America
Pentagon blacklisting of CATL creates challenges for U.S. banks
For Wall Street banks hoping to play a role in one of Hong Kong’s biggest IPOs in years, the U.S. Department of Defense’s decision this week to add CATL to a list of companies thought to have links to the Chinese military could not have come at a worse time.
The company, the world’s largest maker of electric vehicle batteries and a supplier to Tesla, has been in talks with banks in recent weeks as it prepares plans for a secondary public offering in Hong Kong. The initial public offering will give the company, which aims to expand overseas, access to offshore funds, and Morgan Stanley estimates it could raise up to $7.7 billion.
Goldman Sachs, Bank of America, JPMorgan, and Morgan Stanley have expressed interest in working on the listing, two people familiar with the process told the Financial Times. The Shenzhen-listed company is expected to select underwriters ahead of a shareholder meeting on January 17, when the date and size of the offering will be discussed, one of the people said.
But the Pentagon’s move, which also added tech giant Tencent and Cosco, one of China’s largest shipping companies, to the list, threatens to change banks’ risk-reward calculations.
Although it does not directly impose legal restrictions on banks working with companies on the list, it will force banks to face a difficult reputational question: Can a bank finance shares in a company that the U.S. says has links to the Chinese military?
“Unfortunately, random blacklisting of customer names is becoming a more common feature of banking these days, which creates risk,” said Han Shen Lin, China country director at U.S. consultancy The Asia Group. “The most banks can do is to reposition their business and customer mix accordingly,” he added.
Speaking to the Financial Times, Lin said inclusion on the list “doesn’t carry the same weight as a sanction, but it’s close enough that banks can preemptively reduce exposure to these names just to avoid negative headlines.”
It is unclear whether U.S. banks will continue their participation following the Pentagon’s move. Goldman Sachs, Bank of America, and JPMorgan declined to comment, and Morgan Stanley did not respond to a request for comment.
Tensions lead to uncertainty in trade agreements
This action is the latest sign that U.S.-China tensions are dragging deals into more and more uncertainty. Any move to sever ties with companies on the list could be costly for banks. Tencent, in particular, is among the most important Chinese customers of U.S. institutions.
The tech giant’s parent company paid $524 million in investment banking fees between 2004, the year of its initial public offering, and 2023, according to figures from the London Stock Exchange Group. Morgan Stanley, Bank of America, Goldman Sachs, and Citigroup were the biggest beneficiaries of these payments.
Although Goldman Sachs was the third-largest recipient of fees from investment banking activities, CATL benefited less from foreign banks, with the lion’s share of its fees going to China Securities and CICC, according to LSEG data.
CATL and Tencent said they are planning legal action to challenge the Pentagon listing if talks with the U.S. Department of Defense fail.
Pony Ma, founder and chairman of Tencent, said the company was “neither a Chinese military company nor a military-civilian fusion company contributing to the Chinese defense industrial base.”
CATL said it had “never engaged in any military-related business or activity,” while Cosco said none of the companies on the list were “Chinese military companies” and that it would contact U.S. authorities “to clarify this matter.”
The move echoes the dilemma faced by banks in 2023 when Swiss agrochemical company Syngenta wanted to hire banks for its $9 billion initial public offering on the Shanghai Stock Exchange.
Banks were hesitant about whether they could work on the deal because the U.S. Department of Defense had placed Syngenta’s owner, state-owned ChemChina, on its list of “Chinese military companies.”
Bankers at Goldman Sachs, JPMorgan, Morgan Stanley, UBS, and HSBC lobbied for a role on the list, although Syngenta eventually canceled the plan.
CATL told investors that access to dollars was a key part of the rationale for the listing. The company had RMB 289 billion ($40 billion) in cash as of March 31, but China’s strict capital controls system means government approval is required for overseas direct investments above a certain threshold.
America
US wealthy demolish multimillion-dollar mansions for land
Wealthy buyers in the US are tearing down multimillion-dollar homes shortly after purchasing them for hundreds of millions of dollars.
