November 6, 2025 • 17 mins
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Good morning and welcome to the Bulls Bears in the Bell Morning
Edition. Thank you for joining us.
It is Thursday, November 6th, 2025.
Today, we're diving into a market that feels, well, pretty
tense. We're seeing intense anxiety,
some really volatile stock movesand this huge split between how
the US and Europe are performing.
That anxiety is definitely the word for it, especially
(00:21):
stateside. You've got this kind of
paralysis setting in ahead of the NFP report tomorrow, that
big jobs number. And on top of that, we're
digesting some frankly brutal reactions to tech earnings from
last night. The main theme, there's just
zero room for error out there, OK?
Let's try to break that down. We see three big things really
shaping the market today. First, what you're calling the
(00:42):
guidance trap hitting US tech. That's right, any hint of
uncertainty in the outlook is getting hammered severely. 2nd A
major macro event today, the Bank of England decision at noon
GMT. Yep, the Bay Bowie is walking a
tightrope. Inflation's cooled a bit, but
there's fiscal stuff coming fromthe government soon too.
Their wording today is huge for European markets.
(01:03):
And 3rd, casting a shadow over everything is that anxiety about
tomorrow's U.S. jobs Report, theNFP.
Absolutely. That NFT data is so critical for
what the Fed does next. That big money is mostly sitting
on the sidelines. Keeps things quiet overall, but
makes those individual stock moves even bigger.
(01:23):
So a cautious, jumpy and really split market.
Let's start with that global divide, because the difference
between the US and Europe is pretty striking right now.
It really is stark this morning over in the US futures for the
S&P 500 and NASDAQ 100 are, well, they're being described as
little changed, subdued, basically treading water.
They bounced back a bit in midweek, but there's no real
(01:44):
conviction. The big worry hanging over
everything is just lofty tech valuations.
People looking at those high PE ratios and getting nervous,
right? Especially with rates where they
are. Exactly.
You see stocks trading at 30-40 fifty times forward earnings and
you think how much higher can they really go?
If borrowing costs stay high, itbreeds caution.
OK, so that's the fragile US picture, but then you look
(02:06):
across the pond to Europe. And it's completely different
story. Real relative strength there.
EU KS Footsie 100 is flirting with record highs again.
And maybe even more significantly, the German DAX
forecast is explicitly bullish. Analysts are saying it's finally
breaking out of that consolidation phase it's been
stuck in for months. So why the split?
(02:26):
What's driving Europe's strength?
It really comes down to fundamentals versus sort of
forward-looking fear. the US is stuck on anxiety about the
future, about guidance. Europe, on the other hand, is
rallying on actual positive harddata.
OK. Hard data like what
specifically? This is important if we're
talking about money potentially moving.
(02:47):
Right. We're talking about better than
expected numbers. People can actually see
services, PMI data, you know. The pulse of the modern economy
came in strong for Germany, Spain, Italy and on the
industrial side too. German factory orders were
solid. French industrial production
beat expectations. It suggests the European engine
is actually picking up steam. So Europe has proof actual
(03:07):
numbers showing things are getting better.
That's boosting the decks. Meanwhile, the US is bogged down
by sentiment valuation worries. And those fears are getting
validated by the sharp earnings reactions we'll get into.
So the implication for listeners, for investors, this
could be a real capital rotationplaying out money moving from
potentially overvalued US tech to Europe where there's data
(03:31):
back in the rally. It certainly looks like it could
be. You know, allocators might be
thinking why sit an expensive UStech that gets punished for the
tiniest miss when there's accelerating growth in Europe by
data and arguably at lower valuations?
It's a move towards maybe a bit more certainty.
But is it just a temporary hedgebefore the NFP?
If that number comes in week tomorrow, doesn't everyone just
(03:53):
pile back into US growth? That's the billion dollar
question, isn't it? Yes, a week NFP could definitely
reignite the US growth trade. But, and this is the key
difference now, the European data is improving fundamentally.
If Germany keeps posting strong orders, if services across the
continent keep accelerating, then that European rally starts
to feed itself. It becomes about actual earnings
(04:13):
growth, not just Fed hopes. So Europe could potentially
decouple its performance, might stand on its own legs even if
the Fed pivots. Potentially it's the first time
in a while we can even suggest that with some confidence based
on the data. It's not just about dodging NFP
risk, it might be about finding genuine accelerating value
overseas. OK, let's dive into that US tech
(04:33):
pain. You mentioned this guidance
trap. Explain what that means exactly.
