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The Nasdaq is down nearly 6% over the month of October, and I think the market is starting to price something it ignored for a long time: the AI buildout is increasingly financed with (debt) commitments, not just cash flow. You can see that in the upper chart below. Hyperscalers, NVIDIA, Broadcom and SpaceX now disclose $4.11tn of off-balance-sheet commitments in their latest filings. That's up from $3.29tn in Morgan Stanley's August estimate. The biggest: • Alphabet: $1,059b

Credit is flashing amber. Equity is being asked to pay the bill. Two charts, one story. 📈 Lower-quality credit (CAA-B OAS) has climbed to ~780bp. That's close to the 2016 peak, and every prior peak was met with policy support: global QE in 2008 and 2020, the ECB's CSPP in 2016. 📈 Meanwhile, net equity issuance just turned sharply positive. Q2 2026 is roughly $150bn, the biggest print in the series since 1997 and about three times the 2000 and 2021 peaks. For years, buybacks

The Fed held. The real decision is still ahead. The FOMC kept the target range at 3.75%–4% by a 10–2 vote, with Cook and Hammack preferring a 25 bp hike. Chair Warsh also announced that one meeting a year will become a strategy session with no rate vote, starting in 2027. Market reaction: a hawkish hold that traded dovish. The 2-year yield dipped as low as 4.678% after Warsh declined to give a clear steer on December. Equities rallied modestly, though narrowly, while the 10-y

What's the optimal gold allocation in a stock/bond portfolio? The data from 1970-2024 says ~14%. Incrementum AG ran a gold allocation sweep on a stock/bond portfolio (S&P 500 TR and US 10Y TR), using data from Robert Shiller and LSEG. Gold was added in 2% steps from 0% to 30%, then in 10% steps up to 60%. You can see in the charts below what the numbers show: 📉 Volatility is U-shaped. It starts at 8.28% with no gold, bottoms at 7.81% with 14% gold, then climbs. By 30% gold y

Anthropic just opened its books. Meta just went to the equity market. Together they tell you where the AI trade is headed. Anthropic's S-1 landed Monday. The headline numbers: 📈 Revenue grew about 1,300% to $16.3B in the first half of 2026, including $11.56B in Q2 alone. 📉 The net loss was $80.7B, but most of it came from fair-value changes on convertible bonds, which is largely non-cash. ⚙️ Q2 revenue was $2.08 for every $1 spent on compute. Operating income swung from a $

Moody's Analytics just updated its "What Could Go Wrong" matrix, which maps risks by likelihood and economic severity over the next 12–18 months. A few things stood out: 🔴 Four risks are on Negative Watch: an AI stock selloff, Fed missteps, Iran war escalation, and bond market turmoil. Notice that two of them (Fed missteps, bond market turmoil) tie directly to this week's meeting. 🔵 Newly added: a major AI cyberattack and a debt limit debacle. ⚠️ Highest severity (far right

A decade of quiet erosion: what $1 in 2016 buys today The chart below shows the purchasing power across ~80 government currencies since 2016 (IMF data). It's worth a few minutes of your time, to use it as a framework for your portfolio return over thr last 10 years, measured in fiat currencies. 📉 The "strong" currencies didn't hold their value either: • Swiss franc: -8% • Euro: -22% • US dollar: -26% • British pound: -27% And the tail is brutal: Nigerian naira -79%, Turkish

The 10-year Treasury just fell below 5%. Here's what's behind it. On Thursday the 10-year yield dropped about 19 basis points to roughly 4.95%, its biggest one-day move since March 2023. Just weeks ago, long-term yields were at their highest levels in over 20 years. It wasn't one catalyst: 📉 AI jitters. Nasdaq fell 2.6% and semiconductors dropped nearly 7% on concerns about AI spending and access to capital. Money rotated into Treasuries. 🛢️ Oil and geopolitics. Crude climb

Meta now has $900B in liabilities and future commitments. Almost none of it is traditional bond debt. Meta's latest 10-Q, plus the $68B July lease subsequent event, adds up to roughly $900B in liabilities and future commitments, including contingent cloud purchases. Three quarters ago it was $384B, then $587B in Q1. You can see that in the two charts below. What's in it: • $349B in noncancelable purchase commitments • $279B in leases not yet commenced, plus another $68B signe

SPCX just delivered a strong Q3 2026 — and the real debate is already shifting from the beat to the forecast. Headline numbers: Revenue: $14.6B (+161% YoY) Net income: $4.4B (vs. a $1.1B loss a year ago) Adjusted EBITDA: $8.8B (+306%) Super Intelligence (AI) revenue: $7.6B — now the largest segment Connectivity (Starlink): $5.2B (+69%) Compute capacity: 1.7 GW at quarter-end The print was clearly better than expected. AI scaled faster than most modeled, Starlink remains a hig

