SATURDAY RECAP
Brent settled at $113.17 on Thursday as the 10-year yield closed at 4.96%. Meta's default swaps set a record, and every big AI beat got sold.
The week opened with a bounce. Chip stocks snapped an eight-day slide on Monday, and the Nasdaq gained 1.1%.
Bonds sold that bounce. The 10-year yield rose to 5.15% from 5.09%.
By Thursday the roles had flipped. The Nasdaq fell 2.6%, its worst day since June. The 10-year closed at 4.96%, its first close below 5% since September. Brent settled at its highest since May on the same day.
That is the week's real change. For most of this conflict, higher oil pushed yields up. This week crude rose and Treasurys rallied anyway. Bonds now read oil as a drag on growth.
AI earnings got the same harsh read. Lam Research, Meta, IBM and Tesla all beat. All four pointed lower the next morning. The market stopped grading the quarter. It graded the return on the spending, and the cost of funding it.
By Friday the market had settled on two questions. Who pays for AI, and how much growth oil takes away.
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The Long End Took the Week. Then the Front End Joined.
The curve flattened first. By Tuesday, the 30-year yield had fallen 19 basis points since Oct. 1, to 5.42%. The 2-year sat at 4.79%. That cut the gap between them to 63 basis points from 83.
Wednesday tested demand. Treasury sold $13 billion of 20-year bonds at 5.469%, a 0.9 basis point tail. But the bid-to-cover rose to 2.73 from 2.57. Dealers kept about 10%, down from 16.9% in September.
Those buyers were paid fast. The 20-year closed Thursday at 5.32%, 15 basis points below the sale.
Then the front end moved. The 2-year fell 16 basis points to 4.65% on Thursday. Jobless claims dropped to 194,000 that day, the fewest in three months.
The Fed is in its quiet period, so no official moved it. The 2-year traded with stocks and oil. Next week's 2-, 5- and 7-year sales show whether that drop holds.
Crude Became a Growth Tax. Gold Read It the Other Way.
Brent swung hard. On Tuesday it touched about $112, then fell as low as $105.96 as an unconfirmed Iran report spread.
On Thursday it rose 4% to settle at $113.17 as Houthi forces claimed new attacks on Saudi targets. It traded near $114.60 early Friday. The White House ruled out a U.S. strike on Iran before the Nov. 3 midterms. Oil kept climbing.
The 10-year fell 17 basis points on the same day. Gold went the other way, slipping to about $4,044 early Friday. Reports tied the slide to bets that costly oil keeps rates high.
Energy equities didn't collect. Energy stocks fell about 1% on Thursday. Valero (VLO) tripled its refining margin to $39.24 a barrel and still fell about 2.4%.
The cost is reaching guidance. United Airlines (UAL) assumed jet fuel about 45 cents a gallon above analysts' view. It guided below forecasts.
When oil rises and Treasurys rally, bonds are hedging growth, not inflation.
Buffett, Gates and Bezos Quietly Dumping Stocks—Here's Why
The world's wealthiest individuals are making huge moves with their money.
Warren Buffett just liquidated billions of shares. Bill Gates sold 500,000 shares of Microsoft. Jeff Bezos filed to sell Amazon shares worth $4.8 billion.
What is going on? One multi-millionaire believes they are preparing for a catastrophic event. But not a crash, bank run, or recession. It’s something we haven’t seen in America for more than a century.
Every AI Beat Got Sold. The Suppliers Fell Hardest.
Lam Research (LRCX) posted record revenue of $8.22 billion, up 54%. It fell about 12% on Thursday. KLA (KLAC) lost 9.5% and Applied Materials (AMAT) 8%. All three closed near their lows.
Power names fell further than the chip index. GE Vernova (GEV), Vistra (VST) and Bloom Energy (BE) lost 9% to 11%.
IBM (IBM) beat and raised its cash outlook. Then its chief said clients are "getting worried" that some AI spending has "no real return."
The selling did not stay in New York. Korea's Kospi fell 3.73% on Tuesday and 3.5% on Thursday. A Korean data-center IPO priced at the top of its range and fell as much as 32% in its debut.
Small caps held up. The Russell 2000 gained 1.7% on Tuesday and edged up on Thursday as the Nasdaq slid.
Outside AI, the same rule held. GM (GM) beat, guided below consensus and fell 6.8%. AT&T (T) raised its outlook and fell 6.4%. Its revenue per fiber customer slid 4%. The forward number beat the quarter all week.
