Position: None

Closing Volume

– NYSE volume 3% below its one-month average 

– NASDAQ volume 1% below its one-month average 

– VIX index:  down 4.79% to 17.51

Breadth

S&P 500 Sectors

% Movers

Heat Maps

Position: None

I added to Apple (AAPL) short at $347.16

Position: Short AAPL (S)

At $770.77, I moved to medium-sized short SPY.

Position: Short SPY (M)

*  This week I warned that it was ‘too much too fast’…

I further reduced my staples exposure recently — today we are seeing a lot more pressure on consumer non-durables ((PG) -$1,  (PEP) -$3, (KMB) -$1 and (KO) -$1.25 (I warned about a sell off after the guide up).

From last week:

Staples Slammed

Staples (consumer non-durables) are getting hit over the last few hours.

A reminder, I am down to VS on KMB, PG and KO.

I sold out my entire PEP holdings.

I would be a buyer of the space on weakness — but not at current prices.

Position: Long KMB (VS), PG (VS), KO (VS)

Position: LONG KMB (VS), PG (VS) KO (VS)

Wolf Street howls about rising home inventories and lower home prices:

“What the ‘Housing Shortage’ of New Single-Family Homes Looks Like: Ballooning Inventories, Falling Prices, So-So Sales“

Positions: None

Curaleaf (CURLF) has been on a mission to acquire Aurora Cannabis (ACB).

Aurora is uninterested and it looks like it might fend off Curaleaf: “Aurora Cannabis Reaffirms Recommendation to Shareholders: REJECT Curaleaf’s Revised Hostile Bid; Preserve Opportunities for Future Upside.”

The short interest in CURLF is up by 57% in the last month to about 1.08 million shares.

Should Curaleaf abandon the proposed acquisition and if cannabis rescheduling goes through, we might see an outsized rise in Curaleaf’s shares as shorts seek to cover.

I have recently added to CURLF based on the above.

Positions: Long CURLF (S)

I am re-shorting (GRNY) at $27.55.

Positions: Short GRNY (S)

From PJM:

Apple has a new product release for touch screen macs tomorrow and has been releasing new products the last few days Ipad MIni etc. Earnings are coming up Nov. 2nd and sometimes Apple moves up into earnings. Apple is at the high end of its traditional valuation but there is a lot of positive sentiment around the new products and the new CEO most likely will be quite enthusiastic on the conference call about robust demand for the DUO etc. Pipeline of new products and product categories in 27 and 28 looks to dramatically expand from the Cook days under Ternus. That being said Apple with 5 trillion+ market cap has a lot of good news baked into the current stock price but the new products coming out in 27 & 28 could lead to further market share and stock price gains.

Positions: Short AAPL (S)

Source: TheStreet Pro

Earnings After the Close, October 27:

Earnings Before the Open, October 28:

Here are today’s things:

* I reshorted the indices: (SPY) $768.24 and (QQQ) $721.05.

* Added to Apple (AAPL) short $345.08.

Positions: Short SPY (M), QQQ (VS), AAPL (M)

I have initiated a QQQ short at $720.02 and I have added to my SPY short at $769.56.

Position: Short SPY (M), QQQ (VS)

With S&P cash +42 handles I am shorting more SPY at $769.23 and I have moved to medium sized.

Positions: Short SPY M 

– NYSE volume 14% below its one-month average; 

– Nasdaq volume 3% below its one-month average; 

– VIX index: down 3.48% to 17.75

Breadth

SOURCE: Interactive Brokers

S&P SECTOR ETFs

SOURCE: Interactive Brokers

% GAINERS, DECLINERS

SOURCE: TheStreet Pro

Nasdaq 100 and S&P500 Heat Maps

SOURCE TheFly

Tech (XLK) vs Financials (XLF) at 9:48 a.m.

The following is fro Peter Boockvar:

Just a few things of note

I’ll be out all morning so won’t be able to comment on the flood of data, though none is market moving.

At the end of the day, we know the entire AI infrastructure ecosystem is so dependent on Anthropic and OpenAI and at least we are a step closer to seeing and forecasting the financial state of them. In coming years though, it will not just be the US customers/subscribers they need to capture, it is competition for them around the world where open source/weight will be an intense challenger.

This was an interesting chart in yesterday’s FT which highlights the extent to which some companies have lower bond yields than the countries in which they are domiciled.

On the opposite end of the credit curve is of course the lower rated companies and capturing some of that is the LSTA leveraged loan index which closed yesterday at the lowest level since right after the Middle East conflict began at just $.9425 on the dollar. That’s below the ‘Liberation Day’ lows. The CCC credit spread is nearing 1300 bps at 1273 bps, the highest since the Covid shutdowns.

LSTA Leveraged Loan index

Bloomberg CCC Credit Spread index

What was interesting in the Verizon earnings call were the comments on the upcoming competition with SpaceX:

“Clearly, the tech and the wireless landscape is rapidly evolving, and we need to rapidly evolve along with that. I’m pushing hard on everyone so that we can shape the market and not react to it.”

“I also operate under the assumption that everything SpaceX says they will do, they will do, and that they will execute flawlessly…I think we should take it quite seriously. And from what we see and what we hear in the market because there are no secrets in the market, we know exactly what they’re going to do…It’s going to cost hundreds and hundreds of billions of dollars. I assume somewhere between $300 billion and $.5 trillion over the next, like, seven or eight years.”

From the Whirlpool earnings press release and trading down premarket:

“Excluding currency, net sales decreased 8.2% y/o/y driven by soft industry demand.”

“Announced price increase of 7% effective in Q4, supported by product innovation.”