It's this dynamic where good Q3 results, yeah, they just don't
matter much right now. The market is laser focused on
the future and it's punishing, Imean really punishing.
Any uncertainty, any slight in forward guidance, especially for
these high growth, high valuation stocks, there's just
(04:54):
no margin for error. Fortnet FTNT seems like the
poster child for this. Absolutely a perfect painful
example. Their Q3 numbers were actually
good. They beat earnings estimate
$0.74 versus 63. Expected revenue beat two $1.72
billion versus 1.7. There are a billion dollars
operationally solid yet. The stock is getting crushed.
(05:14):
Pre market down what 9 or 10%? Why?
Solely because of guidance, their Q4 revenue new forecast,
the midpoint was $1.855 billion.Wall Street wanted $1.875
billion. Wait, that's a difference of
just $20 million on almost $2 billion.
Exactly. It's tiny.
You'd think it's a rounding error, but in this market that
tiny miss gets interpreted as a major red flag and boom, 10% off
(05:37):
the stock price. That reaction seems
disproportionate. What does it signal?
Two things, really. One, it shows how sensitive
these high valuations are. Even a tiny wobble in future
expectations has a huge impact on the present value.
And two, maybe more importantly,analysts are taking Fortinet
slight caution and blowing it upinto a signal about the entire
(05:58):
cybersecurity sector. They see it as proof that
enterprise IT spending is slowing down overall.
So the stock isn't just falling on its own outlook, but on the
markets fear about the whole industry.
Precisely. It's an extrapolation of fear
triggered by a minuscule guidance miss.
OK, let's look at DoorDash DASH,another big pre market loser,
down almost 10%. Different reason though.
(06:18):
Similar theme, different flavor.Doordash's core business
actually looked pretty good. Gross order value beat their own
forecast. Revenue was strong, but they
missed profit estimates for Q3 and the real kicker was
management talking about an aggressive plan to invest
several $100 million more in 2026.
Investing in things like AI, newsoftware sounds like long term
(06:41):
growth initiatives. It does, but the market's
reaction was swift and brutal, down 10%.
The message is crystal clear. Forget 2026, we want profits
now. Stop spending.
Why such a harsh reaction to investment?
Isn't that what growth companiesdo?
Normally, yes, but not in a highinterest rate world.
Think about how stocks are valued, discounted cash flows
(07:03):
when interest rates, the discount rate, are high.
Money earned far out in the future, like profits from
investments paying off in 2026, is worth much, much less today.
The market isn't saying AI is bad, it's saying mathematically
we can't afford for you to spendthat money now when the cost of
capital is so high and the payoff is so far away.
It demands near term profitability.
(07:24):
It's not all bad news though, some companies are getting it
right. Apple oven APP is up strongly
pre market about 7%. What do they do differently?
Aplovin delivered exactly what the market wants, a clean beat,
hitting numbers on both revenue and earnings, and crucially,
they gave a clear, credible story about future growth.
They tied it specifically to their a Exxon 2 Point O
(07:45):
platform. This new e-commerce portal
things analysts could understandand model immediately.
And the reward was? Immediate analysts love price
target upgrades across the board.
We saw numbers like 705, seven, $120.00, even $860 reiterated.
It shows the market will pay forgrowth, but only if the
execution is perfect and the story is rock solid with no
(08:06):
whiff of uncertain spending. All right, let's shift gears to
the big macro events influencingeverything.
First up, the Bank of England decision coming up at 1200 GMT.
You said they're walking a tightrope.
They really are. It's a tough spot for Governor
Bailey and the committee. On one side, you've got recent
inflation data that came in a bit softer than expected CPI at
3.8% when folks expected 4.0%. That usually opens the door for
(08:28):
a rate cut. But there's a complication from
the government side. Exactly.
The UK government has a budget announcement on November 26th
and the word is they're likely to announce tax rises, fiscal
tightening. So if the Bowie cuts rates now,
just before the government potentially tightens the fiscal
screws, it gets messy. They might have to reverse
(08:49):
course quickly. So what's the market betting on?
