{"id":797591,"date":"2026-10-10T01:28:18","date_gmt":"2026-10-10T01:28:18","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/797591\/"},"modified":"2026-10-10T01:28:18","modified_gmt":"2026-10-10T01:28:18","slug":"wall-street-fears-doom-loop-as-france-is-veering-toward-a-full-blown-civil-crisis","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/797591\/","title":{"rendered":"Wall Street fears \u2018doom loop\u2019 as \u2018France is veering toward a full-blown civil crisis\u2019"},"content":{"rendered":"

\u27a1\ufe0f If you would like to receive this information in your inbox every morning before the markets open in New York, sign up here<\/a>.<\/p>\n

ONE BIG THINGAnthropic launching a \u2018presidential engagement\u2019 effort for 2028 election cycle<\/p>\n

Anthropic is setting up a \u201cpresidential engagement\u201d program ahead of the 2028 elections, building an in-house team that will work directly with U.S. presidential candidates from both parties on AI issues, help Anthropic\u2019s leadership set political strategy, and run the company\u2019s political funding program.<\/p>\n

The effort\u2014which is taking shape before the November midterm elections and an impending initial public offering that could value Anthropic at as much as $2 trillion\u2014underscores the extent to which government policy, and the support of the White House in particular, have become critical to the AI industry, Fortune\u2019s Emily Forlini reports<\/a>.<\/p>\n

Trump rules out further combat in Iran until after elections<\/p>\n

The U.S. will not restart its war against Iran until after the midterms, President Donald Trump said last night on social media<\/a>: \u201cWe are having productive discussions with the Islamic Republic of Iran. \u2026 we will not be attacking Iran at any time prior to the Midterm Elections to be held in the United States on November 3rd.\u201d<\/p>\n

Nonetheless, the Pentagon is sending three more aircraft carriers to the region, \u201ca massive assembly of force,\u201d according to the NYT<\/a>, and presenting Trump with a range of plans for major combat operations.<\/p>\n

MORE FROM FORTUNE<\/p>\n

The Big Mac Dilemma: Can McDonald’s Fix Sales?<\/a> | Fortune Daily<\/p>\n

Disney offered a 13-year-old $2 million to sing in The Lion King\u2014his mom took $100k plus royalties instead. He\u2019s still getting paid 32 years later<\/a> – Orianna Rosa Royle<\/p>\n

\u2018The gap was not the awareness\u2019: The company phishing trainings you loathe aren\u2019t enough when nearly 1 in 4 security pros say their MFA is optional<\/a> – Tatiana Sataua<\/p>\n

\u2018You decided to evade them\u2019: Former HSBC banker \u2018clearly in a financial position to pay\u2019 banned from finance for dodging $7,800 in fares<\/a> – Catherina Gioino<\/p>\n

Sweden\u2019s startups will raise $5 billion in 2026. Our secret sauce is 150 years old<\/a> – Jan Larsson<\/p>\n

Gwynne Shotwell\u2019s $300 million SpaceX pledge to Trump Accounts shows billionaires a tax-smart way to give away their own company\u2019s stock<\/a> – Sydney Lake<\/p>\n

FRENCH TOAST’What happens in Paris doesn\u2019t stay in Paris!’ Wall Street fears European ‘doom loop’<\/p>\n

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This week, Wall Street analysts began thinking seriously about how big the French debt crisis might get, and whether it will spread to other asset classes. Or even other countries. Their thoughts are not happy ones. \u201cWhat happens in Paris doesn\u2019t stay in Paris!\u201d Peter Schaffrik and his team at RBC said in an email to clients this week. \u201cWe think there is more at play than simply concerns about the French finances\u2014even though this has clearly been the epicenter of the moves.\u201d<\/p>\n

Europe already had an energy crisis (caused by the wars in Iran and Ukraine), plus high inflation, and this was already driving bondholders to demand greater risk premia to hold government debt before France blew up, Schaffrik argued.<\/p>\n

Combined with already high government debt and low growth across Europe, this sets the stage for higher yield demands, which make new borrowing more expensive. And that \u201cwill weigh on growth even further,\u201d he said.<\/p>\n

And then you have all the people in the \u201ccarry trade\u201d who borrowed money to bet on French bond prices and now need to sell those positions, exacerbating the problem.<\/p>\n

