November 10, 2025 • 31 mins
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Good afternoon and welcome to Bulls Bears and the Bell.
Thank you for joining us today. We are diving deep, really deep
into what feels like a very complex market moment.
It's Monday, November 10th, and we're seeing this intersection
of, well, pretty radical political relief on one hand and
some profound economic uncertainty on the other.
Yeah. I mean, if you just glance at
(00:20):
the headlines, the major indices, it looks like a
powerful rebound, right? A real risk on surge.
Everything's green. It suggests maybe all the fear
from last week just evaporated. But if you look closer here,
beneath that surface, especiallyat individual stocks, you find
this really deep, almost schizophrenic contradiction.
That's a good way to put it, schizophrenic, because the
(00:40):
market seems to be celebrating this potential end to the
government shutdown, this macro euphoria, but at the same time
it's absolutely savage towards any company that even hints at a
future growth slowdown. It's a strange mix.
So what's driving it if it's notpure economics?
Well, what's crucial to understand today is that the
main driver, the volatility source and the relief we're
seeing now, it's almost entirelypolitical and technical.
(01:04):
It's not really about fundamental economics changing
overnight. The markets been held hostage
really by this potential end to the what record setting 41 day
U.S. government shutdown. 41 days, yeah.
And that shutdown created this genuine data vacuum.
We'll get into the details, but this vacuum, it's essentially
blinding the Federal Reserve andit's forcing investors, forcing
(01:26):
you to make huge capital decisions pretty much in the
dark. OK, so let's try and unpack this
market structure. We need a plan, our mission
today, our deep dive that's sortof a three-part journey.
First, we have to dissect this sharp risk on rebound.
What's a political catalyst? Why today?
Then we'll zoom right in down tothe micro level, look at these
extreme, sometimes almost illogical punishments or rewards
(01:49):
for specific stocks like what isgoing on in the growth sector.
And finally, we have to look ahead at the frankly daunting
macro reality. How do investors navigate we
where the most critical economicdata, CPI retail sales is just
missing? And how were corporate earnings
suddenly the only game in town? All right, let's start with the
immediate driver. That kind of all clear signal
the markets seem to get late Sunday after 41 frankly
(02:11):
agonizing days. For many, the dominant story
this morning is just probable. Optimism isn't about ending this
record shutdown. We sort of moved from just
hoping to seeing actual procedural progress.
That's the absolute key distinction.
Markets don't really trade on vague hope for long.
They need action. And the catalyst was the US
Senate advancing a key procedural measure late
(02:31):
yesterday. Now investors are interpreting
this, rightly I think, as the first concrete bipartisan step
toward a resolution, something that could actually reopen the
government maybe even this week.It signals that political
logjam, which was the biggest source of non economic
uncertainty, it might finally bebreaking.
And the crucial detail there, you mentioned bipartisan, was a
(02:52):
vote count, right? Because that tells us if this
compromise might actually stick.This wasn't just, you know,
ticking a box along party lines.Exactly.
The measure got the 60 votes it needed, and critically, reports
say 8 Democratic senators joinedRepublicans.
That willingness to cross the aisle?
That's what signals A genuine, viable path forward, maybe an
irresistible one to finally end this thing.
(03:13):
OK. So connecting that political
spark to the market action today, this rally is essentially
just unwinding all that fear that built up last week.
Purely, it's an unwinding of thefear premium.
Last week was characterized by really severe, almost structural
losses, and they were driven by these twin anxieties.
We talked. About and we really need to
(03:34):
stress how bad that damage was for today's bounce.
It wasn't just a little pullback.
The NASDAQ Composite, the tech heavy one, fell a brutal 3%.
That was its worst week in sevenmonths.
Yeah, the worst since those Liberation Day tariff headlines
were flying around a long time ago.
Exactly. And the S&P 500 lost 1.6%.
The Dow dropped 1.2%. This felt like panic selling
(03:55):
driven by uncertainty. And fueled by those two specific
fears, First, the shutdown itself, dragging on, delaying
data. That's the data vacuum anxiety.
And 2nd, which is maybe more structural, these mounting and
frankly legitimate concerns about lofty, maybe inflated
valuations, especially in AI andthe broader tech sector.
So traders were kind of using the shutdown as an excuse maybe
(04:18):
to aggressively take profits on stocks they already thought were
too expensive. OK, so here's where the
character of today's rally gets really interesting, doesn't it?
Because which index is leading tells us which fears are
unwinding the fastest? The fact that the NASDAQ 100
Super Tech Heavy is leading the charge.
Futures were up what, 1.0% to 1.5% earlier?
(04:38):
Maybe more on specific contracts.
Yeah, the NQZ 25 contract was upover 2% at one point.
Right, that confirms the money is pouring right back into the
growth sector, the very place that was the epicenter of last
week's panic. That's Behavioral Finance 101
right there, isn't it? It's risk capital returning when
fear recedes, even temporarily. Money tends to flow back into
the highest beta assets first. And right now, the NASDAQ tied
(05:01):
to that AI narrative is the highest beta game in town.
You see the S&P 500 futures up robustly, you know, .6% to 1.0%.
But look at the Dow futures lagging quite a bit, only up
maybe .2% to .4%. That difference really
underscores that this is fundamentally a technical
unwinding of that valuation fearkicked off by political relief.
It's not really a sudden shift in the economic outlook itself.
(05:24):
And it's not just AUS story either, is it?
This optimism seems global. Absolutely broad based
confirmation of a sentiment shift.
Shares surged in Asia overnight.Europe is strong.
You mentioned in the German DAX Francis CAC 40, both up over
1.4%. Big moves.
So risk is definitely on. How can we confirm that
rotation, say away from safety? Well, look at the traditional
(05:47):
safe havens. Money is actively leaving
safety, or at least pausing its inflow.
We saw the yield on the benchmark 10 year Treasury note
take a bit higher to around 4.11%, which means bond prices
dip slightly as investors felt less need for that government
bond safety capitals rotating. And the VIX, the fear gauge.
Dropping like a stone, the S&P 500 VIX declined sharply, nearly
(06:09):
7%, down towards 18.5. That signals traders are much
less willing to pay up for portfolio protection for puts.
The immediate fear is subsiding.Even gold, Even gold, which
often acts as that hedge againstsystemic uncertainty.
It rose nearly 3% earlier to $4120.00 an ounce.
The whole complex is saying uncertainties receding.
Let's put risk back on the tablefor now.
(06:29):
OK. So that's the big picture, the
macro euphoria backdrop. But now we have to zoom right in
because while the indices are flashing green, the micro
landscape, individual stocks, it's defined by this intense,
almost irrational scrutiny. It's like celebrating in the
streets while auditing every single house line by line.
Let's start with M&A. There's this interesting premium
(06:50):
paradox playing out. OK, first case, Treehouse Foods,
ticker THS. Shares are just soaring today,
up over 21%. The story seems clear.
They're being bought by a European private equity firm.
Invest industrial cash deal $2.9billion works out to $22.50 a
share plus this thing called ACVR.
Right. A contingent value, right.
(07:11):
But the paradox here is frankly stunning and it's a crucial
lesson for listeners and how a takeover valuations can operate
completely independently of current operational performance.
Because this pretty generous acquisition premium completely,
utterly overshadowed what was genuinely A disastrous third
quarter earnings report, which they happened to release at the
same time. OK, wait, how bad were the
actual numbers, the standalone business?
