Good morning. Yields on 10-year Treasuries rose to a nine-month high of 4.7 per cent yesterday, after a strong ISM services survey and a Jolts report that showed higher job openings. Inflation break-evens and the dollar both rose. Looks to us like the market is pricing in a hot economy. Send us cooling thoughts: robert.armstrong@ft.com and aiden.reiter@ft.com.
Mag 7 Capex
Accounting is boring but important. Particularly important: the difference between a capital expense and an operating expense. A capital expense (buying a big piece of equipment, say) does not count directly against earnings on the income statement, as an operating expense (paying a salary, say) does. Instead, a capital expense appears on the income statement over time, in theory matching the drag on profits to the life of the capital asset. This spread-out expense shows up in a line called “depreciation”.