The Morning Call
11/3/26
The
Market
Technical
Monday in the
charts.
Note: the S&P
reset it 50 DMA to resistance and closed below the lower boundary of the trading
range going back to early August. Clearly, not a good sign for the S&P. However,
our portfolios were up on the day, signifying the continuing divergence of the
S&P (dominated by the tech stocks) the rest of the Market. So the
underlying technical picture is not as bad as the S&P indicates. Still
there is no reason to buy, in my opinion; and it is likely too late to sell the
techs.
Monday 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
flush hasn’t even started.
AI’s
last man standing just fell.
Tuesday morning
setup: US futures are down but off session lows, with Nasdaq contracts edging
higher, as America heads to the polls for the midterms, chips rebound even as
Apple slides on a gross margin warning and Palantir tumbles on a soft outlook,
and oil bounces off Monday's 8% plunge after the US struck Iran's Qeshm Island
in what officials called a "small-scale" and "defensive"
attack; as a result the oil-driven bond rally takes a breather with the 10Y
yield edging up to 4.93%. As of 8:00am ET, S&P futures are down 0.1% at
7,564 while Nasdaq futures are up 0.3% and Dow futures are down 0.6% some 300
points to 51,826. On Monday the S&P reversed a 1% gain to close down 0.5%
at 7,541 and the Nasdaq 100 slid 1.4% into a correction, 10% below its October
6 peak, even as the equal-weight S&P rose 0.7% and the Dow added 0.4%. In
premarket trading, semis and memory names are bid again while software lags,
with Shopify plunging 19% and Dynatrace 15%; Apple drops about 4%, after the
stock initially traded flat in the immediate aftermath of the report as
we noted last night, while Nvidia rises 1.5% (Apple closed Monday as the
world's most valuable company, only narrowly ahead of Nvidia, so that title is
in play). The day's driver is the vote (with Iran in the background, again):
Polymarket assigns a 94% chance of a Dem House and a 78% chance of a Dem
Senate, an outcome which markets fear means more AI regulation and more hurdles
for the data center buildout, with the Texas governor race seen as the one to
watch for the AI trade; meanwhile US-Iran headlines swing between mediator
proposals and Tehran declaring it is "now in a state of war"
after the Qeshm strike. Treasuries are broadly flat and outperform European
bonds, which slide as oil and Dutch gas rebound and ECB speakers sound hawkish.
The Bloomberg Dollar Spot Index is up 0.1%, the Aussie lags after the RBA's
split 6-3 hike was read as dovish, and the onshore yuan snapped its longest
winning streak in three decades after the PBOC raised FX reserve requirements.
In commodities, WTI rises 2% to about $98.45 and Brent trades above $105, gold
drops 0.9% and silver slides below $50, while copper slips under $14,000;
Bitcoin dipped to $76,240 before rebounding above $77,000. US economic data
slate includes September JOLTS job openings, factory orders and final durable
goods (all at 10am); there are no scheduled Fed speakers, and the Treasury
sells $100 billion of 6-week bills at 11:30am. Polls start closing at 6pm
ET.
Fundamental
Headlines
The
Economy
US
September construction
spending fell 1.9% versus estimates of +0.4%.
The October manufacturing PMI was 54.9 versus
projections of 56.0.
https://bonddad.blogspot.com/2026/11/in-goods-producing-sector-ai-continues.html
The October ISM manufacturing index was 55.5
versus consensus of 54.6.
The November small
business optimism index came in at 48.5 versus expectations of 46.2.
International
Other
The economy is less K-shaped than you think.
Iran
Overnight news.
Early morning update.
https://www.zerohedge.com/energy/irgc-claims-3-more-tankers-blown-naval-mines-hormuz
Monetary
Policy
Interrogating confusion at the Fed.
AI
When a credit default swap isn’t about credit.
Doubts about Silicon Vally’s AI bet.
The
Election
Three potential outcomes and how they might
move the Markets.
3
Midterm Outcomes & How They’d Move Stocks
The midterm election paradoxes.
https://amgreatness.com/2026/11/02/midterm-election-incoherences-misadventures-and-paradoxes/
Sectors bracing for a pivot following midterm
elections.
https://www.reuters.com/business/finance/sectors-bracing-pivot-us-midterm-elections-loom-2026-11-02/
The S&P’s midterm record faces stiff test.
https://giftarticle.ft.com/giftarticle/actions/redeem/38d230c8-551a-49cc-92fc-080c31a61d1c
Investing
Ever thought of
buying a warrant?
Why the next decade will likely be different.
https://talkmarkets.com/article/above-average-returns-why-the-next-decade-differs
But near term, you
can’t ignore the strong earnings momentum.
News on Stocks in Our Portfolios
What
I am reading today
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