A Sanctions Waiver Pulled Oil Back, And Diesel Is Why

Oil gave back part of a five-month high on Monday after the White House waived newly imposed sanctions on Russia late Friday, and the reason it matters to a household is diesel. Europe went the other way, with France's CAC 40 falling more than a percent after a weekend in which half a million people protested. China reported that its economy grew 4.5% last quarter, with its factories and its exports doing more of the work than its own shoppers.

Fast Facts

• Stock futures rebounded as investors tentatively turned back to artificial-intelligence shares after last week's heavy selling (Read More)
• The Philadelphia Semiconductor Index, which tracks the largest chipmakers, fell 11.4% last week, its longest run of consecutive declines since 2008 (Read More)
• Elon Musk said he will give one of his SpaceX shares to each of the roughly 72 million Americans under 18 next year, a little over $10.5 billion at Friday's closing price of $146.03 (Read More)
• Anthropic committed 5% of its own shares to a new public benefit fund that could send money to people whose work is disrupted by artificial intelligence (Read More)
• Greg Abel, who took over Berkshire Hathaway after Warren Buffett retired, has been reshaping its $363 billion investment portfolio (Read More)
• The federal government is paying offshore wind developers billions to abandon projects already under way (Read More)

Global News

• Indonesia's stock exchange was due to meet MSCI on Monday to seek clarification after a downgrade warning triggered a rout in its market (Read More)
• Chinese memory-chip maker CXMT expects revenue to rise more than eightfold as demand for artificial-intelligence computing lifts the memory industry (Read More)
• Germany's Rheinmetall and Switzerland's Mediterranean Shipping Company won an auction to buy Romania's Mangalia shipyard (Read More)
• Investors in mainland China have been moving into dividend-paying shares, with the highest-yielding listed companies outpacing the broad market heading into October (Read More)

A Sanctions Waiver Pulled Oil Back From A Five-Month High, And Diesel Is The Reason

Late Friday the administration signed an executive order waiving a set of new sanctions on Russia, along with tariffs on the largest buyers of Russian energy, that would otherwise have taken effect under the sanctions law signed last month and named for the late Senator Lindsey Graham. Here is the price sitting behind that decision. On October 11 the average U.S. diesel price was $6.28 a gallon, up 71% from a year earlier. Rapunzl's October 12 briefing covered the original diesel arrangement; what is new is an order declining to use powers Congress had just handed the president.

Crude took the hint on Monday morning. Brent crude, the global benchmark, trades mostly through futures, contracts to buy a barrel on a set date at a price agreed today, and the front-month contract fell 1.8% to $104 a barrel after touching a five-month high on Friday. U.S. crude lost 1.9% to $99.40 and gold rose 0.3% to $4,183 an ounce. Treasury yields eased in Asian trading; for scale, the last published curve, from the October 16 session, had the 10-year note at 5.09%, one basis point lower than the day before, a basis point being one hundredth of a percentage point.

The mechanism runs through trucks, not gas pumps. Diesel is the fuel of freight, farm equipment and school buses, so its price is an input inside the cost of nearly everything that arrives by road. Two things pushed it up this year: the war with Iran throttled Middle East supply, and Ukrainian drone strikes cut what Russia itself could export. Ukraine kept going over the weekend, launching more than 1,000 drones at Russian targets and setting oil facilities alight. The waiver is an attempt to put barrels back into that gap.

Whether the barrels arrive is the open question, and the people closest to the deal describe it in incompatible ways. Energy Secretary Chris Wright called it "a carrot to try to end a war. It's not an economic lifeline for Russia." Secretary of State Marco Rubio said that "diesel was going to be sold one way or the other." Analysts are blunter about the arithmetic: the global diesel market is short roughly 1 million barrels a day, according to the firm Kpler, whose Michelle Brouhard wrote that Russia's ability to deliver more remains uncertain. A price that moves on an announcement can move back when the deliveries do not follow.

Sources: WSJ · Axios · Al Jazeera · Investing.com · U.S. Treasury · Rapunzl's October 12 briefing

China Grew 4.5%, And Its Factories Did The Work Its Shoppers Did Not

China's National Bureau of Statistics said on Monday that the economy grew 4.5% in the third quarter against the same quarter a year earlier. That is faster than the 4.3% recorded in the second quarter and slightly ahead of the 4.4% economists expected. Over the first three quarters the economy grew 4.6%, inside the 4.5% to 5% range Beijing set as its target for the year, a target already lower than the 5% it aimed for last year.

