Chips fell eight sessions in a row last week, an 11% drop that erased about $2 trillion and was the longest losing streak since October 2008. This morning they’re up about 2.4%. The question is whether anything underneath changed, and by our scorecard, not yet.
Monday’s reading: Crack 2.0 / 6. Fragility 1.5 / 3. Leading 1.0 / 5. All three are unchanged from Friday.
What’s lit
Rates: the 30-year is at 5.43%, still above the 5.25% line where we flag long-end stress. The 10-year is 5.09%.
Oil: WTI is about $98 and Brent about $109, both well through our $90 line. Trump’s Russia sanctions waiver took roughly 1% off crude this morning, but it’s still expensive.
What’s quiet
VIX: 18.4, back under 20 and nowhere near our 22 line.
Labor: unemployment is 4.2% and jobless claims are 199,000. Nothing is breaking.
Credit: this is the one to watch. High-yield spreads are about 330bp, versus about 316 last Wednesday. They’re still tight and nothing has triggered, but they’re drifting wider while stocks bounce. The CoreWeave 2031 bond still yields 15.13%, down from above 16% last week. That’s relief, but it’s still a distress-level yield.
Why it matters: last week’s selloff was about the cost of financing AI, not about growth. A hot inflation print pushed up rate-hike bets, and heavily indebted AI builders feel that first. A rally in the stocks doesn’t fix their borrowing costs.
This week: Netflix and GM report Tuesday, Meta and Tesla Wednesday, and the Fed meets October 28. Meta’s AI spending is the number the market will read for debt appetite.
Our read: a bounce with credit unconfirmed. If credit tightens alongside stocks, that’s a better sign. If it keeps widening, that’s a worse one. Credit is the tell this week.
The Fault Line score is weekly macro context, not a timing signal. Our own testing found it doesn’t reliably predict entries. This is not investment advice.