MARKET WRAP

So much for yesterday’s bounce. As we mentioned, yesterday saw some late day selling that muddied a pretty good session. After a non eventful open today, sellers showed up almost immediately. Stocks hit intraday lows midday before another attempt at a bounce, but that one fizzled as well. SPY is now down about -3% from last week’s intraday highs, while the QQQs are -4%. NVDA is lower by about -10% just this week. On the day: SPX -1.1%, QQQ -1.9% and IWM -1.9%.

Elsewhere, the US10YY reversed yesterday’s move, now back below 4.10%. Most of that happened after a uptick in layoffs in the Challenger numbers. That actually increased the odds of a Dec rate cut, now back to about 70%. Gold was fairly quiet. Oil as well. Bitcoin was lower, once again testing 100k. The VIX got over 20 midday before closing 19.50.

Notable Gainers: IBM +1.9%, MRK +1.5%, DDOG +23%, AZN +3.2%, MRVL +1.5%

Notable Losers: DASH -17%, PAYC -11%, HOOD -10%, COIN -7%, AMD -6.4%, MSTR -6.5%, CRM -5.1%, AMZN -2.5%, NVDA -3.5%, NVO -4.2%, PLTR -6.8%

After Hours: TTD is -3.5% on earnings, adding to about the same move lower during the session. Recent meme stock OPEN is down about -9% after hours after a similar down move into the print. DKNG is lower by about -3%. TTWO is -7% on a delay of Grand Theft Auto next’s release.

Today’s MRKT Call: Liz, Guy, and Dan break down this week’s market weakness, digging into the AI trade, stretched valuations, rising volatility, and what’s behind the pullback in NVDA, AMZN, Bitcoin and more.

MRKT MATRIX: TODAY’S TOP STORIES

• Dow slides 400 points as AI stocks resume their decline, Nasdaq falls 2% (CNBC)

• Stocks making the biggest moves midday: Brighthouse Financial, Duolingo, Datadog, Snap & more (CNBC)

• US Companies Announce Most October Job Cuts in Over 20 Years (Bloomberg)

• Homebuilders Bet on 1% Mortgage Rates to Wake Up US Buyers (Bloomberg)

• Builders Are Offering Mortgage-Rate Discounts. Home Buyers Aren’t Biting. (WSJ)

• Flight-Cancellation Plans Prompt Scramble Across Travel Industry (WSJ)

• Why Thanksgiving turkey prices might give shoppers a shock this season (CNBC)

• Lilly, Novo to Lower Obesity Drug Prices in Deal With Trump (Bloomberg)

• Sam Altman says OpenAI will top $20 billion in annualized revenue this year, hundreds of billions by 2030 (CNBC)

• Ford Considers Scrapping Electric Version of F-150 Truck(WSJ)

WHAT’S NEXT?

Volatility picked up once again today, with the VIX moving above 20 midday before closing around 19.50. We’ve been noting that with the majority of the Mag7+ names now through earnings (NVDA and AVGO still to come), the risk to the market rises of them moving together rather in different directions — and that played out today. All but GOOGL closed in the red today, dragging QQQ down nearly -2%.

For most of the late stages of this rally, we’ve seen a baton-passing dynamic — e.g. AMZN or NVDA strength offsetting MSFT or META weakness day to day or week to week — but that may be changing. That puts potential pressure on the indices as some profit taking or hedging now spills over from a name by name basis into the indices themselves. That is likely to keep a bid on implied vol, and add to day to day actual vol in a time period we would have more typically seen stocks begin to calm down into the holidays. The same is true for when the market eventually bounces, as the megacaps could exacerbate that move as well. Either way, vol could have a difficult time pricing a convergence of the AI trade.

For tomorrow, no NFP of course, but we do hear more Fed Speak as well as a Prelim UofM Consumer Sentiment.

Friday, November 6th

• Fed Speak: Miran, Williams, Jefferson

• Pre-market: CEG 5.5%, WEN 6%

• 10am - UoM Consumer Sentiment (53.2)

Tomorrow is one of the largest daily expected moves we’ve seen in some time, so traders are pricing this week getting even uglier, a sharp bounce, or maybe even both:

SPX expected move: 0.8%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: The AI Stock Slam Continues

Liz joins Guy and Dan to discuss this week’s market weakness, focusing on software, semis, and the broader AI trade. They take a closer look at NVDA and AMZN and consider how much further they could fall before finding support. The conversation also covers historically high valuation metrics like the Shiller and Buffett indicators, the recent uptick in intraday equity volatility, and some theories behind Bitcoin’s pullback.

• SoFi Weekly Report - Intraday equity ranges have been expanding while treasury volatility has been contracting. A look at warnings signs from Asia. 

• Analysis - SPX, SPY, QQQ, BTC, MSFT, CRM, IGV, NVDA, AMD

Learn more about our sponsors, SoFi and FactSet.

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