The Morning Call
10/28/26
The
Market
Technical
Tuesday in the charts.
Tuesday in the technical stats.
https://www.barchart.com/stocks/momentum
https://www.barchart.com/stocks/market-performance
https://www.barchart.com/stocks/sectors/rankings
https://www.barchart.com/stocks/signals/new-recommendations
Improving breadth could be a
Market negative.
BofA says defensive froth is
a feature of a bubble market.
Wednesday
morning setup: US futures are higher, if only in Nasdaq terms, as a memory-chip
frenzy sparked by SK Hynix's blowout results revives the AI trade ahead of
today's Fed decision and tonight's Alphabet and Microsoft earnings, while oil
jumps after the WSJ reported the US told Gulf allies to prepare for a short,
intense military campaign against Iran after the midterms; as a result the 10Y
yield is back above 5%. As of 8:00am ET, S&P futures are up 0.2% while
Nasdaq futures rise 0.6% and Dow futures slip 0.1%, a day after the S&P
closed 0.6% higher at 7,723 and the Nasdaq 100 jumped 1.3% for its best day in
over a month (even if roughly 60% of S&P names closed lower). In premarket
trading memory names lead the way, with Micron and Sandisk both up about 4%,
while Alphabet tops the Mag 7 after a report that OpenAI intends to buy
Google's AI chips; on the other side, Robinhood, NXP and Enphase tumble after
disappointing earnings. The day's driver is the Fed (and then the
hyperscalers): a hold at 3.75%-4.00% is all but certain, so the focus is on
the vote split and how hawkish Chair Warsh sounds with a December hike nearly
fully priced, while the AI rebound gets its real test after the close.
Treasuries are slightly cheaper with yields within a basis point of Tuesday's
close as rising oil puts upward pressure on yields; the 2Y is at 4.74%, up for
a fourth day. The Bloomberg dollar index is up 0.1%, edging toward a 17-month
high, the euro sits near a 17-month low around 1.1125 and the kiwi tumbles
after the RBNZ unexpectedly held rates. Brent rises toward $115.6 and WTI
trades near $102, European gas hovers near a four-year high, gold slips 0.7% to
about $4,030 and copper dips. Bitcoin is up 0.9% and back above $81,000. US
economic data slate includes advance goods trade balance, wholesale and retail
inventories (8:30am) and the FOMC rate decision (2pm), followed by Chair
Warsh's press conference (2:30pm); the Bank of Canada decides at 9:45am, and
Treasury sells $30 billion of 2-year FRNs and $75 billion of 17-week bills at
11:30am.
https://cms.zerohedge.com/sites/default/files/inline-images/Market%20Snapshot%20-%202026-10-28.jpg
Fundamental
Headlines
The
Economy
US
Weekly mortgage
applications were up 3.4% while purchase applications were up 3.8%.
Month to date retail
chain store sales were up 9.5% versus +9.0% in the prior week.
The August home
price index was up 0.3% versus estimates
of +0.2%; the August Case Shiller home price index was down 0.4% versus -0.1%.
September
new home sales fell 0.6% versus expectations of -3.5%.
https://bonddad.blogspot.com/2026/10/new-home-sales-and-repeat-home-prices.html
The Q3 Atlanta Fed
GDP nowcast was revised from +3,5% to +3.4%.
The
October consumer confidence index came in at 91.7 versus consensus of 81.0.
The October
Richmond Fed manufacturing index was -2 versus predictions of 0.
International
The November
German consumer confidence index was reported at -30.8 versus forecasts of
-30.9.
Other
Iran
Overnight news:
The U.S. has told
several Gulf Arab countries to be prepared for a short, intense military
campaign after the U.S. midterm elections, people briefed on the conversations
said.
Qatari mediators
presented Iran with a new draft deal on Sunday to end the war, which Tehran is
considering and expected to send a response to by the end of the week, an
official briefed on the negotiations says.
A senior Iranian
official later said Qatar has not presented a new proposal to end hostilities
between Iran and the US and that Tehran's policy of showing no flexibility over
the nuclear issue remains unchanged.
The US told ships
to avoid unnecessary transits through the Strait of Hormuz.
The United Nations
nuclear watchdog said it hasn’t detected any efforts by Iran to rebuild nuclear
facilities damaged in US and Israeli strikes over the past two years, even as
Tehran continues to block inspectors’ access to most of its atomic sites.
Monetary
Policy
To raise or not to raise?
https://www.capitalspectator.com/warshs-hawkish-rhetoric-meets-an-inflation-reality-check/
Fiscal
Policy
The cruelty of government consumption.
AI
No
signs of an AI payoff outside of the tech sector.
With Anthropic IPO, the devil is in the
details.
The biggest takeaways from Anthropic’s IPO.
Some
lenders are getting cold feet.
Who is afraid of AI?
Your job may survive AI, but your salary may
not.
https://newsletter.drorpoleg.com/p/ai-doesnt-have-to-replace-you-to
Tariffs
Another example of Trump’s misguided tariff
regime.
Investing
Managing a bubble.
Short termism and
stock price discovery.
Five myths about
investing in the stock market.
The path to lower interest
rates.
The life insurers most exposed to the AI debt binge.
News on Stocks in Our Portfolios
What
I am reading today
How
the Egyptians built the pyramids.
Rethinking
how the Egyptians built the pyramids | National Geographic
It is not a prank; you are an a**hole.
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