The super-intellectual fence trade continued its rebound, with software (IGV) names beating a hasty retreat, along with sectors that were getting overcrowded and certainly very expensive in relative and absolute terms.

49% of the S&P 500 (SPX) traded higher, but the percentages were higher for the NYSE and NASDAQ.

The main story is wild internal gyrations, with investors alternately seeking foxholes and then flipping the script to chase opportunities, making it hard to get a true read on sentiment; beyond that, staying in the mix despite the turmoil is more attractive than racing to the sidelines.

Gasoline Decides America’s Fate

Gasoline (GASO) prices are easing and down from the April high. It's truly remarkable to see where gasoline was back at the start of the year. I understand the mission in Iran, but if it could have gone more smoothly, the GOP would be looking to gain seats next week. The economic revival, combined with lower gasoline prices, was a major development.

Consumer confidence surged in October to 91.7, up from a consensus of 81.0. Moreover, September was revised up to 84.2 from an initial 81.9. Expectations climbed to 72.6 from 65.7, and present conditions to 120.4 from 111.8. Meanwhile, 12-month inflation expectations eased but remained elevated at 5.8%.

Durable Goods

The durable goods report was also very encouraging.

But 3Q26 GDP estimates slipped to 3.4% from 3.5%, which is still a solid number for the economy.

FOMC Decision

The FOMC wraps up its two-day meeting with a decision today. Most of the Street is looking for a so-called “hawkish pause.”

That means no rate hike, but Fed Chair Kevin Warsh will sound angry and ready to pounce at the podium; this time, expect him to fight inflation, not out of pure frustration with the questions being lobbed his way.

It's kind of weird that investors fear rate hikes so much, considering the market has held up during prior rate-hiking cycles. That said, the Fed usually ushers in recessions when it goes too far.

Why do we have a Federal Reserve?

There was a promise of no more wild business cycles, and economists retired the word “panic,” hoping they'd never have to use it again. They decided “depression” was an easier word to describe economic distress and meltdowns.

Speaking of which, the dollar (DXY) has not fared too well since the advent of the Federal Reserve. Oops.

Today’s Session

Earnings season has ramped up, and it's impressive.

• 83% of reports beat consensus
• 79% of cyclicals beat
• 96% of defensives beat

Reactions to beats have been somewhat muted, especially considering the recent drubbing so many names have taken.

The anti-superintelligence campaign has only grown more intense ahead of an election that could spark more local disruptions to data center buildouts. Ironically, US frontier models have widened their lead over open-source models, particularly from China, and the CXMT chip threat is fading as even Chinese customers are increasing orders from South Korea.

We should push to win this instead of surrendering to weak excuses. We could never have won WWI and WWII with this attitude. Meanwhile, SK Hynix (SKHY) blew away consensus, posting one of the best earnings quarters in history. It's frustrating that the stock isn’t higher.

Big Buyers Waiting

RenMac points out the bounce this week has more to do with short covering ahead of the FOMC decision today than new buyers making an aggressive push.

This is true, but once big buyers reemerge, the moves will be parabolic to the upside, so you have to be positioned.

Comments

The 3rd (unspoken) mandate of the Fed is to devalue the dollar. David G. on 10/28/2026 9:29:17 AM

Yes, the Iran situation is a problem because the so-called ceasefire in April is the cause. If the ceasefire is the objective, why bother? Had the matter been resolved months ago, the upcoming election would have a totally different tone to it. Neil on 10/28/2026 10:47:38 AM

avgerage US voter has no clue of geo politcs Worse if they do show interest they get it from the TDS left wing 'media' These same media conduct biased poles that pre influence the ignorant electorate You can arm chair quaterback all you want but iran needs to get carpet bombed into oblivion before the world can be a safer place It had to be done Trump sacrificed for the greater good its too bad the masses dont get this Marc A on 10/28/2026 12:32:04 PM

Tweet

 

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