EU’S GENERAL COURT UPHOLDS AN ANTITRUST RULING ISSUED TO ALPHABET

In 2018, Google was fined for allegedly violating anti-competitive practices with its use of the Android Operating System to promote the Google search engine. Google’s appeal that Android devices should be viewed as competitors to Apple products and that users could remove Google apps was unsuccessful. The only consolation was that Google’s fine, which was the largest ever issued by the European Union, was lowered by 5% to approximately €4.12 billion. Such a ruling indicates that the EU is standing firm on ensuring big tech companies are not engaging in anti-competitive behavior. Google stated that Android “has created more choice for everyone, not less, and supports thousands of successful businesses in Europe and around the world.”

THE BUREAU of LABOR STATISTICS RELEASES AUGUST’S CONSUMER PRICE INDEX

The CPI reading rose by 8.3%, down from 8.5% in July. Core CPI, which excludes food and energy prices, increased 6.3% in August. Despite the University of Michigan’s consumer sentiment survey showing one-year inflation expectations falling to 4.6% in September, the Dow Jones fell by 1200 points, the worst one-day fall since June 2020. This influenced the recent rise in the average rate on a thirty-year mortgage, which jumped to over 6% for the first time since 2008. The Euro dipped below parity, as traders anticipated larger rate hikes in the U.S. alongside an economic slowdown in Europe. The CPI data led the CME’s FedWatch Group to believe there is a 40% chance that the Federal Reserve will announce an increase to the discount rate by as much as 1% during its meeting from Sep 20 – Sep 21.

Costco Reports Strong Fourth-Quarter Results as Consumer Demand Remains Resilient

Costco reported strong fourth-quarter results as consumers continued spending at the warehouse retailer despite inflation and elevated borrowing costs. Net sales for the 16-week quarter ended August 30 increased 11.2% to $93.9 billion, compared with $84.4 billion during the same period last year. Including membership fees, total quarterly revenue reached approximately $95.7 billion.

Comparable sales increased 9.4% across the company, or 6.7% after excluding changes in gasoline prices and foreign-exchange rates. U.S. comparable sales rose 10.7%, while digitally enabled sales increased 19.5%, highlighting continued growth in Costco’s online business alongside its physical warehouse operations.

Costco also reported quarterly net income of approximately $3.0 billion, or $6.75 per diluted share, compared with $2.61 billion and $5.87 per share one year earlier. Results included a $0.15-per-share benefit from tariff refunds, although Costco said it reinvested part of those savings into providing additional value to members.

The results show that Costco continues to benefit from its value-focused business model. During periods when consumers are concerned about inflation and household budgets, the company’s membership structure and bulk-discount strategy can attract customers looking to reduce their per-unit spending on groceries and household essentials.

Membership fees also provide Costco with a recurring source of high-margin revenue. During the quarter, membership-fee revenue reached $1.85 billion, compared with $1.72 billion a year earlier.

Costco’s results are also useful as a broader indicator of consumer health. Strong sales suggest that household spending remains resilient, although consumers may increasingly be directing purchases toward retailers perceived as offering better value. The company currently operates 939 warehouses globally, including 647 in the United States and Puerto Rico.

For investors, the key question is whether Costco can continue producing strong comparable-sales growth while maintaining its value proposition as inflation, tariffs, and consumer spending patterns evolve.

Source: https://www.wsj.com/business/earnings/costco-reports-higher-fourth-quarter-profit-as-sales-membership-fees-rise-4156cc4a

Meta’s Muse AI Agent Shakes Up Consumer-Facing Stocks

Meta’s new AI agent, Muse, quickly became the top free app in the U.S. and Canada, surpassing ChatGPT on both Apple’s App Store and Google Play. The app allows users to delegate tasks such as shopping, travel booking, and form-filling, and recorded about 2.8 million downloads within two weeks of launch.

The rapid adoption has already affected public markets. Investors are concerned that AI agents could make it easier for consumers to compare prices and switch providers, potentially weakening customer loyalty across sectors such as banking, insurance, travel, fitness, and food delivery. JPMorgan and Wells Fargo each fell more than 3% during the week, Charles Schwab declined nearly 5%, while Booking Holdings and TripAdvisor fell more than 6%.

At the same time, companies that partner with Muse have benefited. Shopify shares rose more than 11% after announcing that it would support checkout through the AI agent, while PayPal also partnered with Meta to allow users to discover and purchase products directly through Muse. Meta shares gained nearly 13% during the week.

