AI Slumps & Yields Tap Resistance, Blackstone Eyes GOOGL for AI Compute

追加: 2026-05-19

[00:00:00]Let's bring in Kevin Green, senior markets correspondent, right away to help set up the action today. All right, KG, so for the broad benchmark of US stocks, we took a small step back yesterday. It was a baby step. We're a little softer in the pre-market today.

[00:00:15]Um, what's your assessment when you look broad strokes across the market?

[00:00:18]Well, I think there's a couple of factors that are really kind of creating a little bit more of a consolidation within the S&P 500, as well as some pressure when it comes to the oil markets back to the upside. Yesterday, we did see this uh commentary coming from the Iranians early on that signaled that they were trying to make some form of a deal. They did propose another deal to the US. We did see oil markets move to the downside and then equity markets briefly had a bounce higher, but then we had some US officials really kind of backed that narrative down. And then towards the end of the day, President Trump did announce on uh Truth Social here that he was actually pausing some planned attacks that were uh set for today, actually, uh because of some of the allies within the Gulf states uh asked him to do so in order to try to make some form of a deal here. But, that was actually a little bit short-lived when you're looking at the equity pop as well as the impact on the oil markets.

[00:01:09]We did see about a $4 move to the downside, uh but we have reversed those losses at this point in time. I think the market's really trying to see and and and see not only just the commentary coming from both sides, but some action actually taking place here. I think the other reason why we are seeing the equity markets move a little bit lower is because, obviously, the memory names are getting hit uh to the downside and you have kind of this rotation of this correlation trade between memory names and software that's still intact, but memory is selling off, software is also catching a little bit of a bid. And the memory names have been driving a lot of the growth here for the S&P 500. So, I think uh portion of this is mechanical.

[00:01:44]Obviously, a portion of this is also geopolitical, and I think we're also kind of looking at the 10-year Treasury yield sitting at around 4.6% a little bit higher than that. And and the market's really kind of questioning, are we actually going to see a formalized breakout to the upside here or is it the near-term peak when it comes to longer duration rates and do we actually see those moving a little bit lower, which could also then fuel equities to try to go back to all-time highs?

[00:02:08]Okay. So, let's talk a little bit about the patterns in the 10-year right now then. As you mentioned, we're sitting at about 4.6.

[00:02:16]It's unchanged right now, but what are we watching for on the levels here?

[00:02:21]Well, if you're looking at the 3-year weekly chart, we're basically looking for either a breakout or a breakdown. We can kind of see that we are now hitting the area of resistance that has been intact pretty much since October of 2023, where we kind of look above and then we have this failure. Right now, if you're looking at the weekly chart, we are above that resistance line. Now, what could actually take place after the fact here is maybe yields actually go up to 4.75%. That's not what you want to see if you are an equity trader and that also will have an impact comes to liquidity in the markets as well as debt issuance. This week's also a little bit unique. I know it's kind of in the back in the back compared to some of the other news headlines, but you are seeing a significant amount of Treasuries, especially T-bills and short-duration maturities, actually rolling off the market here and we are obviously going to be issuing more as we continue to see yields moving higher. The funding rates for the United States government also gets higher as well. That has an impact when it comes to liquidity. You can also see this liquidity drain impacting the book depth and I utilize the E-mini S&P 500 futures in order to recognize that.

[00:03:26]Today, we're seeing around 10 contracts on the bid, 10 contracts on the ask to really kind of start this off. Diane, you would like to actually see that around that 45 by 45 here. So, a significant cut in liquidity, yields moving higher, and we have the memory trade kind of faltering here a little bit. The geopolitical risk has been in the back of everybody's mind, but volatility actually has been kind of holding up given this back and forth between the US and Iran. I think this is more you I'm sorry. I'm I think this is more a yield play as well as the memory trade kind of rolling off. It's really giving us a little bit of pressure here. But you do not really want to see this break out if you are an equity bull.

[00:04:03]Okay. And speaking of uh some of the front lines that we're watching, oil prices, yes, we're pulling back marginally today uh here, but we're still elevated in triple-digit territory. What are you watching on this front?