\u201cFrance is veering toward a full-blown civil crisis\u201d<\/p>\n

At Macquarie, Thierry Wizman and Gareth Berry are even more alarmist. \u201cFrance is veering toward a full-blown civil crisis,\u201d they told clients this week. \u201cWe think a direct and self-reinforcing causal connection can be drawn between the rise in France\u2019s debt yields and the street riots of the past few days.\u201d (The protestors are school students and others angry at the lack of spending on education.)<\/p>\n

The pair argue that the longer the riots go on, the more likely it is that the government will cave and approve more spending, which would make the debt situation worse. That would drive up yields on French bonds, making borrowing to fund that spending even more expensive\u2014and thus worsen the problem that the rioters are complaining about. French Prime Minister S\u00e9bastien Lecornu said he would make new fiscal proposals at the end of October, giving the rioters the rest of the month to pile pressure on the \u00c9lys\u00e9e Palace.<\/p>\n

\u201cThere is a direct and self-reinforcing causal connection (a \u2018doom loop’, perhaps) between the street riots and the rise in France’s sovereign bond yields. Mediated by street protests and France’s political polarization, rising bond yields lead to rising bond yields,\u201d they told clients.<\/p>\n

Looming in the background is Italy, a country that was never great at balancing its books: \u201cItaly has significantly revised up its 2027-2028 deficit forecasts to 3.4%-3.2% of GDP, from 2.6%-2.4% before. The new path surprised most market participants and exceeds the government\u2019s April targets by a cumulative 1.2% of GDP,\u201d Goldman Sachs\u2019 Filippo Taddei said in a note.
\nOK, I hear you say, but I am an American\u2014why should I care about the French, for whom rioting in the street is a national pastime? Because 10-year yields across the major Western economies tend to move together, as this chart from Apollo\u2019s Torsten Sl\u00f8k shows:<\/p>\n

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Schneider chairman defends $22.6 billion PTC deal that tanked the stock<\/p>\n

Schneider Electric chairman Jean-Pascal Tricoire defended the company\u2019s plan to buy U.S. industrial software maker PTC, arguing that investors need time to recognize the benefits of the deal. The agreement, which values PTC\u2019s equity at $22.6 billion, making it Schneider\u2019s largest-ever acquisition, was announced Monday; Schneider shares fell more than 8% in European morning trading that day. Reuters estimates the losses wiped out close to $17 billion from its market capitalization.<\/p>\n

Speaking to Fortune at a company event in Hong Kong on Thursday, Tricoire said the market needed time to \u201cappreciate the value\u201d of the acquisition. He brought receipts, drawing a parallel with Schneider\u2019s 2007 purchase of APC, which Tricoire credited with establishing Schneider\u2019s data center business.<\/p>\n

\u201cAt that time, the share price went down by, if I remember, 20% because people didn’t get it,\u201d he said, adding that data centers now make up 30% of Schneider\u2019s business and are \u201cgrowing high double-digits every year.\u201d<\/p>\n

Whether a nearly 20-year precedent will assuage investor doubts amid wider software skepticism, remains to be seen.\u2014Lee Williamson<\/p>\n

THE MARKETSTraders regain their composure after yesterday\u2019s tech selloff<\/p>\n

The Nasdaq 100 slipped 1.39% yesterday after reports that OpenAI\u2019s revenue base was $20 billion smaller than previously understood. Earlier reports said the company\u2019s annualized revenue would be $70 billion, but that is a gross total counted before the revenue it is required to share with its suppliers. Its net revenue is $50 billion, the FT reported<\/a>.<\/p>\n

Traders took that as a signal that the AI economy might be smaller than hoped. Tech stocks took a beating, especially those related to AI: CoreWeave fell 7.77%, Oracle slipped 5.83%, and SpaceX was down 4.19%.<\/p>\n

Stocks in Asia and Europe were broadly up this morning, and U.S. futures also showed gains before the open in New York. The yields on 10-year bonds in both the U.S. and France declined in the last 24 hours, a sign that traders hit the brakes in the bond selloff that has been pummeling markets globally.<\/p>\n

Investors might be focused on the upcoming Q3 earnings season, according to Bob Edwards, chief investment officer of Edwards Asset Management ($3.3 billion AUM): \u201cCorporate earnings may be stronger than investors appreciate. Third-quarter S&P 500 earnings growth year-over-year is expected to approach 30%, an extraordinary pace.\u201d\u00a0<\/p>\n

