STRAIGHT FROM THE TRADING FLOOR
by Michael P. Reinking, CFA - Sr. Market Strategist
Published on 10/20/26 (a/o 1:00 pm)
DOW 52,469 (+503), S&P 500 7,721 (+30), Russell 2000 2,771 (+43), NYSE FANG+ 18,809 (-67), ICE Brent Crude $108.93/barrel (-$0.62), Gold $4,139/oz (-$21), Bitcoin ~82.7k (+747)
MAC Desk Commentary:
After a rough week tech bounced modestly yesterday helped by some positive analyst commentary. However, there wasn’t a lot of conviction in the trading or arguably much of the research as most of the ratings increases were accompanied by significant PT cuts. The S&P 500 rose 0.4%, but the rest of the market didn’t fare as well as the equal-weight S&P fell 0.3%.  7 of 11 sectors ended in the red with yield-oriented sectors, REITs/Utes, both falling over 1% as yields were up >5bps across the curve. Consumer discretionary led to the upside with the mega-cap components driving the strength.

It was a tepid start to the day ahead of the opening tip to the NBA season. It's banner night at MSG where the World Champion New York Knicks will begin their title defense against a revamped 76ers team. Overnight tech was back under pressure after a South Korean data center IPO flopped, like the newest member of that 76ers team. S&P futures were down ~0.5% at the morning lows but started to bounce ahead of the open as oil prices and yields began to pullback from overnight highs.  The flow of earnings has started to pick up, and the street will be drinking through a fire hose of reports in short order. As has been the case recently there has been a lot of volatility around those reports which isn’t always congruent to the results. Equities were hovering around unchanged until headlines suggesting that back-channel negotiations in the Middle East were progressing sent oil prices sharply lower. However, shortly thereafter an unnamed Diplomat has done his own Mark Twain impersonation saying that the reports of a deal being close were greatly exaggerated. ICE Brent has traded in a $6 range, between $106 - $112, currently down ~1% in the middle of that range. Equities have pulled back from the intraday high but are stilling holding on to solid gains with breadth improving again. The S&P 500 is up ~0.4% though tech is still lagging. The equal weight is up ~1% while small caps are outperforming.
Treasuries have been moving along with oil prices. Yields are modestly lower with some flattening of the curve. The ADP weekly employment growth slowed from last week. The US Dollar Index is continuing to pull back from its highs over 102.50 last week currently down ~0.25% testing its 20d ma. DP weekly employment pulled back to 18.5k from 24.75k last week. The rest of the data was housing related and not surprisingly doesn’t paint a particularly encouraging picture. Housing starts fell more than expected while permits were about in line. Pending home sales fell sharply in September down 7.3% m/m and 11.3% y/y as mortgage rates surged.  

