Things You Need to Know
- The first trading day of November did not disappoint.
- Four major AI infrastructure deals hit before the opening bell — signaling we have moved deeper into the “Arms Race for Compute.”
- Stocks responded in kind — AMZN hit a new all-time high, NVDA surged, and data-center plays exploded higher.
- Bonds fell, oil and gold held steady.
- PLTR reports and crushes it – but the algo’s are not happy!
- Try the Baked Tagliolini
Well Good Morning America! Hold onto your hats! The first trading day of November (which is considered the BEST month of the year for stocks) did not disappoint the staff!
We got four major deals before the opening bell even rang — and each one just kept turning up the heat, raising the excitement in the room. It felt very Captain Kirk of the Starship Enterprise — “to boldly go where no man has gone before…”
Amazon (AMZN +4%, new all-time high) stole the spotlight — announcing a $38 billion, multi-year deal with OpenAI.
The agreement gives OpenAI access to hundreds of thousands of Nvidia (NVDA +2.2%) GPUs to train and run its models. This is frontier AI scale — it describes the level of compute, capital, data, and infrastructure required to train, run, and deploy those models — and it is orders of magnitude above what “normal AI” requires. It is models so large and complex that they require entire data-center grids and power-plant-level energy footprints to operate. This isn’t a ‘non-event’!
Then the fireworks continued:
IREN +12% announced a $9.7B deal with Microsoft to provide data-center capacity for cloud and AI compute.
Nvidia (NVDA) surged after MSFT got U.S. approval to ship chips to the UAE — specifically for the massive AI data centers being built throughout the Gulf region.
And Cipher Mining (CIFR +30%) signed a $5.5B, 15-year lease agreement with Amazon to provide turnkey data-center space and power for AI workloads — and just to add more spice – they reported blowout earnings on top of it.
And that caused anything tech to rally – the Nasdaq rose 110 pts the Mag 7 surged by 403 pts and that pulled the S&P up 12 pts….but what it did not do was take everything else with it….the Dow lost 226 pts, the Russel gave back 8 pts, the Transports lost 69 pts while the Equal Weight S&P gave back 22 pts….and there’s that divergence again…..reminding us that there’s plenty of churn beneath the surface and the rally that we are seeing is concentrated in the tech space –
Eco data was split – the S&P Manufacturing PMI came in at 52.5 (better then expected) while the ISM Manufacturing PMI came in at 48.7 (worse than expected) = remember 50 is the dividing line between expansion or contraction. So, if they are both manufacturing PMIs how come they are different? Well the S&P surveys global manufacturers while the ISM survey US manufacturers. Thus the S&P gives us a broader global supply chain peek while the ISM is focused on what is happening in the US supply chain.
The ISM is the one that really matters for FED policy and markets because it drives the US bond market reaction. If ISM is below 50 and staying there, it’s telling you U.S. manufacturing is contracting — and that has implications for growth, earnings, and rates.
And we saw bonds continue to sell off…the TLT lost 0.6% while the TLH lost 0.5% and that sent yields a bit higher…the 10-yr yield rose to 4.10% while the 30-yr yield rose to 4.68%. Now this morning – that story got flipped on its head- bonds are trading slightly higher and yields are back down to 4.08% and 4.66%.
Oil held steady yesterday closing unchanged…but this morning it is under pressure – down $1 or 1.6% as we see the dollar trade higher (think lower rate cut expectations) and the weak manufacturing PMI’s in both the US and Asia. The weakness is causing some traders to suggest weakening PMIs will force demand to also weaken!
Is someone trying to blow smoke up my …..? Come on! We discussed this – it is NOT demand at all – it is oversupply, a condition we know about…. How long have we been talking about this? Months! Recall – Friday, the Saudi’s announced that they would pause production increases starting in January to try and ‘manage’ the glut that is supposedly coming… Expectations are for oil to land in the $55 range – some even think that WTI will land in the high $40’s. So, stop the hysteria – demand is not waning…. Did you read the part up above about AI demand? (24/7/365) Where do you think that energy is coming from? Wind?
Gold continues to trade around the $4000 mark……as it searches for stability. Yesterday it did nothing – ending unchanged and this morning it is down $9 at $3,992. Like oil – a stronger dollar will put some pressure on gold as well….and this morning the dollar is up just a bit – but a look at the chart will reveal that the dollar has advanced by nearly 4% off the September low….and while it did nothing to halt Gold’s advanced into October – (because investors were focused more on trade policy, disruption and safety) – some of those concerns are no longer ‘top of mind’ – and you can thank Scotty and Jamie for that.
Look, the gold rally was tremendous, but the reasons for the move are starting to fade. With rate cuts no longer guaranteed and trade tensions calming, that safe-haven bid is losing steam — leaving us at a technical crossroads. If gold continues to churn right here – then the short term trendline will rise to meet it and then we will have support…but if it fails to hold here – then a test of that support which is now down at $3,845 would not surprise me.
US futures getting slapped….at 6 am – Dow futures are -335, S&P’s -67, the Nasdaq -331 and the Russell is -35.
After the bell – PLTR reported and by all accounts blew the windows out and the roof off the house….they could not have been better – beating on every metric by a substantial amount….EPS of 21 cts – double last year, Revenue climbed 63% to $1.8 billion, Commercial Revenues grew 121%, (double), gov’t revenue grew 52%.
Adjust operating income came in above consensus – and yet they sold it…and this morning it is down 6.5% or $13 on ‘valuation concerns’! Understand that it is up 170% ytd…. a 6% pullback is hardly anything to get worked up about – but here is the rub – if they start questioning valuations across the board – then yeah – we could see a pullback – why? Because valuations are STRETCHED…. again – how long have I been screaming that out loud?
Today brings another round of earnings…and already we have had 4 reports and all 4 have beaten on the top and bottom lines…SWK, IT, WAT, ADM…..we are waiting for at least another 20 names before the bell. After the bell – we will get another 18 names – and if the story holds – at least 83% of them will beat and offer robust guidance. In the tech space watch for AMD, SHOP, UBER, ANET and SPOT.
Today is also election day – and all eyes on the governor races in Virginia and NJ and the Mayor’s race in NYC…. The prediction markets have all 3 going to the Democrats and so it will be what it will be.
European markets are lower as well…. Germany down 1.4% while the UK is off by 0.8% – everyone else is somewhere in between. UK Finance Minister Rachel Reeves gave a pre-budget speech suggesting that the gov’t will have to make hard choices in the weeks ahead. Her formal speech is not until November 26th.
The S&P closed at 6,851 – up 11pts. It looks like the tone has changed from yesterday to today….expect the algo’s to create more chaos – it’s always worse on the way down…..because buyers will step aside to see just how anxious the sellers get…..I suspect that we might test 6775 ish….down about 1.1%….and if that fails to hold then the trendline would be the next logical stop…and that is at 6647….down 3% from here. Something that is not out of the question – if they get themselves all worked up. I don’t think it happens today – but I am not ruling it out over the next couple of days….remember – once they focus on a negative headline – then they ONLY focus on the negative headlines (until they don’t)….PLTR – absolutely crushed it – but NOW they want to focus on valuations and down we go!
Remember – we could trade down to 6172 (down 9.9%) and still be in a ‘normal trading pattern’…. It won’t feel normal, it will feel really uncomfortable – but it would be considered normal. Now while I do NOT think that is happening – I’m just making it clear that if the algo’s spin out of control – it could get ugly, quickly.
Bottom line: the bulls are still in control — but the ground is shifting just enough to keep everyone on their toes. Stay focused, stay disciplined, and don’t get sucked into the noise. Because in the end, discipline always beats drama.
Countdown
35 days into the Gov’t shutdown
25 days until Official Black Friday
51 days until Christmas
57 days until the ball drops in Times Square
Let’s review your plan. Call me for a complimentary, no-obligation portfolio analysis: 561-931-0190.
Take good care,
Sources: Bloomberg, CNBC, Reuters, Wall Street Journal
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The market commentary is the opinion of the author and is based on decades of industry and market experience; however, no guarantee is made or implied with respect to these opinions, which may not necessarily align with our firm’s standpoint.
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Baked Tagliolini with Béchamel, Peas & Pancetta
(Topped with Gruyère — golden, creamy, and pure comfort.)
This dish comes straight from the old trattorias of Emilia-Romagna, where cooks learned that a little béchamel could turn leftover pasta into a masterpiece. Think of it as Italy’s answer to macaroni and cheese — except silkier, saltier, and a whole lot more sophisticated. The sweet pop of peas, the salty bite of pancetta, and the nutty melt of Gruyère make this one irresistible.
For the béchamel: 4 tbsp unsalted butter, 4 tbsp all-purpose flour, 3 cups whole milk, warmed, s&p, a pinch of nutmeg.
For the pasta: 1 lb. tagliolini (or tagliatelle if you can’t find it), 1 cup fresh or frozen peas, 6 oz pancetta, diced (guanciale works too), ½ cup grated Parmigiano-Reggiano, 1½ cups grated Gruyère (or Fontina for a softer melt), olive oil, s&p.
In a saucepan, melt the butter over medium heat. Add the flour and whisk for 2–3 minutes until pale and foamy (you’re making a roux). Gradually whisk in the warm milk, stirring constantly until the sauce thickens — about 6–8 minutes.
Season with s&p and a pinch of nutmeg. Remove from heat and set aside.
In a skillet, heat the olive oil over medium heat. Add the pancetta and cook until crisp, about 5–7 minutes. Toss in the peas and cook another 2 minutes. Remove from heat.
Bring a large pot of salted water to a boil. Drop in the tagliolini and cook for just 2 minutes less than package directions — you want it very al dente, since it’ll finish in the oven. Drain and toss immediately with a splash of olive oil to prevent sticking.
In a large bowl, combine the béchamel, pasta, pancetta & peas, and ½ cup of Parmigiano. Season with a touch of black pepper and toss until the pasta is evenly coated and creamy.
Preheat the oven to 400°F.
Butter a large shallow baking dish. Pour in the pasta mixture, spreading it evenly. Top with the grated Gruyère (and a sprinkle of extra Parmigiano for good luck).
Bake uncovered for 20–25 minutes, until the top is golden and bubbling with little browned edges.
Let it rest for 5 minutes before serving — just enough time for the sauce to set and the aroma to fill the room.
Serve it in generous scoops, with a glass of white Burgundy or an earthy Pinot Noir.
KP Tip
If you want it extra luscious, whisk one egg yolk into the béchamel before folding in the pasta — it gives the sauce that velvety texture you only get in the best northern Italian kitchens.
Buon Appetito!