Calendar

• Next week: Retail Sales Industrial Production and Business Inventories Tuesday, Housing Starts and Fed Decision Wednesday, FDX earnings, Weekly Claims,  and Existing Home Sales Thursday

Trading Observations

• Futures are bid.  Smalls outperforming, Tech lagging a bit

• Some renewed 25 bp vs 50 bp chatter in the past 24 hours

• Big week in Tech (NVDA, ORCL) + Goldilocks inflation + fearful sentiment = 1% from ATHs

• Real Estate and Utilities are overbought, and Staples are close. Energy is oversold.  Indexes are mostly neutral

• Now, how much soft landing + Fed dovishness is priced-in ahead of tough seasonality?

• For the “we’re too stretched” camp, three-year performances below

  • Nasdaq +16%

  • Dow +18%

  • S&P 500 +25%

  • S&P Midcap 400 10%

  • Russell 2000 -5%

• Interesting

  • Massive drop in shipping costs from China [substackcdn.com]- demand canary or potential margin boost? 

Futures

DOW +81

S&P +11

Nasdaq -2

10-Year Yield

Oil

BITCOIN

Consumer/Financial Healthcare

The US government, for the first time, has spent more than $1 trillion this year on interest payments for its $35.3 trillion national debt, per the Treasury Department. Another reason we need to cut rates

MRNA – Covid darling Moderna downgraded to underweight at JPM as they model a break-even profit line for 2026.

LLY, Novo – JPM expects these two to keep their 85-90% duopoly over the near term despite competitive pressures mounting.

Baird Powersports Survey – Inventory showing pockets of excess including in motorcycle. Everyone begging for higher rates to fix it.

USB Investor Day – Upbeat, guidance in-line, but the buyback was below expectations.

Union Strike in Boston Hotels – Three day scheduled. DRH and PEB are the public problem children.

TMHC – The homebuilder is accelerated repurchasing $50M.

FNMA – Fannie May up 7% on news Trump may privatize it.

PGR – Up 4% on solid August net premiums written and earned.

RH traded +18% after issuing upbeat Q3 guidance in an environment that has tempered discretionary spending.

ADBE/Softening Consumer Spend: Deloitte sees US Holiday spending increasing 2.3%-3.3% slowest since 2018; e-com seen up 7-9% viewing as a return to trend line post COVID w/ in store 1.3-2.1%

Technology

ADBE: -8% Q4 guide light of buyside expects - fears that the F25 outlook, which mgmt will provide addtl details on next month at its MAX conf, could be weak ... qrtr saw upside to top and bottom line and digital net ARR of $504M (vs bogeys of $495M) ... positioning skewed long which explains aggressive move ... Catalysts Ahead: Adobe MAX Oct 14 / release of video-generation tools.

OpenAI: says it has more than 11M paying subscribers for ChatGPT (that suggests the firm is generating ~$225M per month in sales and could post revenue of ~$4B over the next 12 months) (The Information);

ORCL extending its post-earnings rally this week after the company guided FY29 revenue to $104B, well above the ~$88B consensus, while Street also positive on the 45% operating margin target.

GOOGL: GS takeaways what fueled strength Thur - GOOGL Cloud CEO: “1) Public cloud market remains in the early stages of growth & penetration driven by newer industry verticals & geos; 2) Mgmt. laid out its product offering across 5 categories, all with generative AI capabilities layered in; & 3) the company remains focused on balancing topline growth with cost discipline

UBER - WAYMO TO OFFER AUSTIN, ATLANTA RIDES ONLY ON UBER NEXT YEAR

Software: WDAY alpha laggard on M&A commentary - focus next week; FTNT breach/hack; SNOW +1% CEO sounded better than at Citi week prior

FTNT confirmed it experienced a data breach earlier today in response to inquiries from Bleeping Computer after a threat actor posted on a hacking forum, claiming to have stolen data from FTNT’s Azure SharePoint server.

ANET: up 5 out of 6; +13% WTD (flat over 2 wks) -- GS presentation / The Information article on META’s supercluster said they’re looking to switch to ethernet fueling rotation

ARM: +2% post RayJ bullish initiation

AVGO: contd bounce off 200D - $170 resistance on chart

EBAY: up 11 out of 13 ... just a beast both Yip and M-sci called out Q3 trending above street ― stock continues to hit new highs

Industrials 

FDX Preview – Baird Buyers on any weakness. Our estimates for FQ1 and FQ2 reset slightly lower to better reflect the seasonal earnings pressure and second-quarter headwinds, respectively. Overall, we still expect FY25 guidance remains largely intact given sluggish demand but higher-than-expected parcel industry pricing surcharges.

Boeing (BA) – Boeing Unions Strike - IAM District 751 and W24 Machinists vote by 94.6% to reject contract with Boeing; vote by 96% in favor of striking. Stock trading down 4%

GE Vernova (GEV) initiated outperform at BMO Capital Markets

Taylor Morrison Home (TMHC) entered into accelerated share repurchase agreement for $50M