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Oct 17, 2018

Yemen on brink of 'world's worst famine in 100 years' if war continues | Global development I The Guardian


Hannah Summers

Yemen could be facing the worst famine in 100 years if airstrikes by the Saudi-led coalition are not halted, the UN has warned.
If war continues, famine could engulf the country in the next three months, with 12 to 13 million civilians at risk of starvation, according to Lise Grande, the agency’s humanitarian coordinator for Yemen.
She told the BBC: “I think many of us felt as we went into the 21st century that it was unthinkable that we could see a famine like we saw in Ethiopia, that we saw in Bengal, that we saw in parts of the Soviet Union – that was just unacceptable.
“Many of us had the confidence that would never happen again and yet the reality is that in Yemen that is precisely what we are looking at.”
Yemen has been in the grip of a bloody civil war for three years after Houthi rebels, backed by Iran, seized much of the country, including the capital, Sana’a. The Saudi-led coalition has been fighting the rebels since 2015 in support of the internationally recognised government.
Thousands of civilians have been caught in the middle, trapped by minefields and barrages of mortars and airstrikes. The resulting humanitarian catastrophe has seen at least 10,000 people killed and millions displaced.
Speaking on Sunday evening, Grande said: “There’s no question we should be ashamed, and we should, every day that we wake up, renew our commitment to do everything possible to help the people that are suffering and end the conflict.”
Her comments came after the UN and humanitarian workers condemned an airstrike in which the Saudi-led coalition targeted Yemen’s Shia rebels, killing at least 15 people near the port city of Hodeidah.
Video footage released by the rebels showed the remains of a mangled minibus littered with groceries following the attack on Saturday, which left 20 others injured.
The Houthi rebels reported that five members of the same family were among those killed, adding that many children were among the casualties.
“The United Nations agencies working in Yemen unequivocally condemn the attack on civilians and extend our deepest condolences to the families of the victims,” said Grande.
She added: “Under international humanitarian law, parties to the conflict are obliged to respect the principles of precaution, proportionality and distinction. Belligerents must do everything possible to protect civilians not hurt, maim, injure or kill them.”
Hodeidah, with its key port installations that bring in UN and other humanitarian aid, has become the centre of Yemen’s conflict, with ground troops allied to the coalition struggling to drive out the rebels controlling it.
The killing and maiming of civilians including many children in the Red Sea city of has soared in the last three months according to aid workers.
Since June more than 170 people have been killed and at least 1,700 have been injured Hodeidah province, with more than 425,000 people forced to flee their homes.
A Gulf coalition led by Saudi Arabia and the United Arab Emirates has been trying to wrestle back control of the strategic port city.
If the array of Yemeni militias takes the city it would be their biggest victory against the rebels, although the battle on the Red Sea coast also threatens to throw Yemen into outright famine.
Last month Save the Children warned the fighting was turning into a “war on children” with thousands suffering life-changing injuries in the attacks.
On a visit to Yemen the charity’s CEO, Helle Thorning-Schmidt, warned attacks on schools and hospitals were on the rise, with children on the frontline of violence and medics unable to cope with the influx of the wounded.
Meanwhile the country’s currency has collapsed and food prices have doubled in the last month, fuelling the threat of famine.

European Markets at Close Report: European markets turn lower amid disappointing car sales I CNBC


Silvia Amaro, Sam Meredith




European stocks turned lower in early afternoon trading, dragged down by auto stocks.
FTSE FTSE 100 7031.92 -27.48 -0.39% 432309564
DAX DAX 11713.31 -63.24 -0.54% 70044082
CAC CAC 5138.99 -34.06 -0.66% 62655649
The pan-European Stoxx 600 closed provisionally lower by 0.44 percent with investors tracking corporate earnings.
Auto stocks fell as much as 1.3 percent, with Peugeot down by 4.7 percent and Renault off by 4 percent. This was after news that European car sales dropped 23.4 percent in the month of September. Volkswagen, Fiat and Renault led the slump, Reuters reported.
The sector had already been placed under pressure by a note from Goldman Sachs that forecast a tricky third quarter for European auto makers.
Europe's technology stocks were the top performers. ASML was the top sectoral performer, after the Amsterdam-listed stock beat profit expectations in the third quarter. Its shares jumped 4.8 percent.
Looking at individual stocks, Dutch paints and coatings maker Akzo Nobel was trading close to the top of the European benchmark. Its shares were more than 3 percent higher after the company said core profit jumped 8 percent.
Meanwhile, shares in Germany's Fresenius Medical Care slumped to the bottom of the index after the medical group cut its 2018 sales and income outlook due to the under-performance of its U.S. business. Shares tanked 17 percent on the news.
On Wall Street, stocks fell at the open as volatile trading continued through the start of the earnings season.

