Tesla-SpaceX merger talks, UK inflation at 3.5% and French riot fallout: 21 October 2026

Elon Musk confirmed that special committees at Tesla and SpaceX are studying a merger, while UK inflation rose to 3.5% ahead of the 28 October Budget. In France, the weekend riots weigh on retailers and bond spreads.

Maz Vantage ·

Tesla and SpaceX explore a combination

Elon Musk said on SpaceX's earnings call that special committees have been set up at both companies to assess a possible merger, though no agreement has been reached and a deal is "no sure thing" (BBC; The Guardian; MarketWatch). The BBC notes that it would be the biggest merger in history (BBC).

Le Figaro reports that SpaceX beat expectations and posted a first net profit of $4.4 billion for the third quarter, against a loss of $541 million in the previous quarter, helped by its cloud business (Le Figaro). US stock futures rose on the results (Investing.com), and MarketWatch says the surge lifted the wider AI universe (MarketWatch). Super Micro, Dell and HPE also rallied after Super Micro said revenue and profitability could be stronger than expected (MarketWatch).

The mood around AI valuations is not uniform: The Guardian reports that, after a wobble on the tech-heavy Nasdaq, some observers think a reassessment of the value of various AI businesses may be under way (The Guardian).

Earnings and corporate news

  • Netflix: MarketWatch says investors sold the stock after the company acknowledged "intense competition" and investor concern about view-hours growth (MarketWatch). Le Figaro adds that the shares were already down about 25% since January and had fallen after each of the previous five results (Le Figaro).
  • Boeing: the 737 MAX 10 has received US certification, with deliveries expected to begin in 2027 (Le Figaro).
  • Adidas raised its 2026 guidance after a strong third quarter (Investing.com).
  • Getty Images filed for bankruptcy protection in New York as part of a debt restructuring and is preparing to leave the NYSE (Le Monde).
  • Fnac Darty: the European Commission cleared, without conditions, Daniel Kretinsky's planned takeover bid (Le Monde).
  • Flutter (Paddy Power, Sky Bet) plans to cut up to 1,400 jobs, blaming higher UK betting and gaming duties (The Guardian; BBC).
  • Jio Platforms: Mukesh Ambani is launching what could be India's biggest IPO, targeting a valuation of about £81 billion, with the listing due on Wednesday (The Guardian).

UK: inflation up, unemployment down, Budget ahead

UK inflation accelerated to 3.5% in the year to September from 3.1%, according to the ONS, driven by fuel prices (BBC). The Guardian says petrol and diesel costs rose by the most in four years (The Guardian).

On the labour side, unemployment fell to 4.7%, though analysts quoted by The Guardian describe a market "running on idle" amid a slump in vacancies (The Guardian). The BBC reports that small firms are scaling back hiring, citing labour costs (BBC).

Chancellor John Healey will set out his tax plans on 28 October (BBC) and has rejected calls to raise Capital Gains Tax (BBC). Separately, the government approved the Jackdaw North Sea gasfield (The Guardian), and Ryanair's chief executive predicted that European air fares could rise by as much as 20% in 2027 as Middle East conflict pushes up jet fuel costs (The Guardian).

France: riots, retailers and borrowing costs

Following the riots of 17-18 October, Le Figaro says the government announced support for affected shops, with damage described as running to hundreds of millions of euros (Le Figaro). BFM Business reports that the SME minister announced measures including partial unemployment, extended insurance deadlines, zero-rate loans and a support fund for firms with fewer than 50 employees (BFM Business). Carrefour has lowered its 2026 targets, in a context already weakened by higher energy costs (BFM Business).

In bond markets, the yield gap between France and Germany has reached its highest since 2012, according to Le Figaro (Le Figaro). On the budget, the vote on the tax section of the 2027 text has been pushed back to 3 November (Le Figaro), and the Cour des comptes has warned of a "financing rupture" in social security (BFM Business). Retailer Gifi is set to request court-supervised restructuring (redressement judiciaire) (Le Figaro), and Le Monde notes that a broker expects mortgage credit to become scarcer as borrowing rates, possibly above 4%, keep rising (Le Monde).

Inflation outlook and central banks

BFM Business reports that ECB economists see food-price inflation possibly reaching 3.4% in the third quarter of 2027, due to the energy shock linked to the Middle East conflict and heatwaves (BFM Business). The feeds from the Federal Reserve and the ECB contained no new rate decisions today; the latest Fed items are the minutes of the September FOMC meeting (Federal Reserve) and an ECB speech by Philip Lane on euro liquidity lines (ECB).

Other market moves

Japan's Nikkei 225 closed up 0.97% (Investing.com), and Bitcoin firmed to $82,000, with oil and AI concerns limiting further gains (Investing.com).

This summary is informational and does not constitute investment advice.

Sources