Bulls, Bears, & The Bell Morning Edition 11/5/25

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Episode Transcript

(00:00):
Good morning and welcome to the Bulls Bears in the Bell Morning
Edition. Thank you for joining us.
We're diving straight into the source material defining the
mood this morning, November 5, 2025.
And we're jumping right in because the sources are just
screaming one thing today, fear,real caution.
We're not just seeing in a mild profit taking.
It feels like a sharp collectiveshift in psychology.

(00:21):
The markets entering this session in what reports are
calling a deeply cautious risk off posture.
And, well, for good reason it seems.
It definitely feels like more than just caution, maybe an
inflection point. The core idea, the thing uniting
all the sources today, is this rapid technology LED repricing
happening. And the main concern really is
that these lofty valuations and AI stocks are being seen as

(00:45):
detached from fundamentals. So yeah, this deep dive should
give you the map you need to navigate what feels like a
pretty critical phase. OK, let's unpack that.
Where did this risk off mood really kick in?
The catalyst, the sentiment definer seems to be Palantir
PLTR. That feels like where this
global unwind really picked up speed.
Exactly right. Palantir fell a full 7% in

(01:07):
overnight trading and that drop is, well, it's absolutely
stunning because they actually beat their Q3 earnings estimates
as the classics sell the news reaction, you know, but with
maybe a bit more bite this time.And that bite comes from the
context, doesn't it? I mean, this is a stock that's
rallied, what, 170% to maybe even 400% this year purely on AI
hype? Precisely.

(01:28):
So the markets criteria, they'vefundamentally shifted.
It's not just about delivering solid results anymore.
Now you have to deliver results and somehow justify a 400% rally
that already happened. And that's a well, It's a near
impossible standard. It tells you that AI enthusiasm
has hit a more critical phase. Valuations are being questioned
hard. The market's basically moving
the goal. Posts right into the next

(01:48):
stadium, maybe? And that feeling that sentiment
is spread immediately through USfutures.
NASDAQ was the clear laggard. We saw immediate sauce and other
big AI names to NVIDIA down 1.7%, Amazon 1.3%.
But the real proof that this is systemic this this unwind has
gone totally global. Yeah, the synchronization is the
slightly scary part here. Just look at Asia.

(02:09):
Japan's Nikki 225 plunged 2 1/2%and that was led explicitly by a
a massive 10% crash in SoftBank Group.
SoftBank, Yeah, for anyone who doesn't follow Japan closely,
That's the big bellwether for AIanxiety.
Because they're Vision fund investments, right?
Exactly. They're essentially the world's
largest tech venture capital firm, so when SoftBank tanks

(02:31):
like that, it suggests smart money is getting nervous about
high risk tech bets everywhere. And we saw something similar in
South Korea. We did.
Kospi fell 2.9%. Samsung Electronics dropped over
4%. It just confirms this retreat
from the crowded AI trade is happening worldwide
simultaneously, which, you know,really raises the stakes for the
US chip companies. Reporting later today.

(02:53):
OK. Before we get to that after
hours gauntlet, as you call it, we have to talk about the bond
market because it's hitting a really different signal, almost
a paradox. Yeah, that's crucial context.
I mean, the Fed's been pretty hawkish.
You had Chicago Fed's goals be saying he's nervous about the
inflation side. Governor Cook reminding everyone
every meeting is live. That sounds like inflation
warnings should push yields up, shouldn't it?

(03:14):
It absolutely should, but bond yields are actually down.
The 10 year Treasury yield dipped slightly to 4.075%.
And this is the key insight I think.
The bond market seems to be ignoring the Fed's inflation
talk and is instead trading on some serious growth fears.
So you see investors moving out of volatile equities like those
AI names and into safer government bonds.

(03:36):
It's that classic flight to safety.
OK. So the bond market's basically
saying we're more worried about a slowdown, maybe even
recession, that we are about inflation right now, which means
if today's economic data comes in week, it won't necessarily be
seen as good news for rate cuts.It could just confirm those
recession fears, especially withCEO's warning about pull backs.

(03:56):
It could validate the bear case immediately.
Yeah, that conflict, the Fed worrying about inflation, the
bond market worrying about growth.
That's the market's biggest tension point today.
OK, Let's shift gears a bit beyond just valuation stress.
What seems to be spooking the market now are these underlying
structural risks, the stuff you can't just fix by beating an

(04:16):
earnings number. That's right.
In a risk off mood like this, these micro risks company
specific things, they suddenly get magnified and the sources
highlight a couple of specific non earnings catalysts that are
injecting some real foundationaluncertainty into the whole tech
space. Let's start with jet images.
GEET stock fell over 8%. And this wasn't about their

(04:38):
business performance, was it? No.
Not at all. It was because Auk court ruled
against the company and this wasin the first major copyright
lawsuit involving generative AI.Right.
And this is huge because it's not just a Getty problem.
Exactly. It introduces A foundational,
maybe previously unpriced risk to the entire generative AI
business model. Remember these AI models?

(04:59):
They're built in these vast datasets, often script from the web.
Now if courts start ruling that companies have to pay for that
data, or worse, they have to retrain their models using only
fully licensed data. And it in development just slows
to a crawl, costs explode and getting new features outtakes
forever. Precisely.
It shifts the whole risk profilefor the sector.
It's not just about valuation anymore, it's about fundamental

(05:21):
legality. If the data models themselves
are legally questionable, the whole structure gets shaky.
That one ruling, you could argue, justifies some of the
broader AI sell off we're seeing.
OK. And then there's governance
risk. You highlighted Tesla TSLA down
about 2.7%. Again, not about car deliveries.
No, this was a clear message from big institutional money.

(05:42):
It was triggered by Norways sovereign wealth fund.
Huge player, $1.6 trillion announcing they'll vote against
Elon Musks pay package. It signals that these major
institutions are getting seriousabout governance again.
And when the market is risk off stability and predictable
governance, they matter more. If a stock is seen as having
weak governance or maybe too much concentrated power,

(06:04):
investors get nervous. They see that known risk and
think, OK, now is the time to sell.
We also have a pretty stark quantitative signal flashing
right extremely high volume in that semiconductor Bayer
ETFSOXS. Yeah, that volume in Soxs is,
well, it's kind of of a smoking gun.
We need to understand what it means.
This isn't just simple hedging. It's a 3X bear fund.

(06:27):
That means traders are making actively managed leveraged bets
that the semiconductor sector, you know, at the heart of the
whole AI rally, is going to fallhard.
They expect triple the losses. It shows that traders, both
institutional and maybe retail too, aren't just taking profits.
They are actively, aggressively positioning for a deeper, more
immediate correction and chips. That is definitely an aggressive

(06:50):
stance. And Speaking of red flags, we
should quickly mention Beyond Meat.
BYND fell 16% after delaying itsQ3 report, plus their reports of
a securities fraud investigation.
That's never good. Absolutely not.
In a market this jittery, any kind of operational red flag
like that gets punished brutally.
No forgiveness today. OK, let's pivot now to the macro
picture, which is complicated this time by something pretty

(07:11):
unusual, this data vacuum. Right.
This context is absolutely critical for everyone listening
today. The ongoing U.S. government
shutdown means there's a real dearth of official government
data, and that situation dramatically increases how much
the market reacts to private sector data simply because,
well, that's all there is to trade on right now.
Yeah, the sources confirm the big one, non farm payrolls is

(07:34):
almost certainly not coming out.So investors are forced to trade
on what the reports are calling phantom consensus forecasts.
In these private surveys, the Fed says it's data dependent,
but the data is missing. Which makes the two private
reports today absolutely high stakes.
They could really dictate the markets direction.
First up is the ADP employment change at 8.15 AM Eastern.

(07:56):
It's basically the private sector stand in jobs number now
and the forecast is incredibly weak.
Only 25,000 jobs expected. 25,000 Wow, that's barely above
0, bordering on recessionary. If that number actually prints,
it just confirms those growth fears the bond market is already
signaling. Puts enormous pressure back on
stocks. And then the second report,
maybe the high highest impact 1 today is the ISM services PMI at

(08:20):
1000AM Eastern. The big focus here is squarely
on the stagflation trap. The headline forecast is 50.8.
That's weak, sure, but maybe notdisastrous on its own.
But the devil's in the details, right?
Specifically, that price is paidcomponent.
Exactly the absolute worst outcome.
The thing that really kills the soft landing story is if we get

(08:41):
that weak headline number showing slowing growth at the
same time as we get a high or even rising prices paid number.
Because that combination validates the slowdown and the
Fed's inflation fears. It basically locks us into that
stagflation narrative. Very tricky spot.
OK, so this is where it gets really interesting then the
sources seem to suggest that today's regular trading, it

(09:02):
might just be positioning, positioning ahead of the after
hours earnings report. That is the market's real
verdict, isn't it, on whether this Palantir LED unwind is just
a blip or the start of something, well, bigger.
The after hours gauntlet. It absolutely is a gauntlet
because the market seems poised to take the results from four
key tech companies reporting after the close as a kind of
single collective judgement on the future of the tech sector,

(09:24):
especially that AI infrastructure piece.
So who's in the gauntlet? We've got Robin Hood testing
retail investor engagement and those high growth tech hopes,
Aplovin testing ad tech strength, maybe the digital
economies, health overall and Qualcomm that test semiconductor
demand gives guidance on whetherthe smartphone market is

(09:45):
recovering. Right.
But if you only have time to watch one report tonight, it
probably has to be ARM Holdings.ARM is just so crucial.
Its outlook is effectively A proxy for the entire chip
industry's health because they provide that core IP, the
fundamental architecture for almost all major chips,
including the AI 1. So they're guidance that's
basically the markets blueprint for future AI investment.

(10:05):
It's huge. So what does this all boil down
to for you, the listener, the investor?
These reports tonight they will other validate the idea that
there's still strength left in the AI rally, prove that the
Palantir reaction was maybe contained, maybe spark a bit of
a risk on reversal. Or they will definitively
confirm those Palantir LED fears.
And if we get that confirmation tonight, well, we could see the

(10:27):
start, maybe the swift start of that 1020% pullback that some
Wall Street CEO's have been warning about.
It really feels like validation.Or or maybe confirmation of
deeper worries for the AI valuation story tonight?
We've covered a lot the convergence of that valuation
stress, these new potentially foundational legal risks for AI,

(10:48):
and this unique pressure cooker of a critical economic calendar
being watched in a complete datavacuum.
The stakes today are just incredibly high.
The question isn't really if growth is slowing the bond
market, the private data seems to suggest it is.
The real question is whether inflation will drop fast enough
to keep us out of a full stagflationary mess, especially
when the official government data we usually rely on just

(11:10):
isn't there. This has been a deep dive into
the sources for November 5, 2025.
Now here's a final provocative thought for you to Mull over
today. Given that the market and maybe
even the supposedly data dependent Federal Reserve are
forced to rely almost entirely on private surveys like ADP and
ISM and on, you know, generalized sentiment from CEO

(11:31):
warnings to figure out the economic outlook because the
official government data like non farm payrolls is missing due
to the shutdown. What fundamental assumptions
must you as an investor now challenge about the reliability,
maybe even the neutrality of theinformation you use to make
critical decisions? Lots to think about there.