Brexit talks

Investors are also monitoring a crunch EU summit in Belgium later. U.K. Prime Minister Theresa May is likely to urge other EU leaders to give ground on the issue of the Irish border when she address them in Brussels on Wednesday.
The post-Brexit status of the Irish border remains a sticking point for negotiators, with both sides unable to agree on how to avoid a so-called hard border when Britain leaves the EU on 29 March next year. Ahead of the summit, European Council President Donald Tusk said there were "no grounds for optimism" over a Brexit deal.

Jamal Khashoggi: gory reports of killing emerge as Pompeo meets Erdoğan | World news I The Guardian


Bethan McKernan


Mike Pompeo, the US secretary of state, has landed in Ankara for crisis talks with the Turkish president, Recep Tayyip Erdoğan, over the journalist Jamal Khashoggi as pro-government Turkish press published what it said were leaked gory details of his alleged murder in the Saudi consulate.
The dissident journalist was killed minutes after he arrived at the building in Istanbul to pick up marriage paperwork on 2 October, according to US and Turkish press reports of what the officials said were audio recordings that prove he was beaten and drugged, then brutally killed and dismembered.
On Tuesday, Donald Trump defended Saudi Arabia in the face of mounting allegations that Riyadh was involved in the Saudi journalist’s alleged killing.
The Wall Street Journal, citing Turkish official who had heard the recording, said Khashoggi was allegedly killed and dismembered in the office of the Saudi consul general, Mohammad al-Otaibi, who was in the room at the time. A voice on the recording can be heard inviting him to leave, the report said.
Salah Muhammad al-Tubaigy, a Saudi military forensics official,is reportedly heard putting on headphones to listen to music as he begins to dismember the body, and encourages other people in the room to do the same.
According to Middle East Eye, Khashoggi was dragged from the office to Otaibi’s study next door, where Tubaigy began cutting up his body on a table while he was still alive.
Pompeo met Erdoğan and the Turkish foreign minister, Mevlüt Çavuşoğlu, within the confines of Ankara’s Esenboga airport on Wednesday morning, a day after Erdoğan had said police had found freshly painted walls and “toxic” substances during a search of the consulate, where Khashoggi was last seen alive two weeks ago.
Turkish media said on Wednesday that Pompeo was expected to bring answers with him from Riyadh, his previous stop, where he met with King Salman, Crown Prince Mohammed bin Salman and the foreign minister, Adel al-Jubeir. Pompeo described the visit as “highly successful” and said the Saudis had promised to carry out a “thorough, complete and transparent investigation”.
The US secretary of state’s faith in the Saudi authorities to cooperate with the investigation into Khashoggi’s fate was echoed by Trump, who said in an interview with the Associated Press on Tuesday night that Riyadh had again denied it had anything to do with the journalist’s disappearance and remained “innocent until proven guilty”.
Donald Trump says 'rogue killers' may have murdered Jamal Khashoggi - video
The US’s defence of its most important Arab ally may become harder to maintain as further details into Khashoggi’s alleged murder emerge and its links to the powerful crown prince.
On Tuesday, the New York Times reported that four of the men identified by Turkish media as part of a 15-man hit squad sent from Riyadh to silence Khashoggi were members of Bin Salman’s personal security detail. Another, Tubaigy, holds a senior position in the Saudi interior ministry.
The suspects’ direct links to the Saudi establishment weakens the suggestion made by Trump that the alleged murder could have been carried out by “rogue killers” in an unauthorised operation.
Investigators believe Khashoggi’s body was then taken to the consul general’s house nearby, where it was disposed of.
Police set up barricades outside on Tuesday evening in order to carry out a planned search of the premises, but Turkey is waiting for a joint agreement with Saudi Arabia to do so. Under the Vienna convention, diplomatic missions are considered foreign soil.
The consul general, who has not been seen in public since the scandal erupted, left Turkey on a commercial flight to Riyadh hours before his residence became part of the criminal investigation.
A search of the house and some diplomatic vehicles was planned for Wednesday evening, as well as a second sweep of the consulate.
The G7 foreign ministers said in a statement on Wednesday that they remained “very troubled” by Khashoggi’s disappearance.
“We, the G7 foreign ministers, of Canada, France, Germany, Italy, Japan, the United Kingdom, the United States of America, and the high representative of the European Union, affirm our commitment to defending freedom of expression and protection of a free press.
“Those bearing responsibility for his disappearance must be held to account. We encourage Turkish-Saudi collaboration and look forward to the Kingdom of Saudi Arabia conducting a thorough, credible, transparent, and prompt investigation, as announced.”

