Finance

One tendency veteran money-managers often share is a high tolerance for cognitive dissonance. This is because without it their job would be a nightmare. Clients know that outsize returns come from taking risks, and want them to do so, but then balk when they lose money. Research is essential for gaining an edge, but a good chunk of even the best analyst’s ideas will fail to turn a profit. And of course, the most carefully built portfolio—with each position backed by a solid thesis and weights fine-tuned to the basis point—can be trounced by one that might have been slapped together in five minutes. More

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The dollar was little changed Wednesday, recovering from earlier declines, as traders weighed the potential fallout from a U.S. government shutdown.
The dollar index, which gauges the greenback’s performance against six rival currencies including the euro and the Japanese yen, was last up just 0.02% at 97.79. Earlier in the day, it fell more than 0.2%, putting it on pace for its worst annual decline in 22 years.

The U.S. government shut down after the Senate short-term funding bill failed to pass, and Democrats led by Senate minority leader Sen. Chuck Schumer and House minority leader Rep. Hakeem Jeffries push for a measure to extend enhanced Obamacare tax credits. President Donald Trump, meanwhile, threatened benefit cuts for “large numbers of people” if an agreement wasn’t reached.

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Dollar index year to date

“Historically, shutdowns have corresponded with a weaker USD, though primarily against safe haven currencies” such as the yen, Swiss franc and euro, wrote FX analyst Daniel Tobon of Citigroup. “Given persistent [U.S. dollar] pessimism in the current market narrative, further increased U.S. political uncertainty should also pressure the USD lower. However, a quick resolution to the shutdown could lead to limited follow-through, keeping us in similar ranges to recent months.” More

A view of the U.S. Capitol is seen at sunset in Washington, D.C., on Sept. 30, 2025.
Mehmet Eser | Afp | Getty Images

Traders in prediction markets are betting that the U.S. government shutdown could drag on for nearly two weeks, with odds rising that Congress will not reach a deal until at least mid-October.
On Kalshi, a federally regulated prediction market, the current forecast implies the stoppage will last 11.1 days, up sharply in recent days as negotiations on Capitol Hill have stalled.

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On Polymarket, traders see the highest likelihood that the government won’t reopen until Oct. 15 or later, with that outcome carrying about a 38% probability. By comparison, odds of a resolution in the Oct. 6-9 window stand at 23%, while Oct. 10-14 carries 22%. Only 14% of traders expect lawmakers to strike a deal in the coming days, on Oct. 3-5.

Arrows pointing outwards

The full shutdown began early Wednesday morning after top Democrats and Republicans, including President Donald Trump, failed to agree on a short-term deal to keep the government funded. It sets the stage for the furlough of hundreds of thousands of federal workers and the shuttering of a slew of key programs and services.
The length of a government closure matters as a longer-than-normal stoppage could weigh on an already fragile economy and put pressure on a stock market near record highs.
Government shutdowns on average last about 14 days, based on data from Bank of America going back to 1990. While the S&P 500 has averaged a 1% increase during these events, a prolonged closure this time could rattle markets. More

Longtime investor Leon Cooperman believes we are in the late innings of a bull market where bubbles can form and risks rise, a stage of the cycle that Warren Buffett had warned about.
The chair and CEO of the Omega Family Office read a quote from the “Oracle of Omaha” on CNBC’s “Money Movers” Wednesday, which he said fits neatly with what he’s seeing right now.

“Once a bull market gets under way, and once you reach the point where everybody has made money no matter what system he or she followed, a crowd is attracted into the game that is responding not to interest rates and profits but simply to the fact that it seems a mistake to be out of stocks,” Buffett said in 1999, according to a Fortune Magazine article.
Buffett believes bull markets often end not only when valuations are stretched, but also when there is irrational exuberance and when the rally is fueled by momentum.
“It’s what’s going on now,” Cooperman said, adding that investors’ mood is very similar and valuation on artificial intelligence companies is “ridiculously high.”
The S&P 500 has surged almost 40% since its April lows, returning to all-time highs. The rally has been led by mega-cap tech giants, which have invested billions in artificial intelligence and are being valued richly on the potential of this emerging era.

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The famous Buffett Indicator — the ratio of total U.S. stock market value to GDP — is also flashing one of the clearest signs of market exuberance. The gauge is sitting at record highs well above the peaks reached during the Dotcom Bubble as well as the pandemic-era rally in 2021, suggesting equity prices are running far ahead of the underlying economy. At 217%, it’s also beyond the level Buffett once said is “playing with fire.”

