Key Takeaways
- German Chancellor Friedrich Merz has announced plans for preferential treatment for domestic green steel and backs an EU tariff plan to shield the steel industry, which he describes as being in an "existence-threatening crisis."
- Former U.S. President Donald Trump is expected to announce a deal with Eli Lilly (LLY) and Novo Nordisk (NVO) to lower weight loss drug prices to $150 a month in some cases.
- U.S. Trade Representative (USTR) Jamieson Greer stated that the U.S. will maintain tariffs regardless of a potential Supreme Court ruling, while also indicating Swiss openness to manufacturing in the U.S. and efforts to reshore rare earth processing.
- U.S. consumer sentiment has fallen to crisis levels, dropping below the lows seen during the 2008 financial crisis, and Oracle's (ORCL) 5-year credit default swap has surged above 80 basis points, marking its highest level in two years.
German Steel Industry Faces Existential Crisis Amid EU Tariff Push
Germany's steel industry is grappling with an "existence-threatening crisis," prompting Chancellor Friedrich Merz to advocate for robust protective measures. Merz announced plans for preferential treatment for domestic green steel and voiced Germany's support for an EU tariff plan aimed at safeguarding the sector. He emphasized the strategic importance of the steel industry to Germany, stating that the government would do "everything" to preserve it.
The German Chancellor confirmed that Germany backs an EU tariff plan designed to shield the steel industry, which faces significant challenges from global competition, high energy costs, and existing U.S. tariffs. Merz is currently engaging in discussions with factories and workers, with proposals expected to be finalized in the coming weeks to establish a reliable steel strategy. The Social Democrats, junior partners in Merz's coalition, are pushing for a "buy European" strategy and a tariff quota system to limit excessive imports and counter subsidized foreign competition.
Trump Eyes Weight Loss Drug Price Cuts
Former U.S. President Donald Trump is reportedly set to announce a deal aimed at significantly lowering the prices of weight loss drugs in certain cases. According to CBS News, the agreement, expected to involve pharmaceutical giants Eli Lilly (LLY) and Novo Nordisk (NVO), could reduce prices to $150 per month for some patients.
This move comes as weight loss medications, particularly GLP-1 receptor agonists, have seen a surge in demand, with sales projected to reach $150 billion by 2035. Eli Lilly and Novo Nordisk currently dominate this rapidly expanding market.
US Trade Policy Under Scrutiny as Tariffs Remain a Key Tool
U.S. Trade Representative (USTR) Jamieson Greer affirmed that the U.S. intends to maintain its tariff policies, even in the face of a potential adverse Supreme Court ruling. The Supreme Court is currently hearing arguments on the legality of tariffs imposed by the Trump administration under emergency powers, with a decision anticipated before the end of 2025. Greer expressed confidence in the administration's position but indicated that alternative legal measures would be pursued if the court rules against them.
Greer also highlighted ongoing efforts to strengthen U.S. manufacturing and supply chains, noting that Switzerland is open to establishing pharmaceutical, aircraft, and gold manufacturing operations in the U.S. Additionally, the U.S. aims to reshore and near-shore rare earth processing, reducing reliance on external sources. Despite potential "levers" with China, Greer emphasized the U.S. desire for stability in its relationship with Beijing.
Economic Indicators Signal Caution: Consumer Sentiment and Oracle's Default Risk
The U.S. economic landscape shows signs of increasing caution, with consumer sentiment plummeting to "crisis levels." Americans' perception of the economy has fallen below the lows observed during the 2008 financial crisis, driven by concerns over inflation and tariffs. The University of Michigan's Consumer Sentiment Index declined to 55.4 in September, down from 58.2 in August, with a growing share of consumers citing high prices and tariffs as negative factors.
Adding to market jitters, Oracle's (ORCL) default risk is spiking, with the company's 5-year credit default swap surging above 80 basis points, its highest level in two years. This increase reflects investor anxiety regarding Oracle's substantial AI-driven debt plan, which aims to fund new cloud data centers. Analysts warn that Oracle's net adjusted debt could more than double to approximately $290 billion by fiscal year 2028.
European M&A and Commodity Market Outlook
In European corporate news, the European Union has cleared the takeover of Groupe ADIT by Bpifrance Participation. This development marks a notable activity in the M&A space.
Meanwhile, the commodity market is showing signs of vulnerability, with CME Copper appearing particularly susceptible. Analysts suggest that a flush out to the $4-ish per pound level could occur if market sentiment deteriorates further, with $4.50/lb currently acting as near-term support.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.