Bulls, Bears, & The Bell Morning Edition 11/4/25

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Episode Transcript

(00:00):
Good morning and welcome. You've tuned in to the Bulls,
Bears and the Bell Morning edition of the Deep Dive.
Great to be here. If you need that shortcut, that
quick way to get fully informed about what's shaping up to be a
really complex start to the trading week, this is November
4th, 2025. Well, you're definitely in the
right place. Absolutely.
We're diving deep. We've got the market

(00:20):
intelligence right here, and we're going to break down what
really matters before that opening bell rings.
And there's a definite tension, isn't there?
It's something you really need to pay attention to today.
What are you saying? Well, the big picture, the broad
index environment, it feels likelet's call it cautionary profit
taking. There's real uncertainty out

(00:41):
there, macro uncertainty drivinginvestors to sort of, you know,
pull back risks. De risking OK.
But, and this is the crucial part, underneath that surface
caution, we're seeing some incredibly strong specific
opportunities, real micro level alpha.
Alpha meaning potential outperformance, right?
Exactly. So it's a market that frankly

(01:02):
might punish you if you're just passively holding an index, but
it looks set to really reward very selective, fundamentally
driven choices. Understanding that split that
segmentation that's key this week.
OK, so. That's our mission for this deep
dive. Then we need to connect those
almost conflicting signals for you, the listener.
We're going to tackle 3 things today.

(01:24):
Three key pillars. First, the big picture index
sentiment from the futures, those global risk signals
setting the early tone. Then second, we'll pivot.
We'll look at those specific stocks, the premarket winners
generating that micro alpha. What makes them tick?
What does their success tell us?And that second part is
fascinating, revealing what the market actually values right

(01:45):
now. And finally, the third piece,
the calendar, it's heavy this week, macroeconomic data,
corporate earnings, these are the events that are going to
really dictate the direction andprobably the volatility for the
next few days. Let's get into it.
All right, Let's jump straight into that immediate market bias.
What are the futures telling us right now ahead of the open?

(02:06):
OK, let's unpack the futures. The data we have shows, well,
moderate negative pressure overall, but it's where that
pressure is concentrated. That seems really telling,
right? Absolutely.
You've got this synchronize negative pressure across the
main US index derivatives. But if you dig into the actual
contract data, the divergent andrisk exposure, well, it's very

(02:28):
instructive. So not all indices are feeling
the same heat. Exactly.
Let's look at the tickers. Take the Micro E mini Dow
futures. That's MYM Z5.
The Z5 meaning December 2025 expiry, it's down, but only
moderately, maybe .37%. OK. .37% relatively stable then.
Relatively stable, yes. It suggests investors are sort

(02:49):
of holding the line in those more traditional sectors,
industrial value stocks that kind of make up the Dow.
Less immediate panic there. OK.
Now contrast that with the NASDAQ, the tech side.
Right now look at the Micro E Mini, NASDAQ 100, the M and QZ
5. That's showing a much sharper
drop. We're seeing it down around
.75%. Wow, so more than double the
Dow's decline? Pretty much.
And that gap, that difference, it's not random.

(03:11):
It tells you the D risking is very focused, very targeted.
The hesitancy is aimed squarely at those high beta growth
oriented tech stocks. And just to remind everyone,
high beta means these stocks tend to move more dramatically
than the overall market. They amplify the swings.
That's the one. They fly higher in rallies, but
they fall harder in downturns. And why hit them now while

(03:34):
they're very sensitive to interest rates?
Rates, of course. Investors are doing this
targeted selling precisely because we've got 2 massive
events looming today. First, that crucial jolts labor
market report. Second tonight's big tech
earnings, AMD and Super Micro especially.
OK connect the dots if jolts is hot.
If JOLTS comes in strong, suggesting the labor market is

(03:56):
still tight, the thinking is rate stay higher for longer and
high growth tech stocks, they rely heavily on cheaper
borrowing, cheaper capital. So investors are selling before
those potential negative catalysts hit, moving to cash,
maybe rotating into less sensitive areas.
And that pattern that targeted selling in tech futures, it
shows up in the volume data too,doesn't it, particularly in the
smaller contracts? It really does.

(04:17):
The volume in that micro Emini NASDAQ contract, the M and QZ 5
huge 161,007 contracts traded already.
That's significant volume in themicro contract.
Which is 110th the size of the standard Emini.
Why is that important? Because it points to really
broad participation. It's not just the huge
institutions, retail traders, smaller funds, they're all

(04:38):
actively involved using these smaller contracts for tactical
moves. They're hedging, they're
speculating, they're preparing for what they expect to be a
very volatile day around these data releases.
Nobody's just sitting back. So a lot of active positioning
ahead of the noise, OK. We have established the domestic
caution is focused on growth, but is this just AUS thing or a
global markets singing the same tune, hashtag tag tag 1.2

(05:01):
intermarket flow and global riskoff signal?
Oh, it's definitely being reinforced globally.
This isn't happening in a vacuum.
What are we seeing overseas? We'll look at Asia overnight,
mostly lower. Japan's Nikkei down about .36%.
South Korea's Cosby took a bigger hit, down 1.6%.
Shanghai Composite was off just slightly, .19%.
And Europe following the same pattern.

(05:23):
Euro stocks 50. Futures are pointing lower down
about .8%. That's pretty much a global risk
off signal then almost synchronous.
It really looks that way near synchronous caution.
What's the common thread? Is it all just fear about the US
Fed and Joltus today, or is there something else knitting
this together globally? It's definitely a compound
effect, but central bank actionselsewhere are playing a key

(05:44):
role. Take the Reserve Bank of
Australia, the RBA. They just met and decided to
keep their main interest rates steady at 3.6%.
OK, a pause from the RBA. How does that ripple outwards?
It's not just the pause, it's the reasoning.
The RBA specifically highlightedlingering worries about sticky
inflation. That statement coming from a
major central bank confirms thisisn't just AUS problem.

(06:06):
Inflation, particularly in services, is proving really
stubborn worldwide. Right.
So even if the RBA paused, theircommentary still points to this
global inflation persistence. Why should a trader watching,
say, the S&P 500 care specifically about the Rba's
inflation concerns? Because it validates the idea
that high interest rates might be here.

(06:27):
To stay globally for longer, U.S. companies rely on global
supply chains, global demand. If inflation stays sticky
everywhere, as the RBA implies, it makes the US Federal
Reserve's job much harder. It reinforces the need for the
Fed to stay vigilant, maybe stayhawkish.
Precisely. It compounds that domestic bias
we see in the NASDAQ futures. So when you see European futures

(06:49):
down, Asian markets weak, and UStech futures selling off ahead
of a major US labor report, it tells you the market isn't just
bracing for U.S. data, it's positioning for broader,
sustained global rate fears. It puts this morning's tentative
open into that larger context. OK.
This is where it gets really interesting, that counter
narrative you mentioned. This is where the deep dive
really pays off I think because despite all that index caution

(07:10):
that DE risking, certain individual stocks are absolutely
flying. Yes, it shows that investor
appetite for alpha for specific gains is still huge if a company
meets the market's current criteria.
And a prime example is Pediatrics Medical Group, ticker
MD. This one's a really important
case study, isn't it? Tells us a lot about what the

(07:31):
market values right now. It really does.
MD is soaring pre market up. What is it 24.22%?
And the reason why is maybe the single most critical insight for
anyone listening today. It's just a perfect example of
this market segmentation rewarding a specific kind of
discipline. And the data is almost
counterintuitive because the bigdriver isn't sales growth, it's

(07:52):
profitability, pure and simple. Can you highlight that contrast
for us? Why is that so powerful today?
It's powerful because it essentially redefines valuation
in this kind of environment. Look at Pediatrix's numbers.
Their operating margin. It expanded dramatically.
Went from 6.6% year ago to 13.8%now.
Wow. More than doubled their margin.
Huge improvement, massive step up in efficiency and cost

(08:14):
control. But here's the kicker.
As you said, their actual revenue contracted.
Year on year, revenue was down 3.6%.
So they sold less but made way more profit on what they did
sell. Exactly.
And then management basically validated this whole strategy by
significantly raising their forecast for the full year 2025
Adjusted EBITDA. They bumped the range up to $270

(08:35):
million to $290,000,000. That's well above what analysts
were expecting. And the market's response?
A massive plus 24% jump, rewarding them for shrinking the
top line, but nailing the bottomline.
So what's the big signal here? What does this MD story mean for
how we should think about other stocks?
The implication is profound, andit ties right back to that high

(08:58):
cost of capital world the Fed has created.
Remember when interest rates were basically 0?
Yeah, growth at all costs. Exactly.
The market rewarded companies purely for top line growth, even
if they're burning cash like crazy to get it.
Market share was everything. Now money's expensive.
Borrowing costs are high, discount rates on future
earnings are high. So the market's priorities have.
Flipped. It's demanding profitability.