[00:04:17]Couple of factors taking place in the oil complex, especially for looking at WTI. It's down about uh what's 0.75% uh but today is the last trading day for the June contract. So we will be focusing on the July contract. This time uh last month, we had a similar situation where uh the roll, especially those that actually are positioned long, kind of took a little bit of time for them to get repositioned back into the oil markets. That just means that we could see some near-term downside pressure for maybe a session or two as this kind of rebalancing or restructuring does take place. This is going to impact ETFs like the USO and things of that nature that obviously uh roll contracts as uh time goes on here.

[00:04:56]Uh but we were able to recover some of those losses from that president from President Trump's through social post yesterday. Once again, I think the market really is looking for action. We know that there is a supply shortage that is taking place right now. Transit in the street has actually improved over the last 5 days, but it has not gotten back to a level that really can uh sustain oil prices moving a little bit lower here. And I think you have another couple of factors that we have to keep on the radar today. The Ukrainian military hit two oil uh facilities within Russia. One was a refinery, one was an oil pumping station. That also is providing a little bit of a price floor for oil markets at least for this morning. On the back of that, it does appear that we are going to issue another 30-day uh waiver on Russian uh seaborne oil here. That's something that we did have in place. We let that lapse yesterday, but it seems like we're going to put that back into place. And then last but not least, Department of Energy did report a 9.9 million barrel draw last week from the SPR, which is remarkable, to say the least. You're talking about a flow rate of about 1.4 million barrels per day, higher than anybody's expectation as as to how much we could actually get from the SPR on a day-by-day basis. But it's unsustainable at this particular rate here. So, if we keep it up at, let's say, even 7 million barrels a week coming from the SPR, Diane, you're looking at around November where it gets a little bit concerning for the US consumer, and that's when you start talking about potentially cutting exports of diesel as well as other byproducts in order to shore up supply in-house. So, a lot happening in the oil in the oil complex here. Doesn't seem like we're seeing any type of progress when it comes to this conflict finding a resolution.

[00:06:38]Okay. And let's get across Alphabet Google. They kick off their IO conference today. And then you also have this news, according to reports first seen in the Wall Street Journal, that it's linking up with Blackstone.

[00:06:50]Walk us through the latest here.

[00:06:52]So, we are seeing Blackstone and Google actually doing a AI cloud joint venture here. Now, Blackstone's going to commit around $5 billion in equity, and the plan is to really ramp this project up to have 500 megawatts worth of power online by 2027, and they plan to actually scale significantly over time. Think of this as a neo cloud type of project, similar to what we see from Coreweave, where it allows customers to get access to the Google GPUs as well as other hardware and software coming from Google here.

[00:07:25]And this is something that they find that is in immediate need right now, but does provide a little bit more competition within this space to take some of the overflow from some of the hyperscalers here. So, a very unique development. And when you're looking at the conference, I think a lot of individuals are really kind of focusing on the AI portion. What new features are they going to be able to roll out here to make it obviously easier for developers to build on top of their platforms here. So, we'll see those headlines as they kind of cross the wire. But this Blackstone deal is a little bit unique. Once again, trying to eat into some of that market share from a name like a Coreweave right now in order to get some better access for the Google TPUs. We are seeing Google move up on the session based on this news.

[00:08:11]Blackstone not so much about 0.7% last time that I checked here, but an interesting development to say the least.

[00:08:17]All right. And let's get across your levels that you're watching out for on the S&P 500 flows to the upside downside.

[00:08:23]Yeah. So, this is actually going to be a a wide range here today. Volatility actually is inching up here a little bit, but to the upside 7450 that has been an area of resistance over the last two trading sessions. To the downside 7300 is actually catching more of a bid this morning than what we saw for yesterday. So, more of a downside skew when you're looking at options positioning for the S&P this morning. What's going to be interesting is the volume weighted average price for today. That was acting as an area of resistance yesterday until we went into the close about 30 minutes. Does it act as an area of resistance for today or do we utilize it as a springboard? I think that's going to be the make or break for the intraday traders out there.

[00:09:02]All right. Thank you, KG. That's Kevin Green, our senior markets correspondent with what you should keep your eye on today.