The Kobeissi Letter

“BREAKING: US diesel inventories dropped -3.6 million barrels last week, to 99.3 million barrels, the lowest level since May 2003. Since January 2026, distillate fuel oil inventories have declined -33.7 million barrels, or -25%. Furthermore, the Strategic Petroleum Reserve (SPR) fell -399,000 barrels last week, to 282.2 million barrels, its lowest since October 1982. Since March, oil inventories in the SPR have dro…”

“On today's stock market crash: As an investor, on days like today, you have to ask yourself one question: What fundamentally changed over the last 24 hours? The shift in the fundamental backdrop cannot be attributed solely to the Midterm Election results; markets had already largely priced in the outcome. So, what changed between yesterday and today? What is the fundamental reason for today's decline? One of the m…”

“The election is over. The market called it hours ago. Objectively, it's an undisputed Democrat 'sweep' all the way across the board. The Republicans have lost control of both the House and Senate. Meanwhile, Texas' US Senate and Governor races are set to flip blue for the first time since 1988 and 1990, respectively. The defining issue for voters? Affordability. The ongoing energy crisis has further fueled the aff…”

“AI infrastructure spending is driving a sharp increase in US bank lending: Commercial and Industrial (C&I) loans at large US banks surged +11.4% YoY in October, to $1.6 trillion, the most since June 2020. This also marked their largest YoY growth since February 2023. In Q3, C&I loans at the 25 largest US banks grew almost +10.0% YoY, the strongest growth in 10 years excluding pandemic-related swings. This represen…”

“BREAKING: US equity funds recorded -$6.7 billion in outflows in the week ending October 28th, their largest weekly withdrawal since mid-September. This follows +$5.1 billion and +$13.0 billion in inflows over the previous two weeks. Meanwhile, global equity funds attracted +$10.2 billion in the week ending October 28th, marking their 6th consecutive weekly intake. However, this was down from +$25.1 billion and +$1…”

“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. Novem…”

“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 $2…”

“New details on how the $6.3 billion Binance hack likely occurred: According to initial reports, hackers compromised a Binance engineer's laptop, gaining access to internal systems used to authorize withdrawals. The attackers then: 1. Hijacked a Binance hot wallet using Ethereum's EIP-7702 mechanism 2. Redirected wallet transactions to a malicious smart contract 3. Transferred billions in crypto attacker-controlled…”

“BREAKING: US September PCE inflation, the Fed's preferred inflation metric, rises to 3.6%. Core PCE inflation also rose to 3.1%, up +0.3% month-over-month. This officially confirms that CPI, PPI, and PCE inflation are all rising again. A December rate hike is coming.”

“BREAKING: The US has told several Gulf Arab countries to be prepared for a 'short, intense military campaign' after the US Midterm elections, per WSJ. Details include: 1. There are 'a growing number of indications' that the US and Israel are readying to launch a new round of heavy combat operations against Iran, WSJ reports 2. The US Military is sending an additional Patriot system to Israel 3. US forces in the re…”

“US stocks tend to rally following Midterm elections: The S&P 500 has returned +17.2% on average in the year following Midterm elections since 1950, the strongest return of any year in the Presidential cycle. The index has finished higher in 17 of the 19 post-Midterm years during this period. This is also nearly quadruple the +4.6% average return recorded during midterm years, when the index finished higher in 11 o…”

“BREAKING: Anthropic officially files its S-1 registration statement for an IPO, seeking to list on the Nasdaq under the ticker symbol $ANT. FULL SUMMARY OF ANTHROPIC'S S-1 FILING: 1. Anthropic posted H1 2026 revenue of $16.3 billion with a net loss of $80.7 billion 2. Anthropic says it does not expect to pay a dividend 'in the foreseeable future' 3. Expects to spend up to $120.5 billion on SpaceXAI and Nvidia comp…”

“BREAKING: The Memory ETF, $DRAM, has posted -$2.0 billion in outflows so far in October, putting the fund on track for its largest monthly withdrawal since launching on April 2nd. This would also mark its 3rd consecutive monthly outflow, following -$1.6 billion in September and -$400 million in August. Last week alone, $DRAM saw -$105 million in outflows, its 9th consecutive weekly withdrawal. As a result, the fun…”

“Semiconductor prices are skyrocketing in the US: Producer prices for semiconductor and other electronic component manufacturing surged +26% YoY in September, their 4th-largest increase on record. This also marks their 6th consecutive YoY increase of at least +25%. Since July 2025, the Producer Price Index for semiconductor and other electronic component manufacturing has risen +31%, to its 2nd-highest level since…”

