Stock Market Today

Foreign buyers weren’t interested in Monday’s 2-year Treasury auction, where indirect bidders (which include foreign buyers) fell to the lowest since November 2021 as direct (domestic) bidders took a record share. They were more so, though, in today’s $70 billion 5-year auction, the second of this week’s three coupon auctions (more than one year in maturity). That lead to better overall demand, even more so compared with September’s historically bad auction, even as the end result was the 12th straight tail (yield above expectations) for this maturity.

Looking at the specifics:

-The sale cleared at 4.845%, down from 5.033% in September (the first 5%-plus for this maturity since 2007), and tailed by +0.4 basis points. That was a big improvement from +3.1 basis points in September, the second-largest in Bloomberg data back to 2018, and better than the six-month average of +0.9 basis points. But it was still the 12th straight tail (the last auction that didn’t tail was October 2025, which priced “on the screws”) and the 17th straight auction without a stop-through (the last was May 2025).

-Overall demand (bid/cover) rose to 2.33 from 2.21 in September (the lowest since December 2018), slightly better than the six-month average of 2.31.

-Indirect bidders (which include foreign buyers) recovered to 60.0% from 54.3% in September (the lowest since March 2020), but stayed below the six-month average of 64.0%.

-Direct (domestic) bidders took 29.4%, down slightly from 29.9% in September (the highest since December 2025), but well above the six-month average of 23.1%.

-That left dealers with 10.6%, the lowest since August, down from 15.8% in September (the most since May 2024) and better than the six-month average of 13.0%.

Overall, it was clearly not a great auction given the tail, but it was better than Monday’s 2-year and much, much better than last month’s auction.

Note: the tail panel (top) currently starts in February 2026, since the when-issued yields for earlier auctions are still being compiled. I’ll update the chart once they’re in.

Israelis are voting today in what many on both sides call the most consequential election in the country’s history. It’s the first since the Oct. 7, 2023, Hamas attack and the wars in Gaza, Lebanon and Iran that followed, and turnout is running at the fastest pace in nearly half a century, per Reuters.

The choice is stark. Prime Minister Benjamin Netanyahu, Israel’s longest-serving leader, is running on his record against Hamas, Hezbollah and Iran, backed by an endorsement from President Trump, and says only he can keep the country safe. His main challenger, former military chief Gadi Eisenkot, is campaigning on accountability for Oct. 7, per the FT. That includes a state inquiry that Netanyahu’s coalition has resisted, reversing parts of the judicial overhaul and ending the military-service exemption for ultra-Orthodox men. On security, though, the gap is narrower. Both oppose a Palestinian state, and Eisenkot has pledged to end Hamas’s rule in Gaza within 18 months, per the WSJ.

What the vote probably won’t deliver quickly is a government. Final polls had Eisenkot’s bloc at about 54 seats and Netanyahu’s coalition at about 50, both short of the 61 needed for a majority in the 120-seat Knesset, with Arab and unaligned parties holding the rest, per the FT. Both camps have pledged not to rely on the Arab parties. The final count is expected by Friday, with official results on Nov. 4. President Isaac Herzog will then designate a candidate, who gets up to 42 days to build a coalition, per Al Jazeera. If that fails, the process can pass to another candidate and then to parliament before new elections are called. That sequence produced four inconclusive elections between 2019 and 2021. Netanyahu would remain caretaker prime minister throughout, leaving him free to act on his pledge to resume the war with Iran, Bloomberg notes. Herzog has said he’ll try to avoid a repeat, raising the prospect that he pushes for a national unity government, per the FT.

Prediction markets lean toward change: Polymarket bettors gave Eisenkot about a 60% chance of becoming prime minister and Netanyahu 27%. As Brazil showed on Sunday, though, they can be quite wrong.

For markets, some investors see a prolonged deadlock as a bigger risk than either outcome, per Reuters. Tel Aviv stocks are up about 130% since Oct. 7, 2023, versus about 80% for Wall Street, and roughly 12% this year. The shekel has gained about 25% since then, though both stocks and the shekel are down about 10% since May. In past elections, Tel Aviv volatility rose as much as 45% in the weeks after the vote, but initial losses were usually recovered within a month, per Tel Aviv Stock Exchange research.

According to ADP’s NER Pulse, private employers added 67,000 jobs, or 16,750 a week, in the four weeks ending October 10, a second week of slowing and the fewest since the period ending August 29. It also revised the prior week down to 70,000 from 74,000.

The four-week moving average of those totals also fell for a second week, to 85,500, the lowest since the period ending September 19. That’s down from a peak of 93,750 in the four weeks ending September 26.

