CoreWeave: Quarterly revenue has scaled to $2.6bn with $104bn of backlog and 52% EBITDA margins, but delivering that growth remains extremely capital intensive: latest-quarter FCF was -$5.7bn as net debt climbed to $30bn. Credit is already pricing substantial execution risk between 2030-32 bonds yield 11-13%, roughly 480-590bp above comparable Single-B yields, while structural model implies a 2.1% PD/B profile. The question isn’t whether CoreWeave can grow; it’s whether $104bn of backlog can convert into cash quickly enough to outrun capex, debt growth and double-digit marginal funding costs. If it can, today’s credit pricing could prove overly punitive. If it can’t, the capital structure becomes the constraint on the equity story.

CCC continue to decompress. HY decompression remains concentrated at the bottom of the quality spectrum. BB and B spreads sit just 3% above their post-GFC tights, while CCC spreads remain 75% above theirs and have widened to a 2.5 year highs. CCCs have also materially underperformed higher-quality HY in September. The divergence suggests the market is increasingly charging a distinct premium for the weakest credits rather than repricing HY uniformly. The weakness isn’t just in distressed names we have seen CCC underperform Bs across $60,$70,80+. So this isn’t solely a distressed story.

Let’s talk about Oracle: Oracle’s credit selloff is increasingly becoming a fundamental financing story. 124.5bn of fixed-rate debt carries 6.1bn of annual coupons, but repricing the stack at today’s curve implies 9.0bn nearly 3bn higher. More realistically, if current funding costs persist, refinancing 2027–36 maturities could add 1.1bn to annual interest expense, compress net margin 130bp to 25.3% and reduce EBITDA/interest coverage from 6.8x to 5.7x. With elevated capex, negative FCF and Oracle’s curve now 100bp wide of BBB on a maturity-weighted basis, the risk is a feedback loop: weaker FCF, greater financing needs, higher interest expense, weaker coverage and profitability.

The 1Y forward OIS curve is at or above late-July peaks across much of the curve, reflecting a broad repricing toward higher-for-longer rates amid resilient activity and renewed inflation risks. However, think the hawkishness is overpriced maybe one more hike.

Forward implied policy path is inherently unreliable.

Sell off of the 10y has been wild. 10s early took out the overnight high before stopping just before 5%. S&P PMI lead to another sell off with stronger than expected print. Swaptions vol 11bps higher on 1m10y and 6bps higher in 3m10y.

Position for UK–US rate divergence by receiving UK 2-year swaps versus the U.S., targeting a move toward 0bp. The view reflects expectations for a comparatively more accommodative BoE policy path.

If AI were already driving broad productivity gains, we’d expect a clear acceleration in utilization-adjusted TFP. So far, we haven’t seen it. Since 2023, labor productivity has improved, but capital deepening accounts for >50% of the acceleration and is the only statistically significant component. That suggests we may still be in the AI investment phase: more capital per worker is boosting output, but broad efficiency gains have yet to emerge. The next leg of the AI thesis requires that investment to translate into sustained TFP growth.

Markets may be mispricing labor-market risk. Employment breadth remains positive, but the margin of companies hiring versus laying off continues to narrow. The deterioration is increasingly broad-based, with Consumer Discretionary the only sector showing even a marginal improvement in hiring breadth.

The Chicago Fed’s flow-consistent unemployment rate also sits above the headline rate, suggesting current labor-market flows are consistent with somewhat higher unemployment. Together, these measures suggest that underlying labor-market conditions have weakened more than the headline unemployment rate alone implie

Poultry inflation may be the next food-price pressure point. Current moves in key inputs imply roughly 1.3% upside to poultry prices, with fishmeal and feed costs doing most of the work. There are some offsets, but not enough to neutralize the broader input-cost shock.

Inflation remains broad, but this is not 2022. More than half of the CPI components in our measure are running above a 3% annualized pace over the past six months, compared with roughly one-quarter below 1%. This suggests that inflation pressure remains relatively widespread rather than being isolated to a small number of categories. However, breadth remains well below the extremes reached during the post-pandemic inflation shock. For the Fed, breadth provides a useful complement to aggregate inflation measures by showing whether price pressures are becoming more or less pervasive beneath the surface.

INDON 5Y spreads have tightened 11bp YTD, outperforming PERTIJ and IDASAL (-6bp each) and PLNIJ (+12bp). PLNIJ’s underperformance likely reflects its earlier 5Y and 10Y dollar issuance, leaving its 5Y bonds 30bp over INDON versus a 1Y average of 34bp. PERTIJ and IDASAL, at around 20bp wide, appear fairly valued. In the long end, PLNIJ has widened 20bp YTD versus a 13bp widening for INDON, while PERTIJ and IDASAL have outperformed. PLNIJ’s 70bp spread is near its 1Y average, but PERTIJ at 36bp is tight versus a 50bp average. We see potential for PERTIJ to decompress by 15-20bp versus INDON as Indonesia-related uncertainty remains elevated.