1HeadlinesWhat does this mean?
Stage 3 (forced deleveraging), unchanged from the last report; earliest downgrade 6 December. AI economics: Stressed, unchanged.
The bad
- Hedge funds cut risk last week at a pace not seen since March 2020. Bloomberg, citing Goldman Sachs prime-brokerage data for the week to 6 November, reported that gross leverage at US fundamental long-short funds fell 8.7 percentage points to 207.5%. Net selling of technology shares nearly matched the record in Goldman’s figures, which go back to 2016. Reported.4
- Reuters reported that some banks are now reluctant to finance new AI deals, even when Google or Anthropic stands behind them. According to two sources, the change came in the past few days. Nebius dropped a planned high-yield bond last month, according to one source. Reported.5
- CoreWeave’s five-year CDS is above 1,240bp, up 50% in a month, and some of its 2031 bonds yield more than 16%, CNBC reported ahead of Tuesday’s results. Reported.6
- SoftBank’s five-year CDS rose 22bp to 466bp on 6 November, its widest since October 2022, Reuters reported. IFR, citing S&P Global data, put Oracle’s CDS at about 305bp, level with single-B credits. Reported.78
- Nvidia fell about 4% while the rest of the chip sector rallied. Its board opened an independent investigation after reports that Jensen Huang was the target of a foreign intelligence effort. Confirmed.23
- The KOSPI fell 0.81% to 5,018.85, its third fall in a row. Foreign and retail investors were net sellers. Confirmed.910
The good
- The Philadelphia Semiconductor Index rose 6.85% to 10,033.93. CNBC reported that the main semiconductor ETF was on course for its best day since 30 July, and the S&P 500 rose 2.35%, its best day since 8 April. Confirmed.12
- The broad firewall loosened slightly. High yield narrowed to 342bp on 6 November from 348bp, and investment grade held at 93bp. Both are inside Calm. Confirmed.1112
- The same Goldman data showed selling eased by the end of last week, and hedge funds ended the week as net buyers on its trading desk, helped by Friday’s short covering. Reported.4
- Brent settled down 5.85% at $92.57, its lowest settlement since 31 August. Confirmed.13
Not what it looks like
- Monday’s rally does not end the deleveraging signal. The Goldman figures describe selling that had already happened by 6 November, so they add weight to the 6 November evidence without restarting the Stage 3 clock. One strong day for chips is also not a change in band: the semiconductor index is still more than 30% below its high.41
- Reports that Anthropic could start marketing its IPO on Tuesday are not an offering yet. Its latest filing, of 2 November, still leaves the price range and share count blank. Bloomberg reported that some potential investors discussed a valuation of $1.1tn to $1.3tn on Friday, down from $1.5tn to $2tn earlier in the month.1415
2ScorecardWhat does this mean?
| Pillar | Status | Trend | Why |
|---|---|---|---|
| AI equities | Stressed | Unchanged | SOX closed at 10,033.93, 31.5% below its 52-week high of 14,655.29, inside the 30–40% Stressed band. It rose 6.85% on the day and needs a close of 10,258.70 to get back within 30%. The Nasdaq 100 rose 3.40%; the KOSPI fell 0.81%.1169 |
| Rates and macro | Elevated | Unchanged | The 10-year closed at 4.88%, up from 4.86%. It has closed at or above 4.75% for 49 sessions in a row. Brent fell 5.85% to $92.57.171813 |
| Broad credit (the firewall) | Calm | Unchanged | Latest prints are 6 November: high yield 342bp and investment grade 93bp, both inside Calm. High yield is 8bp short of the 350bp Watch line, against 2bp in the last report. The CCC spread is 1,317bp.111219 |
| AI-specific credit | Stressed | Unchanged | CoreWeave five-year CDS above 1,240bp and 2031 bonds yielding above 16%. SoftBank CDS 466bp, the widest since October 2022. Oracle CDS about 305bp. Bank of America says 10-year hyperscaler spreads have widened about 50bp this year, against about 20bp for comparable non-AI industrials.6785 |
| AI financing flow | Stressed | Unchanged | Reuters reported banks reluctant to fund AI deals even with marquee guarantors, and Nebius shelving a high-yield bond. Anthropic may begin marketing its IPO on Tuesday, at a lower reported valuation.514 |
| Leverage and liquidity | Stressed | Unchanged | Goldman prime-brokerage data show the biggest weekly cut in US long-short gross leverage since March 2020, adding to last week’s margin calls and the Walleye capital return. Selling eased by Friday. No prime broker has been reported withdrawing lines.4 |
| Private credit | Elevated | Unchanged | No new evidence since the 7 November report, from which the status is held. |
| AI economics | Stressed | Unchanged | Voters rejected data centres in 40 of the 41 ballot measures on 3 November, CNBC reported. No hyperscaler changed its capex guidance. CoreWeave reports on Tuesday.6 |
3Change since last reportWhat does this mean?
Compared against the 7 November 2026 report. That report used the 6 November closes, so the market changes below are for Monday’s session.
| Last report (7 Nov) | This report | Change | |
|---|---|---|---|
| Stage | 3 (evidence 6 Nov) | 3 (evidence 6 Nov) | Unchanged. Goldman’s prime-brokerage data cover the week to 6 November, so they confirm the existing evidence rather than moving its date. The earliest downgrade is still 6 December.4 |
| AI economics | Stressed | Stressed | Unchanged. The ballot results reported by CNBC add to the political pressure on new capacity, but no company changed its spending plans.6 |
| AI equities | Stressed | Stressed | Unchanged status, better inside it: the drawdown narrowed from 35.9% to 31.5%.1 |
| Rates and macro | Elevated | Elevated | Unchanged. The 10-year rose 0.02pp to 4.88%.17 |
| Broad credit | Calm | Calm | Unchanged status, better inside it: high yield narrowed 6bp to 342bp on the first new print since the last report.11 |
| AI-specific credit | Stressed | Stressed | Unchanged status, worse inside it: SoftBank CDS at a four-year high, and Oracle CDS about 305bp against about 298bp.78 |
| AI financing flow | Stressed | Stressed | Unchanged status, worse inside it: banks are reported to be pulling back from AI lending, including deals with strong guarantors.5 |
| Leverage and liquidity | Stressed | Stressed | Unchanged. The Goldman data quantify last week’s deleveraging and show it easing by Friday.4 |
| Private credit | Elevated | Elevated | Unchanged. No new evidence. |
Net: no status moved. Monday’s rally improved the market-priced pillars inside their bands, with chips 4.4 points closer to their high and high yield further from Watch. Pressure built in the lending pillars instead: Reuters reported banks retreating from AI loans, and SoftBank’s and Oracle’s protection costs rose.
4Transmission chainWhat does this mean?
- 1 AI equity correction Confirmed
- 2 AI-specific credit stress Confirmed
- 3 Forced deleveraging Confirmed 6 Nov Earliest downgrade 6 Dec
- 4 Firewall breached Not present
- 5 Systemic liquidity event Not present
| Stage | Status |
|---|---|
| 1 — AI equity correction | Confirmed. The semiconductor index has closed more than 20% below its 52-week high for 19 sessions in a row, since 14 October. It closed 31.5% below.1 |
| 2 — AI-specific credit stress | Confirmed. CoreWeave’s CDS is above 1,240bp and some of its bonds yield more than 16%. Reuters reported banks reluctant to fund AI deals and a Nebius high-yield bond shelved.65 |
| 3 — Forced deleveraging | Confirmed. Entry evidence last confirmed 6 November: margin calls in Asia, Walleye Capital returning capital, and Morgan Stanley leverage data, all reported last week. Goldman’s prime-brokerage data for the same week, reported on 9 November, add to it. The earliest downgrade is 6 December.4 |
| 4 — Firewall breached | Not present. High yield is 342bp, 108bp below the 450bp tripwire, and investment grade is 93bp, 37bp below the 130bp tripwire. Both are 6 November prints. Neither has closed above its tripwire on any day.1112 |
| 5 — Systemic liquidity event | Not present. No funding-market break and no official intervention. The secured overnight financing rate was 3.89% on 6 November, inside the Fed’s 3.75–4.00% target range.20 |
5JudgementWhat does this mean?
Monday looked like relief, and in the equity market it was. The semiconductor index rose almost 7%. Nvidia fell, but its fall was about its chief executive rather than about chip demand. But the market-priced pillars only moved inside their bands. The index is still more than 30% below its high, and the 10-year is still in the Elevated band after 49 sessions. One good session after the worst week in years does not change any status, and the rules are built so that it can’t.12317
The more important news came from the lenders. Reuters reported that some banks that were lining up to finance AI deals a few weeks ago are now reluctant, even when Google or Anthropic guarantees the debt. Bank of America’s figures show that 10-year hyperscaler spreads have widened about 50bp this year, against about 20bp for comparable non-AI borrowers. That is discrimination: lenders charging a specific sector more and rationing it. The broad indices show no contagion yet. High yield narrowed to 342bp on 6 November, and investment grade was unchanged at 93bp. The gap between those two pictures is the firewall, and on today’s evidence it is holding.51112
The leverage evidence is now better documented, not newer. Goldman’s prime-brokerage data put numbers on what Bloomberg and Reuters reported last week: the biggest weekly cut in long-short gross leverage since March 2020, and near-record net selling of technology shares. Because the data run to 6 November, they confirm the existing Stage 3 evidence rather than restarting the clock. The same data show selling easing by Friday. If no new margin calls, liquidations or capital returns are reported, the earliest downgrade stays 6 December.4
On the economics axis nothing changed in the numbers, but the political risk grew. CNBC reported that voters rejected data centres in 40 of 41 ballot measures. JPMorgan Asset Management estimates that 37.5 gigawatts of planned 2028 US capacity could face pauses, but that is an estimate, so it carries no weight in the score. This week’s results test whether that risk reaches the financing. CoreWeave reports on Tuesday, and SoftBank publishes its results the same day, Tokyo time. Nebius reports on Thursday, and Anthropic’s roadshow may start on Tuesday.6212214
6Key indicatorsWhat does this mean?
Market data as at the close on 9 November 2026, compared with the close used by the 7 November 2026 report (6 November 2026). Credit spreads are the 6 November observations, the latest published; the dollar and yen series are also at 6 November. Reported figures are carried forward from the report that last cited them until a newer one appears.
| Indicator | Latest | Previous | Change | Tripwire | Source |
|---|---|---|---|---|---|
| AI equities | |||||
| PHLX Semiconductor Index (SOX) | 10,033.93; 31.5% below its 52-week high of 14,655.29 (22 Jun) | 9,390.25 | +6.85% | Stage 1 when more than 20% below its 52-week high for five closes | Confirmed, Yahoo Finance ^SOX1 |
| Nasdaq 100 | 27,907.63 | 26,989.99 | +3.40% | Context | Confirmed, Yahoo Finance ^NDX16 |
| KOSPI | 5,018.85 | 5,059.69 | −0.81% | Context | Confirmed, Yahoo Finance ^KS119 |
| Rates and macro | |||||
| US 10-year Treasury | 4.88% | 4.86% | +0.02pp | Elevated 4.75–5.25%; Stressed above 5.25%, each for five closes | Confirmed, US Treasury par yield17; FRED DGS10 history18 |
| US 30-year Treasury | 5.26% | 5.26% | 0.00pp | Context | Confirmed, US Treasury par yield17; FRED DGS30 history23 |
| Brent crude | $92.57 (ICE front month) | $98.32 (ICE front month) | −$5.75 (−5.85%) | Context | Confirmed, Dow Jones Market Data via Morningstar13 |
| US dollar index (broad) | 121.88 (6 Nov) | 121.67 (30 Oct) | +0.2% | Context | Confirmed, FRED DTWEXBGS24 |
| Yen per US dollar | ¥158.23 (6 Nov) | ¥157.47 (30 Oct) | +0.76 | Context | Confirmed, FRED DEXJPUS25 |
| Broad credit | |||||
| ICE BofA US investment-grade spread | 93bp (6 Nov) | 93bp (5 Nov) | 0bp | Watch at 100bp; Stage 4 above 130bp for five days | Confirmed, FRED BAMLC0A0CM12 |
| ICE BofA US high-yield spread | 342bp (6 Nov) | 348bp (5 Nov) | −6bp | Watch at 350bp; Stage 4 above 450bp for five days | Confirmed, FRED BAMLH0A0HYM211 |
| ICE BofA CCC & lower spread | 1,317bp (6 Nov) | 1,320bp (5 Nov) | −3bp | Early warning only | Confirmed, FRED BAMLH0A3HYC19 |
| ICE BofA CCC & lower effective yield | 17.71% (6 Nov) | 17.69% (5 Nov) | +0.02pp | Early warning only | Confirmed, FRED BAMLH0A3HYCEY26 |
| AI-specific credit | |||||
| AI investment-grade premium over the broad index | 10-year hyperscaler spreads about 50bp wider this year, against about 20bp for high-quality non-AI industrials (9 Nov) | Widest since 2003 (3 Nov report) | new reading | n/a | Reported, Reuters citing Bank of America5 |
| Oracle 5-year CDS | about 305bp (7 Nov) | about 298bp | about +7bp | n/a | Reported, IFR citing S&P Global Market Intelligence8 |
| Meta 5-year CDS | 124bp (record) (31 Oct report) | 124bp (record) | no new reading | n/a | Carried from the 31 October report |
| CoreWeave 5-year CDS | above 1,240bp (9 Nov) | about 1,155bp | new reading; up 50% in a month | n/a | Reported, CNBC6 |
| SoftBank 5-year CDS | 466bp (6 Nov), widest since October 2022 | ~424bp | +42bp against the 15 October reading | n/a | Reported, Reuters via Business Recorder7 |
| Named data-centre project debt | ING auctioning about $500m of 12 data-centre loans, including $25m of Stargate New Mexico debt; bids due 19 Nov (7 Nov report) | same | no new reading | n/a | Carried from the 7 November report |
| CoreWeave bond prices and yields | Some 2031 bonds yielding above 16% (9 Nov) | 9.625% 2032 bond yielding above 16% | new reading | n/a | Reported, CNBC6 |
| Quarterly financials | |||||
| Alphabet 2026 capex guidance | $195–205bn (29 Oct report) | $195–205bn | no new reading | n/a | Carried from the 29 October report |
| Amazon 2026 capex guidance | $220bn (unchanged) (31 Oct report) | $220bn (unchanged) | no new reading | n/a | Carried from the 31 October report |
| Meta 2026 capex guidance | lower end of range raised (22 Oct report) | lower end of range raised | no new reading | n/a | Carried from the 22 October report |
| Microsoft capex guidance | $170bn (FY2026, cut from $175bn) (31 Oct report) | $170bn (FY2026, cut from $175bn) | no new reading | n/a | Carried from the 31 October report |
| Alphabet quarterly free cash flow | −$9.1bn (Q3) (31 Oct report) | −$9.1bn (Q3) | no new reading | n/a | Carried from the 31 October report |
| Amazon free cash flow | −$42.4bn (trailing 12 months) (30 Oct report) | −$42.4bn (trailing 12 months) | no new reading | n/a | Carried from the 30 October report |
| Meta quarterly free cash flow | −$2.12bn (Q3) (27 Oct report) | −$2.12bn (Q3) | no new reading | n/a | Carried from the 27 October report |
| Microsoft quarterly free cash flow | +$18.6bn (quarter) (29 Oct report) | +$18.6bn (quarter) | no new reading | n/a | Carried from the 29 October report |
| AMD quarterly free cash flow | $554m (Q3); data-centre revenue $8.55bn (4 Nov report) | $554m (Q3) | no new reading | n/a | Carried from the 4 November report |
Yahoo Finance ^SOX, daily closes to 4 Nov.
FRED DGS10, daily closes to 2 Nov.
FRED BAMLC0A0CM, daily closes to 3 Nov.
FRED BAMLH0A0HYM2, daily closes to 3 Nov.
Faint vertical lines mark each of the last 20 reports. Dashed red lines are the published thresholds.
What would change our view
Would make it worse (up toward Stage 4): High yield above 450bp or investment grade above 130bp for five consecutive trading days. Before that, a single high-yield print above 350bp, now 8bp away, or an investment-grade print above 100bp would move Broad credit to Watch. Reports of a prime broker withdrawing lines, or a fund gating or liquidating, would move Leverage toward Critical and restart the Stage 3 clock. A Stage 5 event would need a funding-market failure or official intervention.
