Good morning and Happy Friday, 
 
We saw some interesting dynamics in the market yesterday. The S&P 500 fell 0.5% as basically the entire AI complex came under pressure on news that OpenAI would see a lower-than-expected ARR for the year. However, breadth was actually solid- the equal-weight index rose 0.6% and Russell 2000 was flat. Yields fell and the curve flattened despite oil gaining ~3%, digesting headlines that the US was preparing for renewed strikes on Iran before the midterms (surprisingly), followed by President Trump saying any strikes would commence after the elections. Energy, Staples and Financials led while Tech was the big laggard. The OAI news set off a controversy over how ARR was calculated and if the news was misleading. Right on cue, follow up stories noted the lower ARR numbers were not apples to apples.
 
Heading into the open, S&P futures are higher but moved down from their best levels after reports of an attack on a large tanker. Delta is down ~2% after reporting earnings, with a top line beat but earnings miss on high fuel costs. Tech stocks are bouncing a little after the follow-up reporting on OpenAI’s ARR. SoftBank is reportedly looking to raise up to $100B from Gulf investors to fund more AI investments. The news should draw more handwringing from Bears that point to the extraordinary debt buildup funding AI- SpaceX looking to raise $40B, Broadcom looking at raising $50B most recently. Speaking of SpaceX, the company bought spectrum assets to expand its Starlink network into the US mobile market. That has pressured major telecoms in the pre-market.
 

 
Treasury yields were flat to slightly higher but are moving up on the tanker news as oil rallies off its lows. The US Dollar Index has pushed back toward its highs of the day.
 

• US 2yr +3bps to 4.80%, 5yr +4bps to 5.03%, 10yr +3bps to 5.26%, 30yr +2bps to 5.62%
• USD index: +$0.14 to $102.08

In Japan the Nikkei was basically unchanged after bouncing off the lows ~68K to end the day 69K. For the week the Nikkei rose 1%. Softbank fell 4%, matching Thursday’s decline as the stock reacted to the OpenAI ARR news from yesterday. SoftBank’s financing news was out after markets closed locally. Japan’s cabinet approved a consumption tax cut proposal. Household spending came in weaker than expected. China saw big swings, rebounding from early losses with reports that regulators “advised” funds to limit sell orders. There’s also discussion of officials having sent out the “National Team”  Bat Signal over the past few weeks to support equities.  After reports of investor pushback on the IPO of Australian AI data center Firmus, the company pulled officially pulled the plug on the offering for now. Major European indices are higher, including France’s CAC +1%. Telecom names are getting hit however on the SpaceX spectrum news (Deutsche Telekom -7%). Germany’s DAX is up over 1% after testing support at the 200d ma yesterday. French bond yields are pulling back 5-10bp through the belly of the curve.  
 

 
Despite the tanker news the energy complex is lower, though crude is off its lows. Metals are higher despite yield backing up again, with gold moving above $4200. November Copper bounced off its 100d and rose back above its 50d ma ~$6.70. Ag is flat to higher ahead of the WASDE report today. Bitcoin and Eth are rallying modestly after weakness the past two days.  
 

 
Earnings:
After-Market: ODC, PKE
Pre-Market: DAL
 
Economic Data:
US:

• 10:00am Univ Mich sentiment
• 12:00pm WASDE report
• 1:00pm Rig Count
• 4:00pm Fed Collins speech    

Global:

• Japan Household Spending m/m: 0.1% vs 0.5% cons, prior 0.5%
• Canada Unemployment: 6.5% vs 6.5% cons, prior 6.4%