U.S. Futures & World Markets

Stocks are flat premarket as we get a quiet start to the week. The Columbus Day holiday, with banks closed, and the unofficial start of Q3 earnings season kicking off tomorrow are contributing to the subdued trading.

Crude prices are moving higher, although not as much as you might expect after the Houthis struck an airport in Saudi Arabia. President Trump announced that Russia and Ukraine have agreed to an "energy ceasefire" — but Zelensky says that is "news to me." Things pick up tomorrow with big banks, JNJ, UNH, and ACI reporting. CPI on Wednesday and PPI on Thursday round out a busy week.

S&P Futures vs. Fair Value: +8.00  |  10-Year Yield: 5.24%

CORE Headlines

Charts & Data

US and Europe have fundamentally different roles in the AI economy. The US dominates every supply-side measure: hyperscaler capex approaching $800B in 2026, data center capacity three times that of Europe. Yet several European countries are actually ahead of the US on AI adoption — Europe is an eager user of infrastructure it did not build and cannot easily replicate. Torsten Slok, Apollo via Daily Chartbook.

Firms currently using AI are significantly more likely than non-users to expect increased employment and revenues over the next year, even after accounting for firm and owner characteristics. Liberty Street Economics via Daily Chartbook.

The AI boom is becoming a debt boom and credit markets are getting nervous. Oracle's 5-year CDS trades near a record 261bps, implying a 20.4% default probability. SpaceX: 16.5%. Even Nvidia: more than 7%. AI-related borrowers have issued nearly $500B of debt this year. Holger Zschaepitz via Daily Chartbook.

The immense funding needs of AI capex are not pushing up real yields — the AI capex story has been around a long time, and the US yield curve remains very flat with swap spreads unchanged. Daniel von Ahlen, TS Lombard via Daily Chartbook.

S&P 500 3-month call skew has climbed to the 99.6th percentile of its 1-year range, while put skew has fallen to the 0.4th percentile — unusually strong demand for upside exposure relative to downside protection. Charlie McElligott, Nomura via Daily Chartbook.

The explosive growth of options-income strategies is creating persistent volatility-selling pressure, potentially helping explain why the VIX has remained relatively subdued. Charlie McElligott, Nomura via Daily Chartbook.

Ten stocks drove 70% of the S&P's 23% rally since March 30, with Nvidia alone responsible for 13% and Micron, Apple, and Microsoft another 9% each. The other 490 stocks? 30% combined. Charlie McElligott, Nomura via Daily Chartbook.

The S&P 500's streak without a 1% decline hit 50 sessions. Since 1970, near-term performance following such streaks was below-average but the index was higher 12 months later 26 out of 29 times. Daily Chartbook Studies.

Single stocks are moving like it's a crisis while the index snoozes: over the past month the SPX moved 0.8%, while the average stock moved 8.9%. That 8.1% spread ranks in the 95th percentile of the past 30 years. Charlie McElligott, Nomura via Daily Chartbook.

US consumer sentiment fell in early October and views of current economic conditions hit an all-time low as inflation weighed on households. The expectations index rose to 47.3 from 46.3 — the first increase since July. Bloomberg via Daily Chartbook.

Our MORTGAS index is at a new record high, eclipsing the October 2023 peak. Consumers are feeling the pain as we head into midterm elections less than a month away. @bespokeinvest via Daily Chartbook.

Despite wealth accruing disproportionately to higher-income households, the spending gap has narrowed meaningfully over the last few months. Robust spending, narrowing K. BofA via Daily Chartbook.

The US added 6 crude oil rigs over the past week — the most in 3 months. Daily Chartbook.

Based on the average improvement in earnings growth during earnings season, the index will likely report earnings growth above 35% for Q3. John Butters, FactSet via Daily Chartbook.

Amazon has officially surpassed the United States Postal Service to become the largest U.S. parcel carrier by volume. @patientinvestor via Daily Chartbook.

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