Would make it better (down to Stage 2): A month with no new forced-selling evidence. The earliest date is 6 December. Leverage would return to Elevated once margin-call and liquidation reports stop and prime-brokerage data show leverage stabilising. For equities, a semiconductor index close at or above about 10,259 would return that pillar to Elevated. Five closes inside 20% of the high, at or above about 11,724, would clear the Stage 1 tripwire.
Would move the AI-economics axis: CoreWeave’s results on 10 November, Nebius’s on 12 November and Nvidia’s on 17 November, and what each says about funding and customer commitments. SoftBank’s results on 10 November, for how it is funding its OpenAI stake.22 Whether Anthropic sets a price range and prices on time. More banks declining AI loans, or a hyperscaler cutting capex because of state moratoriums, would make it worse.
7SourcesWhat does this mean?
- Yahoo Finance — PHLX Semiconductor Index (^SOX) daily chart data (continuous) —
market-data-series - CNBC — Stock market news for Nov. 9, 2026 (2026-11-09) —
live-sourced - NVIDIA — Statement From NVIDIA Board of Directors (2026-11-08) —
official-source - Quartz (citing Bloomberg) — Hedge funds sold tech stocks at a near-record pace after midterms (2026-11-09) —
live-sourced - Reuters (via Investing.com) — Banks, investors grow wary of AI debt, spooked by market selloff (2026-11-09) —
live-sourced - CNBC — CoreWeave confronts ‘doom cycle’ narrative as neocloud credit risk overshadows growth (2026-11-09) —
live-sourced - Reuters (via Business Recorder) — SoftBank credit risk jumps to 4-year high as AI fears roil market (2026-11-06) —
live-sourced - IFR — CDS market flashes warning on AI ratings downgrades (2026-11-07) —
live-sourced - Yahoo Finance — KOSPI (^KS11) daily chart data (continuous) —
market-data-series - Yonhap News Agency — Stocks close lower as investors search for direction amid AI sector uncertainties (2026-11-09) —
live-sourced - FRED — ICE BofA US High Yield Index Option-Adjusted Spread (BAMLH0A0HYM2) (continuous) —
official-data-series - FRED — ICE BofA US Corporate Index Option-Adjusted Spread (BAMLC0A0CM) (continuous) —
official-data-series - Dow Jones (via Morningstar) — Front Month ICE Brent Crude Fell 5.85% to Settle at $92.57 (2026-11-09) —
live-sourced - Investing.com (citing Bloomberg) — Anthropic IPO targets November debut as valuation expectations fall (2026-11-09) —
live-sourced - Anthropic, PBC — Form S-1/A, Amendment No. 1 (2026-11-02) —
official-source - Yahoo Finance — Nasdaq 100 (^NDX) daily chart data (continuous) —
market-data-series - US Treasury — Daily Treasury Par Yield Curve Rates, 2026 (2026-11-09) —
official-data-series - FRED — Market Yield on US Treasury Securities at 10-Year Constant Maturity (DGS10) (continuous) —
official-data-series - FRED — ICE BofA CCC & Lower US High Yield Index Option-Adjusted Spread (BAMLH0A3HYC) (continuous) —
official-data-series - Federal Reserve Bank of New York — Secured Overnight Financing Rate, last five observations (2026-11-06) —
official-data-series - Moneycontrol — US midterm backlash puts 37.5 GW of US AI data-centre capacity at risk (2026-11-09) —
live-sourced - SoftBank Group Corp. — Earnings Results for Q2 FY2026 (2026-10-02) —
official-source - FRED — Market Yield on US Treasury Securities at 30-Year Constant Maturity (DGS30) (continuous) —
official-data-series - FRED — Nominal Broad US Dollar Index (DTWEXBGS) (continuous) —
official-data-series - FRED — Japanese Yen to US Dollar Spot Exchange Rate (DEXJPUS) (continuous) —
official-data-series - FRED — ICE BofA CCC & Lower US High Yield Index Effective Yield (BAMLH0A3HYCEY) (continuous) —
official-data-series
Not investment advice. Scoring, tripwires and the persistence rule are set out in How to read the AI Market Watch; terms are explained in the explainers.