Everything moving the Street, before it moves you.
The bond market spent Thursday auditioning for a disaster movie. The 10-year Treasury yield touched 5.34%, its highest since 2002, while UK 30-year gilt yields topped 6% for the first time since 1998 and France's 10-year hit 4.96%, Euronews reported. London stocks tumbled 1.7%, yet Wall Street shrugged as yields gave back their gains, and the S&P 500 (SPX) rose 0.2% to 7,666.45 to snap a three-day losing streak.
Relief may be arriving by tanker: Brent crude fell 2.89% to $99.35 a barrel Friday as EU countries discussed releasing 50 million barrels of diesel, The National reported. Next up is the September jobs report at 8:30 a.m. ET, where the consensus calls for 84,000 new jobs and 4.1% unemployment, per Stocktwits. Bond traders will be refreshing that number like it's a playoff box score.
Artificial Intelligence
Broadcom Becomes Anthropic's Chip Dealer, and Its Bank
In AI, the house doesn't just deal the cards. It lends you the chips to play.
Broadcom (AVGO) has agreed to lend Anthropic up to $42 billion through convertible notes to help pay for leased computing capacity, Reuters reported from Anthropic's IPO prospectus. The notes could convert into Anthropic shares, and Broadcom can bring in a financing partner. Early Friday, Bloomberg reported that Broadcom's bank syndicate is starting to gather $60 billion of AI chip financing, beginning with a $42 billion senior-secured tranche.
Broadcom shares slipped 1.1% to $347.44 Thursday. The real question is less about one day's tape than about who is holding the risk.
Pass the Chips
Vendor financing is as old as the casino floor. The supplier extends credit, the customer buys more product, and everyone's revenue looks great until somebody can't cover the marker. Bloomberg's Sarah Frier walked through the mechanics on Thursday's Bloomberg Intelligence episode:
"It is an instance of Broadcom finding a way for Anthropic to get money so that Anthropic could then purchase its chips."
Anthropic has committed $125.2 billion to a five-year lease of TPU computing capacity, so the Broadcom notes could cover roughly a third of it; Anthropic itself flagged "potential conflicts of interest" in Broadcom's dual role, per the same Reuters report.
The full $60 billion package includes an $18 billion junior tranche led by Blackstone, which plans to commit $9 billion itself, Finimize relayed from Bloomberg's reporting.
Timing matters: Anthropic aims to start formal IPO marketing as soon as the week of Nov. 9 at a valuation of $1.8 trillion to $2 trillion, PYMNTS noted, citing Bloomberg.
House Money: Bulls see Broadcom locking in its largest compute customer for 2027. Skeptics see a supplier underwriting its own demand. Rothschild & Co managing partner Robert Leitao told Reuters it "feels that there's quite a concentrated bet right now on two companies" generating enough revenue to support all the financing. Investors reading the prospectus will need to decide which side of the table they're on.
Consumer
Nike's Comeback Trips Over China, and the Stock Hits a 13-Year Low
Just do it. Again. And maybe once more after that.
Nike (NKE) reported fiscal first-quarter revenue of $11.21 billion after Thursday's close, short of the $11.33 billion analysts expected, per Yahoo Finance. It then guided to a high-single-digit revenue decline for the full year and unveiled a cost program called Pace. The shares were down about 9% in premarket trading, Stocktwits reported.
CEO Elliott Hill is two years into the turnaround. The race was supposed to be getting easier by now.
Hitting the Wall
Every marathoner knows mile 20. Nike's version is Greater China, where sales fell 22%, or 26% excluding currency swings, to $1.18 billion, according to the company's release. Gross margin did widen 60 basis points to 42.8%, a reminder that the problem is demand rather than costs.
By the numbers: Nike's adjusted earnings guide of $1.15 to $1.35 a share sits well below the $1.61 consensus, and Pace targets $2.5 billion of cumulative savings through fiscal 2031 for about $1 billion in charges, StockTitan tallied. After-hours trading pushed the stock to its lowest level since September 2013, roughly 76% below its 2021 peak of $179, Forbes noted.
