Index 51: neocloud stocks drop off flashing after a 4-7% bounce

Neocloud stocks drops from flashing to watch

A quieter day: the stress index slipped to 51 from 52 as CoreWeave bounced 7.3% to $63.93 and its five-year CDS eased to 1,041bp, its tightest in over a week. Don't get comfy though, it's still down 26% in a month, the CDS is still over 1,000bp, and the funds layer is flashing at 86.8.

Stress index: 51 out of 100, Elevated, down 1. 2 of 6 layers are flashing: weakest borrowers and funds. The chain reaction isn’t complete yet: collateral isn’t flashing.

Layers today, score and 1-day move: Collateral 25 calm · Weakest borrowers 80 flashing (−3.7) · Loans 56 watch (−1.4) · Funds 87 flashing (+0.3) · Plumbing 48 watch (−1.2) · People 12 calm

Since yesterday

• Neocloud stocks dropped from flashing to watch (84.8 → 70.2): Neoclouds bounced 4-7% Wednesday; CoreWeave $63.93, still down 26% in a month (source)
• Aurora, Colo. council backs an indefinite data center moratorium 6-5 but misses the two-thirds it needed; mayor vows to try again: Colorado Politics: Aurora City Council votes down indefinite data center moratorium, Oct 26 · Weakest borrowers crack (article)
• Monroe Capital Income Plus Corp: Opens a cash-out window: SC TO-I filed Oct 28 (filing)
• Marks vs market prices score down (72.4 → 68.3), still watch: Listed BDCs lagging junk bonds by 6.0 pts; marks still near cost (source)
• Pulled deals score down (72.1 → 68.3), still watch: Data center financing reported frozen after the CoreWeave rout (source)

On the line

• Neocloud stocks: 70.2 (watch), 4.8 below the flashing line (75)
• Marks vs market prices: 68.3 (watch), 6.7 below the flashing line (75)
• Pulled deals: 68.3 (watch), 6.7 below the flashing line (75)

The tape: Oct 28 close vs Oct 27

• Junk bonds (HYG): $77.59, −0.0% on the day, +0.8% over 5 days, 4% below its high
• Listed BDCs (BIZD): $12.18, +0.7% on the day, +3.3% over 5 days, 19% below its high
• Private credit managers: +1.2% on the day, +4.9% over 5 days, 32% below its high
• Neoclouds (5): +5.7% on the day, +1.5% over 5 days, 56% below its high
• CoreWeave: $63.93, +7.3% on the day, +3.4% over 5 days, 54% below its high
• Oracle: $144.54, +10.7% on the day, +11.9% over 5 days, 49% below its high

Flashing now (4)

1 of 4 got new data since yesterday. The other 3 haven't in 2 to 7 days, and stay flashing until new data says otherwise.

• Redemption gates (new data Oct 28): Gates at several managers at once (source)
• Neocloud bonds (data from Oct 22, 7 days old): CoreWeave 2031 notes yield a record 15.76% (source)
• Delayed projects (data from Oct 26, 3 days old): Roughly 30-50% of 2026 US capacity delayed or canceled; Aurora rejects moratorium (source)
• Credit default swaps (data from Oct 27, 2 days old): CoreWeave 5-yr CDS eased to 1,041bp, still above 1,000 (source)

More on this: Where can I find free data on BDC redemption requests, tender offers and discounts to book value?

The gauges

• Credit stress (OFR): −0.86 (−0.02 vs prior print), Oct 26 print; above zero is more stress than usual
• Listed BDCs vs book, by size: −11.4% (+0.3 pts vs last issue), 5 of 10 more than 10% below
• Funds running cash-out windows: 51 (−4 vs last issue), last 90 days of SEC filings
• Funds paying out less than asked: 1 (±0 vs last issue), lowest: Barings Private Credit Corp paid 46.84%

Slow gauges, latest print: Bond fear premium −38bp (Sep 2026) · Corporate bond spread 93bp (Sep 2026) · Recession odds 9% (Sep 2026) · Bank loans to nonbanks +19.6% (Oct 14) · Banks tightening loans 0.0% (Jul 2026) · Median PIK share 11.0% (quarterly)

Worth watching today

• Whether CoreWeave's CDS can get back under 1,000bp, or the bounce fades
• Q4 tender results from non-traded BDCs, starting with Monroe Capital Income Plus's new offer
• CoreWeave's Nov 11 earnings and any word on its biggest customers

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