Before the Bell Update: Nasdaq set for big gain after strong Netflix earnings, broader may struggle at the open I CNBC


Fred Imbert, Spriha Srivastava


U.S. stock index futures pointed in different directions on Wednesday as investors digested earnings from companies like Netflix.
At around 7 a.m. ET, Nasdaq 100 futures pointed to a gain of 46.32 points, or 0.6 percent. S&P 500 futures indicated a flat open while Dow Jones Industrial Average futures pointed to a slight decline.
Netflix shares were up 11 percent in the premarket after the streaming giant posted third-quarter earnings that easily beat expectations. The big beat was driven by stronger-than-expected subscriber growth in both the U.S. and overseas.
Traders work beneath a monitor displaying General Electric Co. signage on the floor of the New York Stock Exchange.
Bloomberg | Bloomberg | Getty Images
Traders work beneath a monitor displaying General Electric Co. signage on the floor of the New York Stock Exchange.
J.P. Morgan said in a note the company is "back on track" following the release of its latest results. "While quarters can be lumpy, the bigger picture path is consistent, & we continue to believe there is significant growth potential ahead," J.P. Morgan said.
CSX and Cree also reported better-than-expected earnings Tuesday after the close, while M&T Bank and U.S. Bancorp's results topped estimates Wednesday before the bell.
Wednesday's moves come a day after the major indexes posted their best day since March, boosted by strong earnings. On Tuesday, the Dow surged more than 500 points as Goldman Sachs, Johnson & Johnson, and UnitedHealth jumped.
Overall, the earnings season is off to a good start. Of the S&P 500 companies that have reported thus far, 89.8 percent have topped analyst expectations, according to FactSet.
On the data front, housing starts data for September are expected at 8:30 a.m. ET. At 2 p.m ET, the Federal Open Market Committee will release the minutes of its meeting held in late September.
Meanwhile, at 12:10 p.m. ET, U.S. Federal Reserve Bank Governor Lael Brainard — a voting member on the Fed's policy setting committee — will give a speech at the "Fintech, Financial Inclusion — and the Potential to Transform Financial Services" conference at the Federal Reserve Bank of Boston.

Stocks making the biggest move premarket: NFLX, IBM, CSX, UAL, TEVA & more I CNBC


Peter Schacknow



Check out the companies making headlines before the bell:

Netflix – Netflix reported quarterly profit of 89 cents per share, easily beating the consensus estimate of 68 cents a share. Revenue was in line with Street forecasts, and the important metric of net subscriber additions was well above analysts' expectations for the video streaming service.
IBM – IBM beat estimates by 2 cents a share, with adjusted quarterly profit of $3.42 per share. Revenue fell short of forecasts as it dropped 2.1 percent from a year earlier. IBM had seen revenue rise year-over-year for three straight quarters after a nearly six-year stretch of revenue declines. IBM also saw its share of revenue from its faster growing businesses like cloud computing fall to less than 50 percent of total revenue.
CSX – CSX earned $1.05 per share for the third quarter, topping estimates by 11 cents a share. The rail operator's revenue also beat forecasts, Results were helped by cost-cutting and higher prices for freight delivery.
United Continental – United Continental fell a penny a share short of consensus estimates, with adjusted quarterly profit of $3.06 per share. The airline's revenue did come in above forecasts, however, as it posted its best quarterly growth since 2010. United also raised its full-year outlook for the third time this year. Additionally, Deutsche Bank upgraded United, as well as rivals Delta Air Lines and American Airlines after the carriers recaptured a larger amount of their increased fuel expense than analysts had anticipated.
Teva Pharmaceutical – According to a Reuters report, pharmacy benefits manager Express Scripts will cover new migraine drugs from Eli Lilly and Amgen, but is excluding another medication made by Teva Pharmaceutical. That follows price negotiations with all three drug companies.
Winnebago – The recreational vehicle maker earned 94 cents per share for its fiscal fourth quarter, 3 cents a share above estimates. Revenue also beat Street forecasts. Winnebago saw smaller profit margins during the quarter, though cost saving initiatives and pricing adjustments helped offset higher costs.
U.S. Bancorp – The bank reported quarterly profit of $1.06 per share, beating estimates by 2 cents a share. Revenue also came in slightly above forecasts. Both profit and revenue reached record levels during the quarter.
U.S. Steel – Workers at the steel maker will get their biggest wage hike in six years, after the United Steelworkers union struck a tentative pact with U.S. Steel. Sources quoted by Reuters say the pact provides for a cumulative 14 percent wage hike.
Fresenius Medical Care – Fresenius cut its full-year forecast due to slower growth in its North American dialysis business. North America is the Germany-based company's largest market.
Pearson – The British company said it would return to profit growth this year, even as it faces difficulties in its U.S. higher education textbook unit.
Xerox – Xerox was dealt a setback in court, as Japan's Fujifilm won an appeal in its battle with the office equipment company over their aborted merger deal. Xerox abandoned the proposed $6.1 billion deal earlier this year following opposition by major shareholders Carl Icahn and Darwin Deason.
Target – Target is adding extra space dedicated to its toy business for the holiday season, as it tries to win more toy sales after Toys R Us went out of business earlier this year.
General Electric – GE will reportedly win a $15 billion Iraq power generation contract, according to the Financial Times. Sources tell the paper that Germany's Siemens was close to winning the deal, but the White House put pressure on Iraq to award the contract to a U.S. company.
Home Depot, Lowe's – Both stocks were both downgraded to "neutral" from "outperform" by Credit Suisse, with valuation cited for both home improvement retailers. Credit Suisse is also concerned about the impact of higher interest rates on the housing market.
Roku – Roku plans to resume sales of its video streaming devices in Mexico within a few weeks, following a favorable court ruling. Roku sales had been banned in Mexico for more than a year in a dispute involving hackers offering pirated content.

The Finance 202: The GOP's paradox: The economy is popular, but Trump is not I The Washington Post


By Tory Newmyer


THE TICKER

President Trump speaks during an interview with The Associated Press in the Oval Office on Tuesday. (AP Photo/Evan Vucci)
President Trump is a historically unpopular president presiding over a historically strong economy, a singular state of affairs scrambling expectations for Republicans three weeks ahead of the midterms. 
The GOP paradox played out on the president’s Twitter feed on Tuesday. He interrupted a stream of personal grievance-airing to amplify a message fellow Republicans welcome:
Incredible number just out, 7,036,000 job openings. Astonishing - it’s all working! Stock Market up big on tremendous potential of USA. Also, Strong Profits. We are Number One in World, by far!
— Donald J. Trump (@realDonaldTrump) October 16, 2018
Trump actually understated the good news on job openings. The figure is 100,000 openings higher, a record high in the 16-year history of the Labor Department survey. The stock market surged Tuesday on that news, and reports of some strong corporate profits, pushing the Dow Jones industrial average up 548 points and erasing some of last week’s losses.
Yet Trump bracketed that focus on the positive with a slew of insults lobbed at a variety of foes, which are helping keep his approval ratings underwater. He called the adult-film actress who alleges an extramarital affair with him “Horseface”; railed about the investigation into his campaign’s Russia ties while slamming his own attorney general; recycled his denigrating nickname for Sen. Elizabeth Warren (D-Mass.); and blasted the media for raising questions about his financial ties to Saudi Arabia.
“It’s an intriguing, mixed bag,” says Micah Roberts, a partner with the Republican polling firm Public Opinion Strategies.
History is, of course, against the  president's party gaining seats in a midterm election-- and results are worse when that president is unpopular. Since World War II, a president polling below 50 percent approval has seen his party lose an average of 37 House seats in the midterms (this year, Democrats need to net 23 seats to gain control of the chamber). And Trump told the AP yesterday that he wouldn't take responsibility if Republicans lost the House majority as is predicted. "No, I think I’m helping people," Trump said.
Trump’s approval has never broken into positive territory. At the same time, several measures of economic sentiment show after a years-long funk, Americans are finally believing in a brighter future for themselves and the country. “It’s very difficult to make that traditional connection between his unpopularity and other things moving in a consistently positive direction,” Roberts says. 
Indeed, a record-high 48 percent of respondents to CNBC’s new All-America Economic Survey said they are optimistic about the economy now and for its future. Those results — from polling done by Roberts’s firm along with the Democratic Hart Research Associates — match the findings of the latest Economic Anxiety Index, out this morning from Marketplace and Edison Research. The index is hitting an all-time low in its three-year history, with fewer respondents describing themselves as frequently or sometimes anxious about their financial situation than in any previous survey.