What's the expected outcome? The strong consensus is for
what's called a dovish hold, meaning they keep rates steady
at 4.000% today. But, and this is key, they use
the statement, the minutes, the language to strongly hint that a
rate cut in December is now morelikely.
Basically trying to soothe markets without actually cutting
(09:11):
yet giving them time to see the budget details.
OK, so that dovish hold is bakedinto the Footsie rally we're
seeing. Largely yes, which sets up the
risk. What's the risk then, if they do
exactly what's expected? If they deliver the dovish hold,
the market might just shrug. Maybe a small relief pop in the
Footsie. The real risk, the asymmetric
move, is if they deliver a hawkish disappointment, meaning
they hold rates but give no strong signal about a December
(09:33):
cut. Maybe they sound more worried
about underlying inflation or that fiscal outlook.
And that would cause. A sharp reversal, the FTSE 100
would likely sell off hard as those dovish bets unwind, and
the British pound GDP would probably rally sharply as the
market pushes back expectations for rate cuts.
While London waits for the Bohy,the US market seems froven by
(09:55):
the NFP report tomorrow. You called it the final boss.
It really feels like that today institutional money is just
fixated on tomorrow's U.S. jobs data.
You get the big three non farm payrolls number itself, average
hourly earnings, wage growth, and the unemployment rate.
It's the single most important snapshot of the US labor market,
and therefore the key input for the Federal Reserve's next move.
(10:17):
And we're in that weird bad newsis good news phase right now.
Explain that again. Why does the market cheer weak
job data? It's all about about the Fed
strong job growth and especiallystrong wage growth.
Average hourly earnings tells the Fed they need to keep
interest rates high to fight inflation.
High rates are bad for stocks, especially growth stocks, so any
(10:38):
sign the labor market is cracking, like we saw earlier
this week with news of job cuts hitting a high, is seen as good
news for markets. It means the Fed might be able
to ease off the brakes sooner. So bad economic news equals hope
for lower rates, which equals stock market rally.
In this specific context, yes, you saw Treasury's rally.
Yields fell on that job cuts news.
(11:00):
Traders immediately increased bets on Fed rate cuts next.
Year and this anxiety is why U.S. markets are so subdued
today. Big players are just waiting.
Exactly. Nobody wants to make big bullish
bets today just in case tomorrow's NFP number comes in
really strong. That would be a major blow,
potentially wiping out rate cut hopes and hitting those tech
valuations hard. They're hoping for weakness
tomorrow. Since the big indexes are kind
(11:21):
of stuck waiting, the real action, the volatility is
individual stocks reacting to earnings.
Let's look at a few interesting ones.
Qualcomm. QCOM.
Right, QCOM is a fascinating onethis morning.
Stocks down maybe 2.7% to 3% premarket.
But here's the thing, operationally, they beat
expectations and raise their guidance.
(11:41):
Looks like a classic beaten raise.
So why the drop? I see a headline about a massive
loss, $2.89 per share. That sounds pretty bad.
It sounds bad but it's misleading.
That's a gap number. Generally accepted accounting
principles. The actual operations selling
chips look really strong. Revenue beat.
Adjusted EPS beat guidance beat.The gap loss was massively
(12:05):
distorted by a huge one off non cash tax charge, something like
$5.7 billion. Non cash, meaning money didn't
actually leave the bank. It's an accounting entry.
Exactly. It relates to how how they value
deferred tax assets, things related to overseas earnings.
It doesn't impact their current operations or cash flow.
It's accounting noise. So the algorithms or headline
readers see the big negative gapnumber and sell.
(12:27):
That's likely what's happening. Automated trading sees the loss
hit sell, but investors who dig into the details see the strong
underlying business and the goodguidance.
Creates a potential inefficiencyby the dip chance for those who
see past the noise. It often does.
The noise is temporary, the fundamentals look solid.
Maybe even improving that discrepancy can be an
opportunity. Okay, contrast that with
(12:48):
Albemarle ALB, the lithium producer, It's one of the top
gainers pre market up over 3.5%,but they reported a big net
loss. How does that work?
This is a classic better than feared situation.
