Good morning. Today, the topics of interest for Fortune include:
- ING believes that Andy Burnham in the UK may have a secret plan to hold an early general election.
- Market: As the shadow of further conflict with Iran looms, global markets experience selling pressure.
- Chart: The attacks launched by Iran in the Strait of Hormuz remain severe.
- The cost of childcare services in the United States is so high that fewer and fewer Americans are using such services.
- OnlyFans hopes to provide financial services and may also promote IPO.
Headline News
Currently, Tesla's market value is 1.52 trillion dollars; if a 30% acquisition premium is added, the cost of SpaceX acquiring Tesla would reach 1.98 trillion dollars. SpaceX is currently valued at 2.14 trillion dollars. This would almost be an equal merger. In order to acquire Tesla, SpaceX would need to issue shares equivalent to 92% of its existing shares. As a result, SpaceX's share capital would soar from 13.1 billion shares to 25 billion shares.
Politics
Is Andy Burnham of the UK secretly planning for an early general election? ING believes there is a possibility of that.
Last month, British Prime Minister Andy Burnham publicly stated that there would be no snap elections before 2029. However, James Smith believes that, rather than what Burnham says, what he is doing suggests that he may be paving the way for a sudden vote next year.
The problem Bernam faces is that he has large-scale, ambitious spending plans, yet he is constrained by the promises made by his predecessors not to implement significant tax increases. Since Bernam came to power through a "coup within the party" rather than a general election, he lacks the authority necessary to break those promises that helped the Labour Party win the election in 2024.
There are two indications that Burnham might be tempted to pull the "trigger." First, he postponed a major government expenditure review until the fall of 2027. Smith wrote in a report: "If you are also considering holding an early election, then it is almost certain that the expenditure review would preferably be conducted after the election."
Secondly, interest rates in the UK are rising. Interest rates in the UK are more politically sensitive than in the US, as the majority of homeowners' mortgage loans either float with the benchmark rate or require refinancing every five years. (In the UK, only 3% of mortgage loans have fixed rates that exceed a period of five years.) As interest rates rise, those homeowners who need to refinance will face increased monthly expenses of several hundred pounds. For Burnham, it is more advantageous to confront the electorate now, as most people are still enjoying the low interest rates of the past, rather than waiting until everyone's bills have gone up.
The Labour Party's current performance in opinion polls is not very good, but there has been a "Bernham rebound" that has put it ahead of other major political parties. More importantly, right-wing voters are now spread across three different parties: the Conservative Party led by Kemi Badenoch, Nigel Farage's anti-immigration party UK Reform Party, and the extreme nationalist party "Rebuilding Britain" led by Rupert Lord. Smith points out that under Britain's "first-past-the-post" electoral system, "the outcome of an election depends on which side of the political spectrum splits less."
Market
As the risk of further conflict in the Middle East looms, global markets have seen a wave of selling.
Today, market sentiment turned sharply negative, with traders selling stocks on a global scale. Before the opening of trading in New York, the S&P 500 index futures fell by more than 1%. Nasdaq futures, which are dominated by technology stocks, saw an even larger decline of 1.82%. Asian and European markets also mostly moved lower.
There seem to be several familiar sources driving the sell-off. The Houthi militia, supported by Iran, launched further drone attacks on Saudi airports and Saudi Aramco Shaybah oil fields. The United States ordered its staff to evacuate the U.S. embassy in Riyadh. Iran continues to attack vessels attempting to pass through the Strait of Hormuz; four ships have been targeted by drones in the past 24 hours. It is reported that Washington and Israel plan to resume large-scale military operations against Iran after the U.S. midterms. Not surprisingly, oil prices rose to $112 per barrel.
High oil prices are unfavorable for Asia, as most of the region's fuel supply relies on imports. In addition, according to a report by The Wall Street Journal, the oil supplied to China by Iran's "shadow fleet" at sea, which was already operating before the blockade of the Strait of Hormuz, has now finally run out. China's CSI 300 index fell by 1.84%, with the annual cumulative decline reaching 15%.
Tesla fell 5.35% in after-hours trading following its third-quarter earnings call. The company lowered its capital expenditure guidance for 2026 from $25 billion to $20 billion. Deutsche Bank's Jim Reid pointed out this morning: "This has raised questions about the speed of its transition towards AI and robotics, while current revenue and profits are roughly in line with expectations."
Finally, the yield on French 10-year government bonds rose to 5.1%, reaching a level not seen since 2002, indicating that traders still do not believe that France has overcome its fiscal crisis.
This morning, the S&P 500 index futures fell by 1.02%. The index rose by 0.58% yesterday.
In Europe, Stoxx fell by 0.92% in the early session, and the UK FTSE 100 index fell by 0.46% before noon.
In Asia: South Korea’s KOSPI fell by 3.52%; Japan’s Nikkei 225 index fell by 2.65%; India’s Nifty 50 fell by 0.82%; China’s CSI 300 index fell by 1.84%, and has already fallen by 15% this year, clearly entering a technical correction phase.
Brent crude oil rose to $112 per barrel.
Bitcoin fell to $81,922.
Today's Chart
The severity of attacks on shipping in the Strait of Hormuz has approached its worst level in history.
Deutsche Bank’s Michael Hsueh indicates that although oil exports from the Gulf region have returned to pre-war levels since the outbreak of the Iran-Iraq war, the number of attacks on vessels in the Strait of Hormuz remains at a very high level. The charter prices for ultra-large oil tankers have doubled, which has kept oil prices above $110 per barrel.
Today's Numbers
Over $2,000.
This is the amount that 7.7% of American parents pay each month for childcare. According to recent surveys by the Bank of America Research Institute Taylor Bowley and Jon Kaplan on the soaring costs of childcare, this represents the highest cost range. Since 2023, the proportion of people in this cost range has doubled, while the proportion of those paying $1,000 or less per month has decreased. The total number of parents paying for childcare has also decreased by 1% year-on-year.
There's one more thing.
Get ready to welcome “The Bank of OnlyFans” and possibly the upcoming IPO.
Reported by Emma Hinchliffe of Fortune, OnlyFans plans to expand into the financial services sector and go public. Keily Blair, the company's Chief Executive Officer, outlined the new roadmap during her speech at the "Most Influential Women Summit" held at Fortune last week. The first major change will be to provide financial services products to the 2.5 million creators on the platform. Since many of them produce adult content, they are often rejected by mainstream banks. Even Blair herself has been denied services by a bank due to her role as OnlyFans CEO.
Blair indicates that the reason OnlyFans is able to provide banking products in areas where mainstream financial institutions cannot is that it possesses more information about creators. “We have full visibility over the content created on the platform,” she told me, “and there is a huge difference between perceived risk and actual risk.”
OnlyFans is one of the most successful technology companies born in the UK. In 2025, the company's revenue reached 1.55 billion US dollars, which corresponds to a 20% share of the total transaction volume of 7.85 billion US dollars processed by the platform that year.
Blair means: "We are considering the path to IPO and are working towards that direction, regarding it as a potential goal for the company."
