” Jean-Paul Sartre Election Day. I’m going to resist the urge to wax philosophical, to write a stemwinder about the state of play and the outlook, and to share my opinions and expectations.
“We are our choices.” Jean-Paul Sartre
*Election Day. I’m going to resist the urge to wax philosophical, to write a stemwinder about the state of play and the outlook, and to share my opinions and expectations. Whatever it is I believe, or the collective wisdom of my friends and colleagues, we will soon learn where the populace writ large of these United States stands. Terrifying, no? *
Election Day comes immediately after Halloween. These days I am not sure which is scarier!!
Lay’s rebrands because customers apparently didn’t know chips were made with ‘real potatoes.’ Lay’s own announcement of its rebrand on October 9, 2025, explained that said 42% of people who eat Lay’s don’t realize the chips are made with “real, farm-grown potatoes.”
Yes, really.
I’m test-driving these audio recaps. lemme know what you think!
**CREDIT CONFIRMED THE FUNDING READ.**I keep the VIX upside, short a construction lender and own no builders. I’M WRONG IF high yield prints back under 326bp with the VIX near 18.**OIL SOLD ITS WAR INSURANCE THE NIGHT BEFORE THE NAMED DATE.**I stay long Brent upside through the vote. I’M WRONG IF a strait accord is signed or Brent settles under $95.**THE BANK RALLY IS A RATE TRADE INTO A CREDIT PRINT.**Long the money center, short the card lenders; mostly one bet on payrolls. I’M WRONG IF payrolls beat and December odds clear 85%.
My main argument hasn’t changed since Thursday: the AI build has become a funding question, and credit is where it gets priced. What changed is that the credit market answered. Oil is the second story, because Monday’s drop took the war premium out one day before the date everybody in Washington and Jerusalem named as the trigger. The vote tonight matters to me mostly through those two.
High yield printed 344bp for 30 October, 18bp wider in a session and 19bp through the line I use for stress. Thursday’s 326bp was one print and a single basis point over, and I said I’d hold it loosely; two prints with the VIX at 21 is a different thing.
The 30 October number predates Monday, when HYG fell 0.70% against a 0.51% drop in the S&P 500. The next print, for 2 November, publishes today, and I’d be surprised if it’s tighter, unless Monday’s bank rally pulled buyers back into high yield too.
Investment grade went to 94bp, its widest in a year, in a week when Oracle sold $10 billion of bonds and Meta is said to be lining up at least $20 billion more. I didn’t expect that: I thought the high-grade market would shrug off supply for another month.
Oracle priced the equity half of its raise at $116 overnight, about 3% under Monday’s close, after the stock fell 8.76% on the announcement. Pimco’s Emmanuel Roman said on Monday that AI financing may become ‘too much’ (Bloomberg), which is a strange sentence to hear from the largest bond buyer in the room.
Where does the stress actually sit? The CCC index tightened 29bp from its 23 October peak while BB widened 15bp in the same session. Stress is moving up the quality ladder toward the paper banks and insurers own, which matters more to me than the headline spread.
The breadth inside high yield had already gone. More bonds have been falling than rising since spring, while the S&P 500 made new highs.
THE CASE AGAINST.
The other explanation is that this is October’s de-gross showing up late in a lagged series. Funds cut gross through the end of the month, HY ETFs are the fastest thing to sell, and the spread index catches the selling three sessions after the tape does. On that reading 344bp is the bottom of the flush, and the 2 November print comes in tighter as the forced selling stops.
The two can both be true; a funding scare forces de-grossing and de-grossing exposes funding. What separates them is the next three prints and BB:
If high yield holds over 325bp through Friday’s payrolls and BB moves past 240bp from 209bp, credit is pricing borrowers.
If today’s print for Monday comes back inside the line while volatility settles toward 18, I was watching a flush.
I’d still put it 60/40 my way, and I hold it a bit more firmly than I did on Monday.
10:00, September job openings. Consensus is 7.1 million against 7.09 million. A firm number keeps December’s hike, now about three in four, in place and helps my JPMorgan long; a soft one feeds the growth scare without helping my duration view at all. I’d lean soft. Goldman’s analyst survey just fell under 50 for the first time since April 2025, with new orders at their lowest since May 2020, which sits awkwardly next to Monday’s 55.5 on the ISM.
**After the close, AMD and Arista.**Together they’re the first read on whether the October de-rating in the builders was positioning or demand. AMD fell 7.52% on Monday into its print. A capital spending raise that the stock rewards is the single event that could prove my credit view early.**Tonight, the vote.**Polls start closing at 6 p.m. ET (Bloomberg). The House should be called overnight; the Senate could take days, with mail ballots, ranked choice in Alaska and the Justice Department appealing a ruling there. The Supreme Court on Monday refused the administration’s bid to set aside about 20,000 California ballots. I’m not trading the result; I’m trading what it does to Iran timing and to the long end, and neither shows up before Wednesday.The underlying numbers look like a wave. In The POLITICO Poll, about 9% of Trump’s 2024 voters plan to vote for a Democrat this year against just over 2% of Harris voters going the other way. Among Hispanic Trump voters, the share calling themselves MAGA Republicans fell from 56% to 37% since late last year.
The FT/Focaldata final survey has nearly 70% of voters, and 77% of independents, disapproving of Trump’s handling of affordability (
FT). Peggy Noonan made the case for a historic wave in the WSJ (WSJ), and the president’s party has lost seats in 37 of the past 41 midterms.The market already has it. Citi calls a blue sweep priced, and Roberts & Ryan’s view is that Democrats at 54 Senate seats or fewer, with Abbott holding Texas, gets tech a relief rally. I agree with the second half: Texas is where the data-center siting money is, and an Abbott loss is the outcome tech hasn’t priced.
I’d treat that history as a reason not to sell the result, and no more. The index has spent three months inside a range narrower than 99% of history, so whatever tonight brings, the market is coiled for a move it hasn’t had.
**Wednesday, 8:30, the refunding.**The borrowing estimate is already out at $618 billion for the quarter, $10 billion under August’s guide, with $800 billion for the March quarter. So tomorrow is about coupon sizes and the buyback, and a smaller borrowing number makes a coupon cut slightly more likely, which is the risk to my long-end view.
The Bank of England is expected to hike Thursday, after the RBA raised to 4.85% overnight on a 6 to 3 vote and signaled it would wait. Payrolls are Friday at +55,000 against +29,000.
THE REST OF THE TAPE.
The US and Russia meet Ukraine in Abu Dhabi on 10 and 11 November, the first three-way talks since February (
FT). Brussels gets the European security talks this week.Washington is already preparing for the investigations a Democratic Congress would bring: lawmakers are drafting inquiries into the administration and the President’s family, and companies are calling lawyers about subpoenas (
Washington Post).China told banks to hold off on new listings to steady its equity market, and raised the FX reserve requirement to cool the yuan (FT, SCMP).
Disney is preparing to cut thousands of jobs, with some managers told to find 20% in savings (Bloomberg).
CVR Energy is near a deal for Marathon’s refineries for about $4 billion (WSJ).
Goldman has barred most staff from AI coding tools, and Millennium pulled more than $1.5 billion from two external funds it seeded last year.
Qatar’s bet on US LNG is the clearest sign yet the war is moving energy market power toward North America, Ron Bousso argues (
Reuters), and Jamie McGeever’s column on how an AI-driven stock slump could tip slowing economies into recession is the bear case in one page (Reuters).
Two of last night’s prints point at the same conclusion from opposite ends: the money is fine, and the cost of the money is the problem.
**BRENT.**Monday’s settle was the first under $110 since 22 October, and the bounce since came on the Qeshm report. The WSJ says these limited strikes have been running quietly for weeks, alongside the talks. A senior Iranian official told Reuters a deal is ‘far off’, and that ‘Tehran’s conditions must be met if the US wants Hormuz reopened.’ Gulf governments are preparing for a new round of strikes and for the blowback (WSJ). I think Monday priced a headline the night before the window Netanyahu asked for, and I’d rather own the upside here than where it was on Friday.**APPLE.**It beat on revenue, $114.5 billion and up 12%, and on earnings, and it’s lower before the open because the December margin guide came in about 1.2 points under the Street, on memory costs and the Siri rollout. China missed. Here the least capital-intensive mega-cap is telling you its suppliers have pricing power, and Micron and SanDisk are up about 3% on it. I read it as the AI build charging its customers: the same funding story, arriving through the income statement.Palantir is the third read: revenue up 96% and a raised year, and the stock off 6% to 8% because contract value grew 6% against 49% in the June quarter. A great quarter in a market grading on cash is still a sale.
The Nasdaq 100 is now down 10.4% from its high, a technical correction in under four weeks, on a quarter where the beat rate is still running above its long-run average.
Behind the wall this morning:
THE BOOK: 8 live lines, 1 new today, each with the factor it monetizes, its size and the condition that kills it.
FLOWS AND POSITIONING: why the banks rallied into the wides, and who has to buy or sell the tech complex after AMD tonight.
FINANCIALS: where the stress has reached the quality stack, the margin story at the regionals, and the line I’d add first if today’s spread print is wider.
Everything above this line is free and always will be. What’s below is where I put my own capital. $450 a year at marketmusing.com, or the price of one bad lunch a month.
Disclaimer: Opinions are mine alone and may change. It does not constitute an offer to buy or sell or a solicitation of an offer to buy or sell any security, loan or asset or to participate in any trading strategy. It is not intended to form the basis of any investment decision, should not be considered a recommendation, and does not constitute an offer or solicitation with respect to the purchase or sale of any investment, nor is it a confirmation of such terms.
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