S&P 500 futures were up 0.42% this morning. The index fell 0.47% yesterday.\u00a0
\nIn Europe, the Stoxx 600 was up 0.86% in early trading, and the U.K.\u2019s FTSE 100 was up 0.83% before lunch.
\nAsia: South Korea\u2019s KOSPI was closed for a national holiday. Japan\u2019s Nikkei 225 was down 0.02%. India\u2019s Nifty 50 was up 1.49%. China\u2019s CSI 300 was up 0.16%.
\nBrent crude peaked at nearly $106 per barrel yesterday before falling back to $102 this morning.
\nBitcoin was at $82,512.<\/p>\n

Retail investors keep buying tech, dip or no dip<\/p>\n

Prior to yesterday\u2019s carnage, retail investors net bought $5.7 billion in stocks in the week through Oct. 7, slightly below the 12-month average of $6.7 billion per week, according to Arun Jain and his team at J.P. Morgan. They especially favored tech stocks:<\/p>\n

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CHART OF THE DAYHeat stress from global warming could wipe 2.6% off global GDP<\/p>\n

\"\"<\/p>\n

If human greenhouse gas emissions remain high, the loss of economic activity from people being too hot to work or slowing down in the heat could reduce global GDP by 1.4% to 2.6% by the end of the century, according to Oxford Economics\u2019 Beatrice Tanjangco. \u201cThe steepest projected losses [would be] in South Asia (5.9%) and Africa (3.6%),\u201d she said in a note.<\/p>\n

Air conditioning in offices and houses is a major cause of global warming and could add 0.03\u00b0C to 0.07\u00b0C to temperatures by 2050, she said. \u201cAir conditioners increase a household’s electricity use by 36%. \u2026 Leakage of hydrofluorocarbons used as refrigerants generates direct emissions thousands of times more potent than carbon dioxide.\u201d (In the chart above, a “cooling day” is a day when AC would be needed.)<\/p>\n

QUOTE OF THE DAY\u201cNobody suffers better than I can.\u201d<\/p>\n

\u2014Nvidia founder Jensen Huang, giving a talk to the Korea Society recently<\/a>. \u201cIn order to do something incredible, you have to suffer. It\u2019s not a walk in the park. If it\u2019s a walk in the park, anybody could do it.\u201d<\/p>\n

THE FRONT PAGES TODAY<\/p>\n

\u2018Real boss of India?\u2019: Elon Musk takes aim at Indian billionaire Ambani as Starlink launch stalls<\/a> – CNBC<\/p>\n

Kushner, Witkoff to pitch “new ideas” to end Russia-Ukraine war<\/a> – Axios<\/p>\n

Famous Italian winery loses 30,000 bottles worth \u20ac5mn in heist<\/a> – FT<\/p>\n

Firmus Is Said to Explore Raising $3 Billion After Shelving IPO<\/a> – Bloomberg<\/p>\n

Labour Holds Off Green Party in Election for Starmer\u2019s Former London Seat<\/a> – NYT<\/p>\n

Meta bans social media TikTok ads across the US<\/a> – NY Post<\/p>\n

ONE MORE THINGHow much money you need to retire comfortably in every U.S. state<\/p>\n

$1.2 million. That\u2019s how much Americans in workplace retirement plans say they\u2019ll need to retire comfortably, according to Schroders\u2019 2026 U.S. Retirement Survey.<\/p>\n

If that number makes you check your 401(k) twice, you\u2019re in good company. In the same survey, 51% of plan participants said they expect to have less than $500,000 saved by retirement, including 24% who expect less than $250,000.<\/p>\n

But where you live can affect your fortunes as much as how much you have saved.<\/p>\n

Investopedia made a state-by-state set of estimates for a single retiree who collects the average Social Security benefit of $1,975 a month and withdraws 4% of savings a year. Each entry shows the estimated annual cost of a comfortable retirement and the nest egg needed to cover what Social Security doesn\u2019t. See the list here<\/a>.<\/p>\n

Would you like to sponsor this newsletter? Contact advertising@fortune.com for details.<\/p>\n","protected":false},"excerpt":{"rendered":"\u27a1\ufe0f If you would like to receive this information in your inbox every morning before the markets open…\n","protected":false},"author":2,"featured_media":797592,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[1119,4229,1397,262277,819,585,467,50,90,56,54,55],"class_list":["post-797591","post","type-post","status-publish","format-standard","has-post-thumbnail","category-environment","tag-anthropic","tag-economics","tag-environment","tag-fortune-500-digest-weekday","tag-france","tag-iran","tag-markets","tag-news","tag-science","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/797591","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=797591"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/797591\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/797592"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=797591"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=797591"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=797591"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}