  • US 2yr +1bps to 4.79%, 5yr -1bps to 4.94%, 10yr -2bps to 5.13%, 30yr -3bps to 5.44%
  • USD index: -$0.23 to $101.56
Within the S&P 500 8 of 11 sectors are higher and the adv:dec ratio is nearly 4:1. Healthcare is leading to the upside with broad-based strength. The largest components are up between 2 %- 5%. REITs and Utilities are both up >1% recouping some of yesterday’s losses as rates pullback. Financials are also broadly higher up ~1%. On the earnings front KEY and ALLY are both modestly higher after solid numbers. MSCI results and the rotational flows are helping the financial data analytics companies. Consumer discretionary is also up nearly 1%. Auto-related are under pressure despite strong numbers from General Motors after management highlighted a challenging 2027 outlook. Housing and travel-related stocks are outperforming. Industrials are hovering around unchanged with a mixed response to earnings. EFX, MMM and NOC are some of the upside standouts. Airlines are outperforming on the oil pullback while AI/energy infrastructure stocks underperform. 
Tech heavy indices in Asia were under pressure overnight. South Korea dropped almost 4% with the memory names leading to the downside. AI cloud provider Elice fell more than 30% in its South Korean debut- the most recent in a string of negative capital market developments for AI / data centers globally. The Nikkei fell over 1% overnight with financials lagging. Softbank sold off 6% as credit pressures remain front-and-center with the company’s CDSs spread hit its highest in ~4 years. It’s also reportedly in discussions with OpenAI on a $30B fundraising round.  A 20y JGB auction was strong with a record bid:cover and Bloomberg domestic purchases of JGBs in Japan’s fiscal 1H reached their highest total in 17 years. China was mixed with Hang Seng lower, Shanghai higher. LPRs were left unchanged as expected. European indices traded lower overnight but recouped a good portion of those losses after US market opened. Industrials, miners, tech and financials lagged while Healthcare, Food/Beverage and Utilities outperformed similar to the US. European officials are looking into potential government interventions to address soaring energy prices. German PPI was hotter than expected and rose from last month. The ZEW reading for the Current Situation was better than expected improving from last month. UK unemployment unexpectedly fell with hiring better than expected which sent local 2yr yields higher as expectations for a November hike increased.
Oil prices are modestly lower as are natural gas prices in both the US/EU.  Precious metals have reversed overnight losses but are off the best levels. A story in the FT said Japan has reached critical levels of rare earths supply as China maintains strict export controls. Bitcoin and Ether also reversed overnight losses. Bitcoin continues to hold just above its 50d ma. BMNR announced its ETH holdings reached 6.04M tokens, or 4.9% of total supply, right below the goal of 5%, when the company plans to stop accumulating the asset.
Quickly looking ahead earnings will be the focal point tomorrow. SpaceX results are out this evening will set the tone for the tech trade tomorrow followed by a big evening of reports tomorrow after the close including: IBM, LRCX, META, SAP, TSLA and TXN. Overnight there will be some global inflation data. The only data in the US is mortgage apps.

Earnings:
  • After-Market: ADC, ALK, CB, COF, EWBC, HWC, ISRG, LRN, NFLX, NLY, OZK, PEGA, SPCX, UAL, WFRD
  • Pre-Market: ABT, BKU, CME, DHR, ELV, IART, LAD, MCO, MHO, NEE, NTRS, ONB, PM, SF, T, TMO, UNF, WAB, WGO
  • After-Market: BANR, BBT, CACI, CCI, CSX, EGP, FAF, FULT, GGG, GL, GTY, HXL, IBM, KALU, KNX, LBRT, LUV, LVS, LRCX, MEDP, META, MOH, OII, PKG, PNFP, ROL, RS, SAP, SLG, SON, TCBI, TSLA, TXN, URI, WDFC, WH

Economic Data:
US:
  • ADP weekly Employment: 18.5K vs prior 24.75K
  • Housing Starts: 1.221M vs 1.30M cons, prior 1.288M
  • Building permits: 1.4M vs 1.39M cons, prior 1.403M
  • Pending Home Sales: -7.3% m.m: -0.5% cons, prior 0.3% 
Global:
  • Taiwan Export orders y.y: 62.4% vs 58.7% cons, prior 71.4%
  • China: 1/5y LPR: unchanged as expected
  • Germany PPI m.m: 1.9% vs 0.8% cons, prior 1.1%
  • Germany ZEW sentiment: 28.1 vs 30.0 cons, prior 34.7
  • Current situation: -35.9 vs -45.0 cons, prior -47.1
  • EU ZEW sentiment: 18.5 vs 23.6 cons, prior 25.8
  • Current situation: -14.8 vs prior -13.9
  • UK unemployment: 4.7% vs 4.9% cons, prior 4.9%
STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo - Market Strategist
Published on 10/20/26 (a/o 9:00 am)
Good morning and Happy Knicks Championship Banner Raising Day,
 
While we wait for the NBA champions to begin their title defense and raise their banner to the MSG rafters tonight, S&P futures are down 0.2% but moving off the overnight lows. The pressure on tech continues- a poor Korean IPO the latest example- as does the flood of earnings results. CoreWeave is down another 3% in the pre-market, after an early session bounce yesterday disappeared by day’s end. Most of the AI ecosystem is also lower this morning, but trying to move higher approaching the open. Among earnings reporters, GM, GPC, CCK, STLD and GE are down 4-7% in the pre-market. EFX, MSCI (AI-disruption plays) are up ~5%. Defense contractors RTX and NOC are slightly higher.  SpaceX reports tonight after providing the Street with only a few days notice, versus the standard ~2 weeks.
 

