STRAIGHT FROM THE TRADING FLOOR
by Michael P. Reinking, CFA-  Sr. Market Strategist
Published on 11/10/26 (a/o 1:30 pm)
DOW 52,112 (-277), S&P 500 7,494 (-56), Russell 2000 2,812 (-29), NYSE FANG+ 17,147 (-212), ICE Brent Crude $91.41/barrel (-$1.16), Gold $4,038/oz (-$76), Bitcoin ~73.4k (-1520)
MAC Desk Commentary:
Yesterday the S&P 500 shrugged off a 5% decline in NVDA and the biggest espionage news since the Patriots spygate, gaining over 2%. Equity strength was very broad as the equal-weight was inline and Russell 2000 outperformed, climbing over 3%. Every sector was higher, led by the AI ecosystem and cyclicals as Consumer Discretionary, Industrials and Tech sectors paced gainers. Oil continued to fall, helping sentiment. This along with the post-election selloff and tech bludgeoning last week left many stocks in oversold territory helping to fuel the bounce. The Dollar weakened as well, while yields were mixed.

S&P futures were around unchanged trading in a tight range ahead of this morning’s CPI data. Equity futures moved a little lower as yields ticked up early this morning after Fed governor Waller provided some CPI foreshadowing, along with the most specific commentary around monetary policy in some time at a Bank of England event. Waller said he would support a 25bp hike in December and potentially a 50bp increase if today’s CPI was at 0.3% or above. He added the Fed probably needs to reverse the 3 insurance cuts from last year at a minimum and that hiking only 25bp in this cycle risks losing credibility. Which brings us to…

Core CPI hit Waller’s 0.3% threshold and futures immediately sold off while yields and the dollar shot higher. Consensus was expecting core to rise 0.2%, and the 0.3% this month was inline with last month. Headline rose 0.4% versus a 0.3% expectation and 0.6% last month as Energy prices fell while Food prices rose 0.5% versus September, the biggest monthly increase since December of last year. There were no annual readings due to last year’s shutdown. After the open, Fed Logan followed up Waller’s hawkish commentary saying she believed that at least two more hikes were necessary and that more rapid hikes might be necessary this winter.

2yr yields jumped a quick 10bps on the data and have continued to move higher throughout the session up ~20bps. There was some flattening of the curve ahead of this afternoon’s 10yr auction which tailed by 1bps. The long end is up ~10bps and has moved lower by a couple of basis points post auction. The USD index has reversed all of yesterday’s pullback trading back near recent highs >$102. Probabilities for a potential 50bps hike in December have jumped to low double digits from 0%, but this more likely puts a January hike on the table. If we hadn't had Waller’s comments this morning the Treasury market reaction would have likely  been more muted, maybe the Chair is on to something.

  • US 2yr +17bps to 4.75%, 5yr +14bps to 4.82%, 10yr +11bps to 5.00%, 30yr +8bps to 5.37%
  • USD index: +$0.62 to $102.15

S&P futures were down ~0.6% ahead of the opening bell. The index has drifted a little bit lower since the open but considering yesterday’s rally and the move in yields the pullback is pretty well contained. Beneath the surface there is some rotation again with tech moving lower throughout the session while the equal weight is off session lows only down ~0.25%. The Russell 2k is underperforming down ~1%.
Nvidia and Anthropic are the two main talking points within the tech complex. Nvidia remains under pressure as more details get surfaced in the press with one report suggesting that Alice Huang helped to facilitate the shipment of >$7.5B of Nvidia chips to Chinese companies since 2023. There are also reports that there is building momentum in Washington to push for more export controls.

Anthropic’s IPO remains on track for next week but the company added some more drama to the situation yesterday, reportedly sending out an inaccurate offering document to bankers before filing an updated S-1 this morning. The company is looking to raise ~$90B which would include ~$26B to cornerstone investors, a familiar list of the whose who in the tech industry (mostly suppliers). This would put the valuation in the range of $1-1.4T. Most of the other details were consistent with what has been reported in the press. The FT ran a story after the open saying that as the roadshow kicks off Goldman has estimated that revenue will exceed $600B in 2030, nearly 2X SpaceX, Amazon revs are estimated to be ~$830B this year for reference. 2030 is also the year the cp cash flow positive. Those headlines caused a brief tick up in the tape before the drift lower began.

Within the S&P 500 tech is the clear standout to the downside. Comm services are also down nearly 1% with weakness in media and the mega-cap stocks. The move in Treasuries is putting pressure on housing and auto related stocks. Within consumer discretionary this is being offset by strength within travel names. Consumer staples and financials are leading on the upside. Within the latter there is pretty broad based strength with insurance stocks leading the way while banks are also modestly higher. Credit card companies remain under pressure with chatter around interest rate caps making the rounds again. Crypto related companies are down >3% with crypto under pressure as well. 
Oil was trading lower again this morning after President Trump reiterated that renewed strikes on Iran are “quite unlikely” and called the talks with Qatar’s prime minister “excellent”. There’s been some reporting on a preliminary agreement on nuclear concessions, control of the SOH and frozen assets. However, Rubio said Iran’s demands were “unacceptable” and Iran said meeting those demands is the only way to end the conflict, so you try to make heads or tails of that. ICE Brent traded down to ~$89 at the lows testing its 100d ma before bouncing back to ~$92. Precious metals were modestly lower and accelerated to the downside after this morning’s data giving up all of yesterday’s gains and then some. Corn and Soy moved sharply higher after this afternoon’s WASDE report.  Crypto under pressure again. Bitcoin is down ~2% holding just above its 200d ma ~73k. Ethereum broke that technical level over the weekend and continues to underperform. 
Japan’s Nikkei followed up yesterday’s 2% bounce with another 2% gain overnight. South Korea didn’t take part in yesterday’s rally but joined today as the KOSPI jumped ~4%. Chinese equities saw more modest gains. China’s October trade surplus was lower than expected but surpasses $1 trillion for the second straight year. European indices ended with modest gains but off the best levels. 
Tomorrow is Veteran’s Day so bond markets will be closed though we’ll still be here. It will be a light day of economic data and earnings. Coreweave, which is at the center of the AI financing concerns, reports after the close.

Earnings:
  • After-Market (Tues): ALC, AZTA, BGS, BV, CRWV, ENS, FOSL, GO, MRCY, PBR, PETS, REZI, RGTI, SONO, STUB
  •  Pre-Market: BYD, FLNG
  • After-Market: CTVA, DGII, TTEK, VYLR
Economic Data:
US:
  • CPI m.m: 0.4% vs 0.3%, prior 0.6%
  • Core: 0.3% vs 0.2% cons, prior 0.3%
  • NFIB Business Optimism Index: 97.8 vs 97.7 cons, prior 97.9
  •   ADP weekly employment: 19.75k vs prior 16.75K
Global:
  • China Trade Balance: $105.3B vs $125.8B cons, prior $133.53B
  • Exports y.y: 35.2% vs 33.5% cons, prior 36.3%
  • Imports: 41.6% vs 32.0% cons, prior 31.0%
  • France Unemployment: 8.2% vs 8.4% cons, prior 8.3%

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