Stormy Daniels. (AP Photo/Markus Schreiber)
The Marketplace poll shows 60 percent of Americans say the economy is strong, up 7 points from earlier this year. And among that group, nearly two-thirds credit Trump, though a slightly higher number also credit the private sector. The CNBC poll found Trump earning narrow approval for his economic policies. But, tellingly, by a 21-point margin, respondents say they are concerned about his temperament.
The result tracks with the most recent Washington Post-ABC poll, which found the president earning net positive reviews of his economic stewardship for the first time, with 49 percent approving of his handling of the economy while 46 percent disapproved.
But as The Post’s Scott Clement and Dan Balz noted, the president’s improved standing “has not translated into similar Republican gains on the generic ballot because a record 90 percent of those who say they disapprove of the president now say they are supporting Democratic House candidates, up from 83 percent in August.”
The poll found voters trust Republicans over Democrats on the economy, 45 to 41 percent, though Democrats hold leads on five other top issues. Overall, Democrats hold a 7-point edge over Republicans on dealing with the main problems facing the nation; when Democrats retook the House in 2006, they led on that question by 19 points.
Roberts said satisfaction with the economy could mute Democratic anger against Trump. “Angry people vote,” he said. And there should be less anger because of the robust economy. “That’s what makes this such an interesting election: There are a lot of signals that would make you want to believe the election will go one way or the other, and they’re pushing against each other… A trend’s only a trend until it’s not.”
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MARKET MOVERS

Trump and Jay Powell last year. (Reuters/Carlos Barria)
Trump calls Fed his “biggest threat.” AP's Martin Crutsinger: “Stepping up his attacks on the Federal Reserve, [Trump] declared Tuesday that the Fed is 'my biggest threat' because he thinks it’s raising interest rates too quickly. Trump said he doesn’t speak with Chairman Jerome Powell because of the Fed’s political independence but said. “I’m not happy with what he’s doing because it’s going too fast” in raising rates at a time when inflation has remained relatively low. Asked about his decision as president to replace Janet Yellen with Powell, Trump said: 'Can I be honest, I’m not blaming anybody. I put him there and maybe it’s right, maybe it’s wrong but I put him there.”' Trump made his comments in an interview with Fox Business Network’s Trish Regan."
As Fed could drop clues about its rate-hiking path. Bloomberg's Jeanna Smialek and Ivan Levingston write that the minutes from the latest Fed meeting “set for release at 2 p.m. Wednesday in Washington are unlikely to offer answers, but they may drop a few hints about how officials are thinking... The flurry of Fed-speak has made it clear that officials still think policy is easy and are comfortable with continued gradual increases, but have yet to decide how high rates will ultimately climb.”
Investors hunt for safety amid turbulence. WSJ's Akane Otani and Michael Wursthorn: "The volatility racking markets this month is the latest chapter in investors’ struggle to adapt to a world of reduced central-bank stimulus. Even after a sharp rally Tuesday, the Dow industrials are off 2.5% this month and on course for their worst start to a quarter since 2016. Treasury yields have shot to multiyear highs, pressuring shares from New York to Hong Kong to London. Many investors say the turbulence reflects the early stages of what they call a rotation, a pragmatic decision to reallocate resources away from assets whose gains now appear at risk—in this case, to sectors such as safer bonds and away from the most highly valued stocks."
Small stocks have lost their edge. NYT's Matt Phillips: "Earlier this year, small stocks were a big trade. Among investors, the bet was that smaller American businesses had less to lose in the global trade fight than big multinationals, and more to gain from the Trump administration’s tax cuts. With this backdrop, small stocks surged ahead of the giants that make up the Standard & Poor’s 500-stock index, beating them for much of the year. That’s over now. Instead of being insulated, small companies are actually more likely than larger ones to be impacted by investors’ big new worry:  rising interest rates. After peaking in August, the benchmark for so-called small caps, the Russell 2,000-stock index, is down more than 8 percent."
— U.S. is the most competitive economy in the world again. WSJ’s Joanna Sugden: “The U.S. is back on top as the most competitive country in the world, regaining the No. 1 spot for the first time since 2008 in an index produced by the World Economic Forum, which said the country could still do better on social issues. America climbed one place in the rankings of 140 countries, with the top five rounded out by Singapore, Germany, Switzerland and Japan. All five countries’ scores rose from 2017, with the U.S. notching the second-biggest gain after Japan’s. The top spot hasn’t gone to the U.S. since the financial crisis stalled output and triggered a global economic slowdown.”
TRUMP TRACKER
TRADE FLY-AROUND:

