door - but only for one religion.

'It was one joke, not targeted at anybody, pointing out certain parts of Islam.'

Former police officer and foster carer Stephen Gray recounts his experience of being charged for resharing a post criticising Islam, raising questions about a potential backdoor to blasphemy laws. pic.twitter.com/9BMeUigvxC

— GB News (@GBNEWS) August 16, 2026

Gray's first concern when charged was not himself, but the young Irish girl he and his wife had been fostering for six years. "I was initially quite worried because obviously we have to have enhanced DBS checks to foster children," he told The Telegraph.

He added, "These kids have enough to put up with without the fear they may be moving again hanging over their heads." Social services later described the prosecution as "utter rubbish" and reassured the couple it would not affect their fostering.

Gray was reported to Durham Constabulary by a non-Muslim neighbour with whom he had previously had an unrelated disagreement.

He had reshared two images. The first featured a Middle Eastern man alongside the words "time for mass deportation" and "Children in Need," with a caption reading: "12-year-old Mohammed recently arrived at Dover. Please donate to help him move from a three-star to a five-star hotel which has a better halal menu, free wifi and Sky and is nearer to a girls' school."

The district judge ruled this was not grossly offensive because it related to a political issue debated in Parliament.

The second image showed a man in a turban next to a rasher of bacon with the caption: "Fun facts about Bacon! People who eat bacon have a lower chance of marrying a 9-year-old!" That post led to the conviction.

The judge decided it was about religion rather than politics and was therefore "grossly offensive."

Gray has been clear about his intent. "I made a joke, an ironic joke, about Islam. That is all it was at the end of the day. A joke. I certainly never, not for one second, thought it would be deemed abusive."

He added: "I guess some of the posts may have been in bad taste. Some of them may upset one or two people, but I didn't think for one second it would be cast as grossly offensive by the police, the Crown Prosecution Service and by the courts. Not for one second."

Hundreds, if not thousands, of other people had reshared the same material. Gray did not create the images.

The Crown Prosecution Service initially declined to charge him, stating there was no realistic prospect of conviction. The complainant then used the Victims' Right to Review scheme, and the CPS reversed course.

Gray is appealing with the support of the Free Speech Union. His former boss at Cleveland Police was "absolutely gobsmacked." Gray recalled: "Back when I was serving, if I had taken this case to my sergeant or inspector, I would have been on foot beat night shift for the next five years for wasting everybody's time. It wouldn't have got past the front door of the police station."

He now sees a clear pattern. "I just think it's a dangerous road that the Government is going down trying to use the justice system to get us to stop criticising a religion that promotes a lot of things people might not agree with."

Lord Young of Acton, general secretary of the Free Speech Union, put it bluntly: "Prosecuting people for making jokes about Islam, particularly if they contain a kernel of truth, is a new low. No one making a similar joke about Jesus would face prosecution."

Young added, "Blasphemy laws were abolished in England 18 years ago and should not be resurrected by the courts and applied to just one religion."

This is not an isolated incident. It fits a growing pattern of institutional pressure against any criticism of Islam.

Earlier this year, a Christian police community support officer with North Yorkshire Police was driven out of his job after asking basic questions about jihad and Hamas atrocities during a mandatory diversity training session billed as a "safe space."

Luke Salmons was suspended, faced misconduct proceedings, and ultimately resigned under pressure after colleagues reported a book in his locker. The force's own "safe space" invitation to discuss the issues proved hollow the moment scrutiny touched Islam.

Police forces have gone further. South Wales Police instructed officers to log conversations and comments about Islam that go beyond what the force deems "legitimate" discussion.

The Free Speech Union has warned this creates a chilling effect, allowing subjective judgments to be recorded and potentially surface in future enhanced DBS checks.

It is part of a wider push under the Labour government's non-statutory definition of "anti-Muslim hostility," which critics say is being gold-plated by public bodies to police speech.

Schools have not been spared. Multiple Labour-run councils issued guidance telling teachers that children's drawings of prophets, including Jesus or Mohammed, could be considered blasphemous under certain Islamic interpretations.

Art, music, dance and PE have all been flagged for sensitivity to Muslim parental concerns about human figures, instruments and mixed-gender contact.

At the same time, the government has urged schools, councils and workplaces to monitor and report "anti-Muslim hostility," complete with a new tsar-style role to oversee the effort.