From the Celestica press release, the original equipment manufacturer making many things going into the data centers and trading up premarket after good numbers:

“Celestica is well positioned to continue to support leading hyperscalers and frontier AI labs through the ongoing AI infrastructure supercycle. The demand environment continues to be very robust, supporting our 2027 revenue outlook, with customer demand forecasts meaningfully higher for 2028.”

In yesterday’s Dallas Fed’s manufacturing index for October which rose to 13.4 from 9.8 as the manufacturing recovery continues, here were some notable respondent comments:

Beverage and tobacco product manufacturing

·      We continue to see pressure on profitability. We are profitable, but barely. The challenge is the increase in costs we are paying for our raw materials. The increase in diesel costs is the justification we are being told from our suppliers. Being able to give our employees year-end raises to keep up with inflation will be a further pressure on profitability.

Computer and electronic product manufacturing

·      Higher interest rates affect our industry in a big way.

Fabricated metal product manufacturing

·      Some product mix changes, but overall we’re forecasting a fairly positive picture over the next 6 months.

Food manufacturing

·      Geopolitics, labor issues and recession/inflation worries.

Machinery manufacturing

·      Business is strong, with many new existing projects ramping up, and we’re continually receiving new business opportunities.

·      Activity is up and down; right now we are up.

·      The data center bubble will burst soon, but a viable business model underlies it that will survive, just on a smaller scale. The creative destruction of the free-market system will prevail.

Nonmetallic mineral product manufacturing

·      It’s difficult to find manual labor workers right now. We are hopeful the political climate will change in November and things overall will get better.

Printing and related support activities

·      Data centers spending money on flimsy steel and HVAC systems does not make the economy robust. Rates should come down for those of us that have to support the system in the long term.

·      We are getting to be really slow and low on work which concerns me greatly. Many of our competitors were slow this summer when we were busy with large projects we have done for many years in a row during the summer months. Now it’s our turn I guess to be slow.

Transportation equipment manufacturing

·      Fuel pricing and the cost of domestic product increasing are dramatically tempering a recovery in the freight market.

·      Outlook plans will depend on the midterm outcomes and the Fed’s interest rate action.

I added to my SPY short at $768.29.

Positions: Short SPY S

Upside

– MFIC +23% (ARCC agrees to acquire it for $10.88 per share in cash and stock, valuing the transaction at about $2.6B)

– INIO +14% (record Q3 results and FY26 revenue and EBITDA outlooks were raised)

– CLS +12% (Q3 beat, FY26 outlook raised and initial 2027 guidance called for 90% revenue growth on accelerating AI-infrastructure demand)

– SOFI +11% (record Q3 revenue and EBITDA, strong member growth and a raised FY26 outlook)

– FER +9.9% (no clear fresh catalyst identified; unusually large, liquid move ahead of 9M results after the U.S. close)

– RCL +5.3% (Q3 beat, bookings remained strong and the full-year profit outlook was raised)

– CRDO +4.3%, SKHY +3.2%, COHR +2.7%, AMKR +3.6%, LITE +2.6%, AVGO +2.9% (AI-chip and optical-connectivity names rise as the CLS outlook reinforces accelerating hyperscaler demand)

– JCI +4.3% (Q4 beat and the FY27 profit outlook topped expectations)

– SPGI +3.8% (FY26 outlook raised and a strategic review of Capital IQ businesses was launched)

– NBIS +3.7%, BE +3.3%, CRWV +3.6%, VRT +2.2% (AI-infrastructure names gain after CLS said customer demand forecasts continue strengthening into 2027 and 2028)

– NCLH +2.2%, CCL +2.7% (cruise peers rise after RCL beat expectations and raised its full-year profit outlook)

– CDNS +1.8% (Q3 beat, FY outlook raised, backlog reached a record $8.2B and a $2.5B buyback was added)

– UPS +1.8% (Q3 beat and FY26 revenue and profit forecasts were raised as shipment mix and cost reductions improved)

Downside

– XYL -8.5% (Q3 update disappointed, with investors focusing on softer revenue expectations)

– WSO -8.3% (Q3 profit missed expectations)

– HSBC -6.7% (Q3 revenue and pretax profit missed expectations, outweighing a new $1B buyback)

– HLT -4.4% (Q3 earnings beat, but revenue missed and the raised RevPAR outlook was not enough for elevated expectations)

– SHW -3.8% (Q3 results and outlook disappointed as housing-linked demand remained soft)

– ONON -3.3% (no clear fresh catalyst identified; unusually large, high-volume premarket decline)

– MAR -2.0% (hotel peer slips in sympathy with HLT after its revenue miss)

Source: TheStreet Pro

Source: TheStreet Pro

Source: TheStreet Pro

Could Democrats Crash This Market? – by Quoth the Raven

Positions: None

Coca-Cola (KO), an investment long, beat and raised this morning.

Here is the press release: 

Coca-Cola Reports Third Quarter 2026 Results and Raises Full Year Guidance :: The Coca-Cola Company (KO)

I have been reducing the weighting of KO on the recent strength, which seemed to have discounted the strong fundamentals in a near all-time share price high.

Position: Long KO (VS)

At $767.82.

Position: Short SPY (VS) 

I shorted more Apple (AAPL) in the premarket.

Position: Short AAPL (S)

The S&P Short Range Oscillator moved a bit more overbought to 0.80% vs. 0.48%.

I traded (very small) SPY and QQQ on the short side last night (when S&P futures rose by +15 handles and Nasdaq was +130 handles) and took a very small gain on the cover, as I enjoyed and marveled at the Milwaukee Brewers World Series win in game three. 

Position: None