The whole lithium sector has been absolutely hammered prices
down. Oversupply worries.
Albemarle stock itself fell over8% just yesterday going into the
(13:08):
earnings. So expectations were incredibly
low. People were braced for disaster.
Completely. So when they reported, yes, it
was a net loss on a GAAP basis $160.7 million, but they managed
to beat the very low revenue estimates and importantly, they
still generated positive Adjusted EBITDA earnings before
interest, taxes, depreciation and amortization of about $225
(13:31):
million. So not great, but not the total
catastrophe, the marketed price down.
Exactly. The stocking isn't because the
quarter was good. It's a relief rally.
Shorts covering extreme fear unwinding.
It was simply better than feared.
Now the Big 1 today. Tesla TSLA gaining a bit one 2%
ahead of the annual shareholder meeting.
(13:51):
What's the focus there? It's not about Q3 numbers today.
It's all about corporate governance, specifically the
shareholder vote on Elon Musk's huge pay package.
The multibillion dollar one. What are the odds looking like?
Prediction markets are showing very high probability of it
passing, like over 90%. Big institutional shareholders
have already said they'll vote yes.
(14:12):
So the yes vote is mostly pricedin small rally today reflects
that expectation. Seems like it if it passes,
maybe a little sigh of relief, but probably not a huge move up.
The real story here is the asymmetric risk.
Meaning the downside risk if something unexpected happens.
Exactly the small but nonzero chance that shareholders vote
no. That would be a shockwave, a
(14:32):
massive vote of no confidence. What would a no vote trigger?
A huge sell off? Almost certainly.
The market would immediately have to question the Musk
premium built into the stock price.
The idea that his leadership justifies evaluation far beyond
a normal car company. A no vote would raise
fundamental questions about his future, the company's direction.
It could shatter the investment case.
(14:52):
For many, the downside is potentially much bigger than the
option market seems to be pricing.
OK, one more interesting situation.
The one group Hospitality STKS they report after the close
expected loss per share. But you said the numbers don't
really matter. Not today, no.
This story is all about an activist investor, Randy, and
Capital turning up the heat. They've made very specific, very
(15:15):
aggressive demands today right before the earnings call.
What are they demanding? Basically a complete overhaul.
Stop spending company money building new restaurants, switch
to a franchise model where others pay them to open stores,
and hire bankers to look at selling off brands like STK or
Beniha to cut debt. Wow, that's forcing management's
hand right before the call. Absolutely.
(15:35):
So the Q3 numbers are irrelevantbackground noise.
The only thing traders care about is how CEO Emanuel Hilario
responds to those demands on theconference call later today
around 4.3. BM Eastern.
A binary outcome, then, if he signals openness to Randian's
ideas, the stock could jump. If he resists, it falls further.
That's the setup. Any hint of moving towards a
(15:58):
franchise model or selling assets could pop the stock as
the market likes those asset light models.
But if he digs in his heels, expect a fight and likely more
pressure on the stock price. It's all about the call tonight.
Hashtag tag outro. So wrapping things up for today,
it really feels like we're dealing with three different
markets at once, a trifurcated market.
Yeah, you've got the macro market totally focused on the
(16:20):
Bailey today and NFP tomorrow, keeping the big indexes sort of
pinned down. Then you have the US tech market
caught in that guidance trap. Super sensitive to any
forward-looking wobble. And finally, the European and
cypical market, which seems to be actually moving on positive
fundamental data, may be starting its own path.
The key take away seems to be that NFP report tomorrow is the
(16:40):
main event hanging over everything.
That anxiety is capping broad market gains today.
Forcing investors to really focus on these individual stock
stories, the potential opportunity and QCM's accounting
noise, the warning from FTNT's guidance punishment and the high
stakes drama around Tesla's vote.
So a final thought for everyone navigating today if the Bank of
(17:02):
England delivers that expected dovish hold, does it just kick
the can down the road, pushing the anxiety onto their December
meeting? Or is the strength we're seeing
in European data real enough? Could the EU rally actually
start to decouple from this intense US focus on NFP and Fed
policy? Something to definitely ponder.
Definitely something to watch. We'll be back tomorrow, of
(17:24):
course, to break down that crucial NFP report and see how
the market reacts. Thanks for joining us for this
deep dive.
Good morning and welcome to the Bulls Bears in the Bell Morning
Edition. Thank you for joining us.
It is Thursday, November 6th, 2025.
Today, we're diving into a market that feels, well, pretty
tense. We're seeing intense anxiety,
some really volatile stock movesand this huge split between how
the US and Europe are performing.
That anxiety is definitely the word for it, especially
(00:21):
stateside. You've got this kind of
paralysis setting in ahead of the NFP report tomorrow, that
big jobs number. And on top of that, we're
digesting some frankly brutal reactions to tech earnings from
last night. The main theme, there's just
zero room for error out there, OK?
Let's try to break that down. We see three big things really
shaping the market today. First, what you're calling the
(00:42):
guidance trap hitting US tech. That's right, any hint of
uncertainty in the outlook is getting hammered severely. 2nd A
major macro event today, the Bank of England decision at noon
GMT. Yep, the Bay Bowie is walking a
tightrope. Inflation's cooled a bit, but
there's fiscal stuff coming fromthe government soon too.
Their wording today is huge for European markets.
(01:03):
And 3rd, casting a shadow over everything is that anxiety about
tomorrow's U.S. jobs Report, theNFP.
Absolutely. That NFT data is so critical for
what the Fed does next. That big money is mostly sitting
on the sidelines. Keeps things quiet overall, but
makes those individual stock moves even bigger.
(01:23):
So a cautious, jumpy and really split market.
Let's start with that global divide, because the difference
between the US and Europe is pretty striking right now.
It really is stark this morning over in the US futures for the
S&P 500 and NASDAQ 100 are, well, they're being described as
little changed, subdued, basically treading water.
They bounced back a bit in midweek, but there's no real
(01:44):
conviction. The big worry hanging over
everything is just lofty tech valuations.
People looking at those high PE ratios and getting nervous,
right? Especially with rates where they
are. Exactly.
You see stocks trading at 30-40 fifty times forward earnings and
you think how much higher can they really go?
If borrowing costs stay high, itbreeds caution.
OK, so that's the fragile US picture, but then you look
(02:06):
across the pond to Europe. And it's completely different
story. Real relative strength there.
EU KS Footsie 100 is flirting with record highs again.
And maybe even more significantly, the German DAX
forecast is explicitly bullish. Analysts are saying it's finally
breaking out of that consolidation phase it's been
stuck in for months. So why the split?
(02:26):
What's driving Europe's strength?
It really comes down to fundamentals versus sort of
forward-looking fear. the US is stuck on anxiety about the
future, about guidance. Europe, on the other hand, is
rallying on actual positive harddata.
OK. Hard data like what
specifically? This is important if we're
talking about money potentially moving.
(02:47):
Right. We're talking about better than
expected numbers. People can actually see
services, PMI data, you know. The pulse of the modern economy
came in strong for Germany, Spain, Italy and on the
industrial side too. German factory orders were
solid. French industrial production
beat expectations. It suggests the European engine
is actually picking up steam. So Europe has proof actual
(03:07):
numbers showing things are getting better.
That's boosting the decks. Meanwhile, the US is bogged down
by sentiment valuation worries. And those fears are getting
validated by the sharp earnings reactions we'll get into.
So the implication for listeners, for investors, this
could be a real capital rotationplaying out money moving from
potentially overvalued US tech to Europe where there's data
(03:31):
back in the rally. It certainly looks like it could
be. You know, allocators might be
thinking why sit an expensive UStech that gets punished for the
tiniest miss when there's accelerating growth in Europe by
data and arguably at lower valuations?
It's a move towards maybe a bit more certainty.
But is it just a temporary hedgebefore the NFP?
If that number comes in week tomorrow, doesn't everyone just
(03:53):
pile back into US growth? That's the billion dollar
question, isn't it? Yes, a week NFP could definitely
reignite the US growth trade. But, and this is the key
difference now, the European data is improving fundamentally.
If Germany keeps posting strong orders, if services across the
continent keep accelerating, then that European rally starts
to feed itself. It becomes about actual earnings
(04:13):
growth, not just Fed hopes. So Europe could potentially
decouple its performance, might stand on its own legs even if
the Fed pivots. Potentially it's the first time
in a while we can even suggest that with some confidence based
on the data. It's not just about dodging NFP
risk, it might be about finding genuine accelerating value
overseas. OK, let's dive into that US tech
(04:33):
pain. You mentioned this guidance
trap. Explain what that means exactly.