The working group that helped shape the government's definition of anti-Muslim hostility has drawn particular scrutiny. Every member has documented links to Islamist organisations, including groups successive governments have refused to engage with because of their extreme positions.

The Free Speech Union's investigation laid out the connections in detail, raising obvious questions about bias in a process meant to define acceptable speech about one faith.

The same machinery has already claimed other victims for online jokes. Lucy Connolly was imprisoned for a post on X after the Southport attacks.

After her release on licence, the government threatened to return her to prison for sharing another satirical comment. Her case, like Gray's, shows how quickly a joke can become a criminal matter when it touches the wrong subjects.

Gray's conviction is the latest demonstration that Britain's justice system now treats criticism of Islam as uniquely toxic. A political meme about immigration hotels was waved through. A joke referencing historical facts about the Prophet Muhammad's marriage was criminalised.

The complainant was not Muslim. The posts were not directed at any individual. Thousands of others shared the same content without consequence. Yet a retired police officer who spent his career upholding the law now has a criminal record for a Facebook reshare.

The Free Speech Union is funding Gray's appeal, scheduled for November, and has instructed leading counsel.

The outcome will test whether English courts are prepared to enforce a selective blasphemy code that Parliament deliberately abolished.

For now, the message to ordinary citizens is clear: some jokes are more equal than others, and the state is watching.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Tue, 08/18/2026 - 06:30

Humanoid War Robots Could Soon Patrol US Southern Border To Combat Weaponized Migrant Flows

Building on our February theme that physical AI and humanoid robots would move beyond factory floors and folding laundry in homes into conflict zones and other high-risk environments, US-based Foundation Robotics is now discussing potential national-security deployments of its Phantom humanoid robot along the southern border.

Fox News reporters spoke with CEO Sankaet Pathak, who said the U.S.-based startup, which develops humanoid robots for industrial and military applications, has already demonstrated the capabilities of its Phantom MK1 robots to the Department of Homeland Security for border deployment.

"We're in conversations with almost all national security government bodies, so Air Force, Navy, Army, DHS," Pathak said. "We continue to have dialogues. We're starting to negotiate contracts and some applications for them."

Pathak said Phantom MK1 is designed to navigate rugged terrain that can be difficult for vehicles, drones and fixed cameras. He said potential deployment missions could center on monitoring remote border areas, inspecting tunnels, and flagging migrant crossings.

"If drones and watchtowers were able to solve for everything, why do we still have humans at the border?" Pathak emphasized.

MACHINES ON A MISSION: A U.S. robotics company says its humanoid robots could soon patrol the southern border — autonomously navigating rugged terrain, detecting people, and flagging potential crossings for human agents 24/7.

Foundation CEO Sankaet Pathak told Fox News Digital… pic.twitter.com/GrCstXNmY5

— Fox News Politics (@foxnewspolitics) August 16, 2026

Pathak said Foundation could begin a limited pilot immediately and potentially undertake a larger deployment within several months.

Yet when Fox News asked a DHS spokesperson about the humanoid robots, the person said there is currently no formal arrangement in place.

"The Department of Homeland Security currently does not have any non-contractual agreements, pilots, or active prime contracts with Foundation," the spokesperson said.

In early March, Foundation co-founder Mike LeBlanc told TIME Magazine that the company is in "very close contact" with DHS regarding possible patrol deployments along the southern border.

LeBlanc prepares to hand a shotgun to a PhantomMattia Balsamini for TIME. Source: TIME

Foundation is already a military-approved vendor and holds government research contracts worth $24 million with the U.S. Army, Navy and Air Force. This suggests that these war bots are very close to being tested in war zones.

In fact, testing humanoid robots in Ukraine, which, remember, is the world's AI weapons laboratory, could be coming much sooner than previously thought. Earlier this year, we outlined that the company sent two Phantom MK1 robots to Ukraine for testing.

By July, several Ukrainian news outlets, including United24 Media, said that its military would begin a grant competition to develop humanoid robots for military use as part of a broader push to automate the front line and reduce battlefield risks for its troops.

We suspect Foundation could receive a portion of the grant, potentially incentivizing the company to send additional robots to Ukraine for testing.

Phantom MK1 robots recently participated in a live-fire training exercise in Las Vegas, Nevada.