(09:18):
Demanding it, profitability, margin expansion, really
disciplined operational control that's valued way more now than
just chasing sales numbers. OK, but let me push back
slightly here. Is there a risk this is short
sighted? If MD is boosting margins so
aggressively, could it be cutting corners, maybe hurting
long term growth prospects or even patient care to hit those

(09:40):
numbers? Aren't investors just buying a
temporary boost? That's a very fair and critical
question. Absolutely.
There's a long term risk if margin gains come at the expense
of core service quality or necessary investment.
The market right now seems to believe either that the margin
expansion is sustainable, or perhaps more likely, that the
previous cost structure was justincredibly bloated and

(10:01):
inefficient. So they're rewarding the cleanup
effort, basically. In the short term, yes, superior
earnings quality, meaning profits backed by actual cash
flow and healthy margins, That'ssetting a new benchmark.
What this tells us is any company still chasing that old
growth at all costs playbook without showing corresponding
margin improvement, they're likely to get punished by this

(10:22):
market. You need to take this MD metric,
operational efficiency, margin discipline and apply it as a
filter to other sectors. Think saws e-commerce areas that
traditionally spent heavily on marketing for growth.
Are they adapting? Great point.
Efficiency is the new growth it seems.
OK Next up, another big pre market mover.
Cipher Mining CIFR up over 22%. This one feels like it's riding

(10:45):
2 powerful waves at once. Crypto's recovery and this huge
AI infrastructure story. It's a perfect example of
thematic convergence. You nailed it.
CIFR benefits, yes, from crypto prices bouncing back.
But the real excitement, the reason for that big jump?
It's about a smart strategic pivot they're making.
It validates their potential beyond just mining.
Tell us about that pivot. How does a crypto miner suddenly

(11:06):
become an AI infrastructure play?
That seems like quite a leap. Well, think about what crypto
miners have. They built these huge
specialized data centers, massive power requirements,
sophisticated cooling systems. It's complex infrastructure.
Right, built for one specific purpose, mining coins.
Exactly. But what companies like CIFR are

(11:26):
realizing is that this infrastructure, this power
capacity they've secured, it's incredibly valuable for other
things too, specifically high performance computing, HPC and
hosting the hardware needed for AI.
So they already incurred the massive cost of building these
facilities and securing the power.
Which is the hardest part. Now they can leverage those

(11:46):
existing assets, repurpose that compute power for AI
applications which carry potentially much higher, more
stable margins than just mining A volatile commodity.
OK. So they're shifting from a
commodity business to more of a tech infrastructure service
provider. That makes them a proxy for the
AI build out itself. Precisely.
And the market loves it. It separates these strategically

(12:07):
minded players like Cipher from the miners who are just exposed
to coin prices. Investors are saying, OK, we're
willing to give you a higher tech like valuation multiple
because you have this valuable infrastructure.
And we're seeing confirmation ofthat AI theme elsewhere this
morning too, right? Like with NVIDIA.
Absolutely. Look at the Anchor stock, NVIDIA
itself, NVDA. It's up over 2% pre market on

(12:29):
really heavy volume, over 180 million shares already.
When you see that kind of sustained buying interest in the
leader, it confirms that the core belief in the AI narrative
is still incredibly strong at the individual stock level.
That creates A bullish backdrop for these thematic proxies like
CIFR. And of course, all of this just
ramps up the importance of tonight's earnings.

(12:50):
From AMD and Supermicro, it all connects.
OK, let's pivot from those pre market movers to the scheduled
event risk. The earnings calendar is packed.
Before we get to the really big ones tonight, what should we be
watching for this morning? Any key reports coming out
before the market close? Yeah, the morning session has a
mix. We've got Big Pharma reporting
Pfizer ticker PFE and Amgen AMGN.

(13:11):
Pharma always interesting. What's the focus there beyond
the usual revenue and pipeline updates?
Well, right now they're reporting against a backdrop of
pretty significant regulatory risk and all the political
pressure about lowering drug prices, managing healthcare
costs. So the focus shifts more to how
they're managing those pressures, their cost controls,
their guidance. Exactly.

