Market Moment
The week ended in the green. At Friday’s close the S&P 500 rose 0.6% to 7,811, the Nasdaq 0.64% to 27,366 and the Dow Jones 0.8% to 51,655. Tuesday’s record (7,819) stayed just a few points out of reach.
Telecom carnage. SpaceX agreed to buy Grain Management’s 800 MHz spectrum for roughly $8 billion (still subject to FCC approval). T-Mobile fell about 13%, AT&T 11% and Verizon 10%, while tower operators rose. The market sees Starlink turning from a satellite provider into a direct rival to mobile carriers.
Bonds do not budge. The 10-year US yield is 5.24%. The University of Michigan consumer sentiment index fell to 46.3, its current-conditions gauge hit a record low (44.7), and one-year inflation expectations rose to 4.7%. Gloomy mood with rising price expectations leaves the Fed no room.
Commodities and crypto. WTI about $91.7, Brent $104.7 (+0.4%). Gold about $4,196 an ounce. Bitcoin about $82,400. I found no reliable DXY figure.
Lithuania and the Baltics
Prisons and land rules. The government simplified the sale and lease of state land. Most of the €36 million in Norwegian aid is earmarked for the Vilnius and Kaunas prisons. The head of the Prison Service is pressing for a pre-trial investigation into a former minister’s actions (LRT).
Defence money sits idle. President Gitanas Nausėda says Lithuania is struggling to spend the funds allocated to defence. With the draft budget promising 5% of GDP for defence, the issue is execution, not headlines: money without contracts and suppliers stays on paper.
Evacuation plan. In case of a military threat, the port of Klaipėda could become a civilian evacuation hub (LRT). In Latvia, an armed incident on the Belarus border has prompted talk of a new security reality.
Train discount and wind. A 50% train fare discount is back to offset costlier fuel. The energy crisis added more than €4 million to Lithuanian Railways group costs this year. Strong wind cut power to between 1,300 and 2,500 customers.
Prosecutors question LRT. The prosecutor’s office questioned the public broadcaster, and a former judge warns of censorship risks. According to LRT, Morningstar DBRS affirmed Lithuania’s high credit rating. I did not verify the exact wording at the primary source, so treat with caution.
Europe
Sanctions package. Germany said it will not ease sanctions on Russia, and the EU is preparing what is reported to be the largest package since the war began. Foreign ministers are due to approve it formally in Luxembourg on October 12. EU foreign policy chief Kaja Kallas says this is not the time to ease pressure.
Ireland’s knife at the budget. Ireland proposes cutting the next EU budget by €140 billion. With defence and Ukraine demanding more, net contributors want to pay less.
Polish schools. Three people were stabbed at a Warsaw school on Saturday. 76 people have been detained after the attacks on Polish schools.
Ukraine
Diesel for sanctions. On Friday Donald Trump announced a deal with Putin on Russian diesel: more than 300,000 tonnes immediately, another 500,000 in November, then a million, possibly a further three million tonnes depending on the state of refineries damaged by strikes. The US Treasury issued a temporary licence valid until April 7, 2027. Zelensky called it a gift to Putin. Axios links the deal to Kyiv’s refusal to halt strikes on Russian oil refining (tier B, single source).
Europe’s reaction. Finnish PM Petteri Orpo called the deal a “terrible disappointment” and doubted the deliveries would happen at all. Estonian PM Kristen Michal called it a major mistake. Germany says Russian diesel will not enter its market.
Russian air defence. Radio Free Europe reports that Russia, short of weapons, is cutting its Arctic air defence forces. A Russian strike on Pryluky (Chernihiv region) on October 7 killed five people. I could not reliably confirm Saturday night’s strikes.
Geopolitics
Hormuz stays nearly shut. IMF PortWatch recorded only 4 transits on October 4, against 85 a day before the crisis. According to USNI News, nine ships were hit in or near the strait and off Oman between October 1 and 6. US officials insist the strait is not closed, while the IRGC says it stays closed until its demands are met. The contradiction between the US and Iranian accounts remains unresolved.
Riyadh airport. On Saturday a Houthi missile strike on Riyadh’s King Khalid airport was reported. Citing Reuters and AP, Terminal 3 was evacuated and flights diverted to Jeddah. Casualty figures conflict and I found no official Saudi confirmation (some sources are tier C). Oil may react on Monday.
Diesel and elections. US diesel costs about $6.28 a gallon, roughly 70% above pre-war levels. With congressional elections on November 3, Trump is drawn to any deal that lowers pump prices.
IPO Radar
SpaceX economics. The $8 billion purchase shows SpaceX has the capital to buy into a sector where it had no position. It lifts the Starlink valuation story ahead of a possible listing.
What to Watch Tomorrow
Oil at Monday’s open. The Riyadh strike and the Russian diesel deal pull the price in opposite directions.
October 12 EU ministers’ meeting. Whether the sanctions package is approved unchanged after Trump’s diesel decision.
October 14 US September CPI. It decides whether yields stay above 5%.
Budget to the Seimas by October 17. Whether the deficit stays at 3.8% of GDP.
FOMC October 27-28. The market currently prices a hike at 17-20%.
The Bear’s Comment
Diesel. When the war over Iran pushed up pump prices, Washington started trading sanctions on Russia for litres before an election. Structurally it is the same old logic: a hegemon squeezed by prices borrows energy from its adversary, while allies are left with their moral statements.
Meanwhile the bond market, with the decade yield above 5.2%, is a reminder that politicians are not the ones really in charge. Stocks held up for a week, but Hormuz, Riyadh and debt fit on a single line of the cycle: the era of cheap capital and cheap energy is over.