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Happy Monday! Allison here with a quick programming note: I'll be traveling for work this week and taking a little vacay next week, so you may get a slightly different Nightcap experience than you're used to, but I can guarantee you'll meet some of my very talented CNN Business colleagues along the way.

Thank you for understanding. Now, let's get into it.

By Allison Morrow

🇬🇧 IN LIZ WE TRUSS?

After a bruising battle with bond markets and members of her own party, UK Prime Minister Liz Truss has admitted defeat, apologizing for her unfunded tax plan, firing her finance minister and effectively gutting her entire economic agenda.

"I do want to accept responsibility and say 'sorry' for the mistakes that have been made," Truss told the BBC on Monday. "We went too far and too fast."

Will her about-face be enough for her to hold onto her job? It's not yet clear, my colleague Julia Horowitz reports.

Here's the thing: On Monday, the government went even further to try to calm jittery markets. Just four days into the job, the new finance minister, Jeremy Hunt, said he would reverse almost all of the unfunded tax cuts announced three weeks ago by his predecessor. The reversal would raise $36 billion, he said.

The announcement helped ease alarm in financial markets. UK government bonds rallied and the pound climbed 1.2% to $1.13. But investors remain on edge.

ICYMI:

Last month, when the Truss government said it would slash taxes while borrowing like mad, investors didn't respond well.
Markets sold off UK assets with abandon. The pound crashed to a record low against the US dollar; bond prices slumped, sending yields soaring. In turn, mortgage rates shot up and brought some pension funds to the brink of default.
The Bank of England was forced to announce three separate interventions to avoid a meltdown in the UK bond market.

And until this past Friday, it seemed like the government was going to press on regardless of all the turmoil it created.

Now, it seems Truss is finally listening. On Friday, she fired her previous finance minister and reinstated a big tax hike on corporations. Then came her apology on Monday.

But the government's credibility won't be so easily restored.

"The government's growth agenda is in tatters," former finance minister Philip Hammond told the BBC last week. "I'm afraid to say we've thrown away years and years of painstaking work to build and maintain a reputation as a party of fiscal discipline and competence in government."

What happens next?

More details on the revised Truss plan aren't expected until October 31, leaving investors plenty of time to stew in their uncertainty.

And not to state the obvious but, like, uncertainty is really bad idea right now.

Many investors are are choosing to hold cash instead of debt as inflation stays stubbornly high. Having people on the sidelines is making bond market swings more pronounced at a delicate moment.

#️⃣ NUMBER OF THE DAY

$25 billion

Kroger plans to buy Albertsons in a nearly $25 billion deal that would combine two of the largest supermarket chains in the country and create one of its largest private employers.

The two companies have a combined 710,000 workers – most of them unionized in an industry with low union rates – and more than $200 billion in sales.

Why it matters: The retail industry is consolidating, and merging would give the companies greater scale to fend off competition from the likes of Amazon and Walmart. If completed, the deal would be one of the largest mergers in US retail history, creating the third-largest retail chain in America by sales.

🎞️ GOOD SCARE

It's a scary time in Hollywood.

The streaming revolution has transformed the entertainment industry, and studios are trying to keep up. But there's one production company that doesn't seem too frightened, my colleague Frank Pallotta writes.

You may not have heard of Blumhouse Productions, but you've likely heard of its movies. Like, "Get Out," "The Black Phone," "The Purge," "Paranormal Activity," and the rebooted "Halloween" trilogy.

That's a lot of hits. And very profitable ones, too.

The company is known for its unique business model, in which it keeps budgets low and pays its creators "on the back end" — cutting them in for a share of the film's profits in exchange for lower paydays upfront, Frank explains.

For example: "The Black Phone," the summer horror hit starring Ethan Hawke, made $160 million worldwide. The film's budget? $16 million.

2020's "The Invisible Man" cost $7 million to make and brought back $144 million.

Its biggest hit was both a critical darling and a cash cow: "Get Out" made $255 million on a measly $4.5 million budget.

You might say Blumhouse is making a killing with that strategy... All right I'll show myself out.

Frank spoke with CEO Jason Blum about how Blumhouse is navigating the menacing landscape of Hollywood in the 2020s and why they decided to release their latest production, "Halloween Ends," in theaters and streaming at the same time.

WHAT ELSE IS GOING ON?

📈 Stocks rallied sharply Monday, thanks to more strong earnings from big banks and a sigh of relief about new plans by the United Kingdom to scrap a controversial tax cut plan.

💸 President Biden announced the formal launch of the application for Americans seeking student loan forgiveness, calling it a "game changer for millions of Americans."

📱 Kanye West, who now goes by Ye, is acquiring Parler, the social media platform favored by many conservatives, after Twitter and Instagram restricted his accounts over his antisemitic rants.

🍎 Apple workers in Oklahoma City voted to form the second-ever labor union at one of the company's US stores, in the latest sign that organizing efforts are gaining traction inside and outside the tech and retail industries.

🏦 Raphael Bostic, the president of the Federal Reserve Bank of Atlanta, said Friday he inadvertently broke the central bank's rules around personal investments.

⚖️ Nikola founder Trevor Milton was convicted of fraud in a case alleging he lied to investors about the electric and hydrogen fuel cell company's technology.