The Morning Call
10/30/26
The
Market
Technical
Thursday in the
charts.
Thursday 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
The great tech
unwind.
Dueling Market scenarios.
Hedge fund
shorting is amplifying risk.
The dollar’s $20
trillion problem,
Friday morning
setup: US futures slide with Nasdaq futures tumbling more than 2%, as the AI
reckoning that started with Alphabet's record plunge claims two more megacaps:
Amazon slides after a capex shock and the slowest e-commerce growth in three
years, while Intel craters 26% after a guide that was "much weaker than
expected"; meanwhile oil keeps climbing on signs the US may resume strikes
against Iran and on an Iranian claim that two oil tankers were hit and stopped
in Hormuz; as a result, the Nasdaq 100 is now tracking its biggest
monthly underperformance against the equal-weighted S&P since 2002,
with its members having wiped out more than $1.2 trillion in market cap this
month. As of 7:30am ET, S&P futures are 1.1% lower at 7,672 while Nasdaq
futures drop about 2.2% (28,970.75 in the Markets at a Glance snapshot) and Dow
futures are up 0.1% at 52,575; Russell 2000 futures are down a more modest
0.5%. The losses come after a session in which the S&P fell 0.3% (and the
Nasdaq 1.4%) even as 406 S&P members rose and the equal-weight index hit
its highest since August, a reminder that the market is rotating rather than
running for the exits. In premarket trading, all Mag 7 names are lower,
led by Amazon (-7.3%), while AI infrastructure stocks tumble after Amazon and
Intel and crypto-linked names slide after Binance suffered the industry's
biggest-ever hack; Amazon's slump confirms our post
from last night. Defensives and the non-AI parts of the market are bid,
with Mondelez, Gilead and Colgate higher. The day's driver is oil (again): Brent
rose as much as 2.5% to around $117.76 as reports keep pointing to US strikes
on Iran after Tuesday's midterms and the Houthis claimed attacks on Saudi oil
facilities, while Exxon and Chevron both posted record refining profits.
Treasuries are higher with the 10Y yield down 3bps to 4.91%, near the lowest in
six weeks, as the tech rout spurs haven demand; bunds and gilts edge higher
while French OATs lag after hotter than expected French inflation. The
Bloomberg dollar index falls 0.3%, its third straight decline, the Swiss franc
outperforms on haven demand and the pound hit the highest since Sept. 16. In
commodities, WTI is up 1.7% at about $103.50, gold slipped below $4,000 and
silver drops 2.6%. Bitcoin is down 1.6% near $77,800 after the Binance hack. US
economic data slate includes 3Q employment cost index (8:30am, est. 0.8%, prior
0.9%) and October MNI Chicago PMI (9:45am, est. 56, prior 58.8). Fed speaker
slate includes Barkin (9:30am), Daly (12pm) and Musalem (12:30pm).
Fundamental
Headlines
The
Economy
US
International
The Q3
German flash GDP grew 0.2% versus forecasts of +0.1%; the October unemployment
rate was 6.4%, in line.
The
Q3 EU flash GDP grew 0.4% versus expectations of +0.2%: the September
unemployment rate was 6.5% versus +6.4%.
The September
Japanese unemployment rate was 2.4% versus 2.5%; September
preliminary industrial production was up 2.2% versus +1.3%; September retail sales fell 0.7% versus +0.6%; September
YoY housing starts were down 2.7% versus +2.9%; September
YoY construction orders were down 11.1% versus -3.0%; October YoY CPI was +2.8%
versus +1.3%; YoY core CPI was up 2.6% versus +2.5%.
Other
More analysis on yesterday’s personal income
and spending reports.
https://bonddad.blogspot.com/2026/10/a-somewhat-negative-personal-income-and.html
Overnight
News
Ukraine shatters strike pause.
Monetary
Policy
The Taylor Rule and the FOMC rate decision.
https://econbrowser.com/archives/2026/10/taylor-rule-and-dissents
The Fed risks falling behind in its inflation
fight.
And probably already has.
https://www.capitalspectator.com/will-the-feds-pause-complicate-the-inflation-fight/
Fiscal
Policy
The $2 trillion gap.
https://www.advisorperspectives.com/commentaries/2026/10/29/mind-2-trillion-gap
The case for a government
stake in the ownership of US companies. (I totally disagree with this proposition.
First, tell me that the ruling class won’t try to exert force on company decisions.
The US’s whole history is a shining example of political/bureaucratic
encroachment on the economy and industry. Second, it provides yet another means
for the ruling class to enrich itself via insider trading. The author points to
the bailouts of the banks and auto companies as an example of the benefits of
government intervention. I would take issue with that. The government should
have let those companies go into Chapter 11. That doesn’t mean the company
ceases to exist. It means that it is reorganized on a more profitable
basis---if that is indeed possible. Old management---the ones whose lousy business
decisions resulted in the bankruptcy itself are canned, instead of being
rewarded with a new lease on life. The inefficiencies/poor decisions are
corrected. And the stock and bond holder suffer the consequences of a bad
investment decision---just like you and I do every day of our lives. No one
bails us out.)
For example:
https://behaviouralinvestment.com/2026/10/27/the-power-and-the-glory-400-years-of-bad-decisions/
Here is the
counter argument for increased government imposing itself into the economy. (it
is a bit long).
https://aier.org/article/the-errors-of-economic-nationalism/ems
The midterms offer
a choice between two brands of socialism.
https://reason.com/2026/10/28/the-midterms-offer-a-choice-between-two-brands-of-socialism/
AI
Anthropic’s IPO just
strengthened the case for AI stocks (This is not a Buy recommendation.)
Counterpoint.
Anthropic showed AI can make money, but the
buildout has to prove it.
Tariffs
All about tariffs.
https://talkmarkets.com/article/all-about-tariffs
The
Financial System
The commercial real estate problem is far from
over.
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