In AI data center credit, the tenant matters more than the building. Take a look at the chart below, showing the G-spreads on 24 high yield data center bonds, grouped by who actually pays the rent. The pattern is hard to miss. At the bottom of the pack, the safer tenants: when Amazon or Meta are the tenants, the spread ranges from 166 to 345bp. For CoreWeave's own unsecured bonds: roughly 980 to 1,008bp Same asset class: powered shells, GPUs, concrete, cooling. The spread gap

When the long bond breaks the weakest borrowers, the long bond eventually comes down. Please take a look at the chart below. It plots the US 30-year yield (blue) against CCC & lower option-adjusted spreads on an inverted axis (gray), so a falling gray line means credit stress is rising. For most of the past 20 years, the two lines moved together. In 2008 and again in 2020, CCC spreads blew out and the 30Y collapsed right alongside them. Stress built at the bottom of the credi

Europe's migration story is more complicated than the headlines. This map of immigration growth since 2000 shows how uneven the continent is. Spain is up roughly 700%, Turkey 446%, and Iceland and Finland about 300%. Ukraine, Serbia and the Baltics have seen sharp declines. Meanwhile, France is in the headlines. Nationwide student protests have disrupted over 700 secondary schools and led to roughly 5,000 arrests. Politicians abroad have been quick to blame migration. But Reu

The yield curve is out of inversion, but it's not exactly steep either. The 30-year minus 3-month spread bottomed near -1.7 points in 2023, one of the deepest inversions in four decades. Today it sits around +1.2. That's positive, but well below the 3 to 4 point spreads we saw coming out of past recessions. So what could move it from here? It comes down to three variables. 1. Inflation - Sticky or re-accelerating inflation pushes long yields up as investors demand more compen

Two inflation reports in two days. Both hot. The Fed's preferred gauge is next. Wednesday's CPI showed headline inflation at 3.7%, above the 3.6% expected, with core CPI up 0.3% on the month and 2.6% on the year. Gasoline did most of the work on the headline, but economists noted that price pressures are broadening beyond energy, with shelter, core goods and airfares all firming. Thursday's PPI was the bigger shock. Producer prices jumped 1.3% in September, more than double t

CoreWeave isn't a household name, but a lot of the AI economy runs through it. Right now, its credit market is flashing red. Quick background: CoreWeave is one of the leading "neoclouds": a specialized cloud provider built around Nvidia GPUs. AI labs and big tech companies that can't build compute fast enough rent capacity from it to train and run their models. It borrows heavily to buy chips and data center capacity, then leases that capacity out under long-term contracts. I

The September CPI prints this morning, and the market has already priced a lot. If you take a loook at the charts below, CME FedWatch has a hold on Oct 28 at 79.3%. For Dec 9, it has 70.6% on 4.00–4.25% and 17.6% on 4.25–4.50%, signaling a 25 bps hike. Here's the three potential outcomes and the scenarios: 🔴 Hot print (above consensus, especially core): The 20.7% October hike probability grows, and December shifts toward 4.25–4.50%. With CPI and PCE both running near 3.8% on

Headline spreads look calm. Underneath, something is cracking. But first, what is PIK? PIK means "payment in kind." Instead of paying interest in cash, a borrower adds the interest to the loan balance. The debt grows, and no cash changes hands. Think of paying your credit card bill by putting it on the same credit card. It can be a legitimate tool for a healthy company in a temporary squeeze. But when a company switches from cash interest to PIK, it's often because it can't a

The chart below plots a fiscal vulnerability index against the "yield gap" (10-year yield minus nominal trend growth) for 35 high-income economies. Three things stand out: 🔹 France and Italy are already paying up. Both sit in the high-risk zone with yield gaps around 2.5pp. The market has repriced them, and France has seen one of the sharpest rises in 10-year yields this year. 🔹 Belgium is the outlier. It sits firmly in the high-risk zone, but its yield gap (~0.9pp) is well

Please take a look at the latest leg of the chart below. The rolling 6-month correlation between Brent crude and the S&P 500 (red line) has collapsed into deeply negative territory, while the correlation between Brent and the 10-year Treasury yield has surged higher. This is the classic signature of an oil-supply shock regime: higher oil prices raise inflation expectations and yields, pressuring both bonds and equities at the same time. Shaded periods on the chart mark earlie