US and Europe: Bonds Dictate, Stocks Obey
On October 1, the S&P 500 rose 0.2% to 7,666, the Dow held at 50,926, and the Nasdaq barely moved. The yield on 10-year US Treasuries first hit a 24-year high, then pulled back. In Europe the picture is harsher: London lost 1.7%, Paris 1.6%, and Frankfurt 1%. The conclusion: elites fear not a specific war, but the price of money. Europe, where the debt market is more fragile, pays for it first.
Oil: The $100 Line Holds
Brent settled above $100 and ended the week at $102.25, with WTI at about $91.10. The gap between them has widened to $11. This means the shortage of physical oil outside the US is felt more acutely. None of the major players is pricing in a quick peace; otherwise the spread would have collapsed.
Defense Sector: Stocks Fall, Orders Rise
The US defense ETF ITA has lost as much as 18% from its August record. Northrop trades at around $484 against a peak of $767, while L3Harris is 22% below its annual highs and has postponed the IPO of its missile unit until mid-2027. Meanwhile, Boeing has won the F/A-XX fighter program worth $20 billion, Raytheon has received a contract of up to $20.7 billion for AMRAAM missiles, and the 2027 budget request stands at $756.8 billion. The conclusion: the stock market overbought defense in the summer and is now taking profits, but the state pays for war as for long-term work. The market doubts the prices; the government does not.
A New Bet: Autonomous Warfare
The Pentagon has created an Autonomous Warfare Command. Elite money is moving away from heavy hardware and into drones, counter-drone systems, and AI.
.png){kind=icon}
.png){kind=icon}
.png)
.png){kind=icon}