(07:32):
Operationally terrible. They missed badly on adjusted
earnings per share reported $0.43.
Consensus was looking for something like $0.53 to $0.56.
Revenue was below estimates too.And most tellingly, they
reported a staggering Japanet loss of $265.8 million for the
quarter. Whoa.
Where did that loss come? From primarily driven by a
(07:53):
massive $289.7 million goodwill impairment chart.
OK, let's pause there. Goodwill impairment for
listeners who aren't accountants, what is a huge
charge like that actually signalabout the company's health?
It sounds bad. It is bad.
It's essentially management admitting past failures.
Big ones. See, when a company buys
another, it often pays more thanthe targets assets are worth on
(08:14):
paper. That excess price is recorded as
goodwill, representing brand value, future synergies, market
position, that kind of intangible stuff.
If down the road that acquired business doesn't perform as
hoped, the company has to write down the value of that goodwill.
They impair it. So a charge of nearly $300
million, that's management basically saying, oops, those
(08:34):
big acquisitions we made in the past, they're officially worth
way less than we paid. It's a huge red flag about their
M and a strategy and execution. So just to recap, the company
admits massive past mistakes, posts terrible current results,
and the stock soars over 20%. Exactly because the M and A
valuation completely overrode the operational disaster.
The price invest Industrial is paying signals they see some
(08:56):
strategic value in Treehouse, maybe restructuring potential,
maybe brand value they can unlock that's significantly
higher than the market thought the company was worth based on
its current messy operations. For existing shareholders, those
bad earnings became irrelevant the moment that $22.50 cash
offer landed. In the CBR, what's that?
(09:17):
The contingent value, right? That just means shareholders
might get an extra payout later if Treehouse hits certain
specific operational or financial targets after the deal
closes. It's a little sweetener, an
extra bit of potential upside tied to future performance under
new ownership. OK.
Now let's look at the flip side of M&A excitement.
The Sell a news event Metzara ticker MTSR shares are sinking
(09:37):
today, down about 15%, even though Pfizer just agreed to buy
them for a hefty $10 billion. Why would a $10 billion buyout
make a stock drop? Yeah, this is a textbook case of
speculation premium just evaporating into thin air.
The market knew Metzara was in play, that it was being shopped
around. There were reports, pretty
credible ones, that Novo Nordiskwas also in the running, maybe
even in a bidding war. Oh, OK, So the Street had priced
(10:00):
in the possibility of an even higher offer, right?
Maybe $11 billion. Maybe a protracted auction
driving the price up further once Pfizer officially locked in
the deal at $10 billion. A good price, but not a crazy
bidding war price. All that speculative fraud, that
hope premium for an even better outcome just vanished instantly.
That 15% drop, that's the market.
Removing the value of the what if?
(10:22):
It's the certainty tax, you could call it.
You lose the speculative upside once the deal is done.
All right. Let's shift gears from M&A to
pure unadulterated fundamental terror.
And this I think is maybe the most instructive, almost
shocking case study this morning, monday.com, ticker MND,
why we're seeing this stock get absolutely crushed, crashing
down 15.27%, hitting new 52 weeklows.
(10:43):
Just brutal. It is brutal and frankly it
seems almost irrational if you just look at the headline
results they reported, because the paradox deepens here.
Their Q32025 results, they're actually quite strong.
They beat estimates. Adjusted EPS came in at $1.16
cents. Consensus was way down at Darrow
Pay, $0.80. Revenue was $316.9 million, also
(11:05):
topping the $312.3 million estimate.
By normal standards, a good quarter.
OK. So they'd be comfortably on
earnings and revenue for the quarter that just ended.
Why the absolute collapse? You mentioned guidance was the
killer, but quantify that miss for us.
How bad was it really? The punishment is pinned
entirely on their forecast for the next quarter.
Q4 management guided Q4 revenue to be between $328 million and
(11:28):
$330 million. The analyst consensus
expectation it was $333.8 million.
Wait, so let me get this straight.
They missed the midpoint of their guidance range versus the
consensus by what about four or $5,000,000 on revenue over 300
million. Dollars.
That's right, a relatively smallmiss in dollar terms.
And for that, the company loses something like $2 billion in
(11:48):
market cap today. Doesn't that make this whole
growth stock valuation game seemridiculously fragile?
Or are traders just massively overreacting?
It feels like a massive overreaction, absolutely.
But, and this is the painful part, it's sort of
mathematically rational within the very specific, very
demanding context of high growthstock valuation.
(12:08):
See, for a company like monday.com, trading at a really
lofty premium, maybe 10-15 timesforward sales, not earnings,
past performance is almost, well, irrelevant, isn't quite
right, but it's heavily discounted.
The entire valuation, that huge multiple is predicated on
expectations of future growth, specifically the steepness of
the growth trajectory that analysts plug into their
(12:29):
discounted cash flow or DCF models.
So when management provides guidance that misses consensus
even by a seemingly small amountlike this, the market interprets
it not just as a small miss, butas a signal of a potentially
severe deceleration in the rate of growth going forward.
It suggests that the hyper growth phase, the phase that
justifies that sky high valuation multiple, might be
(12:51):
ending sooner than everyone expected.
I see it changes the whole slopeof the curve.
Exactly. And when you tweak that growth
rate assumption downward even slightly in ADCF model for the
near term, the compounded negative impact on the projected
value 5 or 10 years out becomes enormous.
It triggers this massive punitive RE rating of the stock.
And that's compounded by the nervousness about tech
(13:12):
valuations that was already bubbling up last week.
The valuation model demands nearperfect execution on future
promises and MNDY in the market size just blinked.
They didn't deliver the perfect future forecast.
Hashtag. Hashtag me on C.
Oksomonday.com shows us that toxic mix growth fears hitting
company specific execution or lease guidance issues.
(13:33):
But let's contrast that punishment with the broad
sweeping relief rally we're seeing in the rest of the AI and
semiconductor space. You know, names like NVIDIA,
Palantir, they have no specific news today, but they're
recovering aggressively. How do we square that?
This contrast is really the key to understanding today's weird
market dynamic. While M&DY suffered what looks
like a fundamental company specific breakdown tied to its
(13:55):
future outlook, the broader AI complex, the semi stocks,
they're experiencing a very different phenomenon, A macro
driven technical rebound. Remember, these are the names
that got hammered hardest last week by those generalized lofty
valuation fears. But those fears were largely
external right, driven by the political uncertainty the data
vacuum concerns. And the moves are significant.
We're seeing Palantir PLTR up what, 8.5%?
(14:18):
That basically reverses its entire 11% loss from last week.
Micron MU up 6.5%, NVIDIA NVDA up 5.5%, AMD up 4.5%.
It's a strong sector move. And there's no specific company
news for Palantir or NVIDIA today that justifies those big
jumps. None.
This is purely institutional capital flowing back in its
momentum trade, maybe some shortcovering, unwinding last week's
(14:41):
bets against the sector, the political optimism, the hope of
a shutdown deal. It acts like an all clear
signal, however temporary. It allows capital that fled the
perceived risk last week to rushback into what's still seen as
the primary growth engine of themarket, AI and related tech.
The market is basically buying back the certainty, or at least
the reduction in uncertainty, that it violently sold off just
(15:03):
days ago. It's a technical unwind, plain
and simple. OK, that technical rebound feels
it's good if you own those names, But it pivots us directly
to the, well, the really daunting reality that's going to
define the rest of this week, navigating this data vacuum.
