A burning tanker in Hormuz lifted CL1 Comdty 3.0% to $97.97, yet SPX Index closed +0.33% as the 10-year fell 12.7bp through a 6.3% PPI. Unlike the dot-com run, when credit stayed calm as stocks rose, HY OAS is 51bp wider in 21 days.
Three things
- Bonds rallied through the hottest PPI since 2022, so growth fear beat inflation fear. PPI ran 6.3% year over year against 5.3% expected, yet USGG10YR Index fell 12.7bp to 5.058% and USGG2YR Index fell 5.9bp to 4.738%.
- The AI trade is now a credit story. CoreWeave 5-year CDS is at 1,150bp, up 282bp in five days, and per Bloomberg ASKB its founders have sold $3.3B of stock since the March 2025 IPO.
- Credit is leading equity, and equity has not noticed. HY cash OAS is 3.21%, 51bp wider over 21 days, while SPX Index closed +0.33% with eight of 11 sectors green.
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Cambridge Sigma Daily, written after the US close. For information only; not investment advice.