“Layoff Announcements in 2026: 1. UPS: 30,000 Employees 2. Oracle: 30,000 Employees 3. Amazon: 16,000 Employees 4. Omnicom: 15,000 Employees 5. Meta: 8,000 Employees 6. Microsoft: 4,800 Employees 7. Dow Chemical: 4,500 Employees 8. Cisco: Fewer Than 4,000 Employees 9. American Express: 3,840 Employees 10. Uber: 3,300 Employees 11. Renault: Up to 2,400 Employees 12. Nike: 1,400 Employees 13. General Motors: 1,300 Em…”

“BREAKING: Nasdaq 100 futures extend losses to -2% on the day after President Trump says the US is not negotiating with Iran and 'something' will happen 'fair soon.'”

“BREAKING: The 15 largest S&P 500 stocks now account for a record 46.7% of the index’s market value. By comparison, during the 2000 Dot-Com Bubble, the 15 largest stocks accounted for 27.2% of the S&P 500. The remaining 485 stocks represent just 53.3% of the S&P 500’s market cap. This comes as Nvidia, $NVDA, Apple, $AAPL, Alphabet, $GOOGL, and Microsoft, $MSFT, account for 7.5%, 7.1%, 5.9%, and 5.6%, respectively,…”

“Corporate earnings growth is set to slow: 10 of the 11 sectors in the S&P 500 are estimated to record lower YoY earnings growth in Q3 2026, compared to Q2. The Consumer Discretionary sector is expected to post the largest slowdown, from +91% YoY in Q2 to just +2% YoY in Q3. This is followed by Communication Services, with projected Q3 earnings growth at +66%, down from +126%. Earnings growth in the Financials sect…”

“US semiconductor stocks are experiencing massive volatility: The Semiconductor Index, SOX, to S&P 500 ratio is down to 1.45 points, its lowest since April 2026. This ratio has declined -0.46 points, or -24%, from its mid-June peak. Over this period, SOX has fallen -24%, while the S&P 500 has gained +2%. The relative decline is comparable to the one seen following the 2000 Dot-Com Bubble burst. However, the ratio i…”

“BREAKING: Ukraine has launched a 'massive aerial attack,' consisting of over 1,000 drones, striking a major oil terminal in Russia. The attack comes exactly 7 days after President Trump said Ukraine and Russia had agreed to an 'energy ceasefire.' Following the announcement, Ukraine's President Zelensky quickly stated that he was unaware of such a ceasefire. This comes after President Trump asked Ukraine several ti…”

“BREAKING: Interest expense on US public debt rose +$144 billion YoY in FY2026, or +12%, to a record $1.36 trillion. This marks the 6th consecutive annual increase, for a total of +$839 billion, or +161%. For perspective, total receipts rose just +3.2% YoY, to $5.40 trillion. In other words, interest on federal debt accounted for 25% of total US government receipts. Meanwhile, Social Security, the largest governmen…”

“The initial response to this article has been incredible. The S&P 500 is now <1% away from a record high but 206 of its components are down over -30%. Never in history has this happened before. It's the 'Bear-Bull Market Paradox.' Bookmark this.”

“BREAKING: South Korea's stock market extends losses to over -8% on the day, triggering a level 1 circuit breaker. Trading has been halted for 20 minutes amid the intense selling pressure. A level 2 circuit breaker would occur next at a -15% drop.”

“BREAKING: Trading volume in the S&P 500 ETF, $SPY, fell to just 22.6 million shares on Friday, the lowest for a full trading day since November 25th, 2005. Excluding sessions around market holidays, Friday's volume was the lowest since October 11th, 2004. By comparison, volume fell below 20 million shares on December 24th, 2019, but that was during a half-day trading session. On Monday, trading volume fell to just…”

“BREAKING: Global money market funds attracted +$166.4 billion in inflows in the week ending October 7th, their largest weekly inflow since April 2020. US money market funds alone posted +$72.3 billion in inflows, lifting their total assets to a record $8.0 trillion. Since 2023, US money market fund assets have risen +$3.0 trillion. Meanwhile, global bond funds attracted +$33.8 billion in the week ending October 7t…”

“BREAKING: Global physical gold-backed ETFs attracted +$30.7 billion in inflows in Q3 2026, their largest quarterly intake on record. In September, inflows totaled +$10 billion, the 3rd-largest monthly inflow of 2026, following +$17.9 billion in August, the 2nd-largest monthly intake on record. As a result, global gold ETF holdings rose +67 tonnes last month to a record 4,256 tonnes. This surpasses the previous rec…”

“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…”