Yesterday, during pre-opening action, I saw the market wouldn’t cheer SpaceX (SPCX) and other strong earnings reports as much as I'd hoped.

Technology (XLK) still led the market higher, but not with the oomph it could have had, given what Elon Musk and others said about the superintelligence trade.

Demand far exceeds supply, and it will for the foreseeable future. I understand legitimate concerns, but I also marvel at how long mega-cap companies have faced criticism for spending their massive windfalls on corporate buybacks. These are investments to dominate for the next couple of decades or longer.

Trepidation

While the Volatility Index (VIX) drifts back to very low levels, individual stock volatility keeps edging higher. This will likely remain elevated as earnings reports hit in waves. Earnings reactions remain excessive, particularly to the downside.

More than 50% of the S&P 500 (SPX) finished higher, and far fewer names closed at 52-week lows.  Overall breadth was better, but still reflected trepidation.

Factors 

I was surprised by the negative action in small-cap/low-volatility, since many investors are kicking those tires looking for oversold bargains. I guess not yesterday.

It's still all about the largest names moving the needle, and one posted results after the close.                     

Meta Delivers

There is a lot to unpack, but Meta Platforms (META) shares popped after the releases, then gave back much of that move. One big story is negative free cash flow and capital expenditure (capex) plans.

The company is doing a special stock split of non-voting Class C shares. It will be interesting to see whether buyers embrace Muse's ambitious plans.

Today’s Session

Futures are pointing to a lower open as attacks in the Middle East add pressure on the market.

Middle East tensions are rising as more ships are hit in the Strait of Hormuz and the Houthis in Yemen step up attacks on Saudi Arabia. As a result, oil is on the move and approaching $100 a barrel.

Yields are lower mostly as global bond buyers flee Europe for the U.S., with the 10-year down about 11 basis points. French fiscal worries sent France's 10-year yield above 5% for the first time since 2002 and pushed its spread over Germany to the widest since 2011, ahead of a Moody's (MCO) review of France's credit rating tomorrow.

Chip and AI-linked names are leading the decline, with Lam Research (LRCX) down about 10% after its quarterly report. Intel (INTC), Advanced Micro Devices (AMD), and Marvell Technology (MRVL) are off about 5%. International Business Machines (IBM) and Tesla (TSLA) are also lower after their results. On the other hand, Lockheed Martin (LMT) is higher after raising its 2026 guidance while Spotify (SPOT) rose 7.6% in pre-market hours after third-quarter results topped estimates.

Economic News

Initial jobless claims fell by 6,000 to 194,000 in the week ended October 17, the lowest since July and below the 200,000 consensus. Continuing claims rose by 25,000 to 1.728 million in the week ended October 10, above the 1.720 million consensus.

Tweet

 

Home | Products & Services | Education | In The Media | Help | About Us | Disclaimer | Privacy Policy | Terms of Use | All Rights Reserved.