AI Stocks Bounced | An AI Campus's Debt Hit 80 Cents | Cliffs Jumped 16% on 2027

Good morning, Slaters!

Monday gave the AI trade a bounce. The Nasdaq rose 1.1% after last week's chip rout. Whether it holds is this week's question.

The money behind AI didn't bounce with it. Debt on an Oracle-leased campus with no power traded near 80 cents. Microsoft walked away from a U.K. site that isn't expected to get power until the 2030s.

That is the split. Stocks are pricing demand. Lenders are pricing power, timing and a 10-year yield above 5%.

This week, the biggest spenders open their books. Let's get into it.

The AI trade bounced. The AI bill didn't.

Debt on Project Jupiter recently traded near 80 cents on the dollar, The New York Times reported. The New Mexico AI campus, leased by Oracle (ORCL), carries about $18 billion of debt. In September, the Financial Times reported quotes of 89 to 91 cents.

The buildings are nearly done. The power isn't there. An air-quality permit hearing for its on-site power starts Dec. 7.

Across the Atlantic, Microsoft (MSFT) ended its deal for Nscale's site in Loughton, Essex, The Telegraph reported Sunday. Grid officials told Nscale not to expect power until the 2030s. Nscale says its other contracts are unaffected.

Read those together. The electricity is late, and lenders are charging for the wait. Last week, Volta's $5 billion AI loan had to price at 95 cents to sell.

The market signal?

Equity buyers came back Monday. Credit buyers haven't. Goldman Sachs estimates the five biggest cloud and platform companies will spend about $1.2 trillion next year, and much of the wider buildout runs on debt. Meta (META) reports Wednesday. Its 2027 spending plan, and how it pays for it, matters more than the quarter.

The Fed went quiet. Now the bond market talks.

The Fed's quiet period runs through its Oct. 27-28 meeting. Until then, the market sets rates on its own.

The 10-year yield closed Friday at 5.09% and was near 5.14% early Monday afternoon. Kalshi's October hike contract sat near 13 cents over the weekend, down from a 55-cent peak after the Oct. 14 CPI report. Its December contract was near 77 cents.

The first real test is Wednesday's $13 billion 20-year sale. September's sale cleared at 5.420%.

Oil can flip all of it. Brent settled near $109.55 Monday and rose overnight. Energy Secretary Chris Wright says Gulf flows are back to about 80% of prewar levels, a figure his department hasn't published. The IEA puts September Gulf exports near three-quarters of prewar volumes, and fuel flows below half.

Treasury Secretary Scott Bessent played down Friday's Russia waiver on Sunday: "The only thing that has been lifted is the diesel embargo."

Bitcoin sat out the rebound, up about 0.35% from Friday to Monday afternoon while the Nasdaq gained 1.1%. Its biggest corporate buyer, Strategy (MSTR), spent $193.1 million last week buying back its own preferred stock and $22.1 million on bitcoin.

The market signal?

Traders moved the hike to December, not off the table. The University of Michigan's first read put one-year inflation expectations at 4.7%. A sloppy auction or an oil spike would pull the hike forward. A clean sale buys stocks room before Meta.

Cliffs sold investors on 2027

Cleveland-Cliffs missed on revenue Monday. The stock still jumped about 16%, to $14.10.

CEO Lourenco Goncalves explained why. The company's 2027 outlook "has improved materially since our last earnings call," he said. Cliffs now sees 2027 adjusted EBITDA above $4 billion, based on signed contracts and index price forecasts. Executives said renewed contracts alone add more than $1 billion versus 2026.

Here is the gap. Fourth-quarter guidance of about $715 million annualizes to roughly $2.9 billion, a crude figure given seasonal maintenance. Investors paid for the difference.

The quarter helped. Adjusted EPS of 28 cents beat analysts' estimates, and adjusted EBITDA more than doubled to $612 million.

The market signal?

Investors bought a forecast, not a quarter. A 2027 target this far above the current run rate needs proof every quarter, and it needs imports to stay low.

France's riots now have a price tag

Saturday's riots damaged about 50 French Carrefour stores and looted about 20, CEO Alexandre Bompard said. He put the bill in the tens of millions of euros. The interior ministry reported nearly 2,400 arrests nationwide.

The CAC 40 fell 1.1% Monday. Carrefour fell about 2% and LVMH about 1.8%.

The budget fight runs alongside. Today, the National Assembly holds an all-or-nothing vote on the 2027 budget's revenue section. It includes an amendment that would tax crypto swaps into stablecoins such as USDC.

The market signal?

The repair bill is small. The bigger question is whether Paris can pass a budget while managing unrest. Watch French bank stocks and government bond spreads if protests continue.

• Five days to test the AI bill
• Today: GM (GM), GE Aerospace (GE) and RTX (RTX) reported this morning. Netflix (NFLX) reports at 4:01 p.m., with options implying about a 7.6% move either way, per Unusual Whales.
• Wednesday: EIA oil inventories at 10:30 a.m. and the 20-year sale at 1 p.m. After the close, Meta, Tesla, IBM, Texas Instruments and Lam Research report.
• Thursday: Blackstone (BX) holds its 9 a.m. call, and jobless claims land.
• Sunday: Brazil's runoff. Monday morning, Polymarket priced a Flávio Bolsonaro win near 77 cents and Kalshi near 79. Recent polls show a close race, with Flávio narrowly ahead in all three major surveys.
• The market signal across the week?
• Meta, the 20-year sale and oil answer one question: who pays for the buildout at 5% rates. A confident Meta and a clean auction keep the bounce alive. A weak auction plus an oil spike hands the week back to the lenders.

That's it for today's Slate. Stock buyers came back for AI on Monday. The lenders, the grid and the bond market are still sending invoices. This week, the spenders show whether they can pay.

Today's reply prompt: Who has the AI trade right this week, the stock buyers or the lenders?