It's this dynamic where good Q3 results, yeah, they just don't
matter much right now. The market is laser focused on
the future and it's punishing, Imean really punishing.
Any uncertainty, any slight in forward guidance, especially for
these high growth, high valuation stocks, there's just
(04:54):
no margin for error. Fortnet FTNT seems like the
poster child for this. Absolutely a perfect painful
example. Their Q3 numbers were actually
good. They beat earnings estimate
$0.74 versus 63. Expected revenue beat two $1.72
billion versus 1.7. There are a billion dollars
operationally solid yet. The stock is getting crushed.
(05:14):
Pre market down what 9 or 10%? Why?
Solely because of guidance, their Q4 revenue new forecast,
the midpoint was $1.855 billion.Wall Street wanted $1.875
billion. Wait, that's a difference of
just $20 million on almost $2 billion.
Exactly. It's tiny.
You'd think it's a rounding error, but in this market that
tiny miss gets interpreted as a major red flag and boom, 10% off
(05:37):
the stock price. That reaction seems
disproportionate. What does it signal?
Two things, really. One, it shows how sensitive
these high valuations are. Even a tiny wobble in future
expectations has a huge impact on the present value.
And two, maybe more importantly,analysts are taking Fortinet
slight caution and blowing it upinto a signal about the entire
(05:58):
cybersecurity sector. They see it as proof that
enterprise IT spending is slowing down overall.
So the stock isn't just falling on its own outlook, but on the
markets fear about the whole industry.
Precisely. It's an extrapolation of fear
triggered by a minuscule guidance miss.
OK, let's look at DoorDash DASH,another big pre market loser,
down almost 10%. Different reason though.
(06:18):
Similar theme, different flavor.Doordash's core business
actually looked pretty good. Gross order value beat their own
forecast. Revenue was strong, but they
missed profit estimates for Q3 and the real kicker was
management talking about an aggressive plan to invest
several $100 million more in 2026.
Investing in things like AI, newsoftware sounds like long term
(06:41):
growth initiatives. It does, but the market's
reaction was swift and brutal, down 10%.
The message is crystal clear. Forget 2026, we want profits
now. Stop spending.
Why such a harsh reaction to investment?
Isn't that what growth companiesdo?
Normally, yes, but not in a highinterest rate world.
Think about how stocks are valued, discounted cash flows
(07:03):
when interest rates, the discount rate, are high.
Money earned far out in the future, like profits from
investments paying off in 2026, is worth much, much less today.
The market isn't saying AI is bad, it's saying mathematically
we can't afford for you to spendthat money now when the cost of
capital is so high and the payoff is so far away.
It demands near term profitability.
(07:24):
It's not all bad news though, some companies are getting it
right. Apple oven APP is up strongly
pre market about 7%. What do they do differently?
Aplovin delivered exactly what the market wants, a clean beat,
hitting numbers on both revenue and earnings, and crucially,
they gave a clear, credible story about future growth.
They tied it specifically to their a Exxon 2 Point O
(07:45):
platform. This new e-commerce portal
things analysts could understandand model immediately.
And the reward was? Immediate analysts love price
target upgrades across the board.
We saw numbers like 705, seven, $120.00, even $860 reiterated.
It shows the market will pay forgrowth, but only if the
execution is perfect and the story is rock solid with no
(08:06):
whiff of uncertain spending. All right, let's shift gears to
the big macro events influencingeverything.
First up, the Bank of England decision coming up at 1200 GMT.
You said they're walking a tightrope.
They really are. It's a tough spot for Governor
Bailey and the committee. On one side, you've got recent
inflation data that came in a bit softer than expected CPI at
3.8% when folks expected 4.0%. That usually opens the door for
(08:28):
a rate cut. But there's a complication from
the government side. Exactly.
The UK government has a budget announcement on November 26th
and the word is they're likely to announce tax rises, fiscal
tightening. So if the Bowie cuts rates now,
just before the government potentially tightens the fiscal
screws, it gets messy. They might have to reverse
(08:49):
course quickly. So what's the market betting on?
