👀 Berkshire Drops $193M on Lennar as the 10-Year Hits 5.35%

Good afternoon and happy Sunday! Let’s get into how a week of record highs, bond-market jitters and an AI wobble ended in the green.

Let's get into it.

📊 Market Performance

Stocks closed the week higher on Friday:

• Dow: 51,655, up 0.83% on the day and about 0.9% on the week

• S&P 500: 7,811.54, up 0.59% on the day and about 1.2% on the week

• Nasdaq: 27,366.17, up 0.64% on the day and about 0.6% on the week

The S&P is up more than 13% year to date after setting a record close on Tuesday. The divergence this week was leadership. The Dow ETF is down roughly 3% over the past month while the Nasdaq-100 ETF (QQQ) has gained about 5%. The index is near highs, but fewer stocks are carrying it.

🔑 Key Drivers

📈 Bonds Stole the Show
The 10-year Treasury hit about 5.35% on Wednesday, its highest level since 2002, and the 30-year touched a 24-year high too. Both pulled back by Friday, with the 10-year settling near 5.23% after a solid 30-year auction. This is the number to watch. Mortgages, corporate borrowing and equity multiples all key off it, and stocks only look comfortable when it stops climbing.

🏦 The Fed Is Still in the Frame
Minutes from the September meeting, where the Fed voted unanimously to hike, showed most policymakers expect another increase this year. Governor Waller said more hikes may be needed but not necessarily right away. Odds of a hike at the October 27–28 meeting have fallen sharply, to under 20% by midweek per CME FedWatch. December is where the real debate sits.

🤖 The AI Trade Got Its First Real Scare
The Nasdaq dropped more than 1% on Thursday, its worst day since mid-August, after a report that OpenAI’s annualized revenue is roughly $20 billion below earlier estimates. The Nasdaq bounced Friday, but the lesson stands. The AI trade has been priced for perfection, and a revenue miss gets noticed fast.

🛢️ Oil Keeps Inflation on the Table
Brent settled above $100 on Wednesday as Iran war supply fears and Houthi attacks on Saudi airports kept the Middle East in play. Crude eased by Friday. As one strategist put it this week, a credible Iran deal could pull oil toward $70 and yields down with it. Until then, energy keeps inflation sticky.

🏠 Housing Is Under Pressure
Mortgage rates are around 7.3%, near a three-year high, and Lennar is down roughly 20% this year. Lennar’s CEO said in September that conditions had “deteriorated” since the prior earnings call. The homebuilders are being priced for the worst, even as real estate led the S&P on Friday, up 1.85%.

🕵️ Insider Angle: Berkshire Keeps Buying Lennar
Berkshire subsidiaries bought about 2.42 million Lennar shares on October 1–2, roughly $192.6 million at around $78–$80 a share. That includes 710,542 shares on October 1 at about $80.14 and 1,708,095 on October 2 at about $79.44. It lifts Berkshire’s Class A holding to about 28.4 million shares, an 11%-plus stake worth around $2.2 billion. Berkshire is filing as a 10% owner, so these Form 4 reports are real insider transactions. They are not the 13F filings that show up with a 45-day delay.

🎯 KEY TAKEAWAYS

• 📉 Long yields at 24-year highs are the market’s real boss right now.

• 🛢️ Oil near $100 means inflation is not done, and neither is the Fed.

• 🤖 One revenue report took a full point off the Nasdaq. Crowded trades have thin exits.

• 🏦 Banks report Tuesday. The S&P banks index is down about 9% in a month, so expectations are low.

• 📊 Q3 S&P earnings are expected to grow more than 30%. The bar is high, so beats will be priced in.

• 🕵️ When Berkshire buys $193M of a 20%-down homebuilder in two days, that is capital allocation worth reading.

👀 WHAT WE’RE WATCHING NEXT WEEK

🏦 Tuesday, Oct 13: Big Bank Earnings
JPMorgan, Goldman, Citi and Wells Fargo report before the open. Morgan Stanley and Bank of America follow Wednesday. Banks are the first real read on how the yield spike is hitting balance sheets and whether capital markets activity is slowing.

📅 Wednesday, Oct 14: September CPI, 8:30 AM ET
The Cleveland Fed nowcast points to about +0.5% month over month and +3.6% year over year, with core near 2.4–2.5%. A hot print puts October back in play. A cooler one supports the Fed sitting tight until after the midterms.

📅 Thursday, Oct 15: PPI and the Beige Book
Producer prices give a second inflation read. Retail sales and the Beige Book add color on consumer strength, which matters when rates are this high.

📈 The 10-Year at 5.35%
That level capped the week. A close above it would push mortgage rates and equity multiples under more pressure. Below 5.2% would give risk assets room to breathe.

🕵️ Insider Spotlight: Lennar (LEN) and Berkshire
Berkshire’s buying slowed in the past week to about $13.5 million a day from roughly $58 million a day at the late-September peak, but the position keeps growing. The bull case is a stock trading below its roughly $90 book value in a depressed sector. The bear case is real: 7%-plus mortgage rates, margin pressure and a reported Hunterbrook allegation about end-of-quarter closings. Berkshire is also now the nation’s fourth-largest homebuilder through its Taylor Morrison deal. Watch Form 4s Monday and Tuesday to see whether the pace picks back up.

That's the week. See you next Sunday.

— Silas P. Insider Authority | insiderauthority.com

Insider spotlight of the week…#LEN

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