Calendar

This Week – We have a Presidential Election and potential results, the Fed, and a crescendo of earnings cycle all working in the markets this week. We think energy stocks could be the most interesting play into a decision.

Monday – Durable Goods

Tuesday – Election, ISM Services

Wednesday – Election Results?

Thursday – Fed Meeting (25 bps expected), Jobless Claims

Friday – 1 Fed Speaker.

Trading Observations

• All eyes on the election tomorrow

• Iowa poll has Harris trade in effect today (weak $, lower rates(in theory)

• Fed Thurs

• 5700/5670 support. 5775 resistance

• NVDA added to Dow....

• For the bulls

  • New highs still outpacing new lows (12 weeks in a row) WillieDelwiche [x.com] 

  • Consumer hasn't slowed down so far despite higher rates MikeZaccardi [x.com] 

• For the bears

  • Breadth divergence that needs to resolve allstarcharts [x.com]

  • Wall Street most bullish on stocks in over 2.5 years Barchart [x.com]

  • And stocks still overloved WillieDelwiche [x.com] 

  • Fed repo FALLS to lowest since 2021 zerohedge [x.com] ...

• Lot of talk on Buffett raising cash - fwiw - Last time Warren Buffett had this high % of cash in his Berkshire portfolio, the stock market immediately went on to have the greatest 52-weeks in American history. The time before that, the bull market in stocks lasted for 3 more years. The lowest % of cash he's had at any time over the past decade is right when the S&P500 peaked at the end of 2021....

  

Futures

DOW -49

S&P -1

Nasdaq -30

10-Year Yield

Oil

Consumer/Financial Healthcare

FIS – Strong beat including one from Worldpay on good margins.

Baird October Boating Checks – Weak retail demand, elevated inventory.

BEN – Down 2% on an earnings miss and weak inflows.

PTON - +8% on BAC upgrade (it’s an $8 stock a far cry from its former self).%, COIN +2%

Technology

AAPL: Jefferies Asia cuts iPhone ests slighty (from 225 to 222m for 2024; 242m to 230m for 2025) ... Channel checks suggest iPhone total unit growth is flat to LSD decline, but rev growth would likely be helped by a higher mix of P/PM ...

AAPL spent an Intel on buybacks this year; ~$100B

MSFT: launches genAI accelerator with NVDA/Github in UK

NVDA: +2.3% effective Nov 8 - Nvidia going into Dow, replacing INTC (SHW also to replace DOW) ... FT article that Co's chips act as collateral for ~$10B+ worth of debt to “neocloud” providers offering AI-focused computing infrastructure

NVDA: Nvidia in talks to invest in xAI – NY Post [engage.mail.marquee.gs.com]

RBLX: +4.2% as MS upgrading (Bush added to Best Ideas List a week ago) ... Fresh highs, >$53 level - "Roblox is at an inflection point and is accelerating market share gains ... incremental rev streams like advertising and e-commerce remain small in our base case, but could drive significant incremental upside in the bull case .... company is reaching a broader audience and scaling on new platforms"

SMCI: -1% in pre delay results until Dec 31; fading initial premkt gains - Digitimes reporting that Nvidia is "taking steps to restructure Supermicro orders, reshaping its supply chain" (+VE for DELL/HPE) .... audit issues last week wiped off 44% mkt cap SMCI US is now -8.5% ytd (having been +325% in the early 1Q24 rally)

TSLA: saw sales of China-made EVs drop 5.3% Y/Y in Oct (Reuters)