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👀 Today’s Stories at a Glance
🔥 Core hits Waller’s line: Core inflation rose 0.3% in October against 0.2% expected, and the 2-year Treasury yield jumped 21 basis points.
🔻 Nvidia’s probe goes legal: Nvidia fell 5.47% yesterday as outside lawyers, a shareholder lawsuit and the FBI joined the story.
🖥️ CoreWeave beats, borrows dearly: CoreWeave’s revenue rose 168% to $3.66 billion, while its quarterly interest bill nearly tripled to $846 million.
💼 Anthropic sets its range: Anthropic priced its IPO range at $70 to $78, with 7 chip and cloud partners buying $26 billion alongside.
₿ MSCI rules on Strategy: MSCI names its index deletions tonight, with Strategy flagged, as bitcoin slipped below $73,000 yesterday.
🛢️ Oil bounces off its low: Brent rose 1.4% to $92.77 after Iran said no enriched nuclear material will leave the country.
🏠 Taylor Wimpey cuts its outlook: Taylor Wimpey cut its completions forecast to around 10,500 homes, blaming higher mortgage rates and living costs.
📈 Bought more at $170: Chart of the Day covers Nvidia’s $170 support, possible trims at $184 and $199, and the $140 to $150 trend line.
🧠 One Big Thing
The Fed is no longer only deciding whether to raise rates in December. It is now deciding by how much. Core inflation rose 0.3% in October, the third month in a row, and above the 0.2% economists expected. That is exactly the level Fed governor Christopher Waller named yesterday morning as the point where a half-point rise should be considered. Futures moved the odds of that bigger rise from about 1% to as high as 15%. The decision is on 9 December, and US producer prices on Friday are the next reading before it.
⚖️ Fear & Greed
📉 The Number That Matters
21 basis points
How far the 2-year Treasury yield rose yesterday, to 4.76%, after core inflation came in at 0.3%. The 2-year tracks Fed expectations most closely, and that is a big move for one day.
✅ 5 Things to Know
🔥 Core inflation hit Waller’s line, and bonds moved first
0.3%. That was October’s core inflation, which strips out food and energy, released yesterday. Economists expected 0.2%. Headline prices rose 0.4% against a 0.3% forecast, after 0.6% in September. Core has now risen 0.3% for 3 months in a row, TradingKey reported. Energy prices rose 0.7%, after 5.2% in September, and shelter rose 0.3%, more than 30% of the monthly increase. Car insurance rose 0.7%. Thomas Ryan, senior North America economist at Capital Economics, called it “a shocker of a CPI release.” TradingKey Marketplace
So who moved first? The bond market. The 2-year Treasury yield, the one most tied to Fed expectations, was up 21 basis points at 4.76% by 12:41pm New York time, CoinDesk reported. The 10-year closed at 5.00%. Futures put the odds of a half-point rise on 9 December at 15.3% after the report, up from 1.1% before it, TradingKey reported. A quarter-point rise is priced as close to certain. The average 30-year US mortgage rate rose to 7.3% from 7.18%, according to Mortgage News Daily. US bond markets are shut today for Veterans Day, so Treasuries trade again tomorrow. CoinDesk Real Estate News
Sensei’s Insight: Yesterday’s edition said the second decimal of core was the number. Core printed 0.3%, Waller’s level, for a third month running. What I am watching is US producer prices on Friday at 1:30pm UK, 8:30am in New York, for what is still coming down the pipe.
🔻 Nvidia’s board probe now has lawyers, a lawsuit and the FBI
Nvidia fell 5.47% yesterday, after a 4.3% fall on Monday, and dragged all 3 major US indexes lower, StockTitan reported, citing CNBC. Its market value was about $4.07 trillion, the lowest since late March, according to IC. The independent members of Nvidia’s board said they had hired former acting US Attorney Joon H. Kim and the law firm Wachtell, Lipton, Rosen & Katz to run the investigation into chief executive Jensen Huang. A lawsuit filed in federal court in California accuses Nvidia and Huang of misleading shareholders, TheStreet reported, citing The Guardian. President Trump said the FBI was looking into the matter. StockTitan TheStreet
The rest of the market slipped with it. The S&P 500 fell 0.38% to 7,520.93, the Nasdaq Composite 0.74% to 25,065.87 and the Dow 0.30% to 52,231.89. Last Friday, NBC put Nvidia’s value at about $4.5 trillion. This morning the buyers came back. Nvidia was up about 5% before the open, CNBC reported. Michael Burry said the shares could become “a heck of a trade,” while warning that Nvidia’s edge could shrink over the next 5 years. Morgan Stanley took Nvidia off its list of top ideas, noting a fall of more than 25% since it was added on 2 October. S&P 500 futures were up 0.7% and Nasdaq 100 futures about 1.6% at 4:30am in New York, Yahoo Finance reported.
Sensei’s Insight: On Monday I called this key-person risk. Since then it has picked up outside investigators, a shareholder lawsuit and the FBI. What I am watching is 17 November, because the results call is the first time management takes questions on it in public.
🖥️ CoreWeave beat its forecast, and its interest bill nearly tripled
Is the AI build-out slowing? CoreWeave, which rents out AI computing power, answered after the US close yesterday with third-quarter revenue of $3.66 billion. That was up 168% on a year earlier and above the top of its own guidance. Adjusted operating income was $379 million, against guidance of $200 million to $260 million. CoreWeave raised its full-year revenue forecast to $13 billion to $13.3 billion and its spending plan to $37 billion to $39 billion. Chief executive Michael Intrator said the backlog grew to about $133 billion. The shares closed at $48.73, then jumped 14.8% before the open this morning, Seeking Alpha reported. Investing.com Seeking Alpha
What does all that building cost? Interest expense was $846 million, up from $310 million a year earlier. The net loss widened to $709 million from $110 million. Intrator said funding is “anchored by secured lending, customer prepayments, and operating cash flows.” On bonds, he was blunt: “we will not use the unsecured debt market to fund our business at current yields, nor do we need to.” That comes with the 10-year Treasury yield back at 5%. Other AI cloud stocks rose with CoreWeave before the open. Investing.com
Sensei’s Insight: Last week’s sell-off asked whether AI spending was slowing. The company renting out the chips says demand is still there, with $133 billion booked. What I am watching is the interest line, $846 million in one quarter, while the 10-year yield sits at 5%.
💼 Anthropic set a lower IPO range, and its partners bought $26 billion
19 November. That is around when Anthropic’s shares are set to start trading on Nasdaq under the ticker ANT, according to CNBC. The company set its IPO price range at $70 to $78 a share, on 825 million shares, TechCrunch reported. That would raise $57.75 billion to $64.35 billion. Yesterday’s edition reported a filing seen by Reuters with a range of $70 to $80 on about 867 million shares, which Anthropic said was inaccurate. Up to 20% of the offering could go to retail investors, CNBC reported. TechCrunch
So how big is that? At $70 to $78 a share, Anthropic would be worth roughly $1.26 trillion to $1.4 trillion on a fully diluted basis, up from $965 billion at its May fundraise. That is about a third of Nvidia, one of its own backers, which ended yesterday at about $4.07 trillion. SpaceX sought about $1.75 trillion when it listed in June, Fortune reported. TechCrunch Fortune
Who else is buying? AMD, Broadcom, Google, Micron, Microsoft, Nvidia and TSMC agreed to buy $26 billion of non-voting shares at the IPO price, Google and Nvidia $10 billion each. Anthropic’s yearly revenue run rate reached about $81 billion by the end of October, from roughly $71 billion in late September, Fortune reported. The founders keep a share class with 50.1% of the voting power. Fortune noted the valuation sits well short of the $2 trillion talked about earlier this year. Fortune TechCrunch
Sensei’s Insight: Yesterday it was a range, then a correction. The corrected deal is smaller, and the companies that sell Anthropic its chips and cloud capacity are putting in $26 billion of their own. What I am watching is where the final price lands against $70 to $78.
₿ MSCI rules on Strategy tonight as bitcoin loses $73,000
MSCI publishes its index changes tonight at 10pm UK, 5pm in New York, TechTimes reported, citing MSCI’s own notice. Under rules finalised in October, companies whose main business is holding assets such as bitcoin can be dropped from its indexes. A current member is removed only if it fails the test in each of its last 2 annual filing periods. An earlier test run on May data flagged 3 companies: Strategy, Japan’s Metaplanet and UK uranium investment company Yellow Cake, CoinDesk reported. Any changes take effect at the close on 30 November. TechTimes CoinDesk
How much is at stake? Funds tracking MSCI held about 13 million Strategy shares in August, 3.1% of its basic shares, according to Strategy’s own disclosure. JPMorgan estimated about $2.8 billion of outflows from an exclusion, though that was worked out on MSCI’s earlier proposal. A deletion would not force Strategy to sell any of its 850,364 bitcoin. Strategy shares closed at $121.07 yesterday. Bitcoin itself fell below $73,000 yesterday for the first time since August after the inflation report, CoinDesk reported. Bitcoin.com CoinDesk
Sensei’s Insight: Bitcoin sat out Monday’s rally and then fell with the inflation numbers yesterday. Tonight’s list decides whether index funds have to sell shares in the biggest corporate holder. What I am watching is whether Strategy is on it, and how the shares trade into 30 November.
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🛢️ Oil bounces as Iran refuses to move nuclear material
Brent crude rose $1.28, or 1.4%, to $92.77 a barrel this morning, and US crude 0.9% to $86.80, Reuters reported via RTE. Yesterday Brent settled at $91.49, its lowest in about 2 months. Iran’s security chief said Tehran would not allow “even a single particle of enriched nuclear material to leave the country.” Washington has said nuclear matters must be part of any first round of talks. Attacks at sea go on. A tanker was struck off Oman yesterday, and 37 ships were attacked in October, the most in any month of the war. RTE Eurasia Business News
🏠 Taylor Wimpey cuts its outlook as mortgage rates bite
Taylor Wimpey cut its forecast for homes completed this year to around 10,500, from 10,600 to 10,800, and said earnings would land at the bottom end of expectations. Private sales per outlet fell to 0.60 from 0.63 a year earlier, and cancellations held at 17%. “The autumn selling season has been more subdued, as higher mortgage rates and living costs continue to reduce customer affordability,” chief executive Jennie Daly said. The shares fell 2% in early trading. The Bank of England raised rates to 4% last week, and Lloyds said UK house prices fell 1.2% in the year to October. Irish News