Global Bond Rout, Meta’s Landmark Trial, and Anthropic’s Revenue Surge 8/18/26

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**Kelly Evans** (1:00)
You're listening to The Exchange. Here's today's show.
Thank you very much, Scott. Global long bonds are breaking out and the AI suppliers are hitting the skids today. I'm Kelly Evans and welcome to The Exchange. 30-year debt in Germany and France hit nearly two decade high yields today. Same in the US where the 30-year hit 5.33 percent. Japan's 10-year hitting a three-decade high. Robin Brooks has been warning about a G10 debt crisis. We'll check in with him on that in just a bit. Plus, Lumentum, Marvell, Sandisk and Teradyne. Well, look at why these leaders have turned into laggards today. And another trial starts for Meta. This one, State Attorneys General are saying, could be the largest consumer protection lawsuit in American history. We'll discuss. But we begin with this global bond route, the mirror image of the years of zero and even negative rates we saw before and just during the onset of the pandemic. Japan's 10-year yield hit negative 0.3% in 2019
Germany's 10-year, negative 0.9% in early 2020 At one point, the entire Swiss yield curve was negative.
Bill Gross used to warn that this whole era was a supernova that would eventually explode. Is that what we're seeing play out today? For that, we turn to Rick Santelli, our bond watcher who is out in Chicago at the CME. Rick, how big of a deal is this reset?

**Rick Santelli** (2:25)
Well, I think it's a big deal, but I think it is light years, many, many, many Star Trek light years from something catastrophic. I want to underscore that. You hit the nail on the head. You know what, when you take a beach ball or a spring or compress anything that has kinetic energy stored, once you remove the obstacles, it bounces back. All those low and negative interest rates you pointed out, yes. Bill Gross was right. Everybody knew at some point in the future, there would be a comeuppance. So, maybe we're in that chapter, but honestly, let's go through things quickly. So, there's the US. We still haven't even taken out yet on a closing basis. Our July 31st high-yield close in the 10-year, which was 473.5. We touched 474.5, but we're back down. But should we get above there on a close, it'd be the highest-yield close since Jan of 25 And by the way, what's our debt to GDP? 125%.
Here's Japan, okay? 30 years, you pointed it out, yes. We haven't seen these mid-290 yields in 30 years. What's their debt to GDP? 220%.
Look at France. 411, 18 years before we've seen that. Debt to GDP in France, 120%.
And finally, Germany, 3 1⁄4, highest in 15 years. Their debt to GDP, half of some of our countries, 65%.
So you can see that is a debt issue. But if this was the kind of route that everybody seems to want to point to here, these yields would be much significantly higher. They'd be 7, 8, 9%. Now, I'm not making light of this, and I still think there is a backside that could be a bit nasty, but short lived. But ultimately, it's still orderly. The only thing you want to really pay attention to that could make it less orderly is some of the big positions, for example, in the sovereign debt of all these countries, like the US with the repo market, reverse repo market, and the way the Fed conducts business now. There is a huge amount of open interest holding treasuries. So we want to make sure we watch that if there's any match in that tinderbox, that we will recognize it. But at this point, it's world event for sure, but it's certainly not a catastrophe.