While Cooperman thinks stocks could be risky with the late-cycle crowd behavior, he dislikes government bonds even more due to elevated inflation. Bonds pay fixed nominal interest, so higher inflation erodes their real returns.
“Stocks are less risky than bonds at these levels,” he said. More

Cheng Xin | Getty Images

Bitcoin ticked higher on Wednesday while most other risk assets fell after U.S. lawmakers failed to reach a government funding agreement, leading to a shutdown.
The move showed the evolving view of the cryptocurrency to a store of value during dysfunctional geopolitical times, not unlike gold, which rose to a record on Wednesday.

The flagship cryptocurrency traded around 2% higher on the day at $116,598.
The U.S. government shut down at midnight after a Senate bill to keep the government funded did not garner enough votes to pass. This comes as Democrats led by Sen. Chuck Schumer and Rep. Hakeem Jeffries push for such a measure also extend enhanced Obamacare tax credits.

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Bitcoin 5-day chart

President Donald Trump, meanwhile, has threatened government benefit cuts for “large numbers of people” if an agreement isn’t reached soon.
Stocks fell in early trading on Wednesday as traders assessed the ramifications of a government shutdown, with Wall Street perhaps looking to other assets for safety — including bitcoin. Gold also caught a bid, hitting a fresh all-time high.
Bitcoin is up about 25% this year, rising as more Wall Street institutions embrace the cryptocurrency and global investors begin to view it as a reputable portfolio allocation and not just a quick trading vehicle. More

Warren Buffett speaks during the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska, on May 3, 2025.

Warren Buffett’s Berkshire Hathaway is closing in on a deal to buy Occidental Petroleum’s petrochemical unit OxyChem for roughly $10 billion, the Wall Street Journal reported Tuesday.
The potential deal, which could finalize within days per the Journal, could be Berkshire’s largest since 2022 when it bought insurer Alleghany for $11.6 billion. That deal was announced in March of that year and completed in October 2022. Berkshire is sitting on a record cash hoard of $344 billion.

Buffett, 95, is stepping down as Berkshire CEO at the end of 2025, but he will remain as chairman. Buffett’s successor Greg Abel, who was CEO of Berkshire Hathaway Energy, is known for his strong expertise in the energy industry.
Shares of Houston-based energy company fell 1.8% Tuesday despite WSJ’s report.
The Omaha-based conglomerate owned more than $11 billion worth of Occidental stock, or a 28.2% stake. The 95-year-old Buffett previously said he wouldn’t take full control of the oil company, founded by legendary oilman Armand Hammer.
In 2019, Buffett helped bankroll Occidental’s purchase of Anadarko Petroleum with a $10 billion commitment, receiving preferred shares and warrants to buy common stock in return. 
The billionaire investor started buying Occidental common stock in the open market in early 2022 after reading a transcript of the oil company’s earnings conference call. He took advantage of the heightened volatility in the Covid pandemic to scoop up the shares at a discount.

Occidental also pays a 2% dividend yield and has been investing in a carbon capture business.
— Click here to reach the original WSJ story. More

The rebound in Wall Street dealmaking is undeniable. And, for Goldman Sachs , that’s undeniably bullish. Investors got two new reasons to be optimistic about the Club stock this week: Goldman was tapped as a financial advisor in the massive deal to take video game publisher Electronic Arts private, and smaller investment bank Jefferies posted its best third-quarter revenue ever , lifted by strength in the dealmaking environment. Both of these developments bode well for revenue in Goldman’s crucial investment banking division — a key reason we initiated a position back in December 2024 . Goldman’s investment banking business, which brings in fees from services like underwriting initial public offerings (IPO) and advising on mergers and acquisitions (M & A), has been rebounding over the past several quarters. Higher interest rates and macroeconomic uncertainty coming out of the worst of the Covid pandemic nearly froze IPO and M & A activity in 2022. A stringent regulatory environment under former President Joe Biden was also a headwind. After Donald Trump won the 2024 presidential election, expectations were high that his second term would usher in a more relaxed approach to business regulations. The stock market soared post-election, but then tanked on tariffs. Now, on the other side of the worst of the trade policy uncertainty, the bet on a dealmaking comeback is starting to pay off. GS YTD mountain Goldman Sachs (GS) year-to-date performance Shares of Goldman Sachs have reflected that investment banking bounce — closing at a record high $806 each last Tuesday. The stock, which has since come off the boil a bit, is still up roughly 38% year to date. That’s even after Tuesday’s roughly 1.5% drop on lower-than-expected consumer confidence data. The stock market overall was also lower ahead of a possible government shutdown. Tuesday’s trading does not, however, change our bullish thesis on Goldman, which is further supported by the two aforementioned announcements, starting with the EA leveraged buyout. Biggest LBO ever Goldman was revealed Monday as a financial advisor for Electronic Arts in its agreement to be acquired by private equity firm Silver Lake, Jared Kushner’s Affinity Partners, and the Saudi Public Investment Fund. The all-cash deal, which is expected to close in the first quarter of fiscal year 2027, is worth around $55 billion. The consortium will be making a combined equity investment of roughly $35 billion and $20 billion in debt financing from JPMorgan. If completed, this will go down as the largest leveraged buyout in U.S. history. A leveraged buyout, often referred to as an LBO, is a method of acquiring a company in which the deal is financed by a mix of equity and debt. Goldman will receive huge fees for advising EA in the take-private deal — a boon to its investment banking revenue. The transaction keeps Goldman at the top of the list among M & A advisors, a title it has held for eight years, according to Bloomberg. As Jim Cramer said in the September Monthly meeting , “Goldman’s got everything going for it: IPOs, M & A, wealth management, sales and trading. And, it’s the best at them. The best.” Blowout quarter Jefferies’ stellar quarter after Monday’s close showcased company-record advisory fees on a better dealmaking backdrop. Advisory revenue jumped 10.7% in the quarter to $655.6 million. In sum, investment banking net revenue surged 20.3% to $1.14 billion from a year earlier. Shares fell more than 3.5% on Tuesday despite the better-than-expected release. The stock was caught up in Tuesday’s bank stock selloff, which also hit Club name Wells Fargo . The quarterly results from Jefferies give investors a positive read-through to Goldman’s earnings report on Oct. 14. Wells Fargo will report on the same day. Jim, however, described the Jefferies quarter as amazing during ” Squawk on the Street ” on Tuesday morning. Now, let’s hope the Club’s holdings can also deliver. We will also be looking to see how Goldman’s second-largest division, asset and wealth management, has performed while the bank tries to dominate a less crowded corner of Wall Street. (Jim Cramer’s Charitable Trust is long GS, WFC. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. More

Chamath Palihapitiya has launched a $345 million SPAC that he said was more than five times oversubscribed.
The vehicle is designed to target companies in AI, energy, defense and decentralized finance.
Palihapitiya once helped ignited the SPAC boom in 2020, but his first wave of deals mostly ended poorly for retail investors who followed along.
The investor said he wants to temper retail investors’ involvement with his SPACs this time.

Venture capitalist Chamath Palihapitiya.
Mark Kauzlarich/Bloomberg via Getty Images

Chamath Palihapitiya, once dubbed Wall Street’s “SPAC King,” is back with a new blank-check vehicle and a promise to do better after a bruising track record.
Palihapitiya on Monday launched the American Exceptionalism Acquisition Corp. A (AEXA), a $345 million SPAC that he said was more than five times oversubscribed, drawing $1.4 billion in demand. The vehicle, which will trade on the New York Stock Exchange, is designed to target companies in AI, energy, defense and decentralized finance.

“These are areas where I believe American entrepreneurship can still lead the world, and where a disciplined, institutionally backed vehicle can add value,” the 49-year-old the Social Capital CEO and former Facebook executive said in a post on X.
The SPAC was up 3% in early trading Tuesday.
Palihapitiya once helped ignite the SPAC boom among retail investors during the pandemic in 2020, but his first wave of deals mostly lead to poor returns. Virgin Galactic lost more than 90% of its value, while Clover Health trades around only $3 compared to the $15 peak after regulatory scrutiny and a short-seller report. Opendoor, which had fallen into a penny stock earlier this year, became a meme name supported by retail traders, but the stock is still about half of its record price in 2021.
SPACs are special purpose acquisition companies, which raise capital and use the cash to merge with a private company and take it public, usually within two years.

Improving the SPAC structure

Now, Palihapitiya said AEXA is structured differently. The SPAC will carry no warrants, and his compensation vests only if shares rise at least 50% after a deal. Meanwhile, just 1.3% of the allocation went to retail investors, he said.

“I want to temper retail investors’ involvement with my SPACs,” he said. “This deal was built for institutional investors. Specifically, 98.7 percent went to large institutions, each picked explicitly by me.”
Palihapitiya’s return comes as he has recast himself both politically and publicly. A longtime Democrat donor who once floated a run for California governor, he has more recently aligned with President Donald Trump’s politics. At the same time, he has built a media platform through the All-In Podcast, where he and other tech investors debate politics and markets, often favoring the views of the Trump Administration.
SPACs are having a resurgence after a sharp, two-year slowdown as regulatory scrutiny, disappointing post-merger performance and rising rates dampened investor appetite. Many SPACs liquidated rather than find deals, and the once red-hot sector became a cautionary tale. Now, with traditional initial public offerings returning and the broader stock market charging ahead, dealmakers are dusting off the structure.
“No one can predict what will happen in the future so be safe out there and no crying in the casino,” Palihapitiya said. More