Week of 2 - 6 November 2026

The equity market applied the cash-flow test to the largest companies in the world: Alphabet fell 12.6% on Thursday and Amazon followed on Friday, while Microsoft was the exception. This is the week's read on rates, currencies, equities, commodities and crypto, with the levels we are watching into it.

1. The AI Bill Came Due

Alphabet fell 12.6% on Thursday, its largest one-day percentage decline on record, erasing more than $500bn of market value. Revenue was not the problem. The company reported negative free cash flow of $9.1bn on quarterly capital spending of $51.4bn — a second consecutive quarter of negative free cash flow, the first time that has happened. Google Cloud revenue more than doubled.

Amazon followed on Friday, missing on both revenue and earnings while holding its 2026 capital expenditure plan near $220bn, with negative free cash flow of $42.4bn over the past twelve months. Intel fell as much as 29% after warning it would burn cash in 2026. Meta announced a record $97.5bn fund raise. More than $2 trillion of market value was wiped from the Nasdaq 100 across October, and the Composite had its worst month in over a year.

Microsoft was the exception, and the exception is the whole story. It spent $45.2bn in the quarter — below the $50bn it had guided — and posted positive free cash flow of $18.6bn, the only positive result among the five hyperscalers. Its shares rose while the rest were sold.

We wrote last week that debt markets had split in two: companies with revenue independent of AI data centres could borrow, and companies without it could not. This week the equity market applied the same test, and it applied it to the largest companies in the world.

Goldman Sachs put the arithmetic behind it most clearly. Ben Snider, its chief US equity strategist, framed the quarter as earnings growth that is strong but no longer accelerating, with the growth rate of AI capital spending now peaking. The numbers: hyperscaler capex roughly doubling to $800bn this year and reaching $1.2 trillion in 2027, against S&P 500 earnings growth slowing from about 30% in 2026 to 18% next year. Spending keeps rising while earnings momentum falls, and the gap between the two is what valuations are now absorbing.

Friday showed what that repricing looks like in a single session. The Nasdaq 100 fell 3.46%, its worst day since June; the Philadelphia semiconductor index dropped 7%. Intel fell 29%, AMD 10.88%, ASML 6.55%, TSMC 5.95%. Alphabet ended the week down 12.61% with RSI at 21.4 — the deepest oversold reading in the market — and 31.4% below its 52-week high.

The Fed held at 3.75–4.00% in a 10–2 vote, with Cook and Hammack dissenting in favour of an immediate hike. The statement upgraded economic activity from “solid” to “strong” while keeping inflation “elevated”. December is priced at roughly 72–73% by Friday’s rate futures, down from above 80% earlier in the week, and the next decision on 9 December carries new projections. Warsh also announced fewer rate-setting meetings from next year — consistent with his push for less forward guidance, and, as Wells Fargo’s Tony Miano observed, a change that could mean more market volatility rather than less.

The data gave both sides something. Third-quarter GDP came in at 3.4% annualised against a 3.0% consensus, up from 2.2% in the second quarter. But September PCE inflation rose to 3.6% year-on-year from 3.4%, with core at 3.1% from 3.0% — and energy prices up 21.3% over the year did much of the work. Warsh said tightening financial and credit conditions could moderate demand, while stopping short of calling conditions restrictive.

And Brazil repriced violently. Lula won Sunday’s runoff 51.8% to 48.2% against prediction markets that had put Flavio Bolsonaro at 75–80%. On Monday the Ibovespa fell 13.88%, its worst day since March 2020, triggering B3’s first circuit breaker since the pandemic and the first ever caused by an election result. The real went from roughly 4.99 to 5.60. By Friday the index had lost 18.3% on the week and the real 9.65%.

And crypto suffered the largest theft in its history. On Thursday 29 October, roughly $6.3bn was drained from Binance in about twenty minutes — four times the Bybit theft of 2025 and, in the words of TRM Labs’ Ari Redbord, “the largest bank robbery in human history.” The entry point was reportedly a compromised DevOps engineer’s laptop; the attack is widely attributed to a North Korea-linked unit. Binance suspended deposits and withdrawals, froze about $3bn on-chain with help from Circle, Tether and Ripple, and covered the shortfall from its Secure Asset Fund, futures insurance fund, Bitcoin reserve and corporate treasury. By Sunday it said customers had been made nearly whole and withdrawals had resumed.

