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👀 Today’s Stories at a Glance
✈️ Houthis hit Riyadh’s airport: A missile killed 13 at Saudi Arabia’s main airport, Trump said the US “may” join in, and Brent hit a 2-week high.
🛢️ Trump turns to Russian diesel: Trump announced 4.8 million tons of Russian diesel, and oil’s dip on the news reversed within hours.
🧾 Wednesday’s inflation test: Economists expect September prices up 0.6% on the month, mostly gasoline, with core seen at just 0.2%.
🇰🇷 Korea catches up, hard: The Kospi fell 3.65% after a holiday as foreigners sold 2.02 trillion won and retail investors bought.
🤖 Nvidia eyes Reflection AI: Nvidia is in early talks to deepen its $800 million stake in Reflection AI or buy it, the FT reported.
🌀 Gulf oil restarts slowly: Isaias left 69% of Gulf of Mexico oil output shut on Saturday as Shell and Chevron sent crews back.
🚗 VW deliveries drop 14.3%: Volkswagen delivered 1.89 million cars in the third quarter, with China down 38.5%, and its shares still rose.
🪙 Bitcoin back above $84,000: US bitcoin ETFs took in $21.1 million on Friday after 2 heavy days of selling.
🐂 The bull market turns 4: The S&P 500 has more than doubled since its 12 October 2022 low of 3,577.03.
📈 Zoom above both Deep Trends: Chart of the Day covers the $107.25 resistance, $123.98 above it, and the Deep Trend at $90.12 and $75.82.
🎥 Premium member event: Sensei Desk chart requests on 17 stocks, the silver levels I’m watching, and a Portfolio Challenge review with no new buys.
🧠 One Big Thing
Oil dipped on Trump’s Russian diesel deal overnight and had climbed back by the European morning. Brent was at $103.18 in early Asian trading, then rose above $105.50, its highest in more than 2 weeks, as the Houthis kept firing at Saudi Arabia. Goldman Sachs puts just over $20 of the price down to risk alone. So fuel stays expensive, and fuel feeds straight into Wednesday’s US inflation figure, expected to show prices up 0.6% in September. Core inflation, expected at 0.2%, is the number that shows whether costly fuel is spreading into everything else.
⚖️ Fear & Greed
📉 The Number That Matters
Just over $20
Goldman Sachs estimates just over $20 of Brent’s roughly $105 price is risk premium, the extra paid for fear of lost supply, even as it raised its December forecast to $90.
✅ 5 Things to Know
✈️ Houthi missiles shut Saudi Arabia’s main airport
A Houthi missile hit King Khalid International Airport in Riyadh on Saturday 10 October, striking the complex that houses terminals 3 and 4. The death toll rose to 13, including an American, after an Indian national died of his injuries on Sunday, and Saudi aviation authorities said 309 were injured. It was the deadliest attack in a Gulf Arab country since the Iran war began. The airport has stayed shut since, and Lufthansa has suspended Riyadh flights until 16 October. The Houthis have declared Saudi airspace a zone of military operations. Times of Israel Euronews
Asked whether the US would join Saudi strikes on the Houthis, President Trump said: “We may. We’re going to look at it.” On Thursday he had ruled out attacking Iran before the 3 November midterms. The Houthis are backed by Iran, and that pledge named Iran alone. Another projectile hit the airport on Sunday and started a fire, and the Houthis blamed Saudi Arabia for overnight airstrikes on Sanaa. At sea, a drone hit a tanker near Sohar in Oman and a projectile damaged another in the Strait of Hormuz, the UK’s maritime agency UKMTO reported. Brent rose above $105 on Monday, its highest in 2 weeks, CBS News reported. CBS News Business Standard
Sensei’s Insight: Trump’s promise on Thursday covered Iran. It said nothing about the Houthis, and they have now hit the capital of the world’s biggest oil exporter. Is that priced? Goldman thinks about $20 of fear is already in Brent, and the price went up again on Monday. What I am watching is whether the US joins in.