The composition is the news. Industrial output rose 5.5% in September from a year earlier, and exports were up more than 16% across the first three quarters, led by semiconductors and other technology goods; Rapunzl's October 14 briefing covered the September export figure feeding into that. Retail sales, the closest read on what Chinese households actually spent, rose 1.1%. Investment in fixed assets fell 7.2% over the nine months to September, and property development investment fell 20.6%. That is an economy growing on what it sells abroad rather than on what its own people buy, which is fragile: those buyers live somewhere else and can change their minds or their trade rules. China's currency reached its strongest level against the dollar since June 2022, at 6.6815 yuan per dollar, making those exports slightly more expensive for everyone buying them.

Someone is on the other side of that export number, and on Monday morning Germany published the receipt. The Ifo Institute found German industry employed 496,000 fewer people at the end of 2025 than at the start of 2019, a drop of 7.1%, with carmakers and their suppliers shedding 123,500 jobs. Ifo tied the decline across almost every industrial sector to falling competitiveness, naming China in particular. The caution is that a quarter is not a trend: Capital Economics said the September data do suggest momentum returned late in the quarter while remaining skeptical that growth had picked up in practice, and Stanford economist Zhiguo He said real estate is still shrinking.

Sources: Investing.com · Al Jazeera · Investing.com on September output and sales · Investing.com on the Ifo study · WSJ · Rapunzl's October 14 briefing

France's Weekend Of Protest Showed Up In Its Borrowing Costs

More than half a million people joined protests across France on Saturday, in demonstrations over the cost of living and public services that turned destructive in many cities. The Interior Ministry said more than 2,300 people were arrested that day, almost 1,000 police and gendarmes were injured, and 60,000 officers had been deployed nationwide. Interior Minister Laurent Nunez said police "lost control" and offered to resign; President Macron acknowledged "failures in anticipation and intelligence" and declined the resignation. Markets opened on it. France's CAC 40 fell 1.38%, Spain's benchmark fell 1.34%, the pan-European STOXX 600 fell 0.79% to 639.63 points, and the three big French banks, BNP Paribas, Societe Generale and Credit Agricole, fell between 2.2% and 2.6%.

The part worth understanding is why a protest becomes a borrowing cost. The French government is trying to pass a budget that narrows its deficit, meaning spending less or taxing more, and the protests measure how unpopular that is. A government that cannot make the cuts has to borrow the difference instead, so lenders asked for a little more to hold French debt: the yield on the French 10-year government bond rose 7.3 hundredths of a percentage point, what traders call basis points, to 4.857%, while Germany's equivalent rose 1.6, to 3.425%. The gap between what those two governments pay to borrow for a decade is the market's running estimate of which is the safer bet, and on Monday it widened. The euro fell 0.3% to $1.1203, close to the 16-month low of $1.1113 it reached last week.

Sources: Al Jazeera · Investing.com · Nasdaq · WSJ

What To Watch

This is the heaviest earnings week of the quarter, and the question differs by company: for the banks it is what they earn on loans against what they pay on deposits, and for the chip names it is whether the money spent on artificial intelligence is turning into revenue yet. Every figure below is analysts' average estimate for earnings per share, not a result.

Expected to report today:

• Fifth Third Bancorp (FITB), before the open, $1.09 against $0.93 a year ago
• Cleveland-Cliffs (CLF), before the open, $0.24 against a loss of $0.45
• After the close: Steel Dynamics (STLD) at $5.42, Zions (ZION) at $1.64 and Western Alliance (WAL) at $2.43

Later this week:

• Tuesday, before the open: GE Aerospace at $2.02 against $1.66, RTX at $1.78, General Motors at $3.52 and Northrop Grumman at $7.22
• Tuesday, after the close: Netflix at $0.82 against $0.59, Capital One at $5.45 and United Airlines at $2.60
• Wednesday, after the close: Meta Platforms at $6.67 against $7.25, Tesla at $0.21 against $0.37, Texas Instruments at $2.39 against $1.48 and IBM at $2.87
• Thursday, the busiest day, with 139 companies on the calendar including Procter & Gamble, Union Pacific, Lockheed Martin, Spotify and Comcast
• Friday, before the open: American Express at $4.47 against $4.14

Beyond that:

• The Federal Open Market Committee, the officials who set the country's benchmark short-term interest rate, meets on October 27 and 28, with a press conference on the afternoon of the 28th. Nothing has been decided.
• The Bureau of Economic Analysis is scheduled to publish Gross Domestic Product on October 29.
• Brazil's presidential run-off is on October 25, and Israel holds elections on the 27th.

The Classroom Takeaway

A fuel price is not just a number on a sign by the highway; it is an input in the cost of almost everything that arrives by truck, which is why an order signed in Washington on Friday night showed up in a barrel of crude on Monday morning. Students can follow the prices that do that work with live market data.