(13:32):
Investors will be looking closely at their R&D pipelines,
sure, hoping for the next blockbuster.
But maybe more importantly, they'll want to hear concrete
plans for cost mitigation. How are they going to protect
margins if pricing comes under pressure?
Interestingly, Pfizer PFE was barely moving pre market, just
slightly positive. It's just these reports are
maybe more about sector health than triggers for broad market

(13:55):
volatility today. OK, Pharma watching costs.
What else this morning? Uber, Right?
Uber, That's a big one for the gig economy.
Huge barometer for the gig economy and consumer spending.
Yes, for Uber, the deep dive is all about the quality of their
earnings. Forget the adjusted numbers for
a second. Investors want to see a clear
path to sustain profitability based on GAP Generally Accepted

(14:18):
Accounting principles. Real net income, not just
adjusted figures. Exactly.
Can they make money under the strict accounting rules?
We'll also be watching their take rate, how much they keep
from each rider delivery. Is that growing?
And of course, any comments on driver supply, driver costs and
the regulatory hurdles they always face in different parts
of the world, that remains a constant risk factor.

(14:39):
All right, now for the main event, really the reports after
the market closes today, the AMCreports, you said earlier, these
are critical, like define the week critical for the NASDAQ.
Absolutely. These have the highest potential
to really move the market this week.
Tonight's results, particularly from the semiconductor space,
will set the tone for the entiretech sector, all the related
stocks, the ETF's, everything. And the single most important

(15:03):
report, the one everyone's watching, is Advanced Micro
Devices AMD. Why does AMD carry so much
weight tonight? Because the market is
desperately looking for proof for tangible evidence that
there's a real viable competitorto NVIDIA in the AI chip space.
NVDA has had this near monopoly on the high end accelerators.

(15:24):
So AMD needs to show they can actually take meaningful share.
Yes, expectations are sky high, especially for their newest AI
chip offerings. The market needs to see more
than just promises. They want confirmation of actual
deal flow. Remember that Oracle
partnership? They announced our partnerships
like that, translating into big orders, significant revenue, and
crucially, what's the forward guidance for 2026 look like?

(15:46):
This tells us if that massive wave of AI spending is
broadening beyond just NVIDIA, or if it's still highly
concentrated. OK.
So the risk here is massive. If AM DS guidance is weak, or if
those deals aren't materializingfast enough, what happens?
It could be ugly. A weak report from AMD would
instantly reignite fears that Nvidia's dominance is just too
strong, that maybe the AI spending isn't as broad as

(16:08):
hoped. That would put immediate heavy
pressure back on the whole NASDAQ complex, validating that
cautious selling we saw in the M&Q futures this morning.
But AMD isn't reporting in a vacuum.
Tonight we also get super micro computer SMCI.
You called this the supply chainlitmus test.
Why is SMCI just as important, maybe even more so, for
understanding the physical reality?

(16:30):
SMCI provides a crucial ground truth.
While AMD tells us about the demand for the chips, the brains
if you will, SMCI tells us aboutthe actual deployment.
They build the integrated AI servers, the racks, the cooling
systems, the physical body. The physical build out.
Exactly. Their results give us real
visibility into whether companies are actually
installing this stuff or their bottlenecks in the supply chain.

(16:51):
Are companies hesitant to spend the capital right now?
SMC eyes results, especially their backlog and margins, tell
that story. So the brain and body analogy
you mentioned helps frame this. We need both reports together.
We absolutely do think about thescenarios.
Scenario 1 The bull case. Both AMD and SMCI are strong.
AMD shows massive chip demand, great guidance.

(17:14):
SMCI confirms the servers are flying off the shelves.
Backlog is strong. That's the dream scenario for AI
bowls. The narrative is real.
The spending is happening now. Market likely rips higher.
OK, scenario 2. Scenario 2.
The bottleneck. AMD is strong, the demand is
there, but SMCI is weak. Maybe their margins are
squeezed. Maybe deployment is slower than
expected. This suggests a bottleneck.

(17:36):
The desire is there, but the physical build out is hitting
snags that would probably cap the rally.
Makes sense. Scenario 3.
Scenario 3 The contradiction. AMD is weak, but SMCI is strong.
This seems less likely right now, but it would mean SMCI is
building servers, perhaps for other chip makers or for general
computing, while AMD is losing the AI race.
Bad for AMD, but maybe OK for the broader infrastructure

(17:57):
theme. And the worst case.
Scenario 4. The bear case.
Both AMD and SMCI disappoint. Weak guidance from both that
signals either AI hardware demand is cooling faster than
expected, or maybe broader corporate capital spending is
just getting slashed. That would hit the NASDAQ hard
and confirm the morning's DE risking was spot on.