According to a report by The Wall Street Journal, the trend is driven by a shortage of land in prestigious locations, particularly along coastlines.
For ultra-wealthy buyers, the prime factor has become the land’s location rather than the structure standing on it. After the acquired properties are flattened, newer, more modern homes are built on the cleared lots.
Drawing attention to the shift in the luxury real estate market, the report noted:
“The home itself, formerly the primary driver of an expensive real estate purchase, is now almost beside the point. Buyers are competing first and foremost for well-located land, situated on the ocean or a mountaintop.”
The newspaper cited moves by US billionaire William Lauder as an example. Lauder purchased the oceanfront estate of radio host Rush Limbaugh, who died in March 2023, for $155 million and had it completely demolished in July.
Lauder had previously torn down two homes situated on roughly 1.2 hectares of land along the Palm Beach coast. Having initially planned to construct his own residence on the parcel, Lauder subsequently sold the cleared plot for approximately $200 million.
Jonathan Miller, a real estate appraiser, stated that such transactions are becoming increasingly common as land prices rise.
Amid this momentum, estate agents have also begun marketing luxury homes directly as teardown lots.
Listings use artificial intelligence-generated imagery to showcase how the land would look without the structures on it.
Marketers avoid using the word “demolition” directly, resorting instead to terms such as “adaptive reuse”.
Teardown listings rise across luxury housing market
The trend is not confined to the coast and is spreading to other regions across the US.
Data from property brokerage Redfin reveals that references to demolishing buildings are becoming more frequent in sales listings.
The share of such listings exceeds 15% in the Bunker Hill Village area of Houston, while standing at 6.67% in Pimmit Hills, Virginia.
Dina Goldenteyer, a real estate agent working in Miami, remarked that serial demolitions have become more frequent because buyers no longer appreciate homes older than a decade.
Former retail executives Jamie Dooley and Christine Scott spent $3.7 million in 2020 to demolish a seaside home near Destin, Florida.
Although the couple spent five years building a modern home on the cleared site, they listed the resulting new structure with a demolition condition, citing the fact that no one wanted to buy the property as it stood.
William Paddock, an employee at the environmental consultancy WAP Sustainability, pointed to the environmental damage caused by this construction cycle.
Paddock emphasized that tearing down a home of roughly 1,000 square metres and replacing it with a new building of approximately 2,700 square metres generates a carbon footprint equivalent to the annual emissions of an average 250 American households.
America
US inflation reaches 3.7% as midterm election campaign intensifies
An uptick in September inflation as the US midterm elections approach has pushed the cost-of-living debate back to the centre of the agenda for Democrats seeking to regain control of Congress from Republicans.
Annual inflation stood at 3.7% in September, according to the Consumer Price Index published by the Bureau of Labour Statistics, with energy, petrol, and electricity costs rising on a monthly basis.
Food prices remained flat from August to September, recording a 2.5% increase compared with the same period last year.
Democrats are anchoring their election campaigns to pledges of easing the cost of living, blaming the price increases on President Donald Trump’s tariffs and the war with Iran.
Trump and Republicans, pointing to the numerous left-wing candidates who won primary elections this year, contend that the opposition has become captive to “communists” within the party.
When annual inflation stood at 2.4% in February, the US and Israel launched the Iran war on the final day of that month, and prices continued to climb throughout the conflict.
The recent acceleration has not entirely reversed the retreat from the 40-year peak of 9.1% recorded in June 2022; however, the rate has remained above the Federal Reserve’s 2% target for over five years.
Fed policymakers raised the benchmark interest rate by a quarter of a percentage point last month, citing the battle against stubborn inflation. Officials will convene again next week to consider whether to raise rates or hold them within the 3.75% to 4% target range.
Energy and fuel record sharpest increase since first month of war
In September, energy prices posted their largest monthly jump since March, the first full month of the war with Iran, climbing 20.4% year-on-year. Energy costs had risen 2.1% from July to August, after falling 1.5% from June to July and 5.7% from May to June.
