Amazon burned forty-two billion dollars of free cash flow over twelve months and told the market that next year will cost more. Good morning and welcome to today's market chronicle. It's Friday, October 30, 2026.
Yesterday's close looked like a tech rout and was not quite one. The S&P gave back about three tenths to 7,720, the Nasdaq about a percent and a half, and Alphabet (GOOGL) fell twelve percent, its worst day ever. The equal-weight index rose about one and two tenths. Most stocks went up, the index went down. Then the bell rang.
Amazon (AMZN) reported trailing free cash flow of minus $42.4 billion against positive $14.8 billion a year ago. Operating cash flow was up twenty-nine percent, so this is not a demand problem, it is a construction bill. Capex stays near $220 billion this year and Jassy says 2027 goes higher. Intel (INTC) guided fourth quarter revenue well under consensus and is down fifteen to twenty-two percent depending whose screen you trust. I wrote about Alphabet's nine billion yesterday. Amazon's is four and a half times larger and I have run out of ways to be surprised by it.
What almost nobody mentioned overnight is that the ten-year fell, to near 4.92 percent from roughly five. That is with September PCE at 3.6 percent, up from 3.4, crude above $100, two Fed officials wanting a hike, and December priced around eighty percent. The long end is not confirming it. Either the bond market thinks the hike does its job or it thinks something breaks first, and those are very different Novembers.
I keep going back to Amazon in 2001, converts near fifty cents, burning cash on warehouses in towns nobody could place. I have been writing some version of "the discount rate is the story" since September and the tape keeps filing it under technology, so price my parallels accordingly. The spending then was real and early rather than wrong, which fits. What does not fit is that a warehouse still stands in 2026 and a GPU bought today is scrap in six. A man I sat two desks from in Geneva was short it through all of that, right for a year, wrong for the twenty-five after. He retired early anyway, on something else.
Ahead today, the employment cost index at 8:30, the cleanest wage reading anyone publishes and forgotten by lunch. Month end, so the last hour belongs to index funds doing arithmetic. Midterms Tuesday.
Nothing in the book earned its own paragraph today, and on a morning when all the dispersion sits inside four cash flow statements, the absence is the report. So the sleeve. Mosaic Mid-Horizon is up about 1.3 percent over the last five sessions through yesterday's close, against roughly seven tenths of a percent for the SPDR S&P 500 ETF (SPY), total return. It owns the rest of the market, and last week that was the better place to be.
Gold around $4,003, though the futures screen says $4,031 and I have stopped arbitrating. WTI $103.21, Bitcoin near $77,700, quotes spread wide, S&P futures 7,679.25, the ten-year at 4.92 percent.
The largest building program in corporate history is funded by cash flow that is still growing, which is precisely why nobody can call it. See you Monday.
Salomon