Market Beats | Over 250,000 US Federal Workers Miss Pay; How Shayne Coplan Built Polymarket; Elon Musk’s xAI Expands Fundraising to $20B; NYC Developers Launch $70 Million Office-to-Residential Project; German Industrial Output Plunges to 2005 Levels; Kering CEO Luca de Meo Holds Townhall to Chart Revival Path; IRS to Furlough Nearly Half Its Workforce

—— Over 250,000 US Federal Workers Miss Pay; How Shayne Coplan Built Polymarket; Elon Musk’s xAI Expands Fundraising to $20B; NYC Developers Launch $70 Million Office-to-Residential Project; German Industrial Output Plunges to 2005 Levels; Kering CEO Luca de Meo Holds Townhall to Chart Revival Path; IRS to Furlough Nearly Half Its Workforce

1. Over 250,000 US Federal Workers Miss Pay

More than a quarter million federal employees missed their scheduled paychecks this week as the US government shutdown stretched into its second week — and another two million workers stand to go without pay if the standoff drags into a third.

The missed payrolls represent one of the most visible signs of strain from the partisan budget impasse, intensifying calls on Congress to pass a spending bill to reopen the government. The Trump administration, however, is leveraging the moment to increase pressure on Democrats.

A draft legal memo from the White House Office of Management and Budget argues that furloughed workers may not automatically receive back pay when the shutdown ends — a stance that would overturn four decades of precedent and appear to contradict a 2019 law requiring retroactive compensation.

“It really depends on who you’re talking about, but for the most part, we’re going to take care of our people,” President Donald Trump told reporters Tuesday. “There are some people that really don’t deserve to be taken care of, and we’ll take care of them in a different way.”

The proposal fits within Trump’s broader strategy of maximizing political pain for Democratic-leaning constituencies while shielding “essential” services such as the military and immigration enforcement. The president has also threatened to announce mass layoffs of federal employees in the coming days, while his budget director has suspended funding for projects in Democratic-controlled regions.

With no deal yet in sight, the shutdown’s economic and political fallout continues to widen, testing the limits of federal operations and public patience alike.

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2. How Shayne Coplan Built Polymarket

Just a few years after dropping out of New York University with dreams of crypto glory, Shayne Coplan found himself broke — so broke that he inventoried his Lower East Side apartment to sell his belongings just to make rent.

Disillusioned by crypto scams, Coplan in 2019 turned to economist Robin Hanson’s theories on prediction markets, seeing their potential to make societies smarter about forecasting real-world outcomes. “This is too good of an idea to just exist in whitepapers,” he later wrote on X.

Then came the pandemic — the perfect moment, he figured, to build an app for housebound people to bet on real events. Working from his bathroom, Coplan began coding what would become Polymarket, which launched in June 2020.

The path was anything but smooth. Polymarket’s “move fast and ask forgiveness later” approach repeatedly clashed with regulators, forcing it to block US users for years for operating as an unregistered exchange. But its popularity soared, with users wagering over $3 billion on the 2024 US presidential election — just a week before Coplan’s apartment was raided by the FBI.

Now, the tables have turned. Intercontinental Exchange Inc. (ICE), owner of the New York Stock Exchange, announced plans to invest up to $2 billion in Polymarket at a valuation of $8 billion. That deal catapults the 27-year-old into the Bloomberg Billionaires Index as the youngest self-made billionaire in the world.

From a struggling NYU dropout coding in a bathroom to leading one of Wall Street’s most sought-after prediction platforms, Coplan’s rise reflects both the volatility and the promise of the new AI-and-crypto-driven financial era.

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3. Elon Musk’s xAI Expands Fundraising to $20B

Elon Musk’s artificial intelligence startup xAI is ramping up its fundraising to $20 billion, double the previously reported target, with participation from key backers including Nvidia Corp.

According to people familiar with the matter, the round combines equity and debt financing through a special purpose vehicle (SPV) designed to buy Nvidia’s processors and lease them back to xAI for its Colossus2 project in Memphis — the company’s largest data center. Nvidia is investing up to $2 billion in the equity portion of the asset-backed deal, a move that allows the chipmaker to accelerate AI adoption among its clients.

The financing structure includes about $7.5 billion in equity and up to $12.5 billion in debt, the people said. The SPV will own the GPUs and lease them to xAI for five years, giving Wall Street investors a steady stream of returns. By backing the loans with hardware assets instead of company equity, the structure reduces corporate debt exposure and could become a blueprint for other tech firms building massive AI infrastructure.

The move underscores Musk’s determination to rapidly scale xAI’s computing power and close the gap with rivals such as OpenAI in the race for next-generation artificial intelligence dominance.

