Mid-Morning Look

Friday, October 10, 2025

U.S. stocks are looking to end the week the way they started, with more big gains as major averages bounce after yesterday’s decline with investors looking to the next possible market catalyst with quarterly earnings coming up next week. No macro catalysts this week in the U.S. as the government shutdown rolls into Day 10 with no resolution on the horizon, leading to very few economic data points outside of a few private ones.  Energy is among the weakest S&P sectors today as oil prices fall, while transports also see further weakness. The yen and euro are on track for their worst week of the year vs. the US dollar, which is up around 2% this week. Gold and silver prices remain not far off record highs after a decline on Thursday. Treasury yields are lower, recovering from Thursday’s losses.  Just pure momentum, lack of sellers, and increased call buying option activity have kept major averages higher for 7 straight months.

The same sectors continue to lead this market every day, led by tech shares and the optimism/investment each day being made in the AI revolution. Outside of the main chip players like NVDA, AMD, AVGO, some big movers over the last year have been in data centers such as VRT, ETN, NBIS, nuclear names for more power names to support AI like OKLO, SMR, NNE, LEU and bigger nuke names CEG, VST, TLN, NRG have ben huge winners. Big moves over the last month also include bitcoin miners that have pivoted more toward AI infrastructure and high-performance computing (HPC) to support energy needs, lifting shares of IREN, WULF, CIFR, CLSK, HUT, RIOT and others. Data center cooling is where names like MOD, NVT, JCI are in focus. Outside of the AI area, other momentum driven sectors have been rare earth names (MP, CRML, USAR), drone and space names (ASTS, ACHR, JOBY, RKLB), quantum compute names (IONQ, RGTI, QBTS, QUBT) and crypto/mining. Status quo remains for Wall Street, holding near record highs into the weekend.

• U.S Michigan 5-year inflation expectations (Oct) actual 3.7% vs 3.7% previous and the 1-year Inflation Prelim Actual 4.6%, below the previous 4.7%.

• In Consumer Finance: the WSJ reported that Americans are falling behind on their car payments as delinquency rates on subprime auto loans are at records (CACC, SYF, ALLY are big names in auto lending sector). The percentage of new-car buyers with credit scores below 650 was nearly 14% in September, roughly one in seven people, J.D. Power said last month: the highest for the comp period since 2016. And the portion of subprime auto loans that are 60 days or more overdue on their payments hit a record of more than 6% this year, according to Fitch Ratings.
• In Managed care: Mizuho noted that CMS released the 2026 Medicare Advantage (MA) Star Ratings this evening. As a reminder, UNH and HUM preemptively released 2026 MA Star Ratings highlighting the percentage of members in 4.0+ Star plans and HUM released the weighted average Star for the company. Most notably from the release, CVS maintained approximately the same percentage of members in 4.0+ Star plans, in line with Mizuho’s expectations. Further, ELV, CNC, and MOH showed improvements in the percentage of members in 4.0+ Star plans versus last year. Additionally, most companies saw weighted average Stars increase, while only CVS and HUM saw slight declines. Mizuho believes this is a positive for CVS, as it removes a valuation overhang from the stock, along with ELV, CNC, and MOH, all of which saw increases in the percentage of members in 4.0+ Star plans.
• In Data Centers: Citigroup opened positive catalyst watches for ETN and VRT in industrials saying Q3 earnings should highlight ongoing bifurcation amongst coverage, with datacenter-related demand continuing to accelerate while more mixed demand trends persist elsewhere including still slow to improve shorter-cycle activity and self-help efforts as a key lever of earnings growth. ETN is Citi’s top pick in Multis ahead of earnings followed by EMR, ROK, VRT, DOV, XYL and TT.

• APLD +26%; as Q1 adj EPS loss (-$0.03) was narrower than estimates of est. (-$0.13) on revs $64.2Mm vs est. $51Mm; says review of strategic options for cloud services business remains ongoing; said it’s now in advanced discussions with a hyperscaler client for its second data center campus in North Dakota.
• CRML +10%; as rare earth stocks extend recent gains (USAR, MP, METC) after China this week tightened its rare earth export controls on Thursday, expanding restrictions on processing technology and spelling out its intention to limit exports to overseas defense and semiconductor users.
• ESTC +6%; authorizes $500M share repurchase program and raised Q2 revenue view to $417M-$419M from $415M-$417M (est. $416.3M) while affirms Q2 EPS view of $0.56-$0.58.
• LEU +9%; after Evercore raised its price target on the uranium company to a Street-high $452 from $252 as it sees uranium demand for nuclear energy growing. Centrus Energy’s prospects are looking brighter with a boost in SWU prices and potential capacity expansions.
• RKLB +6%; after saying it has signed a contract for two Electron launches with the Japan Aerospace Exploration Agency (JAXA), launching from Rocket Lab Launch Complex 1 in New Zealand.
• WULF +12%; among Bitcoin miner names (CIFR, CLSK, HIVE, HUT, IREN, RIOT) that are rallying now not on crypto mining, but due to their strategic pivots toward AI infrastructure and high-performance computing (HPC). They are leveraging their existing data centers, which are optimized for power-intensive operations, to meet the exploding demand for AI compute resources like GPU clusters for model training.

• GPK -2%; after CFO Scherger resigned last night (as he went to AMCR), extending recent slide, as now down -9% in the last 6 trading days.
• KIDS -13%; after guiding prelim Q3 revenue $61.2M below consensus $63.63M saying they faced incremental headwinds late in September, largely driven by delayed 7D capital sales and headwinds within the