Volume

– NYSE volume 23% below its one-month average 

– NASDAQ volume 15% above its one-month average 

– VIX index: up 7.43% to 20.09

Breadth

S&P 500 Sectors

% Movers

Heat Maps

Position: None

The following is from Peter Boockvar:

The breadth & reach of The Bank of Nvidia/Other tech news, consumer too/Williams wants another hike

As we now try to figure out what the fate of the Bank of Nvidia will be, let alone their core business with new leadership, this was a thorough piece from Bethany McLean laying out the extent of its financing reach. I mentioned yesterday the $99 billion of equity investments as of Q2 along with the other vendor financing and lease obligations but this goes much deeper into detail.

https://hntrbrk.com/investigations/nvidia

The other AI related news of note yesterday was the results from Nebius whose stock fell 17% after rallying by 15% on Wednesday in response to the CoreWeave earnings report. From their earnings call:

The positive case, “Demand is strong. Our customers are committing to us for longer, at higher prices, and they are paying more upfront. Prices keep rising. Q3 agreements closed above $25 million per megawatt, another step up from the $20 million to $25 million per megawatt we achieved in Q2. Our customer agreements are getting larger in size.”

And the make up of their contracts, “we sell on three horizons, and we choose the best mix between the three. First is on spot and short-term at a premium price. Another is one to three year contracts, and this is our core business. And a limited number of five year agreements that diversify our contracts, tenures, and further help us to finance our build out. The second and third are covered by prepayments.” And those prepayments “now cover more than 100% of the capital needed to bring this contracted capacity online.”

But, “Building at this scale is hard, and delays are part of our industry right now. We are not immune. For example, some of our co-location sites, including New Jersey, are behind schedule. Customers have been kept informed, and none of that capacity is canceled. Some of it has shifted to 2027. This means that a portion of this year’s planned revenue moves into the start of next year. But with our own sites, we remain on track and even ahead of schedule.” As a result, “For 2026 we are seeing some third party capacity shifts into the second quarter of 2027. We now expect revenue of $3 billion to $3.2 billion compared with our previous range of $3 billion to $3.4 billion.”

Also hitting the stock, “CapEx for 2026 is now expected to be around $27 billion, up from $20 billion to $25 billion previously.”

From Cisco and whose stock is down premarket as order growth rates outside of Asia Pacific moderated:

“Our strong start to fiscal year ‘27 demonstrates the criticality of networking and security together as agentic AI accelerates.”…We believe we are still early in the networking super cycle driven by AI deployments with enterprise adoption just beginning.”

Maybe why the stock is down, to an analyst question “it looks like we had a little bit of a sequential downtick in AI orders taken from microscales in the quarter. I know the industry is somewhat lumpy and not linear. Can you maybe talk to kind of how you’re seeing that develop as the year progresses and characterize the depth of your conversations.”

The answer from Chuck Robbins, the CEO, “So, while I don’t expect there’s normal linearity in this business at all, I think you’re right, it’s going to be lumpy. And there’s going to be some quarters that are going to be big, others that are going to be smaller.”

A company benefiting from the data center buildout has been Legence, as they “specialize in designing, fabricating and installing HVAC, process piping and other mechanical, electrical, and plumbing systems for new facilities” along with upgrading existing facilities. From their call yesterday:

“We also expect solid growth in data center activity, including in regions such as Northern Virginia, where certain tighter regulatory conditions have actually been in place starting in early 2026…Opportunities in the region extend several years out, and that pipeline remains significant. While the DMV (DC, Maryland and VA) is a substantial region for us, we also serve data center clients nationwide, shipping fabricated products across multiple regions and supporting clients wherever they choose to build. Conversations with our data center customers post-election indicate a continuation of their plans to build.”

They have other customers too, “Now beyond data centers, we expect the semiconductor and memory chip market to be quite robust going forward. Our other end markets, such as life science, education and state and local governments, provide diversification and exposure to other target rich clients that have historically delivered solid growth.”

Shifting gears to retail and the consumer, this was a call from last week but one I always find helpful to go through. From Simon Property, the largest mall operator in the country and who owns the Short Hills Mall that I just gave some money too this week:

“Traffic growth accelerated in the third quarter, furthering a trend we have seen throughout 2026. Sales productivity is a record levels for each of our platforms, underscoring the health of the retailers in our centers and the quality of our real estate.”

