Clouds with benefits

The compute must go on

The AI trade regained its footing on Wednesday with neoclouds leading after CoreWeave delivered an earnings beat, raised guidance and addressed the funding question hanging over its expansion.

CoreWeave’s message was that growth need not entail repeated calls on shareholders. Customer prepayments, asset financing, vendor credit and operating cash flow are expected to carry much of the burden, with approximately $9 billion in prepayments and deposits due over the next three months. Management put parent company capital requirements below $5 billion through 2027 and ruled out unsecured borrowing at that level over the same period.

The commercial picture was equally supportive. Backlog reached $132.5 billion, demand continued to outstrip supply and pricing on new contracts strengthened materially. Renewals covering approximately 300,000 GPUs coming off contract in 2027 and 2028 could generate almost $10 billion without additional CapEx.

Additionally, reported demand for Anthropic’s IPO encouraged bankers to target a $1.5 trillion valuation, potentially lifting proceeds above $100 billion. OpenAI’s quarterly revenue reached $10 billion, up 50% sequentially, although its prospective funding valuation slipped to $1.25 trillion below earlier ambitions of $1.50 trillion.

Equities

Gains in technology heavyweights lifted stocks as investors bet that the AI trade driving the bull market had further to run.

CoreWeave rose 24.71% after its results eased investor concerns about the AI infrastructure build-out. This was its largest-ever post-earnings gain and its biggest overall advance since April 2025. The Nasdaq-100 gained 2.28%.

European shares reached record highs on Wednesday.

After the close, The Wall Street Journal reported that Nvidia’s board is preparing to oust CEO Jensen Huang, its founder and Chief Executive.

• S&P 500 7,620.60 +1.33%
• Nasdaq Composite 25,466.19 +1.60%
• Dow Jones Industrial 52,486.49 +0.49%
• DAX 26,662.77 +1.20%
• CAC 40 8,332.87 +0.66%
• FTSE 100 10,835.47 +0.78%

Currencies

The US dollar strengthened on Wednesday, with the dollar index reaching its highest level since April 2025. The dollar rose to its strongest level in more than two months against the Japanese yen, while the euro extended the previous session’s losses, falling to its lowest level since May 2025. Sterling remained near a two-week low.

• DXY 102.91 +0.66%
• EUR/USD $1.1086 -0.69%
• GBP/USD $1.3280 -0.46%
• USD/JPY ¥159.77 +0.66%
• Bitcoin $74,314.31 +0.73%
• Ethereum $2,068.37 +0.65%

Fixed Income

The US Bond market was closed in observance of the Veterans Day holiday. Eurozone bond yields held steady in quiet trading on Wednesday.

Germany’s €2.5 billion sale of longer-dated bonds drew mixed demand.

• US Treasury 10-year 0.0 bps 4.990%
• German Bund 10-year +0.3 bps 3.332%
• UK Gilt 10-year +0.3 bps 5.229%
• France OAT 10-year +0.9 bps 4.796%
• Italy 10-year -0.8 bps 4.332%

Commodities

Gold prices declined on Wednesday as stronger-than-expected US inflation data pushed the dollar and Treasury yields higher.

WTI and Brent closed broadly unchanged as markets assessed comments from Iran on its nuclear programme, further attacks on vessels in the Strait of Hormuz and continued Houthi attacks targeting Saudi Arabia.

The UKMTO received a report of an attack on a tanker transiting the Strait of Hormuz. Separately, sources familiar with the matter told Reuters that Iran had attacked ship navigation systems on the Omani island of Didamar, also in the Strait.

OPEC’s Monthly Oil Market Report (MOMR) maintained its forecasts for global oil demand growth, non-DoC production growth and demand for DoC crude in both 2026 and 2027.

The report estimated that OPEC DoC production rose by 2.035 million bpd m/o/m in October, led by increases in Saudi Arabia of 1.182 million bpd, Iraq of 496,000 bpd and Kuwait of 232,000 bpd. Iraq’s production reached a four-year high.

At 26.170 million bpd, OPEC production stood 1.470 million bpd below February’s pre-war level. Saudi Arabia reported that its supply to the market increased to 9.203 million bpd in October from 7.988 million bpd in September.

• Spot Gold $3,987.52/oz -1.08%
• Spot Silver $51.66/oz +0.32%
• WTI crude $86.42 -0.02%
• Brent Crude $92.62 +0.60%

Corporate Earnings Today

Companies reporting on Thursday, 12th November:

Key data to move markets today

Attention today turns to UK GDP and Fedspeak.

• Eurozone Economic Bulletin, EU leaders summit and speeches by ECB President Christine Lagarde and Vice President Boris Vujčić
• GDP, Industrial and Manufacturing Production
• Initial and Continuing Jobless Claims, Existing Home Sales, Monthly Budget Statement and speeches by New York Fed President John Williams, Chicago Fed President Austan Goolsbee, Cleveland Fed President Beth Hammack, San Francisco Fed President Mary Daly, Kansas City Fed President Jeff Schmid and Fed Governor Michael Barr