Weekend brief: Republicans turn on Trump's Russia sanctions waiver, France faces a budget vote Tuesday
Futures reopen at 6 PM ET Sunday. Backlash grows over the Graham Act waiver, French unrest ahead of a Tuesday budget vote, Friday's closes and the calendar into the October 28 Fed decision.
Two stories carry into Sunday night's futures open. The political fight over President Trump's waiver of new Russia sanctions has widened to his own party, and France heads into a make-or-break budget vote on Tuesday after a night of riots. U.S. stock markets are shut until futures reopen at 6 PM ET, so every market figure below is as of Friday's close.
Republicans break ranks on the Russia waiver
As CNBC reported Saturday, Trump signed an order Friday waiving key provisions of the Graham Act, the sanctions law enacted last month. Fox Business reported that the reaction has since spread across party lines. Sen. Ted Cruz, R-Texas, called the move "a mistake" on Fox News and said he would tell the president not to waive the sanctions. Sen. Thom Tillis, R-N.C., called it "beyond irresponsible," noting the Senate passed the law 86-11. Nikki Haley called it a "terrible misjudgment."
Trump, asked about it Saturday, called it "a very good decision" and said it would be good for the country. Fox noted that Cruz acknowledged the president was likely focused on rising fuel costs. A Reuters headline says Secretary of State Rubio put the review at up to 60 days; we could not read that article, so we are not relying on it.
For markets the question is whether Congress tries to override or reverse the waiver, which would revive the threat of tariffs on the biggest buyers of Russian oil and gas with Brent near $110. We have seen no such proposal confirmed.
France: a budget vote with bond yields at 24-year highs
Fortune reported that cost-of-living protests turned to rioting in several French cities on Saturday, with shops looted and public buildings set on fire. Fortune says French bond yields are at their highest in 24 years, public debt is 119% of GDP, and Prime Minister Sébastien Lecornu's 2027 budget, which would trim the deficit to 5% of GDP from 5.4%, faces its first National Assembly vote Tuesday. Eurasia Group's Mujtaba Rahman is quoted as saying the budget could pass if Marine Le Pen's allies abstain. That is one analyst's scenario, not a forecast we are making.
Friday's close
| As of Friday, Oct. 16 | Level | Day |
|---|---|---|
| S&P 500 | 7,659.44 | -1.09% |
| Nasdaq 100 | 29,187.55 | -2.50% |
| Dow Jones Industrial Average | 52,002.41 | -0.34% |
| Russell 2000 | 2,721.37 | -1.66% |
| Brent crude (settle) | $109.86 | +3.7% |
| WTI crude (settle) | $101.41 | +3.5% |
| 10-year Treasury yield | 5.09% | from 5.10% |
Index closes and oil settlements are as recorded in our Friday close story; yields are from the U.S. Treasury par curve.
With the 10-year above 5%, borrowing costs stay in view: Freddie Mac's 30-year mortgage rate was 7.40% in its last weekly reading, according to our report. Bitcoin was trading near $81,900 on Coinbase at 8:31 AM ET Sunday; see today's crypto prices.
The week ahead
Our economic calendar shows building permits Tuesday, Oct. 20 (forecast 1.395 million, prior 1.394 million), jobless claims Thursday, Oct. 22 (forecast 200,000, prior 199,000) and flash S&P Global composite PMIs Friday, Oct. 23 (prior 58.4). The Fed's rate decision is Wednesday, Oct. 28. A Bloomberg headline says Microsoft has scrapped a UK data center deal with Nscale, citing the Telegraph; we have not confirmed it, so we only note it. We have not confirmed a list of this week's earnings or Fed speakers, so we leave them out.
Sources: Fox Business, CNBC, Fortune, U.S. Treasury, Coinbase, Chronicle markets board. This is market information, not investment advice.
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