BREAKING: US oil prices drop below $100/barrel after US Secretary of State Marco Rubio says that President Trump prefers not to use military force and would like to resolve the Iran War “diplomatically.” https://t.co/DsjSh8Xwtw
(@TheKobeissiLetter)
BREAKING: US retirement assets surged +$3.8 trillion in Q2 2026, or +7.9%, to a record $51.2 trillion.
The increase was led by assets in individual retirement accounts (IRAs), which jumped +$1.7 trillion, or +9.2%, to $19.9 trillion, an all-time high.
Defined contribution (DC) plan assets also rose +$1.2 trillion, or +8.7%, to a record $15.0 trillion.
Government defined benefit (DB) plan assets increased +$508 billion, or +5.1%, to a record $10.4 trillion, while private-sector DB plan assets rose +$224 billion, or +7.5%, to $3.2 trillion, their 3rd-highest on record.
Since 2022, total US retirement assets have soared +$16 trillion, or +45.5%.
Asset owners are seeing unprecedented gains.
(@TheKobeissiLetter)
BREAKING: South Korea’s economy grew +1.0% QoQ in Q3 2026, marking its 3rd consecutive quarterly expansion, beating expectations of +0.8%.
Exports were the main driver, rising +2.3% on stronger semiconductor, machinery and electrical equipment shipments.
Facility investment surged +4.1%, particularly reflecting increased spending on machinery, including semiconductor manufacturing equipment.
YoY, South Korea's economy grew +3.4%, exceeding expectations of +3.0% and following +3.7% and +3.8% growth in Q2 and Q3, respectively.
South Korea is now on track to surpass $1 trillion in annual exports for the first time in 2026, making it only the 4th economy after the US, China, and Germany to reach this threshold.
South Korea is seeing a historic economic transformation.
(@TheKobeissiLetter)
The Kobeissi Letter for the week of November 2nd has been published and may be viewed through the link below:
https://t.co/9c65UCfNau
The Chart of the Week for the week of November 2nd has been published. View or sign up for FREE through the link below:
https://t.co/lFT7Stj4p1
(@TheKobeissiLetter)
BREAKING: The US goods trade deficit widened by -$2.8 billion in September, or -2.1%, to -$134.9 billion, its widest gap since March 2025.
Imports rose +$8.1 billion, or +2.4%, to a record $344.2 billion.
This jump was led by a +7.5% MoM increase in capital goods, which include computers and accessories, semiconductors, and telecommunications equipment fueling the AI buildout.
Now, the capital goods deficit has widened by -$54.3 billion YoY, accounting for more than the entire increase in the overall trade deficit.
Meanwhile, US goods exports jumped +$5.3 billion in September, or +2.6%, to $209.2 billion, driven by a +12.8% increase in food shipments.
The US trade deficit is rapidly widening again.
(@TheKobeissiLetter)
BREAKING: The S&P 500 Equal-Weight Index outperformed the S&P 500 by +5.7 percentage points in October, its largest monthly outperformance since April 2009.
This also marked its 2nd-largest monthly outperformance since the 1990s.
The Equal-Weight Index surged +4.8% in October, while the S&P 500 fell -0.9%.
Year-to-date, the Equal-Weight Index has gained +13.9%, exceeding the S&P 500's +10.7% return as technology stocks lag the broader market.
Meanwhile, the S&P 500 ex-AI Index has jumped +14.2% year-to-date, reaching a new all-time high on Friday.
Market leadership is rapidly shifting.
(@TheKobeissiLetter)
Key Events This Week:
1. October ISM Manufacturing PMI data - Monday
2. Apple, $AAPL, and Palantir, $PLTR, Report Earnings - Monday
3. US Midterm Elections - Tuesday
4. September JOLTS Job Openings data - Tuesday
5. AMD, $AMD, and SMCI, $SMCI, Report Earnings - Tuesday
6. October ADP Nonfarm Employment Change - Wednesday
7. October ISM Non-Manufacturing PMI data - Wednesday
8. October Jobs Report - Friday
9. November MI Inflation Expectations and Consumer Sentiment data - Friday
10. ~20% of S&P 500 Companies Report Earnings This Week
11. Total of 5 Fed Speaker Events This Week
Buckle up for a huge week ahead.
(@TheKobeissiLetter)
BREAKING: The FBI announces that North Korea was behind the $6.3 billion hack of Binance, now the largest hack in history.
North Korean hackers were previously accused by the FBI of some of the biggest crypto hacks.
This includes the $1.5 billion Bybit attack last year and the 2022 theft of $620 million in cryptocurrency.
North Korea is now responsible for both the first and second largest crypto hacks in history.
(@TheKobeissiLetter)
BREAKING: The US personal savings rate fell -0.2 percentage points in September, to 4.2%, its lowest level since October 2022.
Since January 2024, this metric has declined -3.4 percentage points.
The personal savings rate is now well below the 5-year pre-pandemic average of 6.2%.
This comes as personal income grew +4.1% YoY in September, its 2nd-lowest growth rate since April 2022.
At the same time, personal consumption expenditures rose +6.3% YoY, the 2nd-highest YoY growth since December 2024.
In other words, consumer spending continues to outpace income growth, putting further pressure on household savings and increasing household reliance on borrowing.
Elevated inflation and record prices are putting further pressure on consumer savings.
(@TheKobeissiLetter)
It has been an exceptionally volatile earnings season:
Information Technology stocks fell -1.2% on average in October on the first trading day after reporting earnings, the weakest performance among all sectors.
This was followed by Energy and Consumer Staples, with average 1-day returns of -0.3% and -0.2%, respectively.
On the other hand, 8 out of 11 sectors recorded positive 1-day performance after reporting earnings over the same period.
Consumer Discretionary benefited the most, at +1.9%, followed by Healthcare and Industrials at +1.5% and +1.2%, respectively.
As a result, the average stock gained +0.6% on the first trading day after reporting earnings.
Tech is deviating from the rest of the market.
(@TheKobeissiLetter)
Americans have never been this pessimistic about their finances:
A record 41% of US consumers expect their financial situation to be worse over the next 12 months.
This figure has more than tripled since Q2 2024.
By comparison, during the 2008 Financial Crisis, this metric peaked at 23%.
This proportion is also significantly higher than in the 1970s and the 1980s, when CPI inflation was above 10%.
Furthermore, 31% of US consumers believe their personal financial situation will be worse in 5 years, double the proportion seen in the 1980s.
Americans feel as though we are in a recession.
(@TheKobeissiLetter)
BREAKING: Short interest in the Nasdaq 100 ETF, $QQQ, is up to ~82 million shares, its highest since March 2023.
Over the last several weeks, this figure has surged +18 million shares, or +28%.
Year-to-date, short interest in $QQQ has nearly doubled.
Meanwhile, short interest in the S&P 500 ETF, $SPY, has declined -30 million shares since March, to ~92 million shares, near its lowest in at least 5 years.
By comparison, during the 2022 bear market, short interest peaked at ~90 million shares for $QQQ and ~180 million shares for $SPY.
Short interest in tech is very high right now.
(@TheKobeissiLetter)
On days like today, it's important to zoom out.
No, the AI Revolution is not "over," and the market is not "going to zero."
In fact, the Nasdaq 100 is up +11% YTD and nearly +70% since its April 2025 low.
Meanwhile, the S&P 500 is currently set to post a blended earnings +30.2% growth rate for Q3 2026.
This puts us on track for the third-straight quarter of earnings growth above 25%.
And, even after the biggest hack in crypto history, Bitcoin is down less than -5% this week.
Disruptive technologies like AI will inevitably bring heightened volatility, polarized positioning, and extreme swings in market sentiment.
However, do not let short-term volatility overshadow the broader picture.
We are in the midst of the biggest technological revolution in history.
Technical corrections are healthy, necessary, and an inevitable part of every bull market.
Do not lose sight of the bigger picture.
(@TheKobeissiLetter)
The timing of today's market crash is noteworthy.
As selling pressure spreads, the Nasdaq 100 is now down nearly -5% on the day.
Meanwhile, the market-implied odds of a Democrat "sweep" in the Midterms next week has surged from 65% to 72% today, a record high.
That's +7 percentage points in 2 days amid this market downturn.
We have yet to receive a comment from the Trump Administration regarding the current situation in the market.
However, what is clear is that the timing of today's market crash will be consequential.
And, even as technology stocks drop sharply, US Treasury Yields are barely seeing any relief.
This leaves us with high rates, a falling stock market, $100+ oil prices, and rising CPI, PPI, and PCE inflation.
Next week is going to be interesting, to say the least.
(@TheKobeissiLetter)
BREAKING: Anthropic is now expected to receive a "high junk" rating from major credit rating agencies after its IPO, which could come as soon as November, per FT.
Details include:
1. Blackstone has told investors that Anthropic likely will not receive an investment-grade rating immediately after its IPO
2. Blackstone is working with banks that stumped up financing on selling the debt on to other investors
3. An investment-grade rating is "central" to Anthropic's ability to continue its AI buildout
4. The company says it expects to spend over $800 billion on computing infrastructure between now and 2045
Debt markets are increasingly in the spotlight as AI funding becomes less abundant.
(@TheKobeissiLetter)
US healthcare costs are rising at an alarming rate:
Medical care prices have surged +132% since 2000, the largest increase among major consumer spending categories.
Over the same period, shelter costs have risen +127%, while food prices have soared +112%.
Price increases across all these spending categories have outpaced overall CPI, which is up +99% since 2000.
As a result, ~30% of insured US adults have skipped or delayed getting healthcare they needed due to costs over the last 12 months, according to a KFF survey.
Healthcare costs have never been higher.
(@TheKobeissiLetter)
The global copper market is extremely tight:
China's copper import premium over London Metal Exchange (LME) prices has surpassed $200 per ton, the largest premium on record.
The Yangshan premium, named after a Shanghai port that serves as a major hub for Chinese copper imports, has more than doubled over the last 3 months.
Since the beginning of 2026, this figure has surged +700%.
Furthermore, the premium of spot prices over three-month futures on the LME widened to $217 per ton, the largest since mid-August.
This has been driven by strong Chinese copper demand and domestic inventories falling below typical seasonal levels.
At the same time, expectations of potential US tariffs on refined copper have redirected hundreds of thousands of tons of copper to the US, leaving global inventories heavily concentrated in the country.
The physical copper supply squeeze is far from over.
(@TheKobeissiLetter)
AI spending is rapidly accelerating in the US.
US private fixed investment in information processing equipment and software grew at an annualized rate of +7.3% in Q3 2026, to a record $1.77 trillion.
This marks the largest quarterly increase since Q4 1983.
By comparison, at the height of the 2000 Dot-Com Bubble, this metric grew +6.2%.
Since Q4 2022, private fixed investment in information processing equipment and software has surged +61%, or +$671 billion.
As a % of GDP, this metric is up to a record 5.4%, significantly surpassing the previous high of 4.5% recorded in Q4 2000.
The scale of US AI investment is unlike anything seen before.
(@TheKobeissiLetter)
BREAKING: Israeli President Netanyahu is “pressing” President Trump to strike Iran immediately after US Midterm elections on Tuesday, per Axios.
Israeli sources reportedly said the call was "tough," while US sources described it as "direct."
President Trump said the US still has to "take care" of one or two nuclear sites in Iran.
(@TheKobeissiLetter)
BREAKING: The largest US physical-gold backed ETF, $GLD, recorded -$1.8 billion in outflows in October, its biggest monthly withdrawal since June.
This also marks its 3rd-largest monthly outflow since February 2024.
Year-to-date, $GLD has seen -$3.8 billion in withdrawals, putting it on track for its first annual outflow since 2023.
By comparison, the fund attracted +$23.0 billion in inflows in 2025, its largest annual intake on record.
Meanwhile, investors withdrew -$1.5 billion from gold and other precious metal funds last week, marking their 2nd weekly outflow over the last 7 weeks.
Gold flows are highly volatile right now.
(@TheKobeissiLetter)
AI is burning Big Tech's free cash flow:
The combined CapEx of Amazon, $AMZN, Alphabet, $GOOGL, Meta, $META, and Microsoft, $MSFT, rose +$36.9 billion in Q3 2026, to a record $201.9 billion.
This figure has more than doubled over the last 12 months and is up +356% since Q1 2024.
Big Tech has now spent $1.6 trillion on CapEx over the last 3 years.
Meanwhile, the combined free cash flow of these companies fell -$33.1 billion last quarter, to -$26.4 billion, its lowest on record.
Free cash flow among these firms has dropped -$88.2 billion over the last year.
Only Microsoft reported positive free cash flow in Q3.
Looking ahead, these 4 companies plan to spend another $232 billion on CapEx in Q4, potentially lifting their combined CapEx to a record $740 billion in 2026.
Big Tech is undertaking one of the largest infrastructure buildouts in history.
(@TheKobeissiLetter)
BREAKING: President Trump spoke with Israeli Prime Minister Netanyahu today as the US prepares to resume bombing Iran, per WSJ.
The Trump Administration has also warned Arab Gulf states to prepare for a "short and intense" military campaign after the November 3rd Midterm elections.
Today marks 245 days since the Iran War began.
(@TheKobeissiLetter)
US companies are facing a massive debt maturity wall:
~$1.9 trillion in US speculative-grade corporate bonds and loans mature over the next 5 years, including $438 billion due by the end of 2028.
By comparison, in 2020, 2021, and 2022, this figure ranged from $1.4 trillion to $1.5 trillion.
The amount of junk-rated debt maturing within 2 years alone has surged +31% YoY.
At the same time, $1.6 trillion of investment-grade corporate debt is coming due by 2031.
Meanwhile, refinancing is becoming increasingly expensive, with the effective yield on publicly issued US junk debt rising +150 basis points over the last 12 months, to 8.0%.
The corporate refinancing burden is becoming a major issue.
(@TheKobeissiLetter)
US corporate debt issuance is skyrocketing:
US investment-grade corporate bond sales are expected to rise +$37 billion YoY in November, or +27%, to $175 billion, the highest for any November on record.
This would mark a +$76 billion, or +77%, increase from November 2024 level.
To put this into perspective, the 5-year average before 2025 was $104 billion.
By comparison, US investment-grade bond issuance stood at ~$100 billion in October.
As a result, US investment-grade bond sales have risen to a record $1.76 trillion YTD, already surpassing the full-year 2025 total of $1.75 trillion.
Meanwhile, over $300 billion in AI-related corporate bonds have been issued in global investment-grade markets so far in 2026, almost 3 times the total for all of 2025.
AI spending is fueling an unprecedented wave of corporate borrowing.
(@TheKobeissiLetter)
BREAKING: OpenAI has slashed its funding target by -$10 billion and its valuation by -$150 billion amid this week's technology stock selloff, per FT.
OpenAI is now seeking to raise $20 billion at a $1.25 trillion valuation, down from $30 billion at a $1.4 trillion valuation.
The company set a deadline of today for investors to commit to the funding round.
That "first close" is now expected to bring in less than $20 billion, after some of its investors lowered their allocations to the round.
This comes just weeks before the expected Anthropic IPO.
(@TheKobeissiLetter)
BREAKING: S&P Global revises its outlook on Meta, $META, to "negative," citing "significant uncertainty" surrounding CapEx and free operating cash flow (FOCF).
"The negative outlook reflects our expectation that the company's leverage could exceed 1.0x and FOCF could remain negative for longer than expected," S&P said.
S&P is now raising concerns about AI CapEx.
(@TheKobeissiLetter)
BREAKING: Markets now see a 75% chance of the Fed hiking interest rates again in December as CPI, PPI, and PCE inflation are all back on the rise.
Exactly 12 months ago, markets saw at least 3 rate cuts in 2026.
"Higher for longer" continues. https://t.co/usth9jOS7g
(@TheKobeissiLetter)
BREAKING: The Nasdaq 100 has entered a technical correction, now down -10% from its October 6th record high.
Intel, $INTC, is now down -31% on the day, on track for its biggest drop on record since its 1971 IPO. https://t.co/EXYRL5Vgpc
(@TheKobeissiLetter)
BREAKING: The Nasdaq 100 extends losses to -4.2% on the day, erasing -$1.7 trillion in market cap. https://t.co/ngCpNLJfWp
(@TheKobeissiLetter)
BREAKING: The Nasdaq 100 extends losses to -3.6% on the day, now on track for its biggest daily decline since June 5th.
The index has erased over -$1.3 trillion in market cap today. https://t.co/OwPXf6QXne
(@TheKobeissiLetter)
