MARKET WRAP

A fairly volatile day although within a 1% or so range. SPY and QQQ managed to finish green, powered by Amazon, Nvidia and a few others, while small caps and industrials finished lower. Intraday volatility is largely being driven by the megacaps, even after most have now reported. On the day: SPX +0.2%, QQQ +0.4% and IWM -0.3%.

Elsewhere, yields were fairly quiet with the US10YY now above 4.10%. Gold hanging just above 4k, Oil $61, DXY just shy of $100, and the VIX down slightly, now 17.17.

Notable Gainers: AMZN +4%, PLTR +3.5%, NVDA +2.2%, KVUE +12%

Notable Losers: KMB -14%, MRNA -8.2%, MRVL -3.6%, MRK -4%, NKE -3%

After Hours: PLTR was initially higher by about +4% on its earnings release but is now unchanged.

Today’s MRKT Call: Dan and Guy dig into the euphoric investor sentiment driving a narrow, concentrated rally, and discuss the massive OpenAI–Amazon AWS deal — questioning whether the numbers are real or if OpenAI has become too big to fail.

Today’s RiskReversal Pod: Guy and Dan are joined by Dan Greenhaus of Solus Alternative Asset Management to break down earnings season, the AI-driven CapEx boom, Fed policy, and the economic crosscurrents shaping inflation, growth, and markets heading into next year.

MRKT MATRIX: TODAY’S TOP STORIES

• S&P 500 rises to start November, pushed higher by Amazon and other AI leaders (CNBC)

• OpenAI strikes $38bn computing deal with Amazon (FT)

• Microsoft Signs $9.7 Billion Deal With Data Center Firm IREN (Bloomberg)

• Trump Officials Torpedoed Nvidia’s Push to Export AI Chips to China (WSJ)

• The Double Bind of the AI Bubble Means We’re Screwed Whether the Tech Succeeds or Fails (Vanity Fair)

• Kimberly-Clark agrees to buy Tylenol owner Kenvue in $48.7 billion deal, creating consumer staples giant (CNBC)

• Third-quarter earnings are indicating a divided economy (CNBC)

• A Wave of US Layoffs Flash Early Warning Sign for Job Market (Bloomberg)

WHAT’S NEXT?

Moves in stocks like AMZN, AAPL, NVDA, MSFT and GOOGL continue to dictate the tape even days after their earnings reports (or in the case of NVDA, week’s before). It’s hard to overstate just how much their size alone moves the broader indices. Nvidia’s now a $5 trillion company, Apple close to $4, and Amazon’s closing in on $3 — so when these names swing 3–5% intraday or 10–12% on earnings, we’re talking about market cap changes in the hundreds of billions. NVDA was up about +4% at one point today, that’s a roughly $200 billion change in value, equal to or greater than the market cap of nearly 450 stocks in the S&P 500. NVDA’s 2% intraday swings today were a large reason for SPX’s nearly 1% range. When NVDA put in its high for the day then headed lower, the QQQ and SPY lost all their intraday momentum about 10 minutes later.

There’s been a lot of talk around concentration risk, with even passive investors effectively leveraged to the Mag7+, but I wanted to point out just how large an effect these names are having day to day, and intraday on the SPY and QQQ. META and MSFT’s weakness since earnings have largely been covered up by AMZN and NVDA’s strength. And that may partially explain why Vol still seems to have a slight bid even after most of these megas have reported. It goes without saying that if all of these stocks rolled over together, or decided to rip higher (in unison into or out of NVDA’s report), there’s a good argument that vol is still too cheap.

For tomorrow:

• Tuesday

  • Pre-market: UBER 6.5%, SHOP 10%, SPOT 9%, PFE 4%

  • Fed Speak: Bowman

  • 10am - JOLTS Job Opening

  • After-hours: AMD 8%, SMCI 11%

• The SPX expected move for the day is: 0.5%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: What Are We Euphoric About?

Dan and Guy look at euphoric levels of investor sentiment compared to the concentration of the rally (and the recent negative breadth). A look at the OpenAI Amazon AWS deal, the sheer size of these contracts and whether Open AI is for real on these numbers, or even too big to fail at this point. 

• Analysis - SPX, RSP, BTC, MSTR, COIN, AMZN, CRWV, PLTR, TLT, XHB, TOL, DHI, Gold, 

• Your Questions

  • Chris L - Where do you think is a good spot to lean into CMG?

Learn more about our sponsor, MoneyLion.

Watch RiskReversal Podcast’s newest episode: Is Tech’s Trillion Dollar Buildout Sustainable?

In this episode of the RiskReversal Podcast, hosts Guy Adami and Dan Nathan are joined by ⁠Dan Greenhaus⁠, the chief economist and strategist at ⁠Solus Alternative Asset Management⁠. Returning since his last appearance in July, Dan shares his consistently accurate market predictions, offering insights into the recent earnings season and the broader economic landscape. The discussion covers the impact of company-specific data versus macroeconomic data, consumer behavior, and the role of the Federal Reserve. They also analyze the AI-driven CapEx boom, its implications for various sectors, and how companies are financing this growth. The conversation culminates in reflections on inflation, politics, and the significant economic challenges and opportunities moving into the next year.

Learn more about our sponsor Fidelity, CME Group and iConnections.

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