(18:17):
So the key takeaways, you reallyhave to look at SMCI numbers,
their margins, their backlog before drawing conclusions about
the whole chip sector, even after you see AMD's results.
100% you need both pieces of thepuzzle.
Oh, and we also get Rivian. Automatic motive.
Rivian tonight. Right, the EV startup.
Less of a tech anchor, but stillimportant.
Still important, Yeah. It gives us a read on the health

(18:39):
of these capital intensive EV companies, the focus there will
be on their production ramp up, are they hitting targets and
critically, their cash burn rate, especially now with the EV
market getting more competitive and maybe normalizing a bit
Rivian's ability to manage costsand margins, it'll be judged by
that same efficiency as King Standard we saw with MD.
OK, Let's shift gears now from individual company risk to the

(19:02):
big picture systemic risk. We need to walk through the
macroeconomic calendar because this is what really moves the
broad market and shapes what theFederal Reserve might do next.
Absolutely, and this week is seriously front loaded with data
that hits right at the heart of the feds concerns.
The risk really ramps up as the week progresses.
Hashtag, hashtag 4.1. Today's core indicators November

(19:24):
4th. So starting with today, Tuesday,
November 4th, 1st up 8:30 AM Eastern, we get international
trade data. The expectation is for a deficit
around $60.4 billion. Why does the trade balance
matter right now? Well, the trade balance feeds
directly into how economists calculate GDP, specifically the
net exports part. So if the deficit comes in

(19:45):
narrower than expected, maybe because exports were stronger or
imports weaker, that's generallyseen as a positive sign for Q4
GDP growth, kind of bullish for domestic strength.
OK. So a medium impact number, but
the really big 1 today comes later, right?
Yes. The main event for macro today
is at 1000AM Eastern. That's the Joltus job openings
report. Our sources are flagging.

(20:05):
This is the likely trigger for the highest intraday volatility
today. Joltus job openings and labor
turnover survey. Why is the specific reports so
critical for the market and the Fed right now?
Because JOLTS is seen as the best real time gauge of Labor
market demand or tightness. Think of it as measuring how
many help wanted signs are out there relative to the number of

(20:27):
available workers. So it's about the supply demand
balance for labor? Exactly.
If the number of job openings isreally high, it means employers
are competing fiercely for workers, which tends to push
wages up. And that wage pressure is
exactly the kind of inflation the Fed is trying desperately to
cool down. The last reading was around 7.2
to 7 million openings. OK, So what number should we be

(20:47):
watching for? What kind of reading would
signal trouble, meaning persistent inflation risk and a
more aggressive Fed? If we see an unexpected jump in
job openings, say significantly above that 7.27 point 3,000,000
range, that would be bad news for markets.
It suggests the labor market is still too tight, wage pressures
will continue, and the Fed mighthave to keep rates higher for

(21:09):
even longer or even hike again. And conversely, a drop.
If the number comes in well below say 7.1 million, that
could signal the labor market isfinally cooling off
significantly. That might ease pressure on the
Fed, potentially leading to a more risk on reaction in the
market because JOLT is really get to that core supply demand
imbalance. It's seen as a key leading

(21:30):
indicator ahead of the actual employment numbers later in the
week. Oh, and we also get factory
orders at the same time 1000AM. So a snapshot of both labor
demand and manufacturing activity hitting at once.
Busy 10 AM then hashtag tag tag 4.2.
Escalating midweek and end of week volatility.
And looking beyond today, the risk just keeps building through
the week. The market's likely going to

(21:52):
trade pretty cautiously until weget the full picture on
employment. So what's on deck for Wednesday,
November 5th? What should listeners be
watching for? This day is another potential
minefield. We kick off with the ADP
employment report at 8.15 AM Eastern.
That's the private payroll processors estimate, often seen
as a preview, maybe an imperfectone, but still a preview of the
official government jobs report.OK, ADP first thing, then later.

