The Kobeissi Letter

“US families are falling behind on debt payments. The percentage of families reporting overdue loan payments surged to 19.6% in 2025, the highest since 2010, according to the Fed data. This marks a sharp increase from 12.2% recorded in 2022. This also reverses the gradual improvement between 2013 and 2019, when the percentage declined by -2.6 points. Furthermore, more than 8.0% of families reported they were at lea…”

“Shocking stat of the day: $241 billion worth of French corporate bonds are now trading at lower yields than French government bonds. This figure is up +1,621% from just $14 billion at the start of 2026. This means ~38% of French high-grade corporate debt is now trading at lower yields than government bonds of similar maturity. The gap between corporate and government bond yields is widening as investor concerns ab…”

“BREAKING: Total consumer credit rose +$8.3 billion in August, to a record $5.19 trillion. This marks the 14th consecutive monthly increase, totalling +$154 billion. Since the start of 2022, consumer credit has risen +$684 billion. Non-revolving credit, covering auto and student loans, rose +$13.1 billion in August, to $3.84 trillion, an all-time high. Meanwhile, revolving credit, which includes credit cards, fell…”

“BREAKING: The 'AI Big 10' now accounts for a record 42% of US stock market cap. This includes Magnificent 7 stocks as well as Broadcom, $AVGO, AMD, $AMD, and Micron, $MU. This figure has more than doubled since the 2022 bear market low. By comparison, during the 2000 Dot-Com Bubble, the Technology, Media & Telecom (TMT) sector peaked at 41%, while the Nifty Fifty peaked at 40% in the 1970s. Furthermore, Japan’s eq…”

“BREAKING: Broadcom, $AVGO, is seeking more than $50 billion in financing for OpenAI’s custom AI chip, which the firms are developing together, per WSJ. Apollo and Blackstone are among the lenders Broadcom has talked to about participating in the deal. The financing is intended to help Oracle bridge the gap between when it has to pay for the hardware and when its cloud computing revenue starts coming in.”

“The US high-yield credit market stress is rising: Credit spreads for CCC-rated and lower corporate bonds are up to 12.0%, their widest level since November 2022. Over the last 5 months, this figure has surged +298 basis points, surpassing the April 2025 peak of 11.4%. This represents a comparable increase to that seen during the 2022 bear market and the February-April 2025 market correction. If this pace continues…”

“The physical crude oil market is out of control. The cost to ship 2 million barrels of crude oil from West Africa to China is now up to $27.22/barrel. To put this into perspective, in July, the cost for the same shipment ~$6.50/barrel. That's a +319% surge in shipping costs in just over 2 months. The scramble for physical crude inventories is in full-swing.”

“BREAKING: Market expectations for an October rate hike fall to a new low 17% chance after the weaker than expected September jobs report. Just days ago, markets saw a near 75% chance of an October rate hike. We are seeing some insane volatility in the bond market.”

“BREAKING: The US goods trade deficit widened by -$13.7 billion, or +11.5%, in August, to -$132.6 billion, its widest gap since March 2025. US goods imports surged +$17.4 billion, +5.5%, to $336.1 billion, the highest since March 2025. This was driven by a +16.6% increase in imports of industrial supplies, including petroleum products. Imports of capital goods, which include computers and accessories, semiconductor…”

“BREAKING: US August PCE inflation, the Fed's preferred inflation metric, falls to 3.4%, below expectations of 3.7%. Core PCE inflation fell to 3.0%, below expectations of 3.3%. July headline and core PCE inflation were also revised down by 30 basis points each. October rate hike odds are falling again.”

“BREAKING: Foreign investors bought a net +$426 billion of US equities and investment fund shares in Q2 2026, the largest quarterly purchase on record. This marks the 9th consecutive quarterly net purchase, totaling +$1.6 trillion. By comparison, the previous record of +$299 billion was set in Q2 2022. Furthermore, foreign investor purchases of US equities and investment fund shares rose to +$942 billion in the 12…”

“BREAKING: The US and China announce a '30-for-30' trade deal, with each country cutting tariffs on $30 billion worth of goods. China's list covers 1,619 categories of American products, while the US list contains 77 categories of Chinese goods. China has also committed to importing at least 10 million metric tonnes of US coal in 2027 and 2028. The total value of the trade deal is $60 billion.”

“BREAKING: The Consumer Sentiment Index fell -3.6 points in September, to 48.1, its 2nd-lowest level in history. This marks the 2nd consecutive monthly decline, totaling -7.1 points. This comes as the Current Conditions Index decreased -1.0 point, to 50.9, its 4th-lowest reading on record. At the same time, the Consumer Expectations Index dropped -5.2 points, to 46.3, its 2nd-lowest since 1980. This year, the senti…”

“BREAKING: The US and China have reached a trade deal to lower tariffs on $30 billion worth of 'non-sensitive goods' after President Trump and President Xi met this week. This deal will likely lower prices on a variety of consumer goods, including small appliances, toys, holiday decorations, and kids' car seats. In return, China will cut tariffs on agricultural goods and seafood, wood products, cosmetics, and medic…”

“Global oil markets are facing a historic loss of diesel supply: Diesel supply from the Middle East dropped by -835,000 barrels per day on average between March and August 2026 compared to the same period in 2025, according to Vortexa estimates. At the same time, Russian diesel supply fell -377,000 barrels per day. Meanwhile, Kpler estimates diesel supply was down -750,000 barrels per day in the Middle East over th…”