"This work will result in fewer roles across Nike, and I want to acknowledge that news like this creates uncertainty."
Second Wind?: Nike is saving the next phase of its strategy for an investor day on November 16-17. CFRA's Zach Warring summed up the mood in comments cited by Yahoo Finance, calling it "a quarter you'd expect from a new CEO three or four quarters in, but not two years in." Until China stops bleeding, cost cuts are just lighter shoes on a runner who's still losing ground.
Big Tech
Accenture Proves the Consultants Aren't Dead Yet
Reports of Accenture's death by chatbot were greatly exaggerated.
Accenture (ACN) surged 22% Thursday, the largest single-day gain in its history, Quartz reported, after fiscal fourth-quarter revenue rose 6% to $18.68 billion. The stock had been down roughly 30% this year before the print, Yahoo Finance noted, as investors bet AI would eat into the billable hours that built the business.
That trade just met a client with a very long contract.
Billable Ours
The bear case on IT services is simple: if software agents can write code and run back offices, why pay armies of consultants? Accenture's answer is that clients still need someone to install the agents. Its earnings release showed revenue topping its own guided range of $17.75 billion to $18.40 billion and full-year bookings reaching $84.5 billion, including $22.2 billion in the fourth quarter. Management guided to 3% to 6% local-currency revenue growth for fiscal 2027.
There's a twist, though. Accenture now counts nearly 110,000 AI professionals but expects to hire fewer people in fiscal 2027 thanks to AI productivity, per its earnings call, where CEO Julie Sweet said the company believes "the opportunities related to AI are greater than the impact of AI-related efficiencies in our business."
Accenture didn't prove AI won't disrupt consulting. It proved the disruption needs a consultant, and for now that's worth more than the hours AI saves.
Billing Cycle: A record day doesn't erase the debate; it just resets the meter. If bookings keep growing while headcount flattens, Accenture becomes an AI margin story. If clients start doing the integration themselves, Thursday was a relief rally, not a rerating.
The Tape
Barbie's Dream Bid: Mattel (MAT) jumped about 18% to $15.04 Thursday after Authentic Brands Group discussed an offer worth more than $20 a share, or about $6 billion, Reuters reported, citing the WSJ; the approach lands one day after CEO Ynon Kreiz said he's leaving to become Paramount's co-CEO.
Agents of Discovery: California Attorney General Rob Bonta issued an investigative subpoena to OpenAI over "cybersecurity incidents and risks involving the company and its AI models," Reuters reported, joining an FTC probe and a 15-state inquiry.
Land of Enchantment, Bill of Astonishment: New Mexico asked a judge to order Meta (META) to pay $35 billion to $40 billion after a jury found it misled Facebook users; Meta called the request "astronomical" and argued for a $3.45 billion cap, per Reuters.
What You May Also Like
Channel Surfing: Disney (DIS) fell about 3% Thursday after the WSJ reported a TV restructuring that could cut hundreds of jobs across ABC Entertainment, 20th Television, Hulu Originals and Freeform, Reuters relayed.
Trillion-Dollar Quarter: Microsoft (MSFT) gained 37.5% in the third quarter, its best quarter since 1998, adding $1 trillion in market value, Quartz reported.
Rent-to-Own, in Reverse: Amazon (AMZN) is seeking to move about $8 billion of Nvidia Grace Blackwell chips into a special-purpose vehicle and lease them back, Reuters reported, citing the FT.
Just For Fun
arXiv now caps researchers at two submissions a month after 40,363 papers poured in in September, nearly double September 2024. Peer review, meet rate limiting.
Amazon unveiled the $34.99 Kindle Click, a Bluetooth remote that turns pages for you. Finally, a way to read under the covers without the evidence.
After the Bell
Thursday's recap: bonds threw a tantrum, stocks pretended not to notice, Broadcom handed Anthropic a line of credit, and Accenture reminded everyone that the robots still need someone to plug them in. Today it's payrolls at 8:30 and Nike at the open, so lace up accordingly.
That's the tape. We'll see you at the open. — AllThingsWallSt