What's the expected outcome? The strong consensus is for
what's called a dovish hold, meaning they keep rates steady
at 4.000% today. But, and this is key, they use
the statement, the minutes, the language to strongly hint that a
rate cut in December is now morelikely.
Basically trying to soothe markets without actually cutting
(09:11):
yet giving them time to see the budget details.
OK, so that dovish hold is bakedinto the Footsie rally we're
seeing. Largely yes, which sets up the
risk. What's the risk then, if they do
exactly what's expected? If they deliver the dovish hold,
the market might just shrug. Maybe a small relief pop in the
Footsie. The real risk, the asymmetric
move, is if they deliver a hawkish disappointment, meaning
they hold rates but give no strong signal about a December
(09:33):
cut. Maybe they sound more worried
about underlying inflation or that fiscal outlook.
And that would cause. A sharp reversal, the FTSE 100
would likely sell off hard as those dovish bets unwind, and
the British pound GDP would probably rally sharply as the
market pushes back expectations for rate cuts.
While London waits for the Bohy,the US market seems froven by
(09:55):
the NFP report tomorrow. You called it the final boss.
It really feels like that today institutional money is just
fixated on tomorrow's U.S. jobs data.
You get the big three non farm payrolls number itself, average
hourly earnings, wage growth, and the unemployment rate.
It's the single most important snapshot of the US labor market,
and therefore the key input for the Federal Reserve's next move.
(10:17):
And we're in that weird bad newsis good news phase right now.
Explain that again. Why does the market cheer weak
job data? It's all about about the Fed
strong job growth and especiallystrong wage growth.
Average hourly earnings tells the Fed they need to keep
interest rates high to fight inflation.
High rates are bad for stocks, especially growth stocks, so any
(10:38):
sign the labor market is cracking, like we saw earlier
this week with news of job cuts hitting a high, is seen as good
news for markets. It means the Fed might be able
to ease off the brakes sooner. So bad economic news equals hope
for lower rates, which equals stock market rally.
In this specific context, yes, you saw Treasury's rally.
Yields fell on that job cuts news.
(11:00):
Traders immediately increased bets on Fed rate cuts next.
Year and this anxiety is why U.S. markets are so subdued
today. Big players are just waiting.
Exactly. Nobody wants to make big bullish
bets today just in case tomorrow's NFP number comes in
really strong. That would be a major blow,
potentially wiping out rate cut hopes and hitting those tech
valuations hard. They're hoping for weakness
tomorrow. Since the big indexes are kind
(11:21):
of stuck waiting, the real action, the volatility is
individual stocks reacting to earnings.
Let's look at a few interesting ones.
Qualcomm. QCOM.
Right, QCOM is a fascinating onethis morning.
Stocks down maybe 2.7% to 3% premarket.
But here's the thing, operationally, they beat
expectations and raise their guidance.
(11:41):
Looks like a classic beaten raise.
So why the drop? I see a headline about a massive
loss, $2.89 per share. That sounds pretty bad.
It sounds bad but it's misleading.
That's a gap number. Generally accepted accounting
principles. The actual operations selling
chips look really strong. Revenue beat.
Adjusted EPS beat guidance beat.The gap loss was massively
(12:05):
distorted by a huge one off non cash tax charge, something like
$5.7 billion. Non cash, meaning money didn't
actually leave the bank. It's an accounting entry.
Exactly. It relates to how how they value
deferred tax assets, things related to overseas earnings.
It doesn't impact their current operations or cash flow.
It's accounting noise. So the algorithms or headline
readers see the big negative gapnumber and sell.
(12:27):
That's likely what's happening. Automated trading sees the loss
hit sell, but investors who dig into the details see the strong
underlying business and the goodguidance.
Creates a potential inefficiencyby the dip chance for those who
see past the noise. It often does.
The noise is temporary, the fundamentals look solid.
Maybe even improving that discrepancy can be an
opportunity. Okay, contrast that with
(12:48):
Albemarle ALB, the lithium producer, It's one of the top
gainers pre market up over 3.5%,but they reported a big net
loss. How does that work?
This is a classic better than feared situation.
The whole lithium sector has been absolutely hammered prices
down. Oversupply worries.