AI's Biggest Buyer Started Trading Like a Borrower.
Meta Platforms (META) grew revenue 26% and raised its 2026 spending floor to $135 billion. It closed down about 7% on Thursday, erasing roughly $124 billion.
Its five-year default swaps widened to a record 114.79 basis points, Markit data showed. That is still far below Oracle's 288 or CoreWeave's 1,000-plus. The level is low. The direction is new.
The cash math changed too. Third-quarter capital spending of $34.91 billion topped the $32.79 billion its operations produced. Meta has issued $24.91 billion of debt this year. Its new non-voting Class C shares give it a way to sell stock to sovereign investors. Its finance chief said there are no specific plans yet.
Lenders are choosy, not closed. Every major lender backed EQT's buyout of an Australian waste company, the Australian Financial Review reported. Volta's $5 billion AI loan got only best efforts on its $3.7 billion chip piece, Bloomberg reported. Debt on Oracle's New Mexico campus has traded near 80 cents, The New York Times reported. In September it was quoted at 89 to 91 cents.
If Meta's swaps keep widening, its suppliers' order books lean on its ability to borrow.
Middle East Conflict Lights Fuse on US Debt Bomb
America was already drowning in $38 trillion of debt, but the recent conflict in the Middle East just accelerated the timeline.
As oil spikes, a 100-year-old stock market signal that accurately predicted the 2008 and 2020 crashes is flashing a massive "Sell" on dozens of popular U.S. equities.
If you hold the wrong stocks when this debt crisis hits, it could wipe out years of gains.
Click here to see the 10 popular stocks to dump immediately
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Private Credit Raised the Most in Five Years. Its Retail Funds Couldn't Pay Everyone Out.
Blackstone (BX) took in $63.3 billion, about 41% more than forecast. Its stock rose about 8%. But investors in BCRED, its retail credit fund, asked to pull 10% of assets. The cap is 5%. They got about half.
It wasn't alone. Fitch counted nine of 15 non-traded BDCs with requests above their caps. MA Financial froze redemptions in an Australian property credit fund that had capped exits at 1% a month.
The bank side drew scrutiny too. A UK regulator is examining how Barclays (BCS) booked swaps that finance private-credit funds, the Financial Times reported. Barclays put their value at about £300 million, on roughly £1.5 billion of loans. It says its treatment meets the rules.
Institutions keep committing. Direct-lending funds raised 35% more in the first nine months than a year earlier. Estimated lending fell 28% last quarter from a year earlier.
The strain sits in the wrapper. Locked-up money keeps arriving. Retail money that can ask to leave is lining up.
Fund Flows Didn't Set Prices. Crowds Did.
U.S. spot bitcoin funds took in $527 million on Monday. Bitcoin still slipped. They took in about $1.08 billion over three sessions, and bitcoin touched about $84,840 on Wednesday.
Then the Nasdaq broke. The funds swung to $636 million of outflows on Thursday, the most since June 25. Strategy (MSTR) rose 7.5% on Wednesday and was indicated down 5.3% the next morning. Bitcoin traded with Nasdaq futures, not its funds.
Fed odds showed the same mechanics. On Wednesday, about 160,500 Kalshi October hike contracts moved the price 2 cents. On Thursday, about 184,900 traded, 95% against a hike. The contract fell to 6 cents from 12.
Similar volume. Three times the move. One side was crowded.
Utah also sued Kalshi and named two Susquehanna entities, the market makers whose quotes keep these books liquid. Thinner quotes mean louder prices.
Satellite Confirms: Elon Musk Activating Strange 'Dark Energy' Across U.S. South
Confirmed by satellites 300 miles above the Earth's surface... Elon Musk is rolling out a breakthrough technology that could replace our need for foreign oil and ignite a $10 trillion boom a small group of stocks. Click here to learn how you can invest in this before it becomes mainstream.
Rates Just Reset. Who Feels It First?
On January 2, the 10-year Treasury yielded 4.19%. By September 30, it was 5.29%. Most of that move landed in a single quarter.
The bond market repriced and companies are starting to report it.
Some companies earn from higher rates. Some pay for them. And each one runs on a different clock.
We traced three of them, IBKR, WRB and FIS, in a new FREE Special Report:
Rates Just Reset. Who Feels It First?
Who earns it fast. Who earns it slowly. Who pays. One has already reported. The other two report next, and the report tells you the exact line to check.
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