(22:15):
Then at 10 one for Round EasternWednesday we get the ISM
Services index. This one is hugely important.
Services inflation is what the Fed is really worried about now.
The ISM report measures businessactivity, new orders, employment
and, crucially, prices paid within that massive services
sector of the economy. So if that price is paid, number

(22:35):
comes in hot. It's a big red flag.
It confirms inflation is sticky.It's embedded in the core of the
economy, not just in goods anymore.
That would likely trigger more defensive trading.
Both ADP and ISM services are definitely high impact events
for Wednesday. And then the grand finale, the
biggest volatility event of the week, lands on Friday, November
7th. That's right, the official
Employment situation report at 8:30 AM Eastern Friday.

(22:59):
This is the most significant piece of monthly economic data,
period. It's guaranteed to cause the
week's biggest swings because itdirectly feeds into the market's
pricing of Fed rate hike probabilities.
Non farm payrolls is the headline everyone watches but
other parts matter too. Absolutely.
The market digs deep into this report.
Average hourly earnings are critical.

(23:21):
That's the direct measure of wage inflation, the unemployment
rate, labor force participation.It all gets scrutinized.
Now, we flagged a potential wrinkle here.
There was some talk about government shutdown risks
potentially delaying this report.
Is that still a factor? It's a critical contingency to
keep in mind. While things seem OK for now,
the potential for a delay due tounresolved government funding

(23:42):
issues always lingers if for some reason Friday's official
jobs report were to be delayed. Then today's Jolts and
Wednesday's ATP as I'm suddenly become even more important.
Massively more important, they would become the markets primary
reads on the labor market until the official data could to be
released. It means that scenario planning
and maybe even hedging around today's Joel Test release takes

(24:04):
on extra significance just in case it ends up being the main
labor data point we get for a while.
OK. So we've laid out these two
powerful, almost opposing forces.
On one hand, you've got this broad index caution, this
nervousness driven by the heavy macro calendar, especially the
labor data. On the other hand, you have
these pockets of real convictions, specific stocks

(24:26):
rocketing higher based on efficiency or clear thematic
wins. How do you navigate that?
What's the strategic take away for listeners right now?
The synthesis is pretty clear. I think this kind of segmented
market screams for active management.
You need to be selective. Passive index investing is risky
this week. It feels very risky right now.
Yeah. If you just buy the index,
you're completely exposed to those systemic macro shocks, a

(24:49):
hot jolt to report a hawkish signal from the ISM, a surprise
in the jobs numbers Friday. Those things can pull the whole
market down, regardless of how well individual companies within
the index are actually doing. But the opportunity is in
finding those specific stories, the MD's and CI of ours.
Exactly those targeted positions, the ones backed by
confirmed fundamentals like MD'sefficiency or CFRS validated

(25:11):
pivot, they offer that potentialfor real out performance for
alpha. Active management lets you try
and capture those specific gainswhile also managing or hedging
against the broader macro storm.And the timing of events this
week really forces your hand tactically, doesn't it?
It really does. You've got jolts hitting mid
morning today than the massive AM DSMCI earnings after the bell

(25:34):
tonight. It's a tight cluster of
potentially huge market moving events.
This demands a very tactical, probably shorter term approach.
Trying to predict the market's overall direction for the next
week is tough given the Fed uncertainty, so the smarter play
might be to focus on capturing volatility during the trading
sessions while trying to minimize your exposure to
overnight gaps caused by macro surprises.

(25:57):
Hashtag tag tag 5.2 Recommended adjustments and hedging
strategies. OK, let's get really practical
then. Based on everything we've
discussed, what are the specificsector weighting adjustments
someone might consider this week?
Where should you maybe lean in and where should you pull back?
All right. For tactical overweight
positions, I look at selectivelyincreasing exposure to that
digital infrastructure, AI proxytheme CI far as move validates

(26:19):
it and there's huge anticipationaround AMD and SMCI tonight.
Capital is clearly flowing there.
OK, overweight AI infrastructureplays.
What else? And secondly, healthcare
services companies that are demonstrating that kind of
operational efficiency, we saw with MD look for margin
expansion, discipline, cost control.
The market is clearly rewarding that quality factor right now.
So overweight AI proxies and proven efficiency plays, where

(26:43):
should we be cautious maintaining neutral or
underweight positions? Definitely maintain caution,
maybe neutral to underweight on broad technology indices, things
like the QQQ until we get clarity from AMD and SMCI
tonight. If that AI story hits a bump,
the whole sector could easily sell off.
Makes sense. Any other areas to underweight?
Yeah, I'd also be cautious on highly cyclical sectors and

(27:04):
anything really sensitive to interest rates.
Think housing maybe some consumer discretionary names
that sequential labor data risk throughout the week JOLTS today
ADP as on Wednesday, jobs Friday.
Any upside surprise there could reignite hawkish Fed bats and
hit those rate sensitive sectorshard.
OK. Sector weights adjusted, no
managing the event risk itself hedging.