Gold closed the week at a one-year low, roughly 30% below its January record, and silver broke below $50 for the first time since November 2025. The proximate cause was not macro: Commerzbank attributes it to margin calls and forced selling driven by the technology rout, and calls the decline exaggerated.

Everything above meets a binary political event on Tuesday. The US midterm elections arrive with the S&P below its 100-day average, the Nasdaq 8% off its high and the VIX up 19% on the month. Brazil has just supplied a live demonstration of what happens when a crowded political trade resolves against the positioning — and it did so from a far smaller starting imbalance than US equities currently carry.

2. Rates: The Fed Holds and Shortens Its Own Calendar

A third consecutive week of falling yields, led by the belly. The 5-year fell 8.4bp while the 30-year was almost unchanged at −0.6bp — a steepening, and the opposite of the pattern that dominated September. Money is moving out of equities and into intermediate duration while the long end, which carries the fiscal and inflation premium, refuses to follow.

The Fed’s hold was almost fully priced at around 93% going in, so the information was in the vote and the statement. Two dissents for an immediate hike, and an upgrade of activity to “strong”, removed any prospect of a pivot to a hold bias before December.

December pricing fell during the week, from above 80% to roughly 72–73% on Friday’s rate futures. The 2-year yield dropped to 4.57%, its lowest in more than six weeks. The equity selloff, not the inflation data, did that.

Two data points now decide the meeting: October payrolls on 6 November — consensus about +65,000 with unemployment at 4.2%, after September’s 29,000 and 60,000 of downward revisions to the two prior months — and October CPI on 12 November. The five-year TIPS breakeven has also moved higher, which is worth watching: it is not yet evidence of unanchored expectations, but it is the market attaching more risk to inflation staying above target.

3. Currencies

Three central banks decided inside the reference week. Two of them surprised, and a third changed its leadership.

Euro: A Hold, a Hawkish Tell, and a Resignation

The ECB held the deposit rate at 2.50% on Thursday, with the main refinancing rate at 2.65% and marginal lending at 2.90%. The detail that moved markets was procedural: the Governing Council debated a hike and then held unanimously. The euro erased a 0.4% intraday drop on that disclosure and money-market pricing returned to pre-decision levels. Futures now put roughly 82% on a 25bp move to 2.75% in December.

Christine Lagarde announced she will step down on 7 February 2027, eight months before her term ends. She addressed it directly at the press conference, insisting the institution would not be left in “limbo”. A succession process at the ECB now overlaps with a tightening cycle and French fiscal stress — the French 10-year yielded 4.89% against Germany’s 3.36% on the day, a spread near 153bp.

The statement was explicit about the mechanism this report has tracked for two months: energy prices continuing to rise pose upside risks to inflation and downside risks to growth. Lagarde noted that average 10-year sovereign yields had risen about 35bp relative to the assumptions behind the September projections. Eurozone inflation has climbed to 3.8%. Her guidance for December was that “the direction of travel is quite clear for all of us” absent a major development.

EUR/USD closed at 1.1191, down 0.24% and 4.76% for the year, still in a confirmed downtrend below all three moving averages with RSI at 39.2. After Friday’s close, Fitch cut France’s outlook from stable to negative, pushing the euro to within touching distance of a 17-month low on Monday.

Yen: A Hawkish Hold

The Bank of Japan held at 1.25% in an 8–1 vote, with board member Takata dissenting in favour of an increase to 1.50%, and published its Outlook Report. The Bank warned of an inflation overshoot, and September core CPI at 2.1% year-on-year is back above the 2% target. Ueda said policy would continue to be adjusted as needed.

The yen outperformed most major currencies after the decision, though USD/JPY still finished the week 0.62% higher at 157.800 as the dollar rebounded. The pair sits almost exactly on its 20- and 50-day averages with RSI at 50.6 — the most neutral reading in our table — and remains below its 200-day at 158.549.

