EM ASIA CREDIT: Hyundai Motor (HYUCAP): EUR 3Y priced overnight

The Russell 2000 overnight range was 2548.82 - 2595.98, closing -1.51%. The Russell 2000 topped out towards the 2600 area after breaking the multiple tops around 2540. Risk had a poor weekly close as once untouchable AI names are being questioned. A dovish Fed is particularly good for small caps but it is highly unlikely small caps will be left unscathed in the event of a broader correction should it unfold. How risk starts this week will thus be important, if the market can shrug off the malaise from last week it could resume its trend higher. On the day watch to see how risk starts the week, first support is back toward the 2510-30 area, if this fails to hold we could see a deeper pullback toward the 2455-2475 support.

• The Kobeissi Letter on X: “Many US small-cap firms are struggling: 40% of Russell 2000 companies reported negative 12-month earnings in Q3 2025, near the highest percentage on record. This percentage has more than doubled since 2007 and has remained in a clear upward trend. This is also in line with the post-2008 Financial Crisis peak of ~40%. By comparison, ~33% of the index's firms were unprofitable following the 2001 recession. Fundamentals across many small-cap stocks remain extremely weak.”
• Probably all good reasons for why there has been such a willingness to short them, unfortunately though it has not stopped them from making new all-time highs.
• The Russell 2000 Index Average True Range(ATR) for the last 10 Trading days: 39 Points

Fig 1: Russell 2000 Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

• MNI BOJ DEC TANKAN LARGE MFG INDEX 15; SEPT 14; MEDIAN 15
• BOJ TANKAN LARGE NON-MFG INDEX 34; SEPT 34; MEDIAN 34

The S&P(ESH6) Friday night range was 6864.00 - 6972.00, SPX closed -1.07%, Asia is currently trading around 6890. Risk had a very poor close for the week as AI worries again bubbled to the surface with Oracle chief among them. Oracle and Nvidia have been the AI names driving US outperformance, can the Index continue to outperform while these titans trade under pressure ? This morning futures have opened a little lower, E-minis(S&P) -0.05%, NQZ5 -0.15%. The S&P stalled toward 6900, will these concerns spill over to begin this week. On the day in the (ESH6) futures, dips back toward 6840-6860 should be supported first up but a break below here could potentially signal a deeper pullback for the week ahead.

• Alexander Stahel on X: “So how does this happen to Larry Ellison, a living tech legend and richest man in the world who spent decades ruthlessly obsessing over margins, and refusing to chase unprofitable growth?”
• “The Stargate bet reeks of urgency, not inevitability. It’s a gigantic, leveraged-long duration bet in a market defined by uncertainty, optionality, and rapid regime shifts.
• It’s not how Larry built his massive and enduring database moat but it’s certainly the fastest way how balance sheets get stressed. If this goes pear-shaped it may well pop the AI bubble - 2000-style.”
• The Market Ear on X: "Bond yields are rising even in deflation-hit China. The Fed may cut, but global rates don’t care — and that’s bad news for US equities.”
• The S&P 500 Index Average True Range(ATR) for the last 10 Trading days:  68 Points

Fig 1: Oracle Net Debt Vs Earnings

Source: MNI - Market News/Bloomberg Finance L.P/@BurggrabenH