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4. NYC Developers Launch $70 Million Office-to-Residential Project

New York developers Marty Burger and Andrew Heiberger are spearheading one of Manhattan’s first major office-to-residential conversions in Midtown South.

Their joint venture plans to invest nearly $70 million to redevelop 29 West 35th Street, an office building acquired for about $25 million, into 107 studio apartments ranging from 400 to 575 square feet. Most of the units will feature flexible layouts with home offices, alcoves, or bonus rooms.

The project marks the first significant conversion following the city’s recent Midtown South rezoning changes. Located just a few blocks south of Bryant Park, the building will include a rooftop amenity space featuring an outdoor movie screen, game tables, and seating areas.

Burger said the decision to offer only studio apartments fits both the building’s structure and local housing needs. Its proximity to Grand Central Terminal and Penn Station may attract professionals seeking a pied-à-terre in the city.

The project will include 27 below-market units leased for $1,701 per month under a new tax-incentive program granting a 35-year tax abatement. Market-rate units are expected to rent for around $4,000 per month, with leasing set to begin in the first quarter of 2027.

Burger is the former CEO of Silverstein Properties, and Heiberger is the founder of Buttonwood Development. Financing is provided by Allegiant Real Estate Capital, with equity partners including L&L Holding Co. Chairman David Levinson, Terracotta Management and 400 Capital Management.

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5. German Industrial Output Plunges to 2005 Levels

Germany’s industrial production slumped to its lowest level since 2005 in August, with total output falling 4.3% from the previous month and car manufacturing collapsing 18.5%.

The dismal figures come just as Chancellor Friedrich Merz prepares to meet automotive industry executives in Berlin to address the sector’s ongoing struggles. Despite pledges to revive Europe’s largest economy, Merz’s efforts have yet to gain traction.

Germany’s statistics office said part of the decline was due to later-than-usual summer plant shutdowns, but structural headwinds are weighing heavily. Automakers are grappling with the shift to electric vehicles, weak demand from China, and new US import tariffs. BMW’s profit warning on Tuesday underscored the industry’s deep challenges.

“Industrial output is dropping like a stone,” said Carsten Brzeski, ING’s global head of macro, warning that the risk of Germany slipping into a technical recession had increased. Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, called the numbers “ugly,” noting that one-off factors slightly distorted the data.

Germany’s economy has stagnated for over three years, contracting 0.3% in the second quarter amid global trade tensions that battered its export-heavy manufacturing sector. Merz’s debt-funded spending plan has so far failed to revive growth.

Still, the government expects domestic demand to pick up next year, projecting GDP growth of 1.3% in 2026 and 1.4% in 2027, compared with just 0.2% this year. Economy Minister Katherina Reiche cautioned that “a large share of growth will come from high government spending — but this stimulus will only work if investments are executed quickly.”

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6. Kering CEO Luca de Meo Holds Townhall to Chart Revival Path

Kering SA Chief Executive Officer Luca de Meo is holding a townhall meeting on Thursday in Paris with about 300 senior managers, nearly a month after taking the helm of the struggling luxury group behind Gucci.

According to people familiar with the event, De Meo will outline his early assessment of the company’s challenges and share ideas for reigniting growth. Job cuts will not be discussed, they said. The CEO previously said the group must reduce its debt and costs, with a broader strategic plan expected next spring.

Earlier this year, Francois-Henri Pinault stepped down after several profit warnings. The Pinault family, founders of Kering, remain majority shareholders with a 42% equity stake and 59% of voting rights.

Since taking over, De Meo has toured stores, factories, and met with both business and creative teams. He attended Gucci’s Milan presentation alongside artistic director Demna and was seen in the front rows at Yves Saint Laurent and Balenciaga shows during Paris Fashion Week.

Kering’s new leader faces the task of reviving momentum at its flagship brands after years of slowing sales. Investors are watching closely for signs of De Meo’s strategy to restore the group’s luxury appeal and financial performance.

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7. IRS to Furlough Nearly Half Its Workforce

Hamas said it will release all Israeli hostages captured during its Oct. 7 attack and accepted parts of U.S. President Donald Trump’s plan to end the Gaza war, ahead of a Sunday evening deadline set by Washington.

In a statement, Hamas said it agreed “to release all Israeli prisoners — both living and deceased — in accordance with the exchange formula outlined in President Trump’s proposal, and contingent upon the necessary field conditions for carrying out the exchange.”

The group added, however, that some provisions of Trump’s 20-point proposal “require a unified national stance and must be addressed in line with relevant international laws and resolutions.”

Trump had warned that Hamas had until 6 p.m. Sunday to accept the plan he announced earlier in the week with Israeli Prime Minister Benjamin Netanyahu. Otherwise, he said in a social media post on Friday, “all HELL, like no one has ever seen before, will break out against Hamas.”

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