Recent escalations in Iranian attacks on oil tankers in the Strait of Hormuz, alongside more frequent strikes by Ukrainian forces against Russian refineries, have strained global crude oil and refined product markets, driving up US petrol and diesel prices.
Petrol prices also recorded their sharpest monthly increase since the first month of the war, climbing 9.1% from August to September, bringing the annual increase to 35.3%.
American Automobile Association (AAA) data shows the average price of regular petrol across the US stands at $4.26 per gallon; while below the level of roughly $4.48 recorded a month ago, it remains more than $1.20 higher than a year earlier. Average gallon prices exceed $6 in California and $5 in both Washington state and Nevada.
Electricity prices rose 0.2% from August to September, offsetting the 0.2% decline between July and August, and were up 4.4% year-on-year.
Heavy power demand from new data centres is feeding through into local household electricity bills. Trump argued that companies must cover the cost of the electricity required by their data centres themselves.
In a post on Truth Social, Trump claimed that he was requiring large data centres to generate their own power and feed the surplus back into the local grid, suggesting this could bring about “a major drop” in electricity prices.
Used vehicle market posts monthly rise as food costs stabilise
The cost of food at home fell 0.1% month-on-month in September, while dining out increased 0.2%.
Egg prices dropped to $2.27 a dozen, falling roughly 35% compared with September 2025 and remaining well below the 20-year peak of $6.23 recorded in March 2025.
Ground beef prices rose roughly 2.4% compared with September 2025, but at $6.48 a pound, they remained below the 20-year high of $6.98 reached in June.
Chicken held steady at its year-earlier level of $2.06 per pound last month, having fluctuated between $2.01 and $2.09 since November 2024.
Used car and truck prices fell 1.5% compared with September 2025, but rose 0.7% month-on-month in September following 0.4% increases in both July and August.
Heather Long, chief economist at Navy Federal Credit Union, noted that the sector faces severe pressure stemming from a combination of expensive replacement parts and a shortage of skilled labour.
Speaking to The Hill, Long emphasised that every cost pressure across the market is being felt directly at local auto repair shops.
America
Anthropic posts $80.7bn loss ahead of IPO as computing costs soar
Anthropic, developer of the artificial intelligence model Claude, reported a net loss of $80.7 billion for the first six months of 2026 ending 30 June.
According to a report by The Wall Street Journal citing the company’s draft initial public offering prospectus, this recorded loss nearly doubled the $42 billion loss incurred across the entirety of 2025.
The vast majority of that enormous figure, accounting for $72 billion, stemmed from accounting-driven book-value write-downs.
In contrast, the company saw a sharp surge in revenue, with turnover in the first half of the year climbing to $16.3 billion from $1.1 billion in the same period of the prior year.
During this period, Anthropic spent approximately $9 billion on computing power and infrastructure needs, surpassing in just six months the $7.3 billion spent across the whole of 2025.
The company has commitments to pay roughly $450 billion over the next seven to 10 years under cloud service contracts.
Under these obligations, contracts are planned for $111 billion with Google Cloud, $110 billion with Amazon Web Services, and $31 billion with Microsoft.
Anthropic will also spend up to $86 billion by 2033 and 2034, respectively, to lease Nvidia chips through smaller AI-focused cloud providers Nscale and Lambda.
The company could spend an additional $750 billion in the coming years to expand its computing capacity.
Roughly a third of the draft IPO prospectus was dedicated directly to risk factors.
The document highlighted the possibility that models could cause tangible real-world harm, noting that artificial intelligence could exhibit a “self-preservation” tendency and produce responses resembling “blackmail”.
Anthropic warned that the scale of damage caused by an AI-driven “catastrophic event” could render insuring against such risks impossible.
According to market expectations, Anthropic’s IPO could rank among the largest transactions in history, potentially surpassing SpaceX’s record.
Following the market debut, the company’s market valuation is projected to reach up to $2 trillion.
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