Albemarle stock itself fell over8% just yesterday going into the
(13:08):
earnings. So expectations were incredibly
low. People were braced for disaster.
Completely. So when they reported, yes, it
was a net loss on a GAAP basis $160.7 million, but they managed
to beat the very low revenue estimates and importantly, they
still generated positive Adjusted EBITDA earnings before
interest, taxes, depreciation and amortization of about $225
(13:31):
million. So not great, but not the total
catastrophe, the marketed price down.
Exactly. The stocking isn't because the
quarter was good. It's a relief rally.
Shorts covering extreme fear unwinding.
It was simply better than feared.
Now the Big 1 today. Tesla TSLA gaining a bit one 2%
ahead of the annual shareholder meeting.
(13:51):
What's the focus there? It's not about Q3 numbers today.
It's all about corporate governance, specifically the
shareholder vote on Elon Musk's huge pay package.
The multibillion dollar one. What are the odds looking like?
Prediction markets are showing very high probability of it
passing, like over 90%. Big institutional shareholders
have already said they'll vote yes.
(14:12):
So the yes vote is mostly pricedin small rally today reflects
that expectation. Seems like it if it passes,
maybe a little sigh of relief, but probably not a huge move up.
The real story here is the asymmetric risk.
Meaning the downside risk if something unexpected happens.
Exactly the small but nonzero chance that shareholders vote
no. That would be a shockwave, a
(14:32):
massive vote of no confidence. What would a no vote trigger?
A huge sell off? Almost certainly.
The market would immediately have to question the Musk
premium built into the stock price.
The idea that his leadership justifies evaluation far beyond
a normal car company. A no vote would raise
fundamental questions about his future, the company's direction.
It could shatter the investment case.
(14:52):
For many, the downside is potentially much bigger than the
option market seems to be pricing.
OK, one more interesting situation.
The one group Hospitality STKS they report after the close
expected loss per share. But you said the numbers don't
really matter. Not today, no.
This story is all about an activist investor, Randy, and
Capital turning up the heat. They've made very specific, very
(15:15):
aggressive demands today right before the earnings call.
What are they demanding? Basically a complete overhaul.
Stop spending company money building new restaurants, switch
to a franchise model where others pay them to open stores,
and hire bankers to look at selling off brands like STK or
Beniha to cut debt. Wow, that's forcing management's
hand right before the call. Absolutely.
(15:35):
So the Q3 numbers are irrelevantbackground noise.
The only thing traders care about is how CEO Emanuel Hilario
responds to those demands on theconference call later today
around 4.3. BM Eastern.
A binary outcome, then, if he signals openness to Randian's
ideas, the stock could jump. If he resists, it falls further.
That's the setup. Any hint of moving towards a
(15:58):
franchise model or selling assets could pop the stock as
the market likes those asset light models.
But if he digs in his heels, expect a fight and likely more
pressure on the stock price. It's all about the call tonight.
Hashtag tag outro. So wrapping things up for today,
it really feels like we're dealing with three different
markets at once, a trifurcated market.
Yeah, you've got the macro market totally focused on the
(16:20):
Bailey today and NFP tomorrow, keeping the big indexes sort of
pinned down. Then you have the US tech market
caught in that guidance trap. Super sensitive to any
forward-looking wobble. And finally, the European and
cypical market, which seems to be actually moving on positive
fundamental data, may be starting its own path.
The key take away seems to be that NFP report tomorrow is the
(16:40):
main event hanging over everything.
That anxiety is capping broad market gains today.
Forcing investors to really focus on these individual stock
stories, the potential opportunity and QCM's accounting
noise, the warning from FTNT's guidance punishment and the high
stakes drama around Tesla's vote.
So a final thought for everyone navigating today if the Bank of
(17:02):
England delivers that expected dovish hold, does it just kick
the can down the road, pushing the anxiety onto their December
meeting? Or is the strength we're seeing
in European data real enough? Could the EU rally actually
start to decouple from this intense US focus on NFP and Fed
policy? Something to definitely ponder.
Definitely something to watch. We'll be back tomorrow, of
(17:24):
course, to break down that crucial NFP report and see how
the market reacts. Thanks for joining us for this
deep dive.
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