{"headline": "AI basket in correction as Bubble Pressure index reads 51", "sections": [{"title": "What changed", "body": "The basket is 14.1% below its highest level so far, reached on 6 October 2026. The Bubble Pressure index, a custom average of indicators rather than a probability, now reads 51. Overextension has eased, with the basket 2.2% below its 200-day average."}, {"title": "Which signals matter", "body": "Capital spending intensity is at the top of its range since 23 April 2010: five big spenders are investing 35.8% of their own revenue. Valuation is also elevated, with price-to-sales of 8.6x, total market value over total revenue. Yields matter too: the 10-year Treasury is at 4.86%."}, {"title": "What the model cannot tell you", "body": "The bubble model reads price patterns only, so it cannot say whether AI spending will earn a return. Its weekly runs before the high, flagging from 22 March 2024, 30 months before the high, were computed retrospectively, not published at the time. A past rise is no guide to future returns."}, {"title": "What would change the picture", "body": "Capital spending intensity easing, or revenue growing faster than market value, would reduce the stretch. Watch the share of companies above their 200-day average, now 31%, the high-yield credit spread of 3.48%, and any bubble-model fit meeting the criteria."}], "bull": ["The pullback has already trimmed short-term overextension.", "Heavy investment by the biggest spenders supports demand for chipmakers and infrastructure suppliers."], "bear": ["Spending at this share of revenue needs substantial future AI income to be justified.", "With three companies making up 46% of basket value, a setback at one could move the whole basket."], "as_of": "2026-11-06", "provisional": false, "data_generated": "2026-11-07T05:46+00:00", "prompt_version": "6 (2026-11-05): written daily; six-signal index, signal history and index membership in the digest", "model": "Claude (claude-sonnet-5-5)", "generated": "2026-11-07T05:47+00:00"}