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Trading Observations
No big directional drivers in play following momentum unwind on Tuesday that may have been exacerbated by positioning dynamics. Earnings activity continues to pick up while macro quiet into a busier Thursday featuring retail sales
Froth is back in the stock market – BofA calls it a SELL signal. BofA's indicator issues a sell signal for equity markets By Investing.com [investing.com]
AI Chips looking to rebound after the SMH took a hit yesterday following ASML dismal guide.
MBA mortgage applications fell 17% last week… that’s a 3rd consecutive week.
Einhorn says it’s the most expensive stock market since at least 1996 – MarketWatch (Must be net short)
Upgrades – ATR, CSCO, CGNX, CTVA, MGY, NVCR, UHS, WCC, WLK, GWW
Downgrades – CARR, CF, EMN, EMR, ENPH, EL, HSIC, OMC, PLL, STR, YUM
Futures
DOW +5
S&P +1
Nasdaq +12

CNN Fear/Greed Index
10-Year Yield

Oil

Consumer/Financial Healthcare
BUYBACKS | $6B a day ... The buyback blackout ends in 10 days. Rubner reminds us: US corporates are entering their best two-month period for executions of the year ... they have scope to add ~$6B per day, everyday, to close out the year
MBA mortgage applications fell 17% last week… that’s a 3rd consecutive week.
FI: up 12 out of 14 sessions .... RSI knocking on 86; def screens as one of most crowded names in space heading into EPS ... MS pumping tires this am: "combination of growth durability and earnings outperformance makes it an attractive investment; still trading at a meaningful discount on a growth adjusted basis to consumer names" ... saw HF long supply
MS – Up 4% on a familiar style revenue beat, investment banking. Profits up 32% y/y for the quarter. 45% for GS was the only better number I saw.
USB – Up 3% on solid lending, which is a different style beat than most.
IBKR – Down 3% on income miss. Given how wall street has crushed it on equity and options trading, buyer beware on this one losing market share.
Weekly retail sales from Prodco -2.8% y/y decelerating big time in the south (hurricanes).
CFG posted lower profit and revenue for the third quarter on lower net interest income. Provisions for credit losses amounted to $172 million, flat on year.
SYF beat by 14c; revs beat by $860M. Net interest margin decreased 32 basis points to 15.04%.. Efficiency ratio decreased 200 basis points to 31.2%
ULTA - Falls 2% after the company announced long-term financial targets and strategic priorities.
ABNB – Mscience Raising Q3 est’s on improved trends across the U.S. and Europe in Sept; ADR’s relatively stable in Q3; total listing growth (Y/Y) improve modestly in Q3
Technology
ASML - The stock was down 16% yesterday on a miss and guide down (not a good data point for the near-term timing of GenAi demand and buying patterns around lagging edge and memory spend). China demand also is now tepid (47% exposures in Q424 going to 20% in 2025). China exposures across Tech: ASML (47% revs going to 20%) AMAT (32% revs going to 30%), LRCX (42% revs).
Bloomberg reported QCOM waiting until the US presidential election is finalized before deciding on pursuit of INTC transaction.
AAPL: Indonesia is blocking sales of the iPhone 16 after Apple failed to meet its investment commitments in the country (SCMP)
AMAT: added as a new short idea at Hedgeye (intraday Tues) - sees 22%-32% downside
CSCO: +1.6% early outperformer in alpha post Citi upgrade (expanding ethernet AI TAM) .. Positive on space overall - expects contd investor rotation out of semis and hardware into networking equip
Memory/MU: Micron slid back towards $100 level where we've seen some demand .. overnight: SAMSUNG-2.5%, Hynix-2.2%, Nanya-3.2%, Powerchip-2%, Powertech-1.9%
NVDA / ELON MUSK 100K H200s: Press reports note that Elon Musk and the team behind xAI have achieved an engineering marvel, setting up a supercluster of 100,000 H200 Blackwell GPUs in a whopping 19 days
AKAM Slightly lowering estimates in constant currency on softer September data; remain above consensus on Delivery for Q3
AMZN – Investing in small nuclear reactors. Common theme we are seeing from large cap tech companies as AI Data Centers consume city like levels of energy.
Industrials
UAL beat on Q3, provided largely in line Q4 guidance, and announced a $1.5B buyback.
Airbus - Airbus to cut 2500 jobs in defense division - WSJ
ENPH – Downgraded at Susquehanna
GWW, WCC – Upgrading to Outperform at Baird
AptarGroup (ATR) Raised to Buy at DBS Bank; PT $200
Carrier Global (CARR) Cut to Equal-Weight at Stephens
CF Industries (CF) Cut to Underperform at BofA
Cognex (CGNX) Raised to Overweight at Stephens; PT $55
Eastman Chemical (EMN) Cut to Neutral at BofA; PT $119
Emerson Electric (EMR) Cut to Equal-Weight at Stephens; PT $120
Piedmont Lithium (PLL) Cut to Underperform at Macquarie; PT $7.80
Westlake Corp (WLK) Raised to Neutral at BofA; PT $159
ASPN soars 19% as the Biden administration is poised to loan nearly $671 million to the company to make a key component of electric car batteries in the election battleground state of Georgia.
CTAs are net sellers this week

$SAVE - 3 minutes on if Spirit is with a trade at $1.75