STRAIGHT FROM THE TRADING FLOOR
by Michael P. Reinking, CFA- Sr. Market Strategist
Published on 11/03/26 (a/o 12:30 pm)
DOW 51,735 (-249), S&P 500 7,576 (+35), Russell 2000 2,827 (+21), NYSE FANG+ 17,505 (+187), ICE Brent Crude $103.60/barrel (-$1.17), Gold $3,940/oz (-$30), Bitcoin ~77.6k (+899)
MAC Desk Commentary:
The S&P 500 ended the first day of the new month down 0.4% despite being up ~1% earlier in the day. Once again the weakness was focused on Tech as the equal-weight rose 0.8% and Russell 2000 was up 0.2%. 7/11 sectors were higher and only Energy and Tech saw significant sector declines. Oil was slammed on the latest news of Middle East diplomacy, down 8%, and rates fell modestly across the curve. Tech capital raising continued to feed a bearish narrative, with Oracle announcing a $20B raise split between equity and debt. Anthropic updated their S-1 with Q3 numbers and spending commitments for the next 12 months and by YE 2030 ($70B and $450B respectively).

S&P futures moved modestly lower overnight with weakness in Apple and Palantir after they reported earnings last night though both stocks are well off their overnight lows. Overnight oil prices were also reversing some of yesterday’s pullback after the US launched a limited strike on Iran’s Qeshm Island. The administration said there were no plans to escalate, and JD Vance expressed optimism for a negotiated settlement. As Americans headed to the polls there were some positive headlines related to negotiations which sent oil prices lower ahead of the open. However, a couple hours later Iranian officials threw some cold water on this again. There are lingering questions as to how the outcome of today’s elections could impact the geopolitical landscape. Aside from the legislative races there are numerous local ballot measures and implications for data center construction across the country that could impact this whole AI story. There is a rebound in that trade todaywith semis, memory, neoclouds and the infrastructure stocks all rallying. Oracle (+5%) completed its $20B capital raise half of which was equity which priced at ~11% discount to Friday’s close before the announcement. Major US indices opened around unchanged and have moved modestly higher throughout the morning. As we head to print, the S&P 500 is up 37pts to 7,578 (+0.5%), the Dow is down 236pts to 51,748 (-0.5%), while the Russell 2k is up 21pts to 2,827 (+0.8%).
Within the S&P 500 4 of 11 sectors are higher as we’re seeing some rotation back into the AI trade. Info tech and Industrials are leading to the upside up just >1%. Apple (-2%) reported after the close and while posting a solid quarter, management noted growth would have been even better if not for supply constraints, while memory costs were a headwind for margins and guidance. PLTR (-2%) is also lower after strong results overall, with weakness from a slowdown in the Commercial business. Within industrials electrical equipment and E&C companies exposed to the datacenter buildout are leading to the upside. Eaton (+5%) also put up solid earnings helping the sentiment. Building products companies exposed to housing are underperforming. Within consumer discretionary homebuilders are also moving lower after a couple of sell-side downgrades and PT cuts following the recent rally. Aptiv sold off after its earnings which is weighing on auto components companies as well. Shopify is also down >5% after its results disappointed.

Consumer staples, which have been outperforming recently, are leading to the downside with broad weakness across food/beverage stocks following earnings (SYY, ADM, KDP). Clorox is outperforming after its results and strength in health/wellness line. Financials are modestly lower with alternative asset managers underperforming following APO earnings. Broadly there is weakness in payment processors and credit card companies though Fiserv (+>10%) is rallying after its results were better than feared. Materials are also down ~1.5% with weakness across packaging, chemicals and mining.  
Late yesterday the Treasury released its Q4 financing estimates. It expects to borrow $618B in Q4, $10B lower than the August estimate despite the starting balance being $34B higher. 1Q27 borrowing is expected to be $800B, up 38% year-over-year. $150B of that is to build Treasury’s cash balance to $1T. Excluding that extra $150B, borrowing would still be up 12% year-over-year. On Wednesday Treasury will release the composition of its borrowing. Dealers don’t expect any changes to the upcoming issuance schedule but there could be hints that note/bond auction sizes will be reduced next year. There has been a little bit of volatility in Treasury markets with yields at the long end starting to move higher.  The US Dollar Index is hovering around unchanged. JOLTS jumped to 7.52ml from an upwardly revised 7.19ml. Layoffs and Discharges as a percentage of total nonfarm employees remained very low hovering just over 1%.  Factory orders came in ahead of estimates as well up 1.8% (vs. 1.2%).        

  • US 2yr +2bps to 4.63%, 5yr +4bps to 4.76%, 10yr +4bps to 4.96%, 30yr +4bps to 5.33%
  • USD index: +$0.07 to $101.69       
 ICE Brent traded down modestly trading in the middle of the overnight range down ~1% (Range ~$101 - $107). European gas is down ~3% adding to yesterday’s losses. Precious metals were lower overnight reversing all of yesterday’s gains, rallied back to unchanged on the initial Iran news but have pulled back again since. Ag is modestly lower. Bitcoin and Ether are up about 1%.
Japan was closed for a holiday. Australia’s central bank raised its policy rate as expected but noted that upside risks to inflation are not as obvious as in prior meetings, and three voters dissented against the hike. China was mixed with Hang Seng higher and Shanghai lower. The FT reported China has asked investment banks to pause IPOs until market conditions improve. That follows efforts to improve liquidity across markets. Foreign reserve requirements were increased as well as Beijing tries to cool the yuan’s strength. South Korea dropped over 3% with the memory makers lower. European indices ended modestly lower in a choppy session.  A preliminary deal between the UK and EU on food and agriculture trade requirements has reportedly been reached- part of the emerging Brexit reset.  
Election results will be the focus tomorrow, hopefully they are decisive, and we’ll get to see if this is the clearing event that everyone has been hoping for. Earnings will continue to flow in but will begin to slow down decisively over the next week. The Treasury Refunding announcement is out ahead of the open along with the ADP employment report followed by ISM services after the bell.

Earnings:
  • After-Market (Tues): AIG, AMD, AMGN, ANET, ASH, BKNG, IFF, JELD, JKHY, MOD, MOS, MTDR, PRIM, PRU, SMCI, SWKS, TOST, TREE, XYZ
  • Pre-Market: BMW, CDW, COR, CRCL, CRL, CVS, DDOG, EMR, FLUT, GWW, KHC, MCD, MLM, NOVO, NYT, OC, PODD, Q, SWK, UBER, W, YOU
  • After-Market: AFL, ALB, ALL, AMC, AMCR, APA, APP, ARM, BIO, BROS, CAVA, CF, COHR, COTY, CPAY, CW, ELF, ES, EW, EXPE, FICO, FIG, FSLY, GNK, GNL, GT, HUBS, ITT, LUMN, MCK, MET, MSI, PAYC, PTC, QCOM, QGEN, RCUS, SNAP, TPL, WOLF, WTS, WU, ZG
Economic Data:
US:
  • LMI Logistics Managers Index: 70.7 vs prior 70.2
  • JOLTS: 7.523ml vs. 7.1ml cons., prior revised to 7.19ml from 7.079ml
  • Factory Orders: 1.8% vs. 1.2% cons., prior revised to 0.3% from 0.1%
Global:
  • Australia rate decision: Raise 25bp as expected
  • Korea CPI m.m / y.y: 0.2% / 2.8% vs 0.3% / 2.9% cons, prior 0.3% / 2.9%
  • Mexico Business Confidence: 48.4 vs prior 48.1

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