Hedge funds cut their favourite bets week, and the result was a market that rose underneath a falling index. From Meta's cash to France's bonds to gold, the week's stories share one cause: crowded money leaving crowded rooms, days before a Fed that isn't done.
Five things
- The average stock beat the index as it has done only a handful of times since 1990. On Thursday the S&P 500 fell 1.2% while two-thirds of its stocks rose, and the rotation is real only if the Russell 2000 holds its 200-day average; lose it and this was a clearance sale, not a turn.
- Meta ran out of cash before it ran out of ambition. Free cash flow turned negative and the spending floor went up anyway; yields fell the same day, so this was a cash scare, not a rate scare, and the strain lands first on the borrowers at the edge, which is why we own protection on CoreWeave's debt.
- France's riots did more damage to its bonds than to its streets. The French ten-year crossed 5% for the first time since 2002 and the gap over Germany is the widest since the euro crisis, a fiscal story with no majority to fix it; we favour Italy as the over-punished leg.
- Oil's war rally lives in the refinery, not at the wellhead. The reported strike on Saudi Aramco's Shaybah field sent Brent up 6.2% on the week, far more than WTI, and Brent's biggest sprints have mostly unwound within a month, so we fade crude and own the majors against the pure producers.
- Everybody raised cash at once, and that is the thread. Gold fell 4.07% while real yields also fell, the 10-year had its biggest one-day drop since August 2024 as bond shorts were forced to buy, and asset managers remain near-record short volatility: a deleveraging, not a verdict.
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Cambridge Sigma Weekly, written on Sunday after the week's close. For information only; not investment advice.