Because even if, let's say, a shutdown deal gets struck
tonight or tomorrow, the fact that the government was closed
for a record 41 days has createdthese profound consequences that
(15:27):
just don't vanish overnight. That's exactly right.
The core problem is that the federal agencies, the BLS, the
Census Bureau, they had to halt collecting, calculating and
releasing key economic reports for over six weeks.
So we are now heading into a critical week with a completely
broken economic calendar. Policymakers and investors were
(15:48):
all forced into a degree of guesswork we haven't seen
before. And what are the specific big
pieces of the puzzle that are missing the reports that would
normally be driving everything this week?
Well, the most critical ones, the ones the market and the Fed
rely on heavily, are delayed. That includes the consumer price
index, CPI for October. That's our main inflation gauge.
It was originally scheduled for this Thursday, November 13th.
(16:10):
Gone for now. We're also missing the producer
price index PPI for October, another inflation indicator, and
the absolutely crucial retail sales report for October.
Both of those were originally slated for Friday, November
14th, also delayed. So no official read on inflation
trends, No official read on the health of the US consumer.
The market is essentially blindfolded on the two most
(16:31):
important factors right now. Blindfolded is a good word for
it. OK, so if the Federal Reserve
keeps telling us repeatedly thatthey are data dependent, what
does it actually mean for monetary policy when they're
missing the core inflation and consumer health data?
Can they even make decisions? It means the Fed is, as one
economist aptly put it, essentially flying blind.
(16:53):
Slime blind, Yeah. They're left sort of groping
around in the dark trying to steer this multi trillion dollar
aircraft of the US economy with maybe an altimeter but no GPS,
no forward-looking radar from the official stats.
They've built their entire communication strategy around
justifying rate decisions based on incoming data.
Without official CPI, without official retail sales, it
(17:16):
becomes incredibly difficult forthe FOMC, the rate setting
committee, to credibly justify their next move, whether it's a
hike, a pause, or even a cut. Eventually it injects massive
uncertainty into their next policy meeting because their
whole justification framework has kind of collapsed,
temporarily at least. It's surely they're using
something right? They can't just sit on their
hands entirely. What alternatives are they, and
(17:38):
by extension smart investors leaning on to try and fill this
void? Oh, absolutely.
They're using alternatives. And this is where you as an
investor really need to focus your attention this week.
The Fed definitely has access tothings like regional Fed
reports, think the Beige Book surveys from the New York Fed,
the Atlanta Fed plus high frequency internal data, maybe
(17:58):
even some private sector data they purchase.
But the market historically treats the official federal data
as the gold standard, the ultimate source of truth.
So the absence of that official data massively magnifies the
importance of all the secondary reports, private surveys,
regional reports, even anecdotalevidence from company earnings
calls. They all get elevated.
(18:19):
Investors are forced to use these as critical proxies.
We saw that last week with a bigreaction to the University of
Michigan consumer sentiment survey, right?
Right. That move market significantly.
So is part of today's rally, then, not just relief about the
shutdown ending politically, butalso relief about the promise
that the data itself will eventually return?
Exactly. That's a huge underlying
(18:41):
component. The shutdown was crippling for
markets precisely because of theuncertainty it created political
uncertainty and data uncertainty.
The prospect of the government reopening means that eventually,
hopefully soon, the data vacuum will end.
We can get back to some semblance of fundamental
data-driven analysis. Remember, the market hates
uncertainty often more than it hates bad news.
(19:04):
Getting the data back, even if it's bad, is preferable to
flying completely blind. OK, Now we also need to flag a
really crucial logistical quote for tomorrow, Tuesday.
It's veteran's day, which means the US bond market is closed,
but the US stock market is open.What kind of weird dynamics does
that create for trading and liquidity?
Yeah, that's always a tricky setup.
It generally creates thinner liquidity conditions in the
(19:25):
stock market. When the bond market is closed,
a significant chunk of institutional players,
especially those who rely heavily on Treasury market
liquidity for hedging or funding, might be less active or
on the sidelines. This can often lead to
exaggerated price movements in stocks on lower than usual
volume. Any company specific news or
even the lighter economic data we do get can potentially have a
(19:48):
bigger impact than it normally would because there's less
overall market depth to absorb it.
So since we're missing the big dogs CPI and retail sales, what
becomes the most important data release we do get tomorrow,
Tuesday? The NFIB Small Business Optimism
Index for October instantly getspromoted to critical status.
It becomes a really key release.Analysts and you should too,
(20:09):
will be scrutinizing this index way more closely than usual,
treating it as a vital proxy forunderlying economic conditions
at the ground level. And you'll want to look
particularly closely at the subcomponents within the NFIB
report. Things like the percentage of
small businesses planning to raise prices that becomes a
crucial proxy for inflation pressure when CPI is missing,
and also their hiring intentions.
(20:30):
That gives us a timely window into labor market health before
we get the official jobs data backlog cleared.
And midweek, we also have a pretty heavy slate of Fed
officials speaking, don't we? Yes, Wednesday is huge for Fed
speak. Absolutely critical.
This week, we've got a lineup including John Williams from the
influential New York Fed Governor Christopher Waller,
Rafael Bostic from Atlanta, Susan Collins from Boston, a lot
(20:54):
of key voices. Their commentary is going to be
absolutely essential because they will inevitably be asked
and will likely have to address how the central bank is
navigating this unprecedented data blackout.
Internally, investors will be hanging on every syllable,
trying to read between the lines, looking for clues about
which private data sources or internal metrics the Fed is
leaning on most heavily right now.
(21:15):
What are they seeing that we aren't?
OK. And then finally, for the week,
if the official retail sales report is delayed potentially
for weeks, what takes its place as the main check on consumer
health? The preliminary University of
Michigan consumer sentiment report that is scheduled for
release on Friday, and it hasn'tbeen impacted by the shutdown,
thankfully. Given the complete blackout on
(21:36):
official retail sales data, thatUMIX sentiment reading instantly
becomes the single most important proxy for the entire
week when it comes to judging the ELF.
And maybe more importantly, the willingness of the US consumer
to actually spend money. It's a huge driver of GDP, so
that report's significance just went way up.
This situation, this data vacuum, leads us directly to
(21:58):
this fascinating inversion principle.
It's really going to govern the market for the next few days,
maybe longer, which is corporateearnings reports aren't really
being measured against the macrodata backdrop anymore.
Instead, the market is being forced to use corporate guidance
and commentary is the de facto macro data itself.
So this relatively light earnings week suddenly becomes
incredibly significant, doesn't it?
(22:19):
That inversion is profound, and it's critical for listeners to
grasp. Normally, right, you'd take
Disney's results, compare them against the official retail
sales data, and say, OK, how does Disney's performance stack
up against the overall consumer spending trend?
But this week, there is no official retail sales data to
compare against, right? So the market has to take
(22:40):
Disney's management commentary about park attendance, about
streaming subscription trends, about per capita spending in the
parks, and treat that as if it were the official report on
consumer discretionary health. Every single corporate guidance
figure, every bit of management color on the earnings calls this
week, it gets elevated. It becomes a forced macro
indicator whether the company likes it or not.
OK. Let's zero in on today's crucial
(23:02):
reports coming after market close.
AMC, we've got Occidental Petroleum Oxy.
Beyond the headline EPS and revenue, what specific insights
will analyst be digging for there?