(27:26):
Let's talk specifics first. How would you hedge against a
bad surprise in the labor data like today's JOLTS?
Right, the labor data hedge. This is crucial for protecting
against an unexpectedly hot number from JOLTS or maybe the
ADPSM later. A straightforward way is using
Define risk index options. Consider the Micro Emini S&P 500

(27:46):
futures options, the MES options.
OK, MES options? What specifically?
You could look at buying some short dated, slightly out of the
money put options that expire atthis Friday, November 7th that
covers you through the entire week's employment data dump.
Buying puts below the current market.
Price exactly out of the money means the strike price is below
where the market is currently trading.

(28:07):
The premium should be relativelycheap.
Think of it as buying affordableinsurance against a sudden sharp
market drop triggered by bad macro news.
It's defined risk. The most you can lose is the
premium you paid and it helps dampen that systemic downside
exposure. OK, that covers the macro risk.
What about the specific earningsrisk tonight, especially for AMD
and SMCI where the expected move, the implied volatility is

(28:30):
already sky high. Buying puts there must be
expensive. It is just buying straight puts
on AMD or SMCI right before earnings is likely paying a huge
premium for volatility that's already inflated.
A more capital efficient approach is often to use defined
risk option spreads. Spreads OK, Like what?
You could consider something like a put debit spread.

(28:52):
You buy one put option, maybe slightly out of money, and
simultaneously sell another put option further out of the money.
Selling that further output helps finance the cost of the
put you bought. So it lowers the cost of the
hedge. Significantly, or you could look
at something like an iron Condorif you think the stock might
stay within a certain range but want protection against a huge
move. Either way, the point is using

(29:14):
spreads allows you to define your maximum risk and reward,
manage the high implied volatility, and still hedge
against a really severe downsidesurprise in AMD or SMCI that
could drag the whole tech sectordown with it.
It's about efficient risk management for these known high
volatility events. Hashtags tag outro.
Wow. OK, that was incredibly
detailed. A fantastic breakdown of this

(29:35):
really conflicted market open. Let's quickly recap the three
absolute must know takeaways foreveryone heading into the
trading day. First.
First, those NASDAQ futures, they're signalling very targeted
DE risking specific caution aimed right at tech, clearly
anticipating tonight's high stakes earnings after the close.

(29:55):
The market isn't necessarily panicked, but it's definitely
brace for impact. Got it.
Second key take away. 2nd that Pediatrics Medical Group story,
MD. It's crystal clear operational
efficiency, margin expansion, real profitability, That's the
new king. Forget growth at all costs.
In this higher rate world, the market is paying up massively
for demonstrated marginal. Efficiency over sheer growth and

(30:17):
the third critical point for today. 3rd, the macro risk is
front and center today with JOLTS at 10 AM Eastern.
That labor data point is the biggest systemic hurdle right
now. It has the potential to
completely reset interest rate expectations for the week and
really influence whether the Fedfeels forced to stay aggressive.
OK, Jolts at 10 AM is key. Before we wrap up, you usually

(30:38):
leave us with a final thought, something to chew on.
Yeah. Just a provocative question,
maybe building on that MD theme,given how willing the market
clearly is to pay this huge premium for real structural
margin improvement, take that benchmark that operational
efficiency test and apply it rigorously to every company you
hold in your own portfolio. OK, ask yourself.

(31:00):
Ask yourself, are these companies laser focused on
disciplined profitability, on generating reliable cash flow or
are they still stuck in that oldplaybook chasing top line growth
no matter the cost, a strategy the market seems to be actively
punishing right now. And maybe the follow up question
is which sector, one that's traditionally been all about
growth like SOZ or maybe biotech, which one is next in

(31:22):
line to get fundamentally re rated based purely on hitting
those efficiency metrics? That is definitely the lens to
be using all week long. Fantastic insights.
We really hope this deep dive gives you the clarity and the
tactical edge you need for a successful trading week.
Thanks for tuning in. My pleasure.
Trade safe. We'll talk to you next time on
the Deep Dive.