The Weekend Spread
Saturday, October 10, 2026 · Edition #3
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A NOTE TO START
I built two new rooms on the site this week and I am proud of how they turned out. The Lab is where my research lives. Deeper pieces that frame how I think about key macro and investment themes. The Tape is for what I'm seeing in the market day to day. This letter is still the front page. Everything else is the archive. And there is a new Culture section in the letter this week, music, podcasts, print, and video. Let's get into it.
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KEY TAKEAWAYS
- The memory supercycle is in full swing. Samsung's Q3 profit jumped 783% on AI memory demand, and D.A. Davidson just put a $3,000 target on Micron. Demand will exceed supply through 2027.
- It costs more to ship oil than to launch a rocket. Moving a tanker of US oil to China now costs $77 million, about $38.50 per barrel, up from $9.2 million before the war. At that price, American oil cannot compete in Asia.
- I'm long Meta through a March 2027 call spread. The reason is four letters: Muse. It crossed 5 million US downloads in 22 days. ChatGPT took 56. Meta reports October 28.
FEATURED READS
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★ THE ELECTION READ
What Six Years of Inflation Mean for the Midterms
Wall Street Journal · ~7 min read
Inflation has cooled to about 3.4% from the 2022 peak above 9%, but cumulative prices are up nearly 29% since 2020 and wages failed to keep pace this summer, which is why voters are still angry. The piece is built on CPI data, a WSJ poll (60% say Trump's policies made the economy worse), Michigan sentiment (down 20% among Republicans this year), and NY Fed data showing the bottom 40% hit hardest. It covers both parties' messaging and notes inflation already burned Democrats in 2022 and 2024. News section, not Opinion; reads as a mainstream explainer, not a hit piece.
Read the article →
Flavio's take: voters don't grade on the rate of change. They grade on the price of eggs.
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Echoes of 1987: The October Setup
The Alethea Narrative · ~10 min read
October 1987 ended with the worst single-day crash in stock market history. Shapiro walks through what rhymes today: stretched valuations, rising yields, and a market that keeps climbing a wall of worry. The piece is not a crash call. It is a setup review, asking which conditions from 1987 are present now and which are not, and what investors should watch as October unfolds. Worth reading for the history alone.
Read the article →
Flavio's take: history doesn't repeat, but October has a memory. Know the setup.
We Asked 7 Laureates: Did Winning the Nobel Change Your Life?
Harvard Gazette · ~6 min read
As the Nobels are given out this month, Harvard checks in with seven previous recipients on what it felt like to get the Call. The answers are refreshingly human: sudden fame they didn't want, a phone that won't stop ringing, and the strange pressure of being expected to have opinions on everything. A few said the best part was what it did for their students and their fields, not for them. Short, warm, and a nice break from markets.
Read the article →
Flavio's take: the prize changes the room you're in, not the work you do.
OpenAI's Revenue Number Needs a Second Look
FT broke it, Barron's explains it · ~4 min read
Headlines screamed about a $20 billion OpenAI revenue shortfall this week, and AI stocks sold off. But the $50 billion is net of revenue shared with cloud partners. The $70 billion figure counted sales made through those partners as gross revenue. Same business, different accounting. And on a like-for-like basis, OpenAI and Anthropic land in a similar range by 2030. The market read the headline and skipped the math.
See the AI revenue chart to 2030 →
Read the article →
Flavio's take: net versus gross is the whole story. The headline is wrong.
CHART OF THE WEEK
56 GW: US live data center capacity, half the world's total. China is a distant second at 24. The AI buildout is a two-horse race and the US is lapping the field.
THE WEEK IN NUMBERS
- $3,000: D.A. Davidson's new Micron price target, raised from $2,100. The stock trades around $1,040 at about 6 times earnings; the target assumes 19 times 2027 earnings. CNBC.
- 783%: Samsung's Q3 operating profit jump from a year ago, to a record 107.4 trillion won (about $80 billion), passing Apple and Nvidia for the biggest tech quarter. AI demand for memory has outstripped supply growth, and the shortage is expected to persist into 2027. Seoul Economic Daily.
- +29%: how much cumulative prices have risen since 2020. Inflation cooled to 3.4%, but voters shop with their memories, not the CPI print. WSJ.
- $77M: the cost to charter a supertanker from the US to China this week, up from $9.2 million in 2025. That is more than a SpaceX Falcon 9 launch. Transport Topics.
NEW ON THE SITE: THE LAB AND THE TAPE
Two new sections are live on theweekendspread.com.
The Lab is where my research lives. Deeper pieces that frame how I think about key macro and investment themes. Five are up:
The Tape is the running market notebook. Short pieces, charts, and a two-minute video each. If you read one, make it Miserable and Spending. All five are up (browse them here):
Start with the newest one if you only read one.
Flavio's take: the site is now the archive. The letter is the front page.
THE LAB: ART IS AN ASSET. HERE IS WHY I OWN IT.
I have wanted to write this one for a while. The art market just came through a real bear market: global sales fell 12% in 2024, the third-worst contraction in fifteen years. I started buying in the middle of it. Today I own 29 works through Masterworks, about 5% of my liquid capital, with a plan to grow it to 10%.