🛢️ Trump turned to Russia for diesel
4.8 million tons. That is how much diesel President Trump said Russia has agreed to supply to world markets. More than 300,000 tons come straight away, which Reuters put at about 2.25 million barrels. Another 500,000 tons follow in November, 1 million tons after that and 3 million tons later. The Treasury issued a temporary licence on Friday 9 October allowing Russian diesel to be sold and shipped, including into the US, until 7 April 2027. On Sunday Trump also announced an “energy ceasefire” between Russia and Ukraine, which Volodymyr Zelensky said “was news for me”. Time Business Standard
Will it bring diesel down quickly? The first batch is small. It equals roughly 2 hours of world diesel use, on the IEA’s estimate of about 29 million barrels a day. ICE gasoil futures, Europe’s diesel benchmark, fell 3% in early Asian trading, and Brent fell 1.47% to $103.18 by 2:54am UK, Reuters reported. Business Standard
The dip lasted a few hours.
Brent was back above $105 by the European morning. “Any hope that Trump’s deal with Putin might help bring down prices has been negated by the flare-up in the Houthi conflict,” said Chris Beauchamp of IG. US diesel averaged $6.28 a gallon on 11 October, AAA said, down from a peak of $6.53 on 22 September. A 2022 law bans Russian energy imports, and Senator Thom Tillis said “there’s a legitimate case for saying the president’s not following the law.” Zelensky called the decision “weak”. Time Reuters via Investing.com
Sensei’s Insight: Diesel moves everything: lorries, farms, ships. Europe’s diesel price dropped 3% on the headline alone, and crude gave the dip back within hours. The first batch covers about 2 hours of world demand. What I am watching is whether the ships sail, and whether Congress blocks it.
🧾 US inflation lands Wednesday, with fuel doing the work
How much of September’s inflation is fuel? Most of it, on the forecasts. Economists expect consumer prices to have risen 0.6% in the month, up from 0.4% in August, according to the Westpac calendar cited by investingLive. Energy is forecast to rise about 5.5%, led by gasoline, which was already more than 27% dearer than a year earlier in August. Core prices, which strip out food and energy, are expected to rise just 0.2%, after 0.3%. The Cleveland Fed’s own model points to 0.5% on the month and 3.6% on the year. investingLive
Households are already braced. The University of Michigan survey on Friday put expected inflation over the next year at 4.7%, up from 3.4% in February, the Associated Press reported. The US bond market is shut on Monday for Columbus Day, with the 10-year yield last at 5.24%. Cleveland Fed president Beth Hammack speaks at 5:50pm UK (12:50pm New York). The figures are out on Wednesday at 1:30pm UK (8:30am New York). CME FedWatch put the chance of a rate rise at the 28 October decision at 19%, Reuters reported. AP via Click2Houston Reuters via Investing.com
Sensei’s Insight: The headline will look hot because petrol went up in September. Core is where fuel shows up in everything else, so 0.2% is the number I am reading first. A core figure well above that could bring an October rate rise back into play.
🇰🇷 Korea came back from a holiday and sold its chipmakers
Seoul was shut on Friday for Hangeul Day, so Korean investors met Thursday’s US tech sell-off and Friday’s partial rebound in a single session on Monday. The Kospi fell 3.65% to 6,384.24, trading below 6,400 for the first time since 11 August. Samsung Electronics dropped 4.4% to 250,500 won and SK Hynix 4.5% to 1,605,000 won. The smaller Kosdaq lost about 4.8%. Invezz Aju Press
Who sold? Foreign investors, a net 2.02 trillion won, and institutions another 110.7 billion won. Retail investors bought 1.47 trillion won. Mirae Asset Securities analyst Kim Seok-hwan said the 2 chipmakers were absorbing “AI-bubble concerns stemming from the OpenAI revenue debate”. That debate started with last week’s report that OpenAI’s annual revenue was about $20 billion below earlier figures. Samsung had guided on 8 October to a record 107.4 trillion won of quarterly operating profit. Aju Press Invezz
Sensei’s Insight: A record profit forecast and a 4.4% fall in the same share. That tells me the selling is about how much was already priced in. Foreigners sold. Local retail investors took the other side with 1.47 trillion won. What I am watching is whether the foreign selling slows this week.