The next BoJ decision is 18 December, nine days after the Fed’s. A dissent in favour of hiking, an inflation overshoot warning and core CPI back above target make December a live meeting, and the yen carry trade has been the most consistent non-US transmission channel into risk assets this half.

Pacific: The RBNZ Did Not Hike

The Reserve Bank of New Zealand held at 2.75% in a 4–3 vote, against a consensus — and a Danske Bank forecast — of a 25bp increase to 3.00%. It retained tightening guidance, saying tighter policy was likely to be required with timing dependent on the outlook, but a one-vote hold is not what the market was positioned for.

That is the kiwi’s week. NZD/USD fell 1.49% to 0.5617, by far the weakest G10 performance, and is back in a confirmed downtrend at −2.45% for the year — having been positive as recently as mid-September. RSI at 39.3 is not yet oversold, which leaves room below.

AUD/USD was almost unchanged at 0.7021 and holds +5.14% for 2026, still the strongest G10 performance against the dollar. The AUD–NZD divergence is now the widest of the year and is a policy story rather than a commodity one — and it widens further this week: the RBA is expected to raise its cash rate to 4.85% on Tuesday, a roughly twenty-year high. The Bank of England and the Riksbank are also expected to hike; Norges Bank is expected to hold.

Brazil: A Crowded Trade Unwinds

USD/BRL rose 9.65% on the week to 5.4389. The real’s year-to-date gain has collapsed from 10.00% to just 1.42% in five sessions — it has given back 86% of its annual advance in a week.

This was a positioning event rather than an economic one. After Bolsonaro led the first round on 4 October, foreign money poured into Brazilian assets: the US-listed Brazil ETF took in $4.09bn in three weeks. Prediction markets priced him at 75–80% going into the runoff. When Lula won, the exit was simultaneous — the ETF fell 23.8% across the week, losing on both the index and the currency, and Brazil’s Treasury cancelled two scheduled debt auctions. Bolsonaro has not conceded and is seeking annulment.

The containment is as notable as the move. Broad emerging-market indices fell 0.31% on the day Brazil lost close to 20%. This did not transmit. A shock this large staying inside one country tells you it was about that country’s politics and that trade’s positioning, not about emerging markets as an asset class.

Dollar, Sterling and the Rest

The dollar index closed at 101.880, up 0.07% — a second consecutive flat week. It peaked at 102.35 before the Fed and slipped to 101.84 after the hold.

GBP/USD at 1.3405 has RSI at 57.8, the only major with momentum above 50. UK inflation at 3.5% with services at 3.7% came in above expectations, and the Bank of England decides this Thursday with a November hike a live possibility — the new Chancellor delivered his first budget last Wednesday against rising global borrowing costs. USD/CAD eased 0.20% to 1.3985 with crude holding above $100, and USD/CHF was flat at 0.8232.

Emerging Markets Beyond Brazil

Outside Brazil the group barely moved, which is the containment point again. The rupiah is now the second-weakest of the five at +8.89%, and carries a specific overhang: MSCI has warned it may reclassify Indonesia to standalone market status over trading-transparency concerns, which would force index-tracking outflows independent of macro.

The lira made a new high against the dollar at 49.94, with RSI at 98.3 — the most stretched reading anywhere in this report, in either direction. USD/TRY closed October up 1.9% and is up 16.16% for the year. Turkish equities have moved the other way: the BIST 100 fell 3.63% on Monday to 10,760, down 29.2% from its 52-week high with RSI at 24.1, with an MSCI index decision adding to the pressure.

4. Equities: Technology Alone

The divergence is now extreme. The Nasdaq fell 2.00% on the week and 5.30% across October; the DAX rose 2.53% and the CAC 2.40%, and the Russell 2000 gained 1.29%. Nearly all the damage sat in technology and communication services — the two sectors carrying the AI capex trade.

The S&P closed at 7,580.07, its lowest since 16 September, below its 100-day average, and 3.37% off its high with RSI at 40.1. The Nasdaq is 8.25% below its high with RSI at 34.7. The VIX rose 12.91% on Friday alone and is up 18.85% for the month.

Breadth improved even as the index fell, which is the part the headline numbers hide. Consumer staples, healthcare and utilities offset the AI damage, and the rotation has broadened market leadership rather than simply removing it. Third-quarter S&P 500 earnings are now tracking +30.2%, revised up from 29.5% a week earlier — a third consecutive quarter above 25% growth.

Apple reports on Monday evening and is the cleanest test of the thesis. It is the only megacap not spending billions on data centres, it has risen for four consecutive months, and it has overtaken Nvidia as the world’s most valuable public company. Consensus is $113bn of revenue and $2.00 of earnings per share against $1.85 a year ago, with early iPhone 18 guidance also in focus. At 344.63 it sits just 2% below its 52-week high — the most resilient large-cap in the market.

Asia rebounded on Monday: the Kospi rose 2.62% to 5,881 after losing 14–16% across October, though it remains 37.3% below its 52-week high. Chinese indices gained on reports that regulators would meet banks and brokers to discuss supporting the market.

Europe has now outperformed for two of the past three weeks, and the pattern is consistent: when the AI trade is sold, capital goes to European value rather than out of equities. China remains the exception in the other direction — Shanghai fell 2.48% to 3,599.02 with RSI at 28.3, down 9.32% for the year and only 0.69% above its 52-week low. Both Chinese indices stay in confirmed downtrends.

5. Commodities

Exchange futures settlements, not spot.

Precious metals had their worst week of the year, and the reason was equities. Gold fell 2.72% to a one-year low at 3,898.90 — roughly 30% below its January record of about 5,595 — while silver dropped 8.59% to 49.097, its first break of $50 since November 2025. Platinum lost 7.48% to a 13-month low and palladium 5.92% to below $1,000.

The white metals fell between 7% and 9% against gold’s 2.7%, pushing their RSI readings deeply into oversold territory for the first time in three years — silver at 22.4, gold at 27.9. The gold–silver ratio has moved from about 69 to 79 across October. Commerzbank reads Friday as margin calls and forced liquidation from the technology rout rather than a change in the metals’ fundamentals, and expects a recovery; the counterpoint is that silver, platinum and palladium lack the central-bank bid that has supported gold, and analysts note that official demand tends to firm below $4,000. Asian investors have been buying the gold-backed funds North American investors are selling.

Brent is up 93.33% for the year and has doubled from its 52-week low, now within 6.71% of its 52-week high with RSI at 70.2. The Brent–WTI spread held near $13.50. Natural gas rose 9.77%, a second week of the short squeeze we flagged, though it remains down 21.38% for 2026.

Oil reversed sharply on Monday, with Brent down 3.3% to 109.70 and WTI 3.4% to 100.58, on reports that Trump wants to allow more time for diplomacy with Iran before returning to possible strikes after Tuesday’s midterms. Iranian and Qatari mediators remain in contact. Tanker attacks in the Gulf continue, so the durability of the pullback is open.

Metals also bounced on Monday — gold back to around 3,911, silver above $50 at 50.23 — but the oversold readings remain extreme: palladium’s RSI at 20.9 and silver’s at 22.4, with silver 58.6% below its 52-week high. The margin-call explanation has since been corroborated: investors were reported to be selling gold to meet collateral calls on equity positions.

Agricultural markets fell across the board, with wheat and corn both down more than 10% in October.

6. Crypto: Caught in the Same Net

A fourth consecutive losing week, and the worst of them. Bitcoin fell 4.78% to 77,198 with RSI at 34.3; Ethereum lost 6.00% and Solana 6.38%, dropping below $100. October was brutal across the complex — Solana −18.46%, Ethereum −16.49%, XRP −15.72%.

The week had a specific cause on top of the macro one. The Binance breach landed on Thursday afternoon, and Bitcoin fell more than 4% intraday on Friday as the scale became clear. Binance’s net exposure after on-chain freezes was reported at around $3bn — small against roughly $155bn of total user assets, but well beyond the $1bn emergency fund it had set aside for exactly this. Chainalysis described laundering patterns it had not seen before, with thousands of automated transactions obscuring the trail.

Bitcoin briefly rallied from a weekly low near 79,255 to above 81,000 on the Fed hold, then faded through the PCE print before the hack dominated. XRP has fallen below its 200-day average at 1.2773, the first of the four to lose that line.

Binance reopened withdrawals in stages on Sunday, and customers took out $3.64bn — 2.1% of exchange assets. The company says it has now replaced 95% of the stolen $6.3bn from its own resources, up from 90% a day earlier, with the remaining 5% in less liquid tokens it is still buying in the market and over the counter. It has committed to restoring the SAFU emergency fund to around $1bn. A full cryptographic proof of reserves is due on 3 November. Co-CEO Richard Teng confirmed additional breach points beyond the originally suspected laptop.

TRM Labs puts the stolen assets at 18,270 bitcoin (about $1.47bn), 200,630 ether, $1.875bn of USDT, $823m of USDC, 233.46m XRP and 970,500 Solana. The bitcoin wallets have not moved. The attacker began converting the Solana into bitcoin via a bridge on Sunday — freezable assets into unfreezable ones — and the cross-chain network THORChain halted trading on 10 of its 13 chains over the weekend.

The freeze itself has opened a debate worth watching. Tether, Circle, Ripple and World Liberty Financial froze roughly $3bn between them within hours. Forte’s Anton Golub supports the action but notes a double standard — smaller venues get court orders and legal obstacles where Binance gets a three-billion-dollar freeze in hours. NEOSLegal’s Irina Heaver draws the practical limit: freezing USDT and USDC stops the attacker moving funds, but does not return them to Binance. For clients the structural lesson is custody-specific: a freezable asset can be recovered, but the same mechanism applies to legitimate holders; an unfreezable one is free of that, and far harder to get back.

Two second-order effects are worth tracking. CFTC chairman Michael Selig said the breach “proves our exact point” in proposing crypto market regulation earlier in the month — a market-structure bill failed in the Senate six weeks ago, and this is the kind of event that revives one. And Coinbase and Robinhood shares both fell on Friday despite being unaffected, which is the contagion that matters for a regulated venue: reputational, not operational.

Across four weeks the macro pattern still holds: crypto fell when equities fell, fell when gold fell, and did not rally on a central bank hold. It is trading as a leveraged expression of the same risk appetite being withdrawn from technology. This week simply added an idiosyncratic shock on top of that — and the two are hard to separate in a single weekly number.

7. Levels to Watch

8. Week Ahead

Tuesday is the week. The midterms land with the S&P below its 100-day average, the Nasdaq 8% off its high and the VIX up 19% on the month — a market with no cushion for a contested or surprising result. Brazil has just demonstrated what happens when a crowded political trade resolves the wrong way, and it did so with a far smaller starting imbalance than US equity positioning currently carries.

The Senate arithmetic matters more than the House. Republicans hold 53 seats to the Democrats’ 45, with two independents caucusing with the Democrats, so four seats would flip control. The Cook Political Report rates seven races as toss-ups. Standard Chartered’s Eric Robertsen notes that a Democratic sweep could bring state-level obstacles to data-centre capital spending — which would land directly on the trade that has driven this market all year — and could make the coming debt-ceiling debate the most difficult in years.

One caution on the forecasts: prediction markets gave Lula roughly 20% a week before he won. Robertsen makes the same point, that anti-incumbent polling does not always convert. AMINA Bank’s Andreja Cobeljic adds the positioning angle — hedge funds lost significantly in October, leaving little capacity to absorb an election surprise.

Friday’s payrolls is the other event. With December priced near 72% and the Fed having upgraded activity to “strong”, the consensus of +65,000 is the number to watch after September’s 29,000.

9. Risks

This document is for general information only. It is not investment advice, a recommendation, or an offer to buy or sell any financial instrument, and does not consider any recipient's objectives or circumstances. Information is believed reliable but not guaranteed; opinions are subject to change. Past performance does not indicate future results. Trading in leveraged products including Forex, CFDs and cryptocurrencies carries a high level of risk and may not be suitable for all investors; you may lose more than your initial investment.