Art is wealth insurance and diversification, not a return engine. The long-run number for great art is 6 to 7%, and it trails equities. That part is fair. What I pay Masterworks for is the other number: their realized exits have all cleared 18% annualized. Selection and timing is the whole game in art.
Sample of the Lobato Collection
Twenty-nine works, post-war and contemporary.
 Keith Haring : Untitled No. 10 |
 Banksy : UFO |
 Cecily Brown : Mean Eyed Cat |
 Yayoi Kusama : Pumpkin |
 Yoshitomo Nara : Sprout in Hands |
 Alex Katz : Pink Kimono |
 Simone Leigh : 107 (Face Jug Series) |
 George Condo : Green and Purple Composition |
 Jean-Michel Basquiat : Early Moses |
 Bridget Riley : Delos |
Bear markets are when allocations get made.
Read the full piece in The Lab → the bear market numbers, the allocation case, and the 6% vs 18% math.
Flavio's take: buy the asset class when nobody wants it. That is the whole game.
THE TAPE: STATE OF THE HOUSING MARKET
Last week we flagged the 30-year mortgage jumping to 7.28%. It kept climbing: 7.49% this week. Here is what that did.
- Buyers sidelined: newly pending sales fell 8.5% in September. Mortgage applications are at their lowest since February, down about half since January.
- It is the rate, not the price: the typical home is up just 1% to $366,913, but the monthly payment is up 6.7% to $1,922.
- Sellers frozen: inventory keeps rising, yet new listings sit 12% below pre-pandemic. Nobody holding a 3% mortgage is moving.
- Builders cutting: sentiment at a one-year low. 38% are cutting prices, two-thirds are offering buydowns. In the Sun Belt, new builds now sell for less per square foot than existing homes.
- Renters squeezed: typical rent hit $1,932, up 2.7%, the biggest gain since April 2025. The escape valve is closing too.
Flavio's take: The rate did what prices couldn't. It froze the whole market without crashing it. For now...
Read the full Tape piece →
WHAT I'M BUYING
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META
Meta Platforms · Reports October 28
March 2027 $660/$850 call spread · $80.45 cost · +136% max return
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I'm long through the spread above.
The reason is four letters: Muse. Twenty-two days after launch it crossed 5 million US downloads. ChatGPT took 56 days. Only 23 apps in history have done it that fast. It now counts 2 million daily active users.
Meta trades at $1.85 trillion, about 8x revenue, priced as an advertising business. OpenAI is raising near $1.4 trillion on a $70 billion run rate. At a 20x AI multiple, Muse at ChatGPT parity adds $240 billion of value.
My four-leg plan: $850 at 6 months (live spread), $1,150 at 12, $1,400 at 18, $1,700 at 24. If the thesis plays out, I roll the short call up.
Read my full Meta thesis → why I invested, the targets, and the trade structure.
Not financial advice. Options can expire worthless.
CULTURE
New in the letter this week: Culture. What I'm listening to, watching, and reading in print. See it all on the site →
 Music: "Bossa Antigua." Old-school bossa nova for unhurried Saturday mornings. Listen → |
 Print: Monocle. Monthly culture and global affairs, founded by Tyler Brûlé. Subscriber for almost a decade. Visit → |
 Video: Slow Horses (Apple TV+). Gary Oldman leads disgraced MI5 agents. Best spy show on TV. Watch → |
 Podcast: "Is your parenting style working?" Listen → |
 Podcast: Acquired, "The Browser" Listen → |
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Flavio's take: culture is the part of the portfolio that provides the highest return.
FRIDAY CLOSE SNAPSHOT
Friday, October 9 close.
| Nasdaq 100 | +0.5% on the day | +16% YTD |
| S&P 500 | 7,812 (+0.6%) | +14.1% YTD |
| Dow | 51,655 (+0.8%) | +6.6% YTD |
| US 10Y | 5.25% | +95 bps YTD |
| VIX / VXN | 14.84 / 20.58 | 5.74 |
| USD/JPY | 158.31 | +0.97% YTD |
| USD/BRL | 5.00 | -19% YTD |
THE WEEK AHEAD
Monday: Columbus Day. Bond markets closed, stocks open. Light data day.
Tuesday: bank earnings continue, the first real read on Q3 results.
Wednesday: retail sales and industrial production, a check on the consumer and the factory floor.
Thursday: weekly jobless claims, plus housing starts.
Friday: quiet end to the week. Earnings season picks up pace next week.
On the calendar further out: TSLA Oct 21, GOOGL / META / MSFT Oct 28, AMZN Oct 29, AAPL Nov 2.
Flavio's take: bank earnings set the tone. Watch what they say about credit, not what they say about the economy.
Thank You for Reading my newsletter.
I'm Flavio Lobato. I've been investing capital in venture and capital markets for the last 30 years. Earned my chops at Goldman Sachs and later implemented a venture development strategy at Ikove Ventures.
I invest my own capital via Lobato Advisory Group, and manage a rules-based options strategy on the Nasdaq 100. I graduated from Harvard Business School.
The Weekend Spread is my passion project, markets and ideas. No noise, no sponsors. Hope you enjoy it.
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