Yeah, Occidental is expected to report a pretty significant year
over year decline in earnings and revenue.
The Zach's consensus estimate for EPS is around $0.48, which
(23:24):
would be like a 52% drop from the same quarter last year,
mostly due to lower oil prices compared to then.
But the focus won't just be on that backward looking decline.
Analysts will be laser focused on operational clarity,
specifically production volumes coming out of the crucial
Permian Basin. Are they hitting their targets?
And maybe even more importantly,commentary on their aggressive
(23:45):
debt reduction strategy. How is that actually flowing
through to lower annual interestexpenses?
Because that's absolutely key tounlocking their future free cash
flow potential, which is what equity investors care about.
But the report that feels like it holds the key to whether
today's big tech and AI rally has legs that's arguably core
weave. CRV also reporting after the
close today. This feels like the AI proxy
(24:06):
right now. I think you're right, core weave
is probably the single most critical report of the day,
maybe the week for tech sentiment because the market is
just desperate for some kind of validation after last weeks
sharp AI sector sell off. Core Weave as you know is a key
player in the AI data center space.
They essentially rent out massive amounts of high-powered
GPU capacity and related infrastructure that companies
(24:29):
need to train and run AI models.So their results give us
arguably the most direct real time read available on actual AI
related revenue generation and critically the underlying demand
for AI infrastructure. So specifically, what will
investors be looking for? I think 2 main things.
First, their capacity utilization rates.
(24:49):
Are those hugely expensive clusters of GPUs they've built
running at full steam or is there some slack appearing?
And second, maybe even more important for the forward look,
their capital expenditure plans,their CapEx guidance, are they
still planning to spend aggressively, maybe even
accelerating spending to build out more capacity to meet
anticipated future AI demand? A strong report from Core Weave,
(25:10):
especially 1 signaling aggressive forward spending
could really solidify today's tech rebound.
It would suggest the AI build out is still full speed ahead.
But a weak report or guidance that suggests maybe a pause or
slow down in their infrastructure build out that
could instantly reignite all those AI bubble fears we saw
flare up last week. It's a pivotal report for
(25:31):
sentiment. OK, looking just a bit further
ahead mid weeks, let's quickly flag the other key corporate
reports acting as proxies for the broader economy.
Wednesday after close we get Cisco Systems CSEO.
Right. Cisco is always treated by the
market as a sort of foundationalproxy for enterprise spending.
You know, overall corporate IT budgets, network demand across
pretty much every industry. If Cisco's management lowers
(25:54):
their forward guidance, especially if they talk about a
slowing backlog for hardware orders, that's a major signal.
It suggests CEO's globally are starting to pull back on big
multi year technology investments and infrastructure
upgrades. That would be a significant
economic warning sign, effectively replacing the
missing official government reports on business investment.
And then on Thursday, we get theWalt Disney Company DIS
(26:17):
reporting before the market opens.
Disney essentially serves as themarket's number one proxy right
now for consumer discretionary health, especially with no
retail sales data. The devil will absolutely be in
the details of their operationalsegments.
Forget just the headline streaming subscriber number.
That's become a volume game withquestionable profitability.
Sometimes the market will look deeper.
(26:39):
Park attendance figures, yes, but crucially, the per capita
spending within the parks. Are people still dropping big
bucks on tickets, food, merchandise?
If that per cap spending is strong, it suggests the middle
class consumer, despite inflation pressures, is still
healthy and willing to splurge on experiences.
That provides a really crucial real world data point,
(26:59):
offsetting the lack of official government stats.
And also on Thursday, but after the close, we have Applied
Materials amat. Amat this one's critical as a
direct proxy for semiconductor and AI capital expenditure
spending. They make the incredibly complex
expensive machines that companies like TSMC, Intel,
Samsung use to actually manufacture advanced computer
(27:22):
chips. So amats forward-looking orders
their book to bill ratio, their guidance that's effectively a
forecast for the entire semiconductor manufacturing
cycle looking maybe two or threequarters ahead.
Got it. If Applied Materials reports a
weak outlook or talks about customers delaying orders for
new equipment, it's a massive signal.
It suggests the entire chip industry, including the
customers of NVIDIA, AMD, everyone, might be slowing down
(27:45):
their long term plans for building new factories or
upgrading existing ones. They really are the ultimate
Canary in the chip industry's coal mine.
What they see often predicts where the whole sector is
headed. And just one quick technical
detail for investors to keep in mind today, Monday, several
fairly large notable companies are trading ex dividend.
(28:05):
That means if you buy the stock today, you don't get the
upcoming dividend payment. This will have a small purely
mechanical downward impact on their share price today.
Examples include Apple going ex dividend 226 cents per share.
American Electric Power AEP at a7 to 95 per share and Aztec
Industries ASTE at $7.13 per share.
(28:26):
Just small adjustments, but always worth noting on a day
with sensitive technical trading.
Good point. Those little adjustments can
sometimes confuse the picture ifyou're not aware of them.
Hashtag tag outro. So as we wrap up this deep dive,
we're left with this really powerful, almost jarring
contradiction, aren't we? At the macro level, you've got
this genuine market euphoria, this violent technical rally,
all driven by the hope of a political solution finally
(28:49):
ending the shutdown mess that's clearly unwinding last week's
generalized fear. But then you zoom into the micro
level and you see this extreme, almost surgical scrutiny being
applied, exemplified perfectlybymonday.com getting
just savagely punished for a fractional miss on future
guidance. It shows that underlying
expectations for growth remain utterly, brutally unforgiving.
(29:10):
That synthesis is absolutely themost important take away from
today. I think Monday's big move
higher, it's fundamentally a political and technical event.
It's unwinding fear, it's unwinding speculation premium,
it's relief pure and simple. But the rest of the week, that's
the real grinding test, the fundamental test.
The big question now is whether these corporate proxies we've
(29:30):
been talking about core weave tonight on AI demand, Disney
later on consumer health, Cisco on enterprise spending, amat on
semi CapEx. Can they actually provide enough
positive news and a fundamental justification to sustain this
newfound optimism, especially when the Fed is still flying
blind and we have this complete void of official economic data?
That's a tall order. So what does the setup mean for
(29:51):
the, you know, the bigger picture view of this rally?
Is it sustainable or just a temporary sugar high?
Well, the market is clearly celebrating the end of
uncertainty, or at least the perceived end of the political
uncertainty. And that reduction in
uncertainty is always a powerfulshort term propellant for asset
prices. Never underestimate relief.
But, and this is the big but, indoing so, the market might be
(30:13):
dangerously overlooking the veryreal economic damage that might
have already been inflicted by this record long shutdown.
We already saw hints of that damage last week, didn't we, in
that shocking crash in the University of Michigan consumer
sentiment survey and some of those concerning private sector
layoff reports that started trickling out.
So the crucial question I think you, the listener need to really
(30:33):
grapple with is this. What happens when the official
data that's been delayed, the October CPI report, the October
retail sales numbers, What happens when that data is
finally released maybe in a weekor two?
What if it reveals the true, maybe ugly economic cost of this
41 day shutdown? Could that delayed data bomb
lead to a major fundamental riskoff shock that completely
(30:53):
reverses today's purely technical optimism, that
potential mismatch between current relief and future
reality? That's the storm potentially
waiting just over the horizon. It's precisely why certainty,
even if it proves temporary, feels so incredibly good to the
market right now.
Good afternoon and welcome to Bulls Bears and the Bell.
Thank you for joining us today. We are diving deep, really deep
into what feels like a very complex market moment.
It's Monday, November 10th, and we're seeing this intersection
of, well, pretty radical political relief on one hand and
some profound economic uncertainty on the other.
Yeah. I mean, if you just glance at
(00:20):
the headlines, the major indices, it looks like a
powerful rebound, right? A real risk on surge.
Everything's green. It suggests maybe all the fear
from last week just evaporated. But if you look closer here,
beneath that surface, especiallyat individual stocks, you find
this really deep, almost schizophrenic contradiction.
That's a good way to put it, schizophrenic, because the
(00:40):
market seems to be celebrating this potential end to the
government shutdown, this macro euphoria, but at the same time
it's absolutely savage towards any company that even hints at a
future growth slowdown. It's a strange mix.
So what's driving it if it's notpure economics?
Well, what's crucial to understand today is that the
main driver, the volatility source and the relief we're
seeing now, it's almost entirelypolitical and technical.
(01:04):
It's not really about fundamental economics changing
overnight. The markets been held hostage
really by this potential end to the what record setting 41 day
U.S. government shutdown. 41 days, yeah.
And that shutdown created this genuine data vacuum.
We'll get into the details, but this vacuum, it's essentially
blinding the Federal Reserve andit's forcing investors, forcing
(01:26):
you to make huge capital decisions pretty much in the
dark. OK, so let's try and unpack this
market structure. We need a plan, our mission
today, our deep dive that's sortof a three-part journey.
First, we have to dissect this sharp risk on rebound.
What's a political catalyst? Why today?
Then we'll zoom right in down tothe micro level, look at these
extreme, sometimes almost illogical punishments or rewards
(01:49):
for specific stocks like what isgoing on in the growth sector.
And finally, we have to look ahead at the frankly daunting
macro reality. How do investors navigate we
where the most critical economicdata, CPI retail sales is just
missing? And how were corporate earnings
suddenly the only game in town? All right, let's start with the
immediate driver. That kind of all clear signal
the markets seem to get late Sunday after 41 frankly
(02:11):
agonizing days. For many, the dominant story
this morning is just probable. Optimism isn't about ending this
record shutdown. We sort of moved from just
hoping to seeing actual procedural progress.
That's the absolute key distinction.
Markets don't really trade on vague hope for long.
They need action. And the catalyst was the US
Senate advancing a key procedural measure late
(02:31):
yesterday. Now investors are interpreting
this, rightly I think, as the first concrete bipartisan step
toward a resolution, something that could actually reopen the
government maybe even this week.It signals that political
logjam, which was the biggest source of non economic
uncertainty, it might finally bebreaking.
And the crucial detail there, you mentioned bipartisan, was a
(02:52):
vote count, right? Because that tells us if this
compromise might actually stick.This wasn't just, you know,
ticking a box along party lines.Exactly.
The measure got the 60 votes it needed, and critically, reports
say 8 Democratic senators joinedRepublicans.
That willingness to cross the aisle?
That's what signals A genuine, viable path forward, maybe an
irresistible one to finally end this thing.
(03:13):
OK. So connecting that political
spark to the market action today, this rally is essentially
just unwinding all that fear that built up last week.
Purely, it's an unwinding of thefear premium.
Last week was characterized by really severe, almost structural
losses, and they were driven by these twin anxieties.
We talked. About and we really need to
(03:34):
stress how bad that damage was for today's bounce.
It wasn't just a little pullback.
The NASDAQ Composite, the tech heavy one, fell a brutal 3%.
That was its worst week in sevenmonths.
Yeah, the worst since those Liberation Day tariff headlines
were flying around a long time ago.
Exactly. And the S&P 500 lost 1.6%.
The Dow dropped 1.2%. This felt like panic selling
(03:55):
driven by uncertainty. And fueled by those two specific
fears, First, the shutdown itself, dragging on, delaying
data. That's the data vacuum anxiety.
And 2nd, which is maybe more structural, these mounting and
frankly legitimate concerns about lofty, maybe inflated
valuations, especially in AI andthe broader tech sector.
So traders were kind of using the shutdown as an excuse maybe
(04:18):
to aggressively take profits on stocks they already thought were
too expensive. OK, so here's where the
character of today's rally gets really interesting, doesn't it?
Because which index is leading tells us which fears are
unwinding the fastest? The fact that the NASDAQ 100
Super Tech Heavy is leading the charge.
Futures were up what, 1.0% to 1.5% earlier?
(04:38):
Maybe more on specific contracts.
Yeah, the NQZ 25 contract was upover 2% at one point.
Right, that confirms the money is pouring right back into the
growth sector, the very place that was the epicenter of last
week's panic. That's Behavioral Finance 101
right there, isn't it? It's risk capital returning when
fear recedes, even temporarily. Money tends to flow back into
the highest beta assets first. And right now, the NASDAQ tied
(05:01):
to that AI narrative is the highest beta game in town.
You see the S&P 500 futures up robustly, you know, .6% to 1.0%.
But look at the Dow futures lagging quite a bit, only up
maybe .2% to .4%. That difference really
underscores that this is fundamentally a technical
unwinding of that valuation fearkicked off by political relief.
It's not really a sudden shift in the economic outlook itself.
(05:24):
And it's not just AUS story either, is it?
This optimism seems global. Absolutely broad based
confirmation of a sentiment shift.
Shares surged in Asia overnight.Europe is strong.
You mentioned in the German DAX Francis CAC 40, both up over
1.4%. Big moves.
So risk is definitely on. How can we confirm that
rotation, say away from safety? Well, look at the traditional
(05:47):
safe havens. Money is actively leaving
safety, or at least pausing its inflow.
We saw the yield on the benchmark 10 year Treasury note
take a bit higher to around 4.11%, which means bond prices
dip slightly as investors felt less need for that government
bond safety capitals rotating. And the VIX, the fear gauge.
Dropping like a stone, the S&P 500 VIX declined sharply, nearly
(06:09):
7%, down towards 18.5. That signals traders are much
less willing to pay up for portfolio protection for puts.
The immediate fear is subsiding.Even gold, Even gold, which
often acts as that hedge againstsystemic uncertainty.
It rose nearly 3% earlier to $4120.00 an ounce.
The whole complex is saying uncertainties receding.
Let's put risk back on the tablefor now.
(06:29):
OK. So that's the big picture, the
macro euphoria backdrop. But now we have to zoom right in
because while the indices are flashing green, the micro
landscape, individual stocks, it's defined by this intense,
almost irrational scrutiny. It's like celebrating in the
streets while auditing every single house line by line.
Let's start with M&A. There's this interesting premium
(06:50):
paradox playing out. OK, first case, Treehouse Foods,
ticker THS. Shares are just soaring today,
up over 21%. The story seems clear.
They're being bought by a European private equity firm.
Invest industrial cash deal $2.9billion works out to $22.50 a
share plus this thing called ACVR.
Right. A contingent value, right.
(07:11):
But the paradox here is frankly stunning and it's a crucial
lesson for listeners and how a takeover valuations can operate
completely independently of current operational performance.
Because this pretty generous acquisition premium completely,
utterly overshadowed what was genuinely A disastrous third
quarter earnings report, which they happened to release at the
same time. OK, wait, how bad were the
actual numbers, the standalone business?
(07:32):
Operationally terrible. They missed badly on adjusted
earnings per share reported $0.43.
Consensus was looking for something like $0.53 to $0.56.
Revenue was below estimates too.And most tellingly, they
reported a staggering Japanet loss of $265.8 million for the
quarter. Whoa.
Where did that loss come? From primarily driven by a
(07:53):
massive $289.7 million goodwill impairment chart.
OK, let's pause there. Goodwill impairment for
listeners who aren't accountants, what is a huge
charge like that actually signalabout the company's health?
It sounds bad. It is bad.
It's essentially management admitting past failures.
Big ones. See, when a company buys
another, it often pays more thanthe targets assets are worth on
(08:14):
paper. That excess price is recorded as
goodwill, representing brand value, future synergies, market
position, that kind of intangible stuff.
If down the road that acquired business doesn't perform as
hoped, the company has to write down the value of that goodwill.
They impair it. So a charge of nearly $300
million, that's management basically saying, oops, those
(08:34):
big acquisitions we made in the past, they're officially worth
way less than we paid. It's a huge red flag about their
M and a strategy and execution. So just to recap, the company
admits massive past mistakes, posts terrible current results,
and the stock soars over 20%. Exactly because the M and A
valuation completely overrode the operational disaster.
The price invest Industrial is paying signals they see some
(08:56):
strategic value in Treehouse, maybe restructuring potential,
maybe brand value they can unlock that's significantly
higher than the market thought the company was worth based on
its current messy operations. For existing shareholders, those
bad earnings became irrelevant the moment that $22.50 cash
offer landed. In the CBR, what's that?
(09:17):
The contingent value, right? That just means shareholders
might get an extra payout later if Treehouse hits certain
specific operational or financial targets after the deal
closes. It's a little sweetener, an
extra bit of potential upside tied to future performance under
new ownership. OK.
Now let's look at the flip side of M&A excitement.
The Sell a news event Metzara ticker MTSR shares are sinking
(09:37):
today, down about 15%, even though Pfizer just agreed to buy
them for a hefty $10 billion. Why would a $10 billion buyout
make a stock drop? Yeah, this is a textbook case of
speculation premium just evaporating into thin air.
The market knew Metzara was in play, that it was being shopped
around. There were reports, pretty
credible ones, that Novo Nordiskwas also in the running, maybe
even in a bidding war. Oh, OK, So the Street had priced
(10:00):
in the possibility of an even higher offer, right?
Maybe $11 billion. Maybe a protracted auction
driving the price up further once Pfizer officially locked in
the deal at $10 billion. A good price, but not a crazy
bidding war price. All that speculative fraud, that
hope premium for an even better outcome just vanished instantly.
That 15% drop, that's the market.
Removing the value of the what if?
(10:22):
It's the certainty tax, you could call it.
You lose the speculative upside once the deal is done.
All right. Let's shift gears from M&A to
pure unadulterated fundamental terror.
And this I think is maybe the most instructive, almost
shocking case study this morning, monday.com, ticker MND,
why we're seeing this stock get absolutely crushed, crashing
down 15.27%, hitting new 52 weeklows.
(10:43):
Just brutal. It is brutal and frankly it
seems almost irrational if you just look at the headline
results they reported, because the paradox deepens here.
Their Q32025 results, they're actually quite strong.
They beat estimates. Adjusted EPS came in at $1.16
cents. Consensus was way down at Darrow
Pay, $0.80. Revenue was $316.9 million, also
(11:05):
topping the $312.3 million estimate.
By normal standards, a good quarter.
OK. So they'd be comfortably on
earnings and revenue for the quarter that just ended.
Why the absolute collapse? You mentioned guidance was the
killer, but quantify that miss for us.
How bad was it really? The punishment is pinned
entirely on their forecast for the next quarter.
Q4 management guided Q4 revenue to be between $328 million and
(11:28):
$330 million. The analyst consensus
expectation it was $333.8 million.
Wait, so let me get this straight.
They missed the midpoint of their guidance range versus the
consensus by what about four or $5,000,000 on revenue over 300
million. Dollars.
That's right, a relatively smallmiss in dollar terms.
And for that, the company loses something like $2 billion in
(11:48):
market cap today. Doesn't that make this whole
growth stock valuation game seemridiculously fragile?
Or are traders just massively overreacting?
It feels like a massive overreaction, absolutely.
But, and this is the painful part, it's sort of
mathematically rational within the very specific, very
demanding context of high growthstock valuation.
(12:08):
See, for a company like monday.com, trading at a really
lofty premium, maybe 10-15 timesforward sales, not earnings,
past performance is almost, well, irrelevant, isn't quite
right, but it's heavily discounted.
The entire valuation, that huge multiple is predicated on
expectations of future growth, specifically the steepness of
the growth trajectory that analysts plug into their
(12:29):
discounted cash flow or DCF models.
So when management provides guidance that misses consensus
even by a seemingly small amountlike this, the market interprets
it not just as a small miss, butas a signal of a potentially
severe deceleration in the rate of growth going forward.
It suggests that the hyper growth phase, the phase that
justifies that sky high valuation multiple, might be
(12:51):
ending sooner than everyone expected.
I see it changes the whole slopeof the curve.
Exactly. And when you tweak that growth
rate assumption downward even slightly in ADCF model for the
near term, the compounded negative impact on the projected
value 5 or 10 years out becomes enormous.
It triggers this massive punitive RE rating of the stock.
And that's compounded by the nervousness about tech
(13:12):
valuations that was already bubbling up last week.
The valuation model demands nearperfect execution on future
promises and MNDY in the market size just blinked.
They didn't deliver the perfect future forecast.
Hashtag. Hashtag me on C.
Oksomonday.com shows us that toxic mix growth fears hitting
company specific execution or lease guidance issues.
(13:33):
But let's contrast that punishment with the broad
sweeping relief rally we're seeing in the rest of the AI and
semiconductor space. You know, names like NVIDIA,
Palantir, they have no specific news today, but they're
recovering aggressively. How do we square that?
This contrast is really the key to understanding today's weird
market dynamic. While M&DY suffered what looks
like a fundamental company specific breakdown tied to its
(13:55):
future outlook, the broader AI complex, the semi stocks,
they're experiencing a very different phenomenon, A macro
driven technical rebound. Remember, these are the names
that got hammered hardest last week by those generalized lofty
valuation fears. But those fears were largely
external right, driven by the political uncertainty the data
vacuum concerns. And the moves are significant.
We're seeing Palantir PLTR up what, 8.5%?
(14:18):
That basically reverses its entire 11% loss from last week.
Micron MU up 6.5%, NVIDIA NVDA up 5.5%, AMD up 4.5%.
It's a strong sector move. And there's no specific company
news for Palantir or NVIDIA today that justifies those big
jumps. None.
This is purely institutional capital flowing back in its
momentum trade, maybe some shortcovering, unwinding last week's
(14:41):
bets against the sector, the political optimism, the hope of
a shutdown deal. It acts like an all clear
signal, however temporary. It allows capital that fled the
perceived risk last week to rushback into what's still seen as
the primary growth engine of themarket, AI and related tech.
The market is basically buying back the certainty, or at least
the reduction in uncertainty, that it violently sold off just
(15:03):
days ago. It's a technical unwind, plain
and simple. OK, that technical rebound feels
it's good if you own those names, But it pivots us directly
to the, well, the really daunting reality that's going to
define the rest of this week, navigating this data vacuum.
Because even if, let's say, a shutdown deal gets struck
tonight or tomorrow, the fact that the government was closed
for a record 41 days has createdthese profound consequences that
(15:27):
just don't vanish overnight. That's exactly right.
The core problem is that the federal agencies, the BLS, the
Census Bureau, they had to halt collecting, calculating and
releasing key economic reports for over six weeks.
So we are now heading into a critical week with a completely
broken economic calendar. Policymakers and investors were
(15:48):
all forced into a degree of guesswork we haven't seen
before. And what are the specific big
pieces of the puzzle that are missing the reports that would
normally be driving everything this week?
Well, the most critical ones, the ones the market and the Fed
rely on heavily, are delayed. That includes the consumer price
index, CPI for October. That's our main inflation gauge.
It was originally scheduled for this Thursday, November 13th.
(16:10):
Gone for now. We're also missing the producer
price index PPI for October, another inflation indicator, and
the absolutely crucial retail sales report for October.
Both of those were originally slated for Friday, November
14th, also delayed. So no official read on inflation
trends, No official read on the health of the US consumer.
The market is essentially blindfolded on the two most
(16:31):
important factors right now. Blindfolded is a good word for
it. OK, so if the Federal Reserve
keeps telling us repeatedly thatthey are data dependent, what
does it actually mean for monetary policy when they're
missing the core inflation and consumer health data?
Can they even make decisions? It means the Fed is, as one
economist aptly put it, essentially flying blind.
(16:53):
Slime blind, Yeah. They're left sort of groping
around in the dark trying to steer this multi trillion dollar
aircraft of the US economy with maybe an altimeter but no GPS,
no forward-looking radar from the official stats.
They've built their entire communication strategy around
justifying rate decisions based on incoming data.
Without official CPI, without official retail sales, it
(17:16):
becomes incredibly difficult forthe FOMC, the rate setting
committee, to credibly justify their next move, whether it's a
hike, a pause, or even a cut. Eventually it injects massive
uncertainty into their next policy meeting because their
whole justification framework has kind of collapsed,
temporarily at least. It's surely they're using
something right? They can't just sit on their
hands entirely. What alternatives are they, and
(17:38):
by extension smart investors leaning on to try and fill this
void? Oh, absolutely.
They're using alternatives. And this is where you as an
investor really need to focus your attention this week.
The Fed definitely has access tothings like regional Fed
reports, think the Beige Book surveys from the New York Fed,
the Atlanta Fed plus high frequency internal data, maybe
(17:58):
even some private sector data they purchase.
But the market historically treats the official federal data
as the gold standard, the ultimate source of truth.
So the absence of that official data massively magnifies the
importance of all the secondary reports, private surveys,
regional reports, even anecdotalevidence from company earnings
calls. They all get elevated.
(18:19):
Investors are forced to use these as critical proxies.
We saw that last week with a bigreaction to the University of
Michigan consumer sentiment survey, right?
Right. That move market significantly.
So is part of today's rally, then, not just relief about the
shutdown ending politically, butalso relief about the promise
that the data itself will eventually return?
Exactly. That's a huge underlying
(18:41):
component. The shutdown was crippling for
markets precisely because of theuncertainty it created political
uncertainty and data uncertainty.
The prospect of the government reopening means that eventually,
hopefully soon, the data vacuum will end.
We can get back to some semblance of fundamental
data-driven analysis. Remember, the market hates
uncertainty often more than it hates bad news.
(19:04):
Getting the data back, even if it's bad, is preferable to
flying completely blind. OK, Now we also need to flag a
really crucial logistical quote for tomorrow, Tuesday.
It's veteran's day, which means the US bond market is closed,
but the US stock market is open.What kind of weird dynamics does
that create for trading and liquidity?
Yeah, that's always a tricky setup.
It generally creates thinner liquidity conditions in the
(19:25):
stock market. When the bond market is closed,
a significant chunk of institutional players,
especially those who rely heavily on Treasury market
liquidity for hedging or funding, might be less active or
on the sidelines. This can often lead to
exaggerated price movements in stocks on lower than usual
volume. Any company specific news or
even the lighter economic data we do get can potentially have a
(19:48):
bigger impact than it normally would because there's less
overall market depth to absorb it.
So since we're missing the big dogs CPI and retail sales, what
becomes the most important data release we do get tomorrow,
Tuesday? The NFIB Small Business Optimism
Index for October instantly getspromoted to critical status.
It becomes a really key release.Analysts and you should too,
(20:09):
will be scrutinizing this index way more closely than usual,
treating it as a vital proxy forunderlying economic conditions
at the ground level. And you'll want to look
particularly closely at the subcomponents within the NFIB
report. Things like the percentage of
small businesses planning to raise prices that becomes a
crucial proxy for inflation pressure when CPI is missing,
and also their hiring intentions.
(20:30):
That gives us a timely window into labor market health before
we get the official jobs data backlog cleared.
And midweek, we also have a pretty heavy slate of Fed
officials speaking, don't we? Yes, Wednesday is huge for Fed
speak. Absolutely critical.
This week, we've got a lineup including John Williams from the
influential New York Fed Governor Christopher Waller,
Rafael Bostic from Atlanta, Susan Collins from Boston, a lot
(20:54):
of key voices. Their commentary is going to be
absolutely essential because they will inevitably be asked
and will likely have to address how the central bank is
navigating this unprecedented data blackout.
Internally, investors will be hanging on every syllable,
trying to read between the lines, looking for clues about
which private data sources or internal metrics the Fed is
leaning on most heavily right now.
(21:15):
What are they seeing that we aren't?
OK. And then finally, for the week,
if the official retail sales report is delayed potentially
for weeks, what takes its place as the main check on consumer
health? The preliminary University of
Michigan consumer sentiment report that is scheduled for
release on Friday, and it hasn'tbeen impacted by the shutdown,
thankfully. Given the complete blackout on
(21:36):
official retail sales data, thatUMIX sentiment reading instantly
becomes the single most important proxy for the entire
week when it comes to judging the ELF.
And maybe more importantly, the willingness of the US consumer
to actually spend money. It's a huge driver of GDP, so
that report's significance just went way up.
This situation, this data vacuum, leads us directly to
(21:58):
this fascinating inversion principle.
It's really going to govern the market for the next few days,
maybe longer, which is corporateearnings reports aren't really
being measured against the macrodata backdrop anymore.
Instead, the market is being forced to use corporate guidance
and commentary is the de facto macro data itself.
So this relatively light earnings week suddenly becomes
incredibly significant, doesn't it?
(22:19):
That inversion is profound, and it's critical for listeners to
grasp. Normally, right, you'd take
Disney's results, compare them against the official retail
sales data, and say, OK, how does Disney's performance stack
up against the overall consumer spending trend?
But this week, there is no official retail sales data to
compare against, right? So the market has to take
(22:40):
Disney's management commentary about park attendance, about
streaming subscription trends, about per capita spending in the
parks, and treat that as if it were the official report on
consumer discretionary health. Every single corporate guidance
figure, every bit of management color on the earnings calls this
week, it gets elevated. It becomes a forced macro
indicator whether the company likes it or not.
OK. Let's zero in on today's crucial
(23:02):
reports coming after market close.
AMC, we've got Occidental Petroleum Oxy.
Beyond the headline EPS and revenue, what specific insights
will analyst be digging for there?
Yeah, Occidental is expected to report a pretty significant year
over year decline in earnings and revenue.
The Zach's consensus estimate for EPS is around $0.48, which
(23:24):
would be like a 52% drop from the same quarter last year,
mostly due to lower oil prices compared to then.
But the focus won't just be on that backward looking decline.
Analysts will be laser focused on operational clarity,
specifically production volumes coming out of the crucial
Permian Basin. Are they hitting their targets?
And maybe even more importantly,commentary on their aggressive
(23:45):
debt reduction strategy. How is that actually flowing
through to lower annual interestexpenses?
Because that's absolutely key tounlocking their future free cash
flow potential, which is what equity investors care about.
But the report that feels like it holds the key to whether
today's big tech and AI rally has legs that's arguably core
weave. CRV also reporting after the
close today. This feels like the AI proxy
(24:06):
right now. I think you're right, core weave
is probably the single most critical report of the day,
maybe the week for tech sentiment because the market is
just desperate for some kind of validation after last weeks
sharp AI sector sell off. Core Weave as you know is a key
player in the AI data center space.
They essentially rent out massive amounts of high-powered
GPU capacity and related infrastructure that companies
(24:29):
need to train and run AI models.So their results give us
arguably the most direct real time read available on actual AI
related revenue generation and critically the underlying demand
for AI infrastructure. So specifically, what will
investors be looking for? I think 2 main things.
First, their capacity utilization rates.
(24:49):
Are those hugely expensive clusters of GPUs they've built
running at full steam or is there some slack appearing?
And second, maybe even more important for the forward look,
their capital expenditure plans,their CapEx guidance, are they
still planning to spend aggressively, maybe even
accelerating spending to build out more capacity to meet
anticipated future AI demand? A strong report from Core Weave,
(25:10):
especially 1 signaling aggressive forward spending
could really solidify today's tech rebound.
It would suggest the AI build out is still full speed ahead.
But a weak report or guidance that suggests maybe a pause or
slow down in their infrastructure build out that
could instantly reignite all those AI bubble fears we saw
flare up last week. It's a pivotal report for
(25:31):
sentiment. OK, looking just a bit further
ahead mid weeks, let's quickly flag the other key corporate
reports acting as proxies for the broader economy.
Wednesday after close we get Cisco Systems CSEO.
Right. Cisco is always treated by the
market as a sort of foundationalproxy for enterprise spending.
You know, overall corporate IT budgets, network demand across
pretty much every industry. If Cisco's management lowers
(25:54):
their forward guidance, especially if they talk about a
slowing backlog for hardware orders, that's a major signal.
It suggests CEO's globally are starting to pull back on big
multi year technology investments and infrastructure
upgrades. That would be a significant
economic warning sign, effectively replacing the
missing official government reports on business investment.
And then on Thursday, we get theWalt Disney Company DIS
(26:17):
reporting before the market opens.
Disney essentially serves as themarket's number one proxy right
now for consumer discretionary health, especially with no
retail sales data. The devil will absolutely be in
the details of their operationalsegments.
Forget just the headline streaming subscriber number.
That's become a volume game withquestionable profitability.
Sometimes the market will look deeper.
(26:39):
Park attendance figures, yes, but crucially, the per capita
spending within the parks. Are people still dropping big
bucks on tickets, food, merchandise?
If that per cap spending is strong, it suggests the middle
class consumer, despite inflation pressures, is still
healthy and willing to splurge on experiences.
That provides a really crucial real world data point,
(26:59):
offsetting the lack of official government stats.
And also on Thursday, but after the close, we have Applied
Materials amat. Amat this one's critical as a
direct proxy for semiconductor and AI capital expenditure
spending. They make the incredibly complex
expensive machines that companies like TSMC, Intel,
Samsung use to actually manufacture advanced computer
(27:22):
chips. So amats forward-looking orders
their book to bill ratio, their guidance that's effectively a
forecast for the entire semiconductor manufacturing
cycle looking maybe two or threequarters ahead.
Got it. If Applied Materials reports a
weak outlook or talks about customers delaying orders for
new equipment, it's a massive signal.
It suggests the entire chip industry, including the
customers of NVIDIA, AMD, everyone, might be slowing down
(27:45):
their long term plans for building new factories or
upgrading existing ones. They really are the ultimate
Canary in the chip industry's coal mine.
What they see often predicts where the whole sector is
headed. And just one quick technical
detail for investors to keep in mind today, Monday, several
fairly large notable companies are trading ex dividend.
(28:05):
That means if you buy the stock today, you don't get the
upcoming dividend payment. This will have a small purely
mechanical downward impact on their share price today.
Examples include Apple going ex dividend 226 cents per share.
American Electric Power AEP at a7 to 95 per share and Aztec
Industries ASTE at $7.13 per share.
(28:26):
Just small adjustments, but always worth noting on a day
with sensitive technical trading.
Good point. Those little adjustments can
sometimes confuse the picture ifyou're not aware of them.
Hashtag tag outro. So as we wrap up this deep dive,
we're left with this really powerful, almost jarring
contradiction, aren't we? At the macro level, you've got
this genuine market euphoria, this violent technical rally,
all driven by the hope of a political solution finally
(28:49):
ending the shutdown mess that's clearly unwinding last week's
generalized fear. But then you zoom into the micro
level and you see this extreme, almost surgical scrutiny being
applied, exemplified perfectlybymonday.com getting
just savagely punished for a fractional miss on future
guidance. It shows that underlying
expectations for growth remain utterly, brutally unforgiving.
(29:10):
That synthesis is absolutely themost important take away from
today. I think Monday's big move
higher, it's fundamentally a political and technical event.
It's unwinding fear, it's unwinding speculation premium,
it's relief pure and simple. But the rest of the week, that's
the real grinding test, the fundamental test.
The big question now is whether these corporate proxies we've
(29:30):
been talking about core weave tonight on AI demand, Disney
later on consumer health, Cisco on enterprise spending, amat on
semi CapEx. Can they actually provide enough
positive news and a fundamental justification to sustain this
newfound optimism, especially when the Fed is still flying
blind and we have this complete void of official economic data?
That's a tall order. So what does the setup mean for
(29:51):
the, you know, the bigger picture view of this rally?
Is it sustainable or just a temporary sugar high?
Well, the market is clearly celebrating the end of
uncertainty, or at least the perceived end of the political
uncertainty. And that reduction in
uncertainty is always a powerfulshort term propellant for asset
prices. Never underestimate relief.
But, and this is the big but, indoing so, the market might be
(30:13):
dangerously overlooking the veryreal economic damage that might
have already been inflicted by this record long shutdown.
We already saw hints of that damage last week, didn't we, in
that shocking crash in the University of Michigan consumer
sentiment survey and some of those concerning private sector
layoff reports that started trickling out.
So the crucial question I think you, the listener need to really
(30:33):
grapple with is this. What happens when the official
data that's been delayed, the October CPI report, the October
retail sales numbers, What happens when that data is
finally released maybe in a weekor two?
What if it reveals the true, maybe ugly economic cost of this
41 day shutdown? Could that delayed data bomb
lead to a major fundamental riskoff shock that completely
(30:53):
reverses today's purely technical optimism, that
potential mismatch between current relief and future
reality? That's the storm potentially
waiting just over the horizon. It's precisely why certainty,
even if it proves temporary, feels so incredibly good to the
market right now.
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