Lenders still charge little extra, so favor cash earners over debt-built builders

Borrowing still looks cheap, but lenders are getting pickier about data-center debt, so favor firms that fund themselves from sales and avoid those that need new loans to grow.

The extra interest firms pay over government bonds is about minus 0.39 points, near record lows. Smaller builders that rent chips still borrow easily, which suggests risk is not yet priced.

Jobs still provide support. New claims averaged about 198,000, near the yearly low, and payrolls added 152,000 jobs in three months, while household spending rose faster than pay.

Anthropic lost over 80 billion dollars in half a year and seeks a listing that could value it near 2 trillion dollars. Meta plans up to 95 billion dollars in new shares to fund building.

Potential opportunities Look at ExxonMobil because fuel above 100 dollars a barrel still brings cash. Avoid smaller chip-renters such as CoreWeave, which need new loans if lenders tighten. The idea weakens if oil falls sharply.

What to watch The prior flag for the extra interest to rise above zero has not triggered, staying near minus 0.39. Watch it rising above zero by March 20, 2027 as a sign funding has tightened.

Not yet in official data Anthropic lost over $80bn in half a year while seeking a huge listing, and Meta plans up to $95bn in new shares, unseen in bond gauges. Banks curbing outside AI agents and Microsoft offering 60,000 buyouts signal tightening operations before payroll surveys capture them.

Commentary vs data Talk of bonds as safe again ignores the 10-year rate near 5.00%, still up 0.87 points in six months, keeping mortgages and loans dear.

Bottom line Favor firms paid from current sales and avoid new borrowing until the extra charge for company debt turns up.

What stopped being talked about Talk of an October rate rise faded before the meeting, but 10-year rates near 5% and dear fuel leave tight policy unresolved.

New contagion vectors Strain in smaller chip-renting builders is spreading to large issuers seeking tens of billions in new shares and debt.