The hawkish pause, Lula's market meltdown, and the Anthropic IPO bombshell: The financial week in five charts
SPY•The Federal Reserve, European Central Bank and Bank of Japan held rates steady, while markets saw sharp moves after Luiz Inacio Lula da Silva's reelection and Big Tech earnings. Anthropic filed for an IPO, reporting second-quarter revenue growth of 1,368% year on year and spending commitments exceeding half a trillion dollars.
1. Rates and energy prices
The Federal Reserve, European Central Bank and Bank of Japan held rates steady, but markets still expect further tightening from the three central banks by year-end. The article says crude oil prices have remained in triple digits amid the Iran war, raising concerns that energy price shocks could fuel broader inflation.
2. Brazil and Big Tech
After Luiz Inacio Lula da Silva's reelection, Brazil's Bovespa had its biggest one-day fall since the COVID-19 pandemic, while the 10-year government bond yield posted its largest surge in more than 20 years. The real had its steepest one-day fall against the dollar since the 1999 devaluation. Alphabet shares fell more than 12% after it reported negative free cash flow for a second consecutive quarter; Amazon reported trailing 12-month cash burn of $42.4 billion in the third quarter, while Microsoft maintained positive free cash flow.
3. Anthropic's IPO filing
Anthropic filed for an IPO, reporting second-quarter revenue growth of 1,368% year on year. The loss-making company disclosed spending commitments of more than half a trillion dollars for the coming years and is expected to make its market debut before Thanksgiving.