Senate Majority Leader Mitch McConnell (R-Ky.) in Washington on Oct. 16. (Andrew Harrer/Bloomberg News)
— McConnell: Revamped NAFTA will wait. Bloomberg News's Jenny Leonard: “Trump’s renegotiated trade deal with Mexico and Canada won’t get a vote in Congress this year, Senate Majority Leader Mitch McConnell said, setting up a potential contentious fight with Democrats next year over a signature White House accomplishment. ‘My trade advisers say you can’t possibly do it under the various steps that we have to go through. I had not heard that it might be possible to address it this year,’ McConnell said in an interview with Bloomberg News Tuesday in Washington . . . Asked about the administration’s trade policy more broadly, including U.S. tariffs on Chinese imports, McConnell said he’s taking a wait-and-see approach. He said Trump ‘deserves to have a little slack cut here and that’s what we’re doing’ to improve America’s trade relationships in the longer term, he said.”
U.S. announces talks with E.U., U.K., and Japan. The Post's Heather Long: "The Trump administration formally launched trade talks with the European Union, Britain and Japan on Tuesday as the president looks to expand his “America First” trade policy. U.S. Trade Representative Robert E. Lighthizer sent Congress three letters Tuesday notifying lawmakers that Trump and his team are going to negotiate trade deals with those governments. The move was widely expected — Trump has been discussing trade with E.U., British and Japanese leaders for months. But giving notice to Congress signals an intent to make wide-ranging free-trade agreements with those countries and a commitment to keep pursuing deals around the globe even as Trump escalates his fight with China."
China cuts U.S. debt holdings again. Bloomberg: "China’s holdings of U.S. Treasuries fell for a third consecutive month in August as the Asian nation struggles to prevent the yuan from weakening amid trade tensions with America. China’s ownership of U.S. bonds, bills and notes was $1.165 trillion, down from $1.171 trillion in July, according to data released by the Treasury Department on Tuesday... Beijing’s sale of Treasuries is sometimes viewed as a response to the trade war, especially after China’s ambassador to the U.S. signaled in March his country could scale back purchases of the debt to retaliate against American tariffs."
Lawmakers urge exclusions from latest China tariffs. Bloomberg's Mark Niquette: "A bipartisan group of almost 170 members of Congress is urging the Trump administration to establish a process for U.S. companies to seek relief from the president’s latest tariffs on Chinese imports. Republican Representative Jackie Walorski of Indiana and Democrat Ron Kind of Wisconsin sent a letter Monday signed by 167 other members, including House Majority Leader Kevin McCarthy, to U.S. Trade Representative Robert Lighthizer asking for an exclusion process for duties on $200 billion in goods imposed last month."
As others focus on chickens. The Associated Press's Richard Lardner: “Well before [Trump] began slapping tariffs on steel, aluminum and other imported goods, there was a deal with South Africa that gave U.S. chicken producers duty-free access to a market that had effectively been shut to them for years. But that trade deal, worth tens of millions of dollars to American businesses, now is being threatened by Trump’s metal tariffs. A group of senators from chicken-producing states — Democrat Chris Coons of Delaware and Republicans Johnny Isakson of Georgia and Roger Wicker of Mississippi — have detailed their concerns in a recent letter to Commerce Secretary Wilbur Ross. They cite a lawsuit in South Africa that aims to end duty-free imports of American chicken unless South Africa is exempted from Trump’s metal tariffs. The dispute illustrates the risk Trump runs by employing tariffs so aggressively."