The launch is significant because it shows how AI is beginning to move beyond chatbots and into tools that can perform tasks directly for consumers. If personal AI agents become widely adopted, they could change how people shop, book travel, manage subscriptions, and interact with financial-services companies.

For investors, the main question is which businesses will benefit from becoming integrated into AI-agent ecosystems and which could lose pricing power or customer relationships as consumers rely more heavily on automated comparison and purchasing tools.

Source: https://www.reuters.com/business/finance/metas-muse-rekindles-fears-over-winners-losers-personal-ai-agent-emerges-2026-09-23/

Anthropic Signs $11.6 Billion Cloud Agreement With Akamai

Akamai Technologies announced a major expansion of its relationship with Anthropic through an $11.6 billion cloud-computing commitment over seven years. Anthropic will use Akamai Cloud’s distributed infrastructure and software to support growing CPU workloads as demand for its Claude artificial-intelligence models continues to increase.

The agreement could become even larger. Anthropic has the option to expand its commitment by an additional $9 billion, potentially bringing the total relationship to approximately $20 billion. As part of the agreement, Akamai also issued Anthropic warrants that could ultimately represent approximately 5% of Akamai’s outstanding common stock if the relationship expands fully.

Akamai expects to spend approximately $5.5 billion in capital expenditures to support the initial contract. About $1.7 billion of that spending is expected in 2026 to secure equipment and supply-chain components, followed by approximately $3.1 billion in 2027 as the infrastructure is built out. Akamai expects the contract to reach its full revenue run rate by the end of 2028 and generate roughly $1.7 billion in annual revenue thereafter.

The deal highlights the enormous infrastructure requirements behind the rapid growth of generative AI. Training and operating increasingly sophisticated models requires large amounts of computing capacity, storage, networking equipment, electricity, and data-center investment.

For Akamai, the agreement represents a significant expansion beyond its traditional content-delivery and cybersecurity businesses and strengthens its position as an infrastructure provider for AI companies. For Anthropic, securing long-term computing capacity gives the company additional infrastructure to support expanding usage of Claude.

The transaction also illustrates how the AI boom is creating opportunities beyond chipmakers. Cloud providers, data-center operators, networking companies, utilities, and other infrastructure businesses are increasingly benefiting from the capital required to build and operate AI systems.

Source: https://www.wsj.com/tech/anthropic-to-pay-akamai-technologies-11-6-billion-over-seven-years-for-cloud-services-7a55360b

Paramount Settles Antitrust Lawsuit, Clearing Path for Warner Bros. Discovery Deal

Paramount Skydance reached a settlement with California and 11 other states that had sued to block its proposed merger with Warner Bros. Discovery, removing one of the largest remaining legal obstacles to the transaction. The combination would bring together two major Hollywood studios along with streaming platforms Paramount+ and HBO Max and television networks including CBS and CNN.

As part of the settlement, Paramount agreed to several conditions aimed at protecting competition and supporting the U.S. entertainment industry. The combined company must release at least 30 theatrical films annually, with that number eventually increasing to 32, and commit at least $1.5 billion of additional spending on domestic film production over five years. Paramount also agreed to preserve key studio facilities and establish an editorial-independence board for CNN and CBS News.

The agreement includes financial penalties and potential asset divestitures if Paramount fails to meet certain commitments. An independent trustee and compliance monitor will also oversee parts of the settlement. The states agreed to lift the order preventing the deal from closing, although the settlement does not represent an admission of antitrust liability by Paramount.

The transaction is significant because it would create one of the largest entertainment companies in the United States at a time when traditional media companies are competing with large technology platforms for viewers and advertising dollars. Paramount expects the combination to create approximately $6 billion in operating synergies, although the merged company could begin with nearly $80 billion of debt.

For investors, the key question is whether combining the companies can generate enough cost savings and streaming scale to offset the large debt burden and continued pressure on traditional television. The settlement moves the transaction significantly closer to completion while creating a major new competitor in the global entertainment and streaming market.

Source: https://www.wsj.com/business/media/paramount-settles-states-antitrust-suit-clearing-way-for-warner-megadeal-95588926?utm_source

Weak Domestic Demand Continues to Weigh on China’s Economy

China’s economy delivered another mixed set of economic data in August, highlighting a widening gap between strong industrial production and weak domestic demand. Industrial production increased 5.2% from a year earlier, accelerating from 4.5% growth in July and exceeding economists’ expectations. The improvement was supported partly by resilient overseas demand for Chinese manufactured goods.

Consumer spending, however, remained weak. Retail sales increased only 0.4% from a year earlier, slowing from 0.6% growth in July and falling below economists’ expectations for approximately 0.8% growth. The slowdown suggests Chinese households remain cautious about spending despite stronger factory activity.

Investment data showed an even more significant weakness. Fixed-asset investment declined 7.2% during the first eight months of 2026 compared with the same period one year earlier. That represented a deeper contraction than the 6.7% decline recorded during the January-to-July period.

The weakness in consumption and investment contrasts sharply with China’s manufacturing sector. Industrial output continues to benefit from strong exports and rapid growth in advanced industries such as electronics, batteries, industrial robotics, and other technology-related manufacturing.

This creates an increasingly uneven economic model. Chinese factories continue producing goods at a relatively strong pace, but domestic households and businesses are not absorbing output at the same rate. As a result, manufacturers become more dependent on overseas markets for future growth.

That imbalance has implications beyond China. Strong Chinese manufacturing and weak domestic demand can increase the amount of goods available for export, potentially intensifying competition for manufacturers in the United States, Europe, and other Asian economies. At the same time, weak Chinese consumer demand can hurt multinational companies that depend on China as a major source of sales.

Investment weakness is also important because China historically relied heavily on property development, infrastructure spending, and other fixed investment to drive economic growth. A prolonged decline in these areas makes it more difficult for the traditional investment-led model to support the economy.

For policymakers, the challenge is therefore not simply increasing factory output. China must also strengthen household confidence, encourage consumption, and create an environment in which businesses are more willing to invest domestically.

For now, the August data suggest the economy remains heavily dependent on manufacturing and exports while consumer spending and investment continue to lag. The key question is whether policymakers can successfully generate stronger domestic demand and create a more balanced source of economic growth.

Source:
https://www.wsj.com/economy/weak-domestic-demand-continues-to-weigh-on-chinese-economic-activity-b8ba09d5

Rising Oil Prices and Borrowing Costs Revive Stagflation Fears

Higher energy prices and rising borrowing costs are increasing concerns that the global economy could move toward stagflation, an environment in which inflation remains elevated while economic growth slows. The combination is particularly difficult because the policies typically used to fight inflation can make weak growth even worse.

Oil prices have returned above $100 per barrel as the conflict in the Middle East continues to threaten major energy-production and shipping routes. Brent crude settled at $105.83 per barrel on September 16, even after Saudi Arabia offered additional crude supplies through Oman in an effort to reduce pressure on global markets.

The impact extends beyond crude oil. Diesel prices have approached record levels, jet fuel costs have risen sharply, and European natural-gas prices have climbed as buyers compete for available supplies. Higher energy prices eventually flow through the broader economy because fuel and electricity are inputs into transportation, manufacturing, logistics, and household spending.

At the same time, global borrowing costs have risen substantially. Government bond yields across major developed economies have reached levels not seen since the global financial crisis, increasing financing costs for consumers, companies, and governments.

Higher bond yields affect the economy through several channels. Mortgage rates rise, companies pay more to issue debt, governments spend more servicing existing obligations, and new investment projects become more difficult to justify because the cost of financing them increases.

The challenge for central banks is that the energy shock is pushing inflation higher just as higher interest rates begin to create pressure on economic activity. Eurozone inflation accelerated to 3.3% in August from 2.9% in July, while U.K. inflation reached 3.1%. Markets have consequently shifted from expecting monetary-policy easing toward anticipating additional rate increases in several major economies.

Normally, slowing economic growth gives central banks room to lower interest rates. Stagflation makes that response more difficult because lowering rates could stimulate demand and worsen inflation. Raising rates, however, could further weaken consumers and businesses already facing higher energy costs.

So far, major economies have remained relatively resilient. U.S. retail sales have surprised to the upside, economic activity in the U.S. and Europe continues to expand, and investment linked to artificial intelligence has supported growth.

The major question is whether that resilience can continue if oil remains above $100 and borrowing costs stay elevated. If consumers eventually respond by reducing spending and businesses delay investment while inflation remains high, policymakers could face the difficult combination of weakening growth and persistent price pressures that defines stagflation.

Source:
https://economictimes.indiatimes.com/markets/us-stocks/wall-street-guide/rising-oil-borrowing-costs-fuel-stagflation-fears-for-global-economy/articleshow/134329348.cms?from=mdr

Bank of Japan Raises Rates to a 31-Year High

The Bank of Japan raised its benchmark interest rate by 25 basis points to 1.25% on September 18, bringing Japanese borrowing costs to their highest level since 1995. The decision represents another major step away from the ultra-low and negative interest-rate policies that defined Japan’s monetary environment for decades.

Japan historically faced the opposite problem from many other developed economies. Weak consumer demand, slow wage growth, and persistent deflation led the Bank of Japan to maintain extremely accommodative monetary policy in an effort to encourage borrowing, spending, and investment.

That environment has changed as inflation has become more persistent. Higher food and energy costs, stronger wage growth, and broader price increases have pushed policymakers to focus increasingly on preventing inflation from remaining above the bank’s 2% target. The September increase follows earlier rate hikes and signals that the central bank believes monetary policy can continue moving toward more normal levels.

The decision passed by a 7-2 vote, showing that there remains disagreement within the Bank of Japan about the appropriate speed of tightening. Despite the rate increase, the Japanese yen weakened following the announcement, falling past 157 against the U.S. dollar as investors focused on the divided vote and uncertainty surrounding how quickly additional increases might follow. Japanese equities moved higher.

Japan’s shift matters beyond its domestic economy. Japanese households, banks, insurers, and institutional investors hold large amounts of overseas assets, including U.S. and European government bonds. For years, extremely low Japanese yields encouraged investors to seek higher returns abroad.

As Japanese rates rise, domestic bonds become more attractive. If investors begin shifting some capital back toward Japan, demand for foreign bonds could weaken, potentially contributing to higher yields elsewhere. This makes Bank of Japan policy increasingly important for global financial markets.

The key question is how far policymakers are prepared to continue. Additional tightening could help contain inflation and support the yen, but moving too aggressively could weaken domestic demand and increase borrowing costs for an economy that spent decades adapting to extremely low interest rates.

Source:
https://www.reuters.com/world/asia-pacific/bank-japan-set-raise-interest-rates-31-year-high-2026-09-17/

U.S. Retail Sales Rebound as Consumers Continue Spending

U.S. retail sales rebounded sharply in August, providing further evidence that American consumers remain resilient despite higher borrowing costs, inflation concerns, and elevated energy prices. Retail and food-service sales increased 1.2% from July to $773.9 billion, reversing the previous month’s 0.5% decline. Sales were also 6.0% higher than in August 2025.

The increase exceeded economists’ expectations for approximately 0.8% growth and suggests that consumer demand remains an important source of support for the U.S. economy. Even excluding gasoline stations, sales increased 1.1%, indicating that the strength was not simply the result of consumers paying higher fuel prices.

The data matters because consumer spending is one of the largest components of U.S. economic activity. When households continue buying goods, eating at restaurants, and spending online, businesses generate additional revenue and have less reason to cut hiring or investment. Strong retail spending therefore reduces concerns about an immediate consumer-driven slowdown.

However, continued spending also creates a challenge for monetary policy. Higher interest rates are designed partly to reduce demand and bring inflation under control. If households continue spending strongly despite elevated borrowing costs, demand can remain strong enough to maintain upward pressure on prices.

The retail report therefore adds to evidence that the U.S. economy may be capable of operating under tighter financial conditions for longer than previously expected. That resilience is positive from a growth perspective but could also reduce the urgency for the Federal Reserve to ease monetary policy if inflation remains above its target.

Consumers still face several pressures. Mortgage rates remain high, energy costs have increased, and borrowing through credit cards and other forms of consumer debt has become more expensive. Those costs could eventually reduce disposable income and cause households to become more cautious.

For markets, the key question is whether August’s rebound represents lasting consumer strength or whether higher energy and financing costs eventually begin to weaken household demand. Continued resilience would support economic growth, but it could also contribute to interest rates remaining elevated for longer.

Source:
https://www.wsj.com/economy/u-s-retail-sales-rebounded-last-month-cdb4a2e0

Anthropic Builds Biology Lab as It Expands Into Life Sciences

Anthropic, the artificial intelligence company behind Claude, has established a physical biology laboratory in the San Francisco Bay Area as it expands its ambitions beyond software and into life sciences. The facility allows Anthropic researchers to conduct physical biological experiments rather than relying exclusively on computer simulations.

