STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo & Michael P. Reinking, CFA
Published on 10/30/26 (a/o 9:00 am)
Good morning and Happy Friday,
We’re getting a head start on the spookiness. Yesterday saw more rotation out of tech which pushed the S&P 500 down 0.3% but the equal-weight and Russell 2000 up 1%. Only 3 sectors were lower and it was basically all Tech (-7% for the sector) and anything adjacent to AI. Healthcare and Real Estate led the sectors, and six sectors were up over 1%. The main focus was on Google after its earnings showed a slowdown in Search revenue, igniting another round of fears of AI disruption. The stock fell 12% for its worst drop ever. It was far from the only tech name to get smoked- NOW, FTNT, MRVL were all came under significant pressure, as did stocks like CAT which have ridden the AI buildout wave.
There was a decent but not huge flight to Treasuries as yields fell 2-5bp. Crude ended around unchanged after the WSJ said Trump was briefed on new military plans against Iran. After the close yesterday it was AMZN’s turn in the Haunted House. Another Trick, at least in the stock’s reaction. Despite saying AWS would grow 40% in 2027 and 2028, the focus was on the $35B negative free cash flow. The stock is down ~7% in the pre-market, but that’s looking good compared to INTC and RDDT, down 20% after reporting. INTC’s personal computer business is weak, lining up with MSFT’s comments about the sector, though Data Center revenues looked solid. RDDT called out a sharp decline in search traffic, which pressured daily active user numbers. Overall, S&P futures are down 1% and Russell 2000 down 0.6% while Dow futures slip only 0.1%. Healthcare and consumer stocks make up most of the top gainers in the pre-market. Today’s weakness may erase this month’s 1% gain for the S&P by the close today. The equal-weight meanwhile is up ~6% and the Russell ~2% before today.
While tech sells off, geopolitical tensions mount and oil rises, treasury yields are largely unchanged but the US Dollar is weaker.
The Nikkei fell 2% but bounced off its lows, ending October down 5%. Tech was hit hard as expected: Kioxia, Tokyo Electron, Advantest, SoftBank all down >5%, as were mining & metals and electrical equipment producers. Defensive healthcare and consumer areas were largely higher. The BOJ held rates unchanged as expected while confirming that underlying inflation has, finally reached its 2% target. The bank will also increase the pace of its ETF sales, which was unexpected. South Korea fell over 3% (SK Hynix -7% locally, Samsung -3%), putting the October decline at 16%. China was mixed with the Hang Seng rising 1.5% (Banks, consumer, energy strong) while Shanghai fell over 1% and other indices were worse off (ChiNext -4%). For the month the Hong Kong and Shanghai fell ~5%. European indices are mixed. France and UK are flat to higher. Germany is down ~1% despite GDP beating estimates. Media, Food & Beverage and Healthcare are leading while Tech, Basic Resources and Banks are leading lower. The STOXX 600 was up 2% in October, with the DAX gained 2.5%.
Oil prices are back on the move higher again this morning adding to the eerie backdrop. ICE Brent is trading back near highs up ~2%. There continue to be issues in the Strait, Ukraine fired on a Russian refinery (so much for the ceasefire) and the press reports that the administration has been briefed on military options. Meanwhile, President Trump continues to say the situation will be over soon one way or the other. Exxon and Chevron are both trading modestly higher after reporting earnings. Not surprisingly the downstream strength (refining) drove the upside while upstream numbers were a little bit light (that’s a little bit of a brain teaser). European natural gas prices continue to move higher up ~5% today and ~10% WTD. US prices remain under pressure. Metals are in the red again adding to this week’s losses. Ag is also modestly lower. It’s been quite a night in crypto. Crypto exchange Binance was hacked with >$6B reportedly stolen the largest incident on record though half have that has reportedly been frozen on blockchain networks. The incident is being tied to North Korean hackers. The exchange has paused withdrawals which are expected to resume on Sunday. As hackers began selling tokens and news spread this set off a wave of liquidations. Yesterday Bitcoin tried to rally failing at its 50d ma ~82k before turning lower it traded below 77k overnight testing the 100d ~76k. Ethereum is also down ~2% testing its 200d ma ~2,160 overnight. In additional news, MicroStrategy (-7%) while reporting earnings announced that its CFO Andrew Kang had resigned for personal reasons but would remain as an advisor through the end of the year.
Earnings:
After-Market: AJG, AMZN, ATR, AX, BFAM, CDP, COIN, COLM, CUBE, CUZ, DLR, DXC, DXCM, EIX, EMN, ERIE, EXPO, FDXF, FMC, FND, FSLR, GDDY, GILD, GLPI, ILMN, INTC, IR, MDLZ, MHK, MMSI, MPWR, MTX, MTZ, OLN, PEB, PMT, RDDT, RMD, RSG, RYAN, SBUX, SKYW, SNDK, SNDR, SPSC, SPXC, SYK, TWLO, VLTO, WY
Pre-Market: ABBV, AN, AZN, BP, CBOE, CHD, CL, CPRI, CVX, D, EXC, FRT, GD, GTES, KRG, LEA, LYB, NVT, NWL, PIPR, REGN, SNY, VRTS, WT, XOM
Economic Data:
US:
We’re getting a head start on the spookiness. Yesterday saw more rotation out of tech which pushed the S&P 500 down 0.3% but the equal-weight and Russell 2000 up 1%. Only 3 sectors were lower and it was basically all Tech (-7% for the sector) and anything adjacent to AI. Healthcare and Real Estate led the sectors, and six sectors were up over 1%. The main focus was on Google after its earnings showed a slowdown in Search revenue, igniting another round of fears of AI disruption. The stock fell 12% for its worst drop ever. It was far from the only tech name to get smoked- NOW, FTNT, MRVL were all came under significant pressure, as did stocks like CAT which have ridden the AI buildout wave.
There was a decent but not huge flight to Treasuries as yields fell 2-5bp. Crude ended around unchanged after the WSJ said Trump was briefed on new military plans against Iran. After the close yesterday it was AMZN’s turn in the Haunted House. Another Trick, at least in the stock’s reaction. Despite saying AWS would grow 40% in 2027 and 2028, the focus was on the $35B negative free cash flow. The stock is down ~7% in the pre-market, but that’s looking good compared to INTC and RDDT, down 20% after reporting. INTC’s personal computer business is weak, lining up with MSFT’s comments about the sector, though Data Center revenues looked solid. RDDT called out a sharp decline in search traffic, which pressured daily active user numbers. Overall, S&P futures are down 1% and Russell 2000 down 0.6% while Dow futures slip only 0.1%. Healthcare and consumer stocks make up most of the top gainers in the pre-market. Today’s weakness may erase this month’s 1% gain for the S&P by the close today. The equal-weight meanwhile is up ~6% and the Russell ~2% before today.
While tech sells off, geopolitical tensions mount and oil rises, treasury yields are largely unchanged but the US Dollar is weaker.
- US 2yr +0bps to 4.61%, 5yr -1bps to 4.74%, 10yr -1bps to 4.93%, 30yr -1bps to 5.30%
- USD index: -$0.18 to $101.71
The Nikkei fell 2% but bounced off its lows, ending October down 5%. Tech was hit hard as expected: Kioxia, Tokyo Electron, Advantest, SoftBank all down >5%, as were mining & metals and electrical equipment producers. Defensive healthcare and consumer areas were largely higher. The BOJ held rates unchanged as expected while confirming that underlying inflation has, finally reached its 2% target. The bank will also increase the pace of its ETF sales, which was unexpected. South Korea fell over 3% (SK Hynix -7% locally, Samsung -3%), putting the October decline at 16%. China was mixed with the Hang Seng rising 1.5% (Banks, consumer, energy strong) while Shanghai fell over 1% and other indices were worse off (ChiNext -4%). For the month the Hong Kong and Shanghai fell ~5%. European indices are mixed. France and UK are flat to higher. Germany is down ~1% despite GDP beating estimates. Media, Food & Beverage and Healthcare are leading while Tech, Basic Resources and Banks are leading lower. The STOXX 600 was up 2% in October, with the DAX gained 2.5%.
Oil prices are back on the move higher again this morning adding to the eerie backdrop. ICE Brent is trading back near highs up ~2%. There continue to be issues in the Strait, Ukraine fired on a Russian refinery (so much for the ceasefire) and the press reports that the administration has been briefed on military options. Meanwhile, President Trump continues to say the situation will be over soon one way or the other. Exxon and Chevron are both trading modestly higher after reporting earnings. Not surprisingly the downstream strength (refining) drove the upside while upstream numbers were a little bit light (that’s a little bit of a brain teaser). European natural gas prices continue to move higher up ~5% today and ~10% WTD. US prices remain under pressure. Metals are in the red again adding to this week’s losses. Ag is also modestly lower. It’s been quite a night in crypto. Crypto exchange Binance was hacked with >$6B reportedly stolen the largest incident on record though half have that has reportedly been frozen on blockchain networks. The incident is being tied to North Korean hackers. The exchange has paused withdrawals which are expected to resume on Sunday. As hackers began selling tokens and news spread this set off a wave of liquidations. Yesterday Bitcoin tried to rally failing at its 50d ma ~82k before turning lower it traded below 77k overnight testing the 100d ~76k. Ethereum is also down ~2% testing its 200d ma ~2,160 overnight. In additional news, MicroStrategy (-7%) while reporting earnings announced that its CFO Andrew Kang had resigned for personal reasons but would remain as an advisor through the end of the year.
Earnings:
After-Market: AJG, AMZN, ATR, AX, BFAM, CDP, COIN, COLM, CUBE, CUZ, DLR, DXC, DXCM, EIX, EMN, ERIE, EXPO, FDXF, FMC, FND, FSLR, GDDY, GILD, GLPI, ILMN, INTC, IR, MDLZ, MHK, MMSI, MPWR, MTX, MTZ, OLN, PEB, PMT, RDDT, RMD, RSG, RYAN, SBUX, SKYW, SNDK, SNDR, SPSC, SPXC, SYK, TWLO, VLTO, WY
Pre-Market: ABBV, AN, AZN, BP, CBOE, CHD, CL, CPRI, CVX, D, EXC, FRT, GD, GTES, KRG, LEA, LYB, NVT, NWL, PIPR, REGN, SNY, VRTS, WT, XOM
Economic Data:
US:
- Q3 employee cost index q.q: 0.8% vs 0.8% cons, prior 0.9%
- Fed speakers: Barkin (9:45am), Daly (12pm), Musalem (12:30pm)
- 9:45am Chicago PMI
- 1:00pm Rig count
- BOJ rate decision: Hold as expected
- France Q3 GDP q.q: -0.1% vs 0.1% cons, prior 0.0%
- Germany Q3 GDP q.q: 0.2% vs 0.1% cons, prior 0.3%
- Europe Q3 GDP q.q: 0.4% vs 0.2% cons, prior 0.6%
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