The pace remains healthy, though. At roughly 72,600 a month, it’s above most recent estimates of breakeven job growth, the pace needed to hold the unemployment rate steady. The Federal Reserve Board puts that at “less than 10,000 new jobs per month in 2026,” and the St. Louis Fed estimates a range of 15,000 to 87,000.

ADP’s next report will be its monthly report November 4th.

I’ve mentioned in the Week Ahead some who have been particularly prescient about market moves the past couple of years, including Deutsche Bank, Citadel’s Scott Rubner, and Ed Yardeni. Another has been HSBC’s Max Kettner, who, like the others, has turned away from his “Max Bullish” call, downgrading global equities to a neutral rating.

Kettner on Monday cut global equities to tactically neutral from maximum overweight and moved developed-market government bonds all the way to overweight from maximum underweight, positions he had held since mid-March, according to Investing.com and Bloomberg. He said bond underperformance has become stretched and that the market mood has swung from cheering records three weeks earlier to mourning the end of the AI trade. “Given the constant narrative bingo we just can’t have the same level of conviction any longer,” he wrote.

He flagged potential AI regulation if the Nov. 3 midterms produce a Democratic sweep and renewed Middle East tensions as the near-term risks, per Reuters. HSBC also cut gold to overweight and raised oil to an outright overweight, according to ZeroHedge. Kettner still prefers the equal-weight S&P 500 over the Nasdaq 100, expects near-term dips to be buying opportunities, more so for equities than credit, and remains bullish into 2027.

This is a downgrade to “buy the dip,” not a bear call he said.

Kettner’s Track Record

Source: Bloomberg

As you can see Kettner’s been more right than wrong the past few years. Bloomberg’s chart shows Kettner heavily overweight stocks for most of the past three years. In 2025, he cut U.S. stocks to neutral on March 10 (Fast Company) and to underweight on March 25 (Investing.com). The S&P 500 then fell about 14% to its April 8 low, although when he upgraded back to overweight on June 11 (Investing.com), the index was about 4% above where he had gone underweight.

This year, he went maximum overweight in mid-March, a bit before the S&P 500 bottomed on March 30th after a 9.1% drop from its January high (Opening Bell Daily). He called the first proper buy signal since Liberation Day about a week after that low (InvestingLive), and the index went on to gain 23.3% to the Oct. 6 record. His maximum underweight in sovereigns also paid off.

It’s a full slate of economic data and earnings as the Fed starts its two-day meeting.

September US economic reports include durable goods orders and new home sales. October reports include Conference Board consumer confidence and the Richmond Fed manufacturing and Dallas Fed services surveys. For August, we get the S&P Cotality Case-Shiller and FHFA home price indexes. We’ll also get the weekly ADP NER Pulse.

The FOMC begins its two-day meeting, with the decision Wednesday at 2pm ET.

Non-Bill (>1yr in maturity) US Treasury auctions are $70B of 5-year notes. Treasury will also conduct a buyback of 20- to 30-year securities.

41 S&P 500 components report, six of them with market caps over $100bn:

• Before the open: Coca-Cola (KO), Boeing (BA), S&P Global (SPGI), HCA Healthcare (HCA), Freeport-McMoRan (FCX), American Tower (AMT), Johnson Controls (JCI), UPS (UPS), Sherwin-Williams (SHW), Ecolab (ECL), Hilton (HLT), Illinois Tool Works (ITW), Royal Caribbean (RCL), Paccar (PCAR), PayPal (PYPL), IQVIA (IQV), CenterPoint Energy (CNP), Xylem (XYL), Hubbell (HUBB), CMS Energy (CMS), Invesco (IVZ) and Pentair (PNR)
• After the close: Visa (V), Seagate Technology (STX), Waste Management (WM), Robinhood (HOOD), Oneok (OKE), NXP Semiconductors (NXPI), Baker Hughes (BKR), Ventas (VTR), EQT (EQT), Arch Capital (ACGL), Extra Space Storage (EXR), FirstEnergy (FE), F5 (FFIV), PPG Industries (PPG), Expand Energy (EXE), Essex Property Trust (ESS), CoStar Group (CSGP), Universal Health Services (UHS) and BXP (BXP)

Outside the US, Novartis (NVS) and Porsche (DRPRY) have reported, followed by SK Hynix (SKHY) tonight.

Ex-US highlights include China September industrial profits, South Korea Q3 GDP, France October consumer confidence, Eurozone September M3 and the ECB’s Q3 Bank Lending Survey. Israel also holds parliamentary elections.

From Christophe Barraud’s international Week Ahead rundown: