Market Perspectives
The 10-year Treasury yield fell 14.6 basis points to 5.097%, its best week in months, and the Nasdaq still had its worst week since June at -4.48%. Falling yields no longer rescue AI equities: the semiconductor ETF declined for an eighth consecutive session, CoreWeave lost more than 15% on the week, and Reuters reported investors weighing a $1.5 trillion valuation for Anthropic's November listing against the roughly $2 trillion previously expected, after third-quarter revenue of $16.8 billion grew 45% on the quarter rather than doubling. December rate-hike odds rose to 74.3% from 50.2% a month earlier after the CPI and PPI prints. Money rotated out of AI financing risk and into value, lifting the Dow 0.67% and giving Europe its best week since June. Brent settled at $109.86, its highest since May, after a missile aimed at Yanbu was intercepted and a Ukrainian drone shut a unit at a large Russian refinery.
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BONDS & MACROECONOMICS
The 10-year Treasury yield fell 14.6 basis points on the week to 5.097%, its strongest rally in months, yet long-duration equities fell sharply, breaking the correlation that has governed the market for three years. Hike expectations moved the other way: CME data put December odds at 74.3%, up from 50.2% a month earlier, following the CPI and PPI releases. The reading on offer is that AI has become a credit story rather than a duration one, so a lower discount rate does nothing for companies whose constraint is the size and cost of debt already raised. Coatue's 7 October public markets update forecast AI data-centre capital expenditure at 2.9% of US GDP by 2030, against railroads peaking at 2.1%. Gold rose 0.26% to $4,181.10 and the euro was broadly unchanged at 1.1236. Brent settled at $109.86, up 3.7% and the highest since 19 May, with WTI's December contract at $99.02; Kpler put seven-day Hormuz transits at 11.62m barrels a day against a 17.15m pre-war baseline, and US diesel inventories are down 14% year on year.
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