If and when Ukrainian forces deploy these systems for testing, the modern battlefield will provide a rapid and unforgiving test of their operational effectiveness. Just imagine the videos that would surface on X, humanoids fightings against FPV drone. 

Back to the southern border, the future vision of securing the border will likely include all categories of drones (latest drone report), humanoid robots, and ground bots that will make the border highly militarized to ensure that no hybrid warfare, such as weaponizing migration flows, can be seen, like what was done over the Biden-Harriss regime years, or more recently, the invasion of the Spanish enclave of Ceuta by military-aged men. 

Tyler Durden Tue, 08/18/2026 - 05:45

Trump Doubles Down On Plans To Make Hormuz Strait A US Territory: "A Great Idea" Summary

• Trump repeats declaration that he'll make Strait of Hormuz a "US territory", calling it "a great idea".
• Iran goes "fully offensive": Tehran threatens escalation if diplomacy fails, after last week's military command reshuffle.
• MoU expires: Iran says the US-Iran agreement is effectively dead & "irrelevant". 
• Trump threatens Oman: Trump warns "we'll bomb the s**t out of them."
• Backchannel denied: Tehran rejects Trump's claim of IRGC communications.

//--> //--> Strait of Hormuz traffic returns to normal by September 30?
Yes 12% · No 89%
View full market & trade on Polymarket

*  *  *

Trump Latest Iran Remarks from Oval

President Trump repeated some of the same old talking points while addressing reporters in the Oval Office on Monday. He asserted that Iran wants to make a deal, but "they're not going to make the kind of deal that I feel is necessary."

"Look, we're in there for one reason: Iran cannot have a nuclear weapon," he said. He also doubled down on a prior declaration that he wants to make the Strait of Hormuz a US territory. He said this is "a great idea" - which in effect dispels the notion that when he said it the first time it was mere hyperbole. This is also amid ongoing claims that the US military has "complete control" over the strait.

🇺🇸Trump just doubled down on plans to declare the Strait of Hormuz a U.S. territory, calling it “a great idea.”

Trump did not detail how the U.S. would claim jurisdiction over the strategic shipping lane between Iran and Oman which carries 20% of the world’s oil.…

— NewsForce (@Newsforce) August 17, 2026 Oil Spikes as Hormuz Developments Continue from Bad to Bad

Oil spiking amid a hodgepodge of more 'bad news' Hormuz headlines, as the Iranians have vowed to go on the 'offensive' amid demands that American forces clear out of the region. Fars is currently reporting Iranian forces have seized a UAE oil tanker in the Strait of Hormuz. 

US Energy Secretary Wright has meanwhile vowed that the US Navy will continue getting better at escorting approved maritime traffic across. He confirmed "we are not fully back to full oil flow in the Middle East," according to the Monday comments.

Oil jumps, though its unclear what the precise catalyst might be...

Iran: Shifting from Defensive to 'Fully Offensive'

This should come as no surprise after the much-publicized military command reshuffle of a week ago, but a top Iranian official has told Reuters that the country is shifting from a defense posture to a "fully offensive" one in its conflict with the United States:

• Iran has decided to shift its policy from defensive to a “fully offensive” one, a senior Iranian official tells Reuters
• Iran has set a deadline of a few weeks for the full implementation of the MoU by the US, the official says
• All Iranian entities will be prepared to escalate tensions in the Strait of Hormuz and the region if diplomacy fails, the official warns
• Iran will not wait for the US to continue the naval blockade indefinitely, the official adds

While bonds and stocks moved on the headline, oil was left little impacted - again perhaps become Tehran had already for days been signaling this new 'offensive' messaging as a policy shift...

Meanwhile, Iran is denying earlier Trump claims to have opened up backchannel communications with the IRGC...

Spokesperson for the Revolutionary Guard to Tasnim: Trump's claims about behind-the-scenes talks with the IRGC are delusions stemming from defeat. There are no talks between IRGC officials and Americans

Based on our information and confirmation from foreign ministry officials,…

— barry with the NED (@bonzerbarry) August 17, 2026

And strangely, there was this development: 

Iranian drones target Barzani's Erbil office. Masrour Barzani stated: "my personal office and the home of the head of the Security and Intelligence Agency were targeted by Iranian drone attacks." No casualties were reported.