Chinese leader Xi Jinping has reacted to American pressure with a level of desperation that is good for neither Washington nor Beijing.
Politico Magazine

The U.S., Mexico and Canada agreed to replace the North American Free Trade Agreement, but nobody agrees on what to call it; votes for T-MEC
The Wall Street Journal
MELTDOWN WATCH:
— Graham calls for sanctions on Saudi Arabia. WSJ's Courtney McBride: “A senior Republican senator on Tuesday called for sanctions against Saudi Arabia over the disappearance and presumed killing of a dissident journalist in the kingdom’s Istanbul consulate this month, and said he would not return to the kingdom as long as Crown Prince Mohammed bin Salman remains in power. In an interview on Fox News, Sen. Lindsey Graham (R., S.C.) said it was up to [Trump] to decide the U.S.’s course of action, but he said, ‘I know what I’m going to do: We’ll sanction the hell out of Saudi Arabia.’ He did not elaborate. ‘Nothing happens in Saudi Arabia without MBS knowing about it,’ Mr. Graham, a top Republican foreign policy hand, said, using shorthand for Prince Mohammed, a son of Saudi King Salman and the de facto leader of the kingdom.”
BlackRock says it won't cut ties. Reuters: "BlackRock Inc Chief Executive Officer Larry Fink said on Tuesday that he would not cut ties with Saudi Arabia even as pressure mounts on the country to explain the disappearance of a prominent critic. Fink is one of several top business executives, including JPMorgan Chase & Co’s Jamie Dimon and HSBC Holdings plc CEO John Flint, who pulled out of a major investment conference in Riyadh after Saudi journalist Jamal Khashoggi, a Washington Post columnist who has been critical of the country’s policies, went missing... Asked on CNBC if he would cut off all business ties with Saudi Arabia if it became clear that King Salman bin Abdulaziz Al Saud or Crown Prince Mohammed bin Salman had ordered Khashoggi’s murder, Fink said, 'No.' ... Fink has long had relationships with Saudi officials and one year ago announced plans to open offices within the country."

Meanwhile, Turkey sought to expand its probe to the Saudi consul general’s residence and consular vehicles.
Carol Morello, Erin Cunningham and Souad Mekhennet

Secretary of State Mike Pompeo arrived in Turkey after talks with Saudi leaders about the journalist’s disappearance.
Carol Morello and Loveday Morris
POCKET CHANGE

The Goldman Sachs logo appears above a trading post at the New York Stock Exchange on Dec. 13, 2016. (Richard Drew/AP)
— Goldman Sachs and Morgan Stanley beat expectations. AP's Ken Sweet: “The leading U.S. investment banks — Goldman Sachs and Morgan Stanley — each reported third quarter profits that beat analysts’ expectations Tuesday, helped by strong performance in their trading operations and better-than-expected revenue from stock underwriting. Investors welcomed the strong results. . . . Both companies’ stocks have struggled this year as investors have worried about the investment banks’ ability to bring in new business, and cope with slower trading businesses. . . . Goldman, the larger of the two banks, reported a profit of $2.52 billion in the quarter, or $6.28 per share. . . . Meanwhile, Morgan Stanley earned a profit of $2.11 billion, or $1.17 per share, which is up 19 percent from a year ago, when the bank earned $1.78 billion, or 93 cents per share.”
Bloomberg has a rundown of analyst reactions. The short version: They like Goldman's results but love Morgan Stanley's.
— Walmart pitches itself as a new company. Reuters's Nandita Bose: “Walmart Inc’s chief executive officer on Tuesday urged investors to revise their view of the company’s business, touting its tech investments to grow online sales at a time that Walmart is battling Amazon.com for market share. Walmart, based in Bentonville, Arkansas, also lowered its earnings forecast for its current fiscal year and said e-commerce growth next year would be slower than in the current year ending in January. ‘I want to challenge your thinking about Walmart,’ Chief Executive Doug McMillon told the company’s annual investor meeting, which was webcast. ‘There is a change within the company that is related to mindset, culture behavior, and we are inventing again.’ . . . Walmart is doubling down on online grocery delivery and pickup options. By the end of the year, 800 U.S. stores will offer grocery delivery and more than 2,000 will offer a pickup service.”

The ride-hailing company recently received proposals from banks valuing it at as much as $120 billion in an initial public offering that could take place early next year.
WSJ
Western investors piled into the Dubai-based Abraaj Group, whose founder, Arif Naqvi, pledged to make money by helping the poor in developing countries. Now it’s the world’s largest insolvent private-equity firm.
WSJ

Salvaged artifacts have been the focus of a tussle over who gets to own a part of the ocean liner’s history. They’re worth $19.5 million, at least.
NYT
MONEY ON THE HILL

Trump, left, and Senate Majority Leader Mitch McConnell, of Ky., in Richmond, Ky., on Saturday. (AP Photo/Andrew Harnik)
McConnell: Deficit is “very disturbing.”  The Post's Damian Paletta: “Mitch McConnell on Tuesday called the ballooning budget deficit 'very disturbing' but said large federal spending programs were to blame, dismissing criticism that last year’s GOP tax cuts are saddling the country with more debt. McConnell, in a Bloomberg News interview, also said there was little chance Republicans would be able to cut government spending next year if they retained control of Congress because any changes would need leadership from Democrats. McConnell (R-Ky.) said that tackling the mandatory spending programs such as Medicare and Social Security, as well as Medicaid, could not be done by Republicans alone, suggesting that it was unlikely to occur unless Democrats controlled at least one chamber of Congress.”
No, the tax cuts aren't paying for themselves. NYT's Jim Tankersley: “There are several ways to ask the question, 'Are tax cuts paying for themselves?' Based on the data we have right now, they all arrive at the same answer: 'No.' ... By the Treasury’s numbers, total revenues grew 0.4 percent from the 2017 fiscal year to the 2018 fiscal year. That’s weak, historically speaking, for an economy growing as fast as it is.”
THE REGULATORS

Tesla CEO Elon Musk. (AP Photo/Kiichiro Sato)
Prudential de-designation expected. From CapAlpha's Ian Katz: "The FSOC, in its readout after Tuesday’s meeting, only indicated that Prudential’s SIFI designation status was discussed. No news of a vote to rescind the designation, which had been widely expected. However, Politico reported Tuesday night that a vote could be announced as early as Wednesday... The FSOC has previously voted electronically between meetings. So if a vote wasn’t taken at Tuesday’s meeting (and we don’t even know for sure that one wasn’t), it can be held shortly thereafter. The FSOC doesn’t have to wait for a regularly scheduled council meeting to hold a vote.
Judge approves Tesla settlement. Reuters: "A U.S. judge on Tuesday approved a settlement between a federal regulator, Tesla Inc and its chief executive officer, Elon Musk, over his tweets promising to take the company private, signaling an end to a tumultuous period for investors. Tesla shares rose as much as 5.5 percent to $273.88 before easing to $271.63 in early-afternoon trade on Nasdaq. Despite the gains, the stock is still down more than 20 percent since Aug. 6, the day before Musk said on Twitter he would take the company private and claimed he had secured funding to do so."
DAYBOOK
Coming soon
  • The American Enterprise Institute hosts a presentation of the book “Finance and Philosophy: Why We’re Always Surprised” by Alex Pollock in Washington tomorrow.
  • The Heritage Foundation holds an event titled “Problems with the JOBS Act and how they can be fixed” in Washington on Oct. 23.
THE FUNNIES
— From The Post's Tom Toles: “We are shocked that Trump’s tax-cut-for-the-rich didn’t pay for itself. Shocked.”

BULL SESSION
“Donald Daters”: The app that wants to “Make America Date Again.”
Meet the Hirshhorn's newest staffer, Pepper the robot:
Parking in the lap of luxury: