A 5% day in equities, one basis point in the credit index — and the chain sorted itself by collateral

The equity market fell 5.3% on the Nasdaq and more than 4% on the S&P on Thursday, and the credit index ended the week tighter than it began. CDX IG five-year closed Friday at 61.6 against 62.3 the Friday before, having moved one basis point on Thursday on 904 prints, twice a normal day; HY was unchanged on the week at 353 and iTraxx Crossover tightened ten to 290. The week's whole move in credit happened where it has been happening since September — in the single names of the AI capex chain, not in the index.

The chain sorted itself by rung on the SEC single-stock swap tape on Thursday. The hyperscalers traded 1–5% lower on swap (Apple −0.9%, Alphabet −2.3%, Amazon −2.7%, Microsoft −3.0%, Meta −4.7%); Oracle −7.7%; the chips 9–16% (Nvidia −9.3%, Broadcom −9.1%, AMD −14.5%, Micron −16.5%); the capacity operators 10–16% (CoreWeave −10.5%, Nebius −15%, Applied Digital −15%, Iren −16%). Friday's bounce was the mirror image — the names that fell most rose most, Iren +16%, Vistra +10%, Nebius +8% — while the hyperscalers were flat. Short-covering recovers what fell hardest; a repricing does not. Protection on the two names whose business is borrowing against GPUs widened: Oracle 293 to 305, SpaceX 266 to 292, the latter printing upfront-quoted again on Friday. Nvidia and Broadcom protection held in the 130s and 180s.

Rates rallied with the sell-off and the payroll report. The ten-year swap fell 8.5 basis points to 4.46%, the two-year nine to 4.36%, the thirty-year five to 4.60%; swap spreads at two years moved four basis points more negative to −14.6 while ten-year spreads were unchanged at −40. Friday's swap tape carried $1.5 trillion of notional on 5,600 prints, the largest notional day of the autumn, and the VIX went from 19.4 to 28.2 and back to 25.6; the one-year VIX ended at 24.3 from 22.8, a smaller move than the front, which is a market pricing an event rather than a regime.

Off the tape, five things that each test a rung of the structure the Observatory has been describing. A seller put roughly $500 million of data-centre loans — a dozen, including debt tied to Vantage and CyrusOne and a slice of the Stargate New Mexico site — up for auction, with bids due 19 November. Oracle sent the developer of that site a notice citing force majeure. The underwriters of the $40 billion SpaceX chip financing, committed in October before pricing, were reported trying to syndicate it into a market that had turned. Forty-four of forty-five local ballot measures on data centres passed as restrictions and the governor-elect of Texas called for a moratorium. And on Friday Microsoft was reported to be winding down its arrangement to rent AI capacity from Oracle, having declined to renew because the hardware used older-generation chips — the first exit by a tenant on generation grounds, at the name whose protection has carried the chain's repricing since September.

The GPU rental curve, the collateral's only public price, ended the week with the H100 at $3.83 an hour against $2.99 a year ago and the B200 at $7.99; the ratio between the generations has drifted from 0.52 to 0.48 over the year. A tenant declining to renew older-generation capacity while the landlord insists it rents at a premium is that ratio argued between two balance sheets over one contract.

Research note 05, on the collateral and who holds it when the tenant leaves, is published today and sits above this review.

New this weekend · AI capex: Research note 05: An unregulated market for airports — who holds the collateral when the tenant leaves.