Musk floats a SpaceX-Tesla merger as rate bets climb

A merger idea and a crowded listings queue

Elon Musk has put his weight behind a possible merger of SpaceX and Tesla. The BBC reported him saying that a combination was being considered, and the Guardian described the two companies as exploring one. Euronews, publishing early this morning, set the news beside a second fact: the rocket firm has turned a profit.

The figures came on Tuesday. The Wall Street Journal's live coverage of 20 October was headlined on SpaceX stock rising after revenue doubled. The merger talk followed later the same day.

None of the headlines gave terms, a structure or a timetable. They reported intent and consideration, not a deal.

It was a busy day for new issues more broadly. The Journal reported that the New York Stock Exchange is getting trounced in the battle for Wall Street's biggest flotations. Mukesh Ambani launched what the Guardian called India's biggest-ever IPO, for Jio Platforms. Not every seller found the price it wanted. In Hong Kong, Suzhou Dongshan's US$1.8bn listing trailed expectations, with the SCMP citing concerns about US trade risk. And in London, Sky News reported that Starling Bank's founder sold the last of the founder's shares at a cut-price valuation of £1.7bn.

Rates, housing and unrest in France

In Britain, the talk turned to higher borrowing costs. This is Money reported that markets are betting rates will rise to 4% in November and to 5% by the end of next year. The trigger was a shock fall in unemployment.

America sent a different signal. CNBC reported that housing is flashing warning signs just as the Federal Reserve weighs more interest rate increases. The Wall Street Journal reported that Treasury yields fell on a string of weak housing data. A Journal investing column ran under the blunt headline 'Yes, the Fed Can Kill the AI Boom'.

Europe had its own trouble. On Monday evening This is Money reported that stock markets and bonds sold off across the continent, as investors grew alarmed at spiralling unrest in France.

Tariffs stayed in the news. The BBC reported that President Trump has been sued over Canadian tariffs, the latest in a run of legal challenges. This is Money said fears of his tariffs are deterring Labour from a rates shake-up that would help hotels but hit online giants such as Amazon.

This morning's tone is firmer. City A.M.'s FTSE 100 live coverage expects stocks to jump, even as oil tips over $110 a barrel on a lack of progress between the US and Iran. In Tokyo, the Journal reported, the Nikkei rose 1.8% on improving risk sentiment and possible dip-buying.

AI nerves and the earnings in between

The worry of the moment concerns artificial intelligence. The Journal reported that US stocks finished Tuesday mixed, as strong earnings offset fears over AI credit. In This is Money, Alex Brummer wrote of tremors in the AI universe as tech shares tumble, and asked what might trigger an earthquake. The Guardian put the question more directly: is this the beginning of the end of the AI stock market boom?

Not every technology name suffered. Super Micro Computer's shares rose after preliminary revenue topped its guidance.

China's news was harder. Battery maker CATL posted a surprise profit slowdown, and the SCMP reported that its mainland China shares tumbled by more than 10%. The same paper reported that Chinese carmakers are gearing up European production to sidestep tariffs and an import quota.

Elsewhere, companies and investors set out their stalls. Kroger unveiled a three-year plan targeting earnings growth and an overhaul of operations. Me+Em, the UK fashion label, reported bumper profits and is plotting a US expansion. DW examined why US investors are snapping up Germany's famed Mittelstand. An industry boss told City A.M. that cautious trustees 'tie the hands' of pension schemes and hold back growth investment. And City A.M. reported that investors cheered the end of what they called 'damaging' speculation about capital gains tax in the Budget.