 
The S&P 500 rose 0.4% yesterday as tech rebounded from Friday’s weakness, but the rest of the market didn’t fare as well. The equal-weight S&P declined, 7/11 sectors ended in the red and the Russell 2000 was higher but lagged. Consumer Discretionary (AMZN, TSLA +4-5%) and Tech led while Utilities and Real Estate were the weakest as Treasury yields rose ~5bp across the curve. 
 
The treasury curve is flatter today with 2y yields around unchanged while 10/30y falls ~3bp. The US Dollar Index is moving lower, continuing to pull back from its highs over 102.50 last week. Housing starts fell from last month and missed expectations, but permits were slightly higher and about inline. ADP weekly employment growth slowed from last week. After
 
  • US 2yr -0bps to 4.77%, 5yr -2bps to 4.93%, 10yr -3bps to 5.11%, 30yr -4bps to 5.43%
  • USD index: -$0.22 to $101.57
South Korea dropped almost 4% with the memory names under pressure. AI cloud provider Elice fell more than 30% in its South Korean debut- another in a string of negative capital market developments for AI / data centers globally. Most of Asia traded down along with the KOSPI. The Nikkei fell over 1% overnight with miners and financials lagging and Softbank getting hit for 6%. Credit pressures remain front-and-center as the company’s CDSs spread hit its highest in ~4 years. It’s also reportedly in discussions with OpenAI on a $30B fundraising round.  A 20y JGB auction was strong with a record bid:cover and Bloomberg domestic purchases of JGBs in Japan’s fiscal 1H reached their highest total in 17 years. China was mixed with Hang Seng lower, Shanghai higher. LPRs were left unchanged as expected. European indices are mostly lower. Industrials (ABB -6%), miners, tech and financials are lagging while Healthcare, Food/Beverage and Utilities lead. European officials are looking into potential government interventions to address soaring energy prices. German PPI was hotter than expected and rose from last month but the ZEW reading for the Current Situation was better than expected and improved from the last survey. UK unemployment unexpectedly fell with hiring better than expected.
 

 
Crude is up modestly but off its highs with Houthi strikes in Saudi Arabia continuing, while various talks between numerous groups to reach an agreement between the US and Iran are taking place. US natural gas is lower on mild weather forecasts while European gas is higher as storage remains below the 5-year average and Russia struck Ukraine facilities. Precious metals are modestly lower despite the Dollar weakening. A story in the FT said Japan has reached critical levels of rare earths supply as China maintains strict export controls. Bitcoin and Ether are lower. BMNR announced its ETH holdings reached 6.04M tokens, or 4.9% of total supply, right below the goal of 5%, when the company plans to stop accumulating the asset.   
 

 
 
Earnings:
  • After-Market (Mon): CCK, FNB, RLI, STLD, WAL, WRB, ZION
  • Pre-Market: ABB, ALLY, CBSH, EFX, GE, GM, GPC, HAL, HAS, KEY, MMM, MSCI, NOC, RTX, SYF, VICR, VMI
  • After-Market: ADC, ALK, CB, COF, EWBC, HWC, ISRG, LRN, NFLX, NLY, OZK, PEGA, SPCX, UAL, WFRD
Economic Data:
 
US:
  • ADP weekly Employment: 18.5K vs prior 24.75K
  • Housing Starts: 1.221M vs 1.30M cons, prior 1.288M
  • Building permits: 1.4M vs 1.39M cons, prior 1.403M
  • 10:00am Pending Home Sales m.m: -0.5% cons, prior 0.3%
  • 4:30pm API crude inventories
Global:
  • Taiwan Export orders y.y: 62.4% vs 58.7% cons, prior 71.4%
  • China: 1/5y LPR: unchanged as expected
  • Germany PPI m.m: 1.9% vs 0.8% cons, prior 1.1%
  • Germany ZEW sentiment: 28.1 vs 30.0 cons, prior 34.7
    • Current situation: -35.9 vs -45.0 cons, prior -47.1
  • EU ZEW sentiment: 18.5 vs 23.6 cons, prior 25.8
  • Current situation: -14.8 vs prior -13.9
  • UK unemployment: 4.7% vs 4.9% cons, prior 4.9%

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