Haru Insights — October 24, 2026

Macro Conditions

Overall Economic Environment: The backdrop is expansionary in some industrial and AI-linked areas but uneven overall. Strong manufacturing and continued consumer spending coexist with weak housing, cost pressure, and more selective credit conditions.

Key Macro Factors:

  • Interest rates and monetary policy: Global yields are at multi-decade highs; the U.S. 10-year yield was 5.25% at September month-end and later struggled to stay below 5%. Sticky inflation and uncertain Fed reactions make rate relief difficult to assume. Higher discount rates weigh on long-duration assets, housing, and companies reliant on external financing.
  • Inflation and energy: Core CPI rose 33.5 basis points month over month in September, with a 3.4% three-month annualized rate. Oil swung above $100 amid supply disruption before falling on unconfirmed de-escalation reports. Persistent energy costs could sustain inflation and pressure airlines and other fuel-intensive sectors.
  • Growth and demand: Manufacturing PMI reached 56, while services PMI eased to 57.9. Pending home sales fell 7.3% month over month, underscoring housing affordability and financing pressures. This favors select industrial demand over a broad-based cyclical recovery.
  • Credit conditions: Stress is concentrated in leveraged AI infrastructure rather than uniformly across markets. A 15% unsecured bond yield at CRWV illustrates how rising funding costs can separate viable demand from financeable growth.
  • Geopolitical risk: Middle East disruption, Russian oil policy, and uncertain U.S.–Iran developments are driving two-way oil-price risk. The resulting uncertainty affects inflation expectations, energy producers, transport costs, and rate-sensitive assets.

Outlook Considerations: Watch Fed communication and inflation data, oil-flow developments, and whether housing weakness broadens. Upcoming large technology-company results will help test whether AI investment is translating into cash generation rather than simply expanding capital requirements.

Assets to Watch

1. Taiwan Semiconductor Manufacturing (TSM)

  • Investment Perspective: Worth watching as a direct exposure to advanced-chip demand and a constrained part of the AI supply chain.
  • Comprehensive Reasoning: AI investment continues to support advanced-node demand, while multiple indicators point to supply lagging customer needs. This positions TSM to benefit from a durable infrastructure buildout, but capacity expansion also requires significant investment amid rising equipment, labor, and power constraints.
  • Risk Considerations: Monitor whether planned capacity translates into profitable output; rising costs, execution delays, and changes in customer investment plans could weaken the outlook.

2. CoreWeave (CRWV)

  • Investment Perspective: Warrants close monitoring as a financing-risk signal within the AI infrastructure trade.
  • Comprehensive Reasoning: Strong AI demand does not ensure attractive returns for every provider. CRWV’s reported bond yield near 15%, heavy financing requirements, and weak cash conversion contrast with the stronger funding position of cash-generative technology leaders. Multiple analyses point to a widening gap between contracted demand and the ability to finance expansion.
  • Risk Considerations: Liquidity, refinancing access, interest expense, and cash-flow conversion are pivotal. A sustained deterioration could intensify pressure even if end-market AI demand remains firm.

3. United States Oil Fund (USO)

  • Investment Perspective: Bears watching as a high-volatility, event-driven expression of crude-market risk.
  • Comprehensive Reasoning: Geopolitical disruptions pushed crude above $100, while reports of possible de-escalation triggered a sharp reversal. This volatility matters beyond energy: higher oil raises fuel and inflation risks, while falling prices could ease cost pressures. The evidence supports monitoring the supply-risk premium rather than assuming a durable one-way trend.
  • Risk Considerations: Oil prices may reverse quickly as supply flows, sanctions policy, or geopolitical conditions change. The sensitivity of fuel-intensive companies to actual costs may also lag spot-price moves.

Trends and Themes

1. AI Investment Is Shifting From Demand Forecasts to Returns and Financing

  • Supporting Evidence: AI demand remains strong, with reported capacity shortages and substantial infrastructure plans. At the same time, CRWV’s financing stress, negative cash-conversion concerns, and scrutiny of capital spending at major platforms highlight the gap between investment and realized returns.
  • Market Implications: Favor scrutiny of balance sheets, funding access, and cash generation across AI exposure; demand alone is not a sufficient measure of investment quality.
  • Time Horizon: Structural, developing over quarters to years.
  • Convergence Notes: This pattern appeared across multiple independent analyses, company commentary, credit reporting, and sector coverage.

2. Power and Semiconductor Capacity Are Binding AI Constraints

  • Supporting Evidence: Chip supply is not keeping pace with demand, while power access, grid connections, permitting, equipment, and labor constrain data-center delivery. TSM and other established suppliers face strong demand alongside capacity limits.
  • Market Implications: Infrastructure providers that can deliver power, equipment, and contracted capacity may be better placed than projects whose timelines or grid access remain uncertain.
  • Time Horizon: Structural, spanning quarters to years.
  • Convergence Notes: Multiple analyses independently identify physical capacity—not just model demand—as a key limit on AI expansion.

3. Higher Yields and Sticky Inflation Are Raising the Cost of Capital

  • Supporting Evidence: Government deficits and AI investment compete for financing as yields reach multi-decade highs. September core inflation remained firm, and borrowing costs are pressuring housing and leveraged businesses.
  • Market Implications: Higher discount rates challenge long-duration valuations and rate-sensitive sectors; companies that depend on refinancing face added risk.
  • Time Horizon: Near term, with potential to persist over quarters.
  • Convergence Notes: Central-bank commentary, market reports, and credit analysis all emphasize the importance of financing costs and the uncertain policy response.

4. Geopolitical Energy Shocks Create Uneven Inflation and Earnings Effects

  • Supporting Evidence: Crude prices responded sharply to Middle East disruption, Russian oil policy, and unconfirmed de-escalation reports. Airline results and outlooks show how elevated fuel costs can overwhelm otherwise resilient demand.
  • Market Implications: Energy producers may benefit from sustained supply disruption, while transport and other fuel-intensive businesses face margin risk. A reversal in the geopolitical premium could quickly alter that balance.
  • Time Horizon: Short term, with consequences for inflation and corporate margins extending further.
  • Convergence Notes: Energy volatility was visible in both market-level reporting and company-specific cost pressures.

This content is for informational purposes only and does not constitute financial, investment, or trading advice. Always consult a qualified financial professional before making any investment decisions.