The early cycle tech earnings this week continued to showcase the strong AI related demand. However, the group turned sharply lower again as companies highlight the large sums of money necessary to fund this investment cycle, adding to the growing concerns about capital constraints. Once again though, the equal-weight version of the S&P 500 outperformed, ending the week up a little more than 1% with a pullback in yields helping to take some pressure off the small caps which were up >1.5%.

Thursday’s stampede bid for Treasuries sent yields sharply lower as tech sold off. That completely erased a modest move higher in rates earlier in the week. The curve bull flattened as 10/30 fell ~10bp for the week. Since peaking around 5.7% two weeks ago, the 30y yield has fallen about 40bp, while the 2y is down 30bp from its peak. December Brent rose 6% this week to reach its highest level at >$117.

As we prepare for Halloween and the midterm elections the 33rd Sports Equinox in history will occur when the NFL, MLB, NBA and the NHL all have games on the same day. Next week includes rate decisions from the Federal Reserve, ECB and BOJ, and key economic data including our first look at Q3 GDP and the PCE report. Outside of the Middle East the big focus will be on earnings with >40% of the companies in the S&P 500 scheduled to release results, including more mega cap tech. Have a great weekend!