Futures are higher premarket, led by AMZN252.3774 and AAPL276.98 after robust earnings yesterday (AWS sales growth and AAPL's revenue guidance). The futures market implies ~70% odds of a 25 bp cut at the December FOMC; this hasn't moved much post-FOMC and will likely stay anchored given the lack of new economic data (Personal Income/Spending, PCE, and Employment data are delayed due to the government shutdown).

With 6 of Mag7 reported, we see noticeable capex increases and higher than expected capex guidance. At the same time, Mag7 FCF multiples are stretching toward dot-com levels. Meta issued $30B of bonds yesterday. Many who argue the AI mania is not a bubble note that current Mag7 PEs are nowhere near dot-com extremes, but once these players run out of cash and capex pauses, the music stops, as the key distinction between the current trend and the dot-com era lies in strong balance sheets and cash flow from major players. These are just early signs. Note NVDA still has ample cash it can give away (round-trip accounting) to extend the party longer.