This is after Axios reported that Nechirvan was the mediator link to the IRGC backchannel. Here's what Axios said in a Sunday report on these prior, secretive diplomatic efforts:

In mid-May, U.S. negotiators trying to reach a deal with Iran to end the war ran into a problem: They couldn't tell if the people across the table actually spoke for the country's powerful Islamic Revolutionary Guard Corps (IRGC).

So Trump administration officials did something unconventional — they went around Iran's negotiators and reached out directly to IRGC leadership. The person they tapped for the backchannel was Nechirvan Barzani, the president of the Kurdistan region in Iraq, who had something very few others do: the trust of both U.S. and IRGC leaders.

Trump Threatens to Bomb Oman if it Gets in Way

President Trump has issued some fresh Monday remarks on Iran, after a weekend where he was relatively quiet on the conflict he launched nearly six months ago, which has long been the central controversial decision made as Commander-in-Chief, threatening to define his whole second term. In a short interview with Fox News reporter Trey Yingst, who frequently reports from Jerusalem and the Middle East, Trump threatened to bomb Oman if the Gulf country "gets in the way" of US efforts to negotiate and strike a favorable peace deal with Iran.

"I asked the president about... parallel talks that are taking place between Iran and Oman about control of the Strait of Hormuz," Yingst introduced. Trump then responded: “if Oman gets in the way [of US control in the Strait of Hormuz], we'll bomb the s**t out of them."

But already, Oman and Iran have been hammering out a nearly finalized Hormuz Strait deal, which essentially cuts the United States out of negotiations and management of the vital energy transit waterway. The deal is widely seen as ceding to Tehran de facto control of the strait, and thus also giving the Iranians major continued leverage in the ongoing standoff and conflict with Washington.

The timing of Trump's remarks are further interesting given that on the same day, 60-day window established in the Memorandum of Understanding (MoU) inked between the US and Iran in June has finally expired.

Iran's Foreign Ministry on Monday made clear its position that the deadline was "irrelevant" anyway given that talks never began as the US resumed hostilities. Spokesman Esmaeil Baqaei said that under the MoU, the ceasefire window intended to give the two sides time to discuss "the nuclear issue" and "the lifting of sanctions"; however he charged the US with violating the terms and thus destroying the chance for talks.

Trump: Bachchannel with IRGC Open, Which Iran Then Denies

But despite that the MoU will now go down as another failed opportunity, President Trump surprisingly raised another avenue, telling Fox that there is a backchannel with the Iranian Revolutionary Guard Corps (IRGC) officials. The IRGC of course represents a 'hardline' aspect to Iranian governance and military command structure, and so it's surprising that this would be Trump's alleged backchannel. To be expected, Tehran has been quick to deny this on Monday.

Trump asserted that Iran should raise "the white flag of surrender" - but that he has "no time schedule" and is in "no hurry" to make a deal. He noted his observation that the Iranian's are "good poker players, but they're dying," said Trump.

In the interview the president was also asked about widespread reports that the Pentagon is running out of missiles - of both defensive interceptor and offensive variety - due to the Iran and Ukraine wars:

Regarding US munitions used against Iran, Trump said that what has been used so far against Iran "is peanuts."

Trump added that while the US has many mid-level weapons, many of the more advanced weapons, including air-defense systems, were "given away" to Ukraine by former US President Joe Biden.

Trump separately on Monday reiterated the following warning on nuclear weapons in fresh Truth Social Post:

Trump Admin 'Very Lucky Oil Prices Haven't Ballooned'

In the meantime there continues to be nothing but bad options for the administration. Tehran will seek to bleed, pressure, and humiliate Trump going into the November midterms. Iran wants global economic and energy pain to come back and bite Americans, and thus sink Republicans in Congressional elections.

Joey Hood, former acting director of the Office of Iranian Affairs at the US State Department, has pointed out that Trump has encouraged Americans to see higher prices as "a very small tax in exchange for making sure that Iran doesn’t get a nuclear weapon."

Hood underscored, "But I don’t think any of those objectives have really been reached." He explained, "The Trump administration is very lucky that oil prices haven't ballooned, because countries around the world have taken measures to try to absorb the shock. There are also still ships getting through the strait, perhaps by turning off their transponders and passing through undetected."

The Iranians have been signaling that they have moved from a defensive posture to an offensive one, which they warn will be more aggressive in dealing with Washington action and provocation. 

Tyler Durden Tue, 08/18/2026 - 05:44