Anthropic’s head of life sciences, Eric Kauderer-Abrams, confirmed the existence of the wet lab and explained that real-world experiments remain necessary to determine whether biological predictions generated by artificial intelligence actually work. The company is also exploring how Claude can direct robotic laboratory equipment to perform experiments with limited human intervention, while maintaining human oversight for safety.

The goal is to test whether artificial intelligence can accelerate parts of biological research that have traditionally required significant amounts of manual work and time. AI models could potentially help scientists identify promising molecules, analyze experimental results, design new experiments, and direct automated laboratory equipment more quickly.

The wet lab forms part of a much broader expansion into life sciences. Anthropic has launched Claude Science, a specialized platform designed to help researchers work across scientific databases and models. The company also acquired biotechnology startup Coefficient Bio and added Novartis CEO Vas Narasimhan to its board. Life sciences has become one of Anthropic’s largest areas of investment by both headcount and resources.

Anthropic has said it sees an opportunity for AI to accelerate research into diseases that may be difficult or financially unattractive for traditional pharmaceutical companies to pursue. However, the company has also drawn an important boundary around its ambitions. Anthropic does not currently plan to conduct clinical trials itself and has clarified that its physical laboratory is not exclusively focused on drug discovery.

The move is significant because it illustrates how leading AI companies are increasingly attempting to apply their technology directly to established industries rather than simply selling general-purpose software. Biology is particularly attractive because drug development is expensive, time-consuming, and often involves processing enormous amounts of scientific data.

If AI can automate portions of early-stage research and improve the speed at which promising treatments are identified, it could reduce the time and resources required to move from scientific hypothesis to potential drug candidate. At the same time, biological applications create significant safety and regulatory questions, meaning human supervision and safeguards will remain an important part of Anthropic’s approach.

Source:
https://finance.yahoo.com/healthcare/articles/exclusive-anthropic-quietly-sets-biology-100133604.html?utm_source=chatgpt.com&guccounter=1

Brookfield Agrees to Acquire Australia’s Reliance Worldwide

Brookfield has agreed to acquire Australian plumbing and heating-products manufacturer Reliance Worldwide Corporation in an all-cash transaction valuing the company at approximately $2.9 billion. Brookfield will pay US$3.38 per share, equivalent to approximately A$4.75 per share, and Reliance’s board has unanimously recommended the transaction to shareholders.

The agreement follows several months of negotiations. Brookfield initially approached Reliance in April and May with proposals of A$4.15, A$4.25, and A$4.50 per share. After receiving access to non-public information and completing an initial eight-week due-diligence process, Brookfield increased its proposal to A$4.75 per share in August. The parties subsequently conducted an additional period of exclusive due diligence before reaching the binding agreement.

The timing is notable because Reliance had experienced a difficult period before Brookfield’s approach. Its shares had fallen roughly 50% during the previous 18 months as higher interest rates weakened housing activity and uncertainty surrounding U.S. tariffs pressured the company’s outlook. Reliance has significant exposure to the U.S. housing market through plumbing and water-control products used in residential construction and renovation.

The company’s recent performance reflects those pressures. Reliance’s Americas sales declined during fiscal 2026, while tariffs, higher input costs, and weaker volumes weighed on earnings. These challenges contributed to the decline in the company’s public-market valuation and created an opportunity for a long-term investor such as Brookfield to acquire the business at a point of industry weakness.

Brookfield believes Reliance remains an attractive global industrial business supported by recurring replacement demand from aging housing stock. Unlike new construction, repair and replacement spending can continue even during weaker housing markets because plumbing systems eventually need maintenance regardless of broader economic conditions.

The transaction highlights a common private-equity strategy of acquiring established businesses when short-term macroeconomic pressures have depressed valuations. Brookfield can potentially benefit if housing activity eventually improves, while also pursuing operational improvements during its ownership period.

For investors, the deal demonstrates how higher rates, tariffs, and housing weakness can create acquisition opportunities for firms with long investment horizons and significant capital. Reliance expects the transaction to close by the end of March 2027, subject to shareholder and regulatory approvals.

Source:
https://www.wsj.com/business/deals/brookfield-agrees-to-2-9-billion-acquisition-of-australias-reliance-ec8240d7?utm_source=chatgpt.com