“Tenant demand remains widespread from established national and international brands to emerging fast growing concepts.”

On what they are seeing with the pace of customer spend, “it is very broad based. It is across platforms, across geographies, across categories that we have seen growth…And it’s the same story that we talked about in the second quarter, athleisure, juniors, brands, luxury, watches, jewelry. One thing that is a nice story is we had actually the best quarter in three years in the restaurants in the third quarter which that business has obviously been sort of flattish, I guess I would say.”

“And so, we really haven’t seen any slowdown in October traffic, in line with the third quarter in sort of that mid 3% growth range. And so, what we’re hearing from the retailers is optimism for the holiday season, which as you know, is our Super Bowl, our time to shine.”

On the high end of consumer spend, Richemont reported today and its stock is down 4.5% in Switzerland as jewelry sales were just below the estimate. From them:

“in the first half, group sales grew by 17% at constant exchange rates with broad based strength across business areas and regions. This included a remarkable 19% growth at the Jewelry Maisons, a robust double digit rise at specialist watchmakers, and a solid high single digit performance at the other business area, which includes fashion and accessories Maisons.”

“In addition, most regions posted double digit growth, led by Japan, the Americas, and Asia Pacific. Impacted by the ongoing conflict in the region, sales in the Middle East and Africa experienced a modest decline overall.”

NY Fed president John Williams is joining some of his colleagues in expressing the need for more rate hikes. “Inflation is far too high and it continues to be high even in the latest data. We’ll need to take actions over time that will ensure that we get inflation back to our 2% goal in a timely manner on a sustained basis…I feel that the data is speaking very clearly to us, the economy is strong, labor market continues to strengthen and inflation is persistent. We still have work to do in terms of getting monetary policy to the right place.”

I will be definitely wrong about the December rate increase, assuming the situation then holds vs today, but I still believe the pace of the AI CapEx and its influence on the stock market is going to be a big Fed topic next year and will limit the pace of 2027 hikes, because how can it not be?

I have an annual eye exam at 11 a.m. ET this morning.

I will be back at noon.

Positions: None.

The following is from Peter Boockvar:

PPI stats, hot but we’ll take in line

Including the revision to September, the October PPI stats were right in line with expectations with a .3% headline and core increase from 1.4% and .8% respectively in the month before. The y/o/y gains are 6.5% and 5%, running about 250 bps above consumer price inflation. After a 10% spike in September, energy prices were flat m/o/m, though up 37% y/o/y. Food prices were up another 1.3% m/o/m and by 1.7% y/o/y. We know energy prices have moderated since but core inflation still running hot.

Core goods prices (ex food/energy) rose .5% m/o/m and 5.2% y/o/y led by organic chemical pricing which jumped by 3.9%.

Service prices were up .2% m/o/m and 5% y/o/y with a big jump in ‘truck transportation of freight’, up 3.9% in the month, by 25% y/o/y and something I’ve been pointing out for a while now. Prices for ‘air transportation of freight’ were flat for a 2nd month but up 6.3% y/o/y. Prices were up too in ‘health/beauty/optical goods retailing along with ‘hospital outpatient care’ and ‘traveler accommodation services.’ Prices fell of note in margins for machinery/vehicle wholesaling, down 4.2% m/o/m and in ‘system software publishing’ and ‘airline passenger services’ (in contrast to what was seen in CPI).

While PPI is still running red hot, the Treasury market will take ‘in line with estimates’ and yields are down a few bps in response. Inflation breakevens are flat today, while up between 2-5 bps this week depending on maturity, though remaining benign highlighting again that most of the interest rate rise has been REAL. The TIPS market just doesn’t believe that the current inflation will last much longer and maybe due to a market that still wants to fade higher oil prices.

I’ll argue again, the complete inflation picture must include producer prices as only analyzing consumer prices in light of the robust wholesale price inflation is missing the margin squeeze some businesses are facing that don’t have pricing power.

Headline PPI y/o/y

Core PPI y/o/y

Adding to GLD and TLT.

Positions: Long GLD M TLT M

I am now long (small) GLD at $355.75. (Low conviction)

Positions: Long GLD S

I purchased  a non trivial amount of TLT at $79.39.

Positions: Long TLT M

Upside

– MRLN +40% (Q3 revenue rose 80% year over year, while new U.S. special-operations and autonomous-CASEVAC awards strengthened the defense pipeline)

– MOD +38% (Samsung reportedly in talks to acquire the data-center cooling supplier, with a potential deal possible within weeks)

– SLSN +32% (Q3 revenue grew 38% and the company swung to record net income)

– VTSI +31% (Q3 bookings jumped 87% sequentially, backlog reached $27.6M and a new CBP contract carries up to $14M of value)

– LFTO +27% (Q3 came well above prior guidance as revenue grew 32% and adjusted EBITDA margin expanded to 61%)

– NMAX +20% (record underlying revenue and a second consecutive quarter of positive adjusted EBITDA)

– HAWK +12% (revenue surged 84%, backlog reached $300M and FY revenue and EBITDA guidance was raised)

– CBRS +11% (Q3 beat, 2026 outlook raised and a new Microsoft partnership announced)

– SLS +5.8% (Q3 update says the Phase 3 REGAL AML primary-endpoint readout is due this month while Phase 2 SLS009 enrollment reached 40 patients)

– NU +4.7% (record profit, customer growth and improved efficiency outweighed a modest revenue miss)

– ENVX +3.0% (record gross margin, debt retirement and a 2027 revenue outlook implying 75%–128% growth)

– PANW +2.6% (KeyBanc upgrades to Overweight, citing accelerating security budgets through 2027)

– NVDA +1.6% (rebounds as investors reassess the leadership fallout and reports show growing support for Huang to return)

– TSLA +1.0% (reportedly advancing merger talks with SpaceX, with a potential deal targeted by December)

Downside

– NPCE -41% (Q3 revenue missed and FY revenue guidance was cut to $91M–$92M from $99.5M–$101.5M)

– CADL -32% (wider Q3 loss, prostate-cancer BLA timing pushed toward mid-2027 and a new $50M ATM programme)

– VIR -15% ($150M public offering priced at $10 per share)

– YSS -12% (Q3 sales missed and fell 7% as the adjusted EBITDA loss widened and a large goodwill impairment hit results)

– FLO -8.0% (Q3 missed on earnings and revenue and full-year guidance was lowered)

– SPCE -7.6% (new $250M ATM programme announced alongside the Q3 update)

– KEP -7.0% (Q3 operating profit fell 71% and missed consensus sharply as fuel and purchased-power costs surged)

– CSCO -3.4% (quarter beat and FY guidance rose, but sharp product-margin compression and elevated expectations drove a sell-the-news reversal)

– COIN -2.6%, MSTR -2.2%, IREN -1.2% (crypto-linked stocks fall as Bitcoin slides nearly 5%)

– AMD -2.4%, AVGO -2.1% (chip rivals give back part of Thursday’s Nvidia-succession rally as investors reassess durable market-share benefits)

– MSFT -1.2% (global Microsoft 365 outage continues to disrupt Outlook, Teams and Copilot)

Source: https://pro.thestreet.com/markets/stocks/premarket

Source: https://pro.thestreet.com/markets/etfs/premarket

Source: Tip Ranks

I continue to view financials/banks as a benefit of market rotation (possibly away from technology).

* Financials, on average, are about  25% off of their 52 week highs. 

* Valuations are now reasonable.

* Major money center banks and brokers have spent massive amounts on technology – a lot of which is already “sunken costs. This provides the “best in class” and largest banks (as first adopters to AI) to be differentiated against the broad universe of smaller sized banks (who will not be able to catch up and compete). 

* As I see it, the yield curve will be normalizing – benefiting net interest margins and income.

* The slowdown in AI spend (which I anticipate) should elongate the domestic economic cycle – improving the credit outlook and asset growth.  

* An improving equity augurs well for capital market activity.

* Finally, while the unrealized losses on their investment portfolio is underwater – the likelihood that interest rates may have peaked augurs well for that line item to appreciate in the time ahead. 

Positions: Long MS M GS S BAC M C M WFC S

9:10 a.m.: Fed Bank of Boston President Collins (Non-Voter) gives opening remarks before the “Residential Realities: Understanding Challenges and Considering Solutions in the U.S. Housing Market” 70th Economic Conference hosted by the Federal Reserve Bank of Boston, Boston, MA (Embargoed text available. No Q&A. Livestream at https://www.youtube.com/@BostonFed/streams; and at 

10:35 a.m.: Fed Bank of Boston President Collins (Non-Voter)  participates in live interview with Bloomberg Television; 

9:40 a.m.: Fed Bank of Dallas President Logan (Voter) gives opening remarks before the Bank Funding Conference 2026: “Bank Funding in the Age of Instant Finance” at the Federal Reserve Bank of Dallas, Dallas, TX (Text and livestream available. No audience Q&A); 

10:50 a.m.: Fed Vice Chair for Supervision Bowman (Voter) participates virtually in “Supervision and Regulation” discussion before the Connecticut Bankers Association Annual Meeting and Conference 2026, Washington, DC ( No text. Q&A from moderator and audience. Livestream available, details forthcoming); 

12:00 p.m.: Fed Bank of San Francisco President Mary Daly (Non-Voter) participates in moderated discussion before the University of Nevada, Las Vegas Center for Business and Economic Research (CBER) Forecast event, Las Vegas, NV (No prepared remarks. Livestream and in-person attendance details forthcoming. No group media interview); 

7:00 p.m.: Fed Vice Chair Jefferson (Voter) speaks on “New Technology, Old Questions: Assessing Productivity Puzzles and Their Implications for Macroeconomic Activity” before the University of California San Diego Economics Roundtable. (Text available. Audience Q&A expected); 

https://www.cfasociety.org/sandiego/events/eventdescription?CalendarEventKey=02350250-0739-478a-a213-01a0c45bdea0&CommunityKey=4307dcbb-c44e-4e8d-888a-0185e47c07a0&Home=%2Fcommunities%2Fcommunity-home%2Fmanage-events

The S&P Short Range Oscillator shifted to an oversold at -1.26% vs. 1.03%.

I have no index positions.

Position: None

* It’s been a good week for China hawks

* As the plot thickens…

I have now written 280 columns on Nvidia (NVDA) (in my “More Tales” series) covering a broad list of concerns including Nvidia’s aggressive revenue/profit recognition, roundtripping, double/triple ordering, circular financing, the efficacy of AI (and contribution to society), whether the AI capital spending spree would yield an adequate return on the invested capital (and net productivity gains), deals with China, etc.

I even coined the phrase Central Bank of Nvidia (now routinely used by CNBC but without attribution!), which described the wide-ranging global influence of the company and of Jensen Huang.

The Most Powerful Banker in the World? The Central Bank of Nvidia

The newest allegation that Jensen Huang has been having an extended affair with a Chinese spy raises the ante as it could be a national security issue.

With a change in Washington leadership, scrutiny of Huang’s multi-dimensional relationships to others (including President Trump’s inner circle and leadership) will likely commence. There will be numerous questions about the Jensen Huang situation and the Administration’s oversight and protocol — including but not restricted to:

* It is believed that Secretary of State Marco Rubio knew about the relationship for over a year.

*  Was President Trump informed of the relationship?

*  Despite the supposed existential war between China and the U.S. regarding the AI race, after knowledge of the affair with a possible Chinese spy why was Jensen Huang invited on a state visit to China — on Air Force 1?

*  Why did Commerce Secretary Lutnick ignore the relationship and look the other way?

*  Was there a coverup and, if so, why — and did anyone benefit?

*  Was the breakdown in our government’s reporting of the relationship willful and intentional?

*  According to AI and industry reports Jensen’s Huang’s paramour worked at Megaspeed, a Singapore-based company that is an empty storefront with only 2-10 employees. 

It seems to me that as soon as Secretary Rubio got the information and had reason to believe she was a spy, President Trump, the Congress, the Intelligence Committee and others (including Jensen Huang) should have been informed. Who knew and when?

Did Secretary Rubio (who apparently has his eyes on the Republican Presidential nomination) sit on the information? If he did, why? 

This week, President Trump has said he knew nothing about the spy. When did he find out and more importantly, what did he do with the information? 

Did the president just want to hang out with Huang or did anyone in Trump’s sphere benefit from Nvidia and the company’s relationship to China? (There is precedent).

Position: None