The Weekend Edition is pulled from the daily Stansberry Digest.
It's "hot" out there...
This week, a batch of fresh economic data showed services and manufacturing activity – and costs – are at their highest levels in years.
These "hot" numbers come from an early look at S&P Global's widely followed Purchasing Managers Index for September.
The good part? Economic activity rose at the highest level in more than five years.
The concerning part? Manufacturing and services costs were the highest in nearly four years. Prices have been trending this direction for months.
On Wednesday, this "flash" report – not quite final for September, but an early indicator – showed inflation is becoming a prevailing characteristic of today's economy... and markets.
And it wasn't the only signal...
The 10-year Treasury yield, reflecting growth and inflation considerations, breached 5% again. It's trading at an almost two-decade high around 5.2%.
As yields rose, the major U.S. stock indexes were lower.
Expectations for another interest-rate hike at the Federal Reserve's October meeting jumped to almost 70% after senior Fed official Michael Barr said higher rates are the right idea.
And oil prices rose again, too.
For those wondering "where are we in a rate-hike cycle?" it increasingly looks like "just the beginning."
As S&P Global Chief Business Economist Chris Williamson commented in the report...
This growth is being accompanied by some of the most severe supply chain bottlenecks seen in the near-two-decade survey history if the pandemic is excluded, with companies also reporting increasing problems finding suitable staff.
Supply-chain bottlenecks... Problems finding staff... We've seen this before, and we remember it well. In 2020 and 2021, backlogs constricted supplies of all kinds of things and led to higher inflation – especially with "stimulus checks" and near-zero interest rates.
Today, the war in Iran is disrupting global energy and critical commodity supplies. That's pushing up prices. As Williamson continued...
Firms' input costs have meanwhile jumped in September at the steepest rate for four years, with fuel and transport costs spiking higher thanks to the rise in oil prices seen during the month, which will add further to the upward pressure on selling prices and inflation in the coming months.
You probably feel this in your everyday life...
My wife recently came back from the grocery store and remarked that "everything was expensive."
The diesel price at the pump sits at $6.46 per gallon at our local station. That's a costly expense for truckers, farmers, and the other industries that prop up the U.S. economy. And in one way or another, that impacts the U.S. consumer and the economy at large.
President Donald Trump said he's considering banning diesel export, intending to lower prices in the short term.
In California, some gas stations have maxed out diesel prices at $9.999 on the pump, only because they weren't designed with double-digit prices in mind. Talk about a sign of the times.
The AI Boom Is Creating a Copper Shortage
This week, copper hit an all-time high of $6.83 per pound. The metal is up about 27% from its 2026 lows in the early days of the Iran war... and up more than 45% over the past 12 months.
Typically, when copper prices rise, it's a good sign for the economy's health. That's why it's called "Dr. Copper."
But in this case, rising prices are also saying something about supply...
This week, data from the Shanghai Metals Market showed that Chinese copper inventories hit their lowest level since 2023. S&P Global reported that the country has even turned to using more scrap metal because of a shortage of higher-quality copper.
This isn't just a China story. Take a look at this chart from the Financial Times...
In the first half of 2026, copper production fell year over year thanks to production halts at some of the world's largest mines. Meanwhile, copper demand is projected to grow 50% by 2040.
Add that up, and wealth-management firm Bernstein expects a global copper deficit to begin next year. By the end of the decade, demand for copper could outpace supply by more than 2 million metric tons.
By S&P Global's math, copper production will fall about 25% short of demand in 2040. That's pretty simple math for "the price will go up."
And AI is creating much of this demand...
According to the Copper Development Association, AI data centers can use up to 3 times as much copper as a traditional data center. And by 2030, AI data-center demand for copper could reach 500,000 tons.
That means these facilities alone may account for almost 20% of the global copper deficit.
The 'Real Things' Boom
The ironic part about an AI bull market is that (along with government-aided inflation), it has provided the backdrop for the growing value of "real things," like copper, electricity, and water.
Another real-world thing growing in value? Weapons.
With the yearslong war in Ukraine and the almost seven-month conflict in the Middle East, America needs to restock and reimagine its munitions and defense supplies.
During his speech at the United Nations on Tuesday, Trump said the U.S. is replenishing its weapons stockpiles "fast." With that, the U.S. spending bill for 2027 will likely increase the defense budget to a record high of more than $1 trillion.
As Joel Litman, chief investment officer of our corporate affiliate Altimetry, says, America's military leaders and defense contractors are meeting soon to discuss resupplying and rebuilding the nation's military. That will send trillions of dollars into the sector in the coming years.
From an investing standpoint, this is a huge opportunity...
But not for the well-known "Big Five" defense contractors. Instead, Joel says the real opportunity lies in the smaller companies that the government could turn to for help in beefing up the military supply chain.
And Joel just revealed the stocks he believes will soar during the coming defense build-out.
All the best,
Corey McLaughlin
Editor's note: As a Pentagon and FBI consultant, there are few people more plugged-in to the defense world than Joel. And to help explain the opportunity building in America's growing military budget, Joel brought on a retired Army colonel who spent his career overseeing billions of dollars in government contracts. Together, they revealed what happens when the Pentagon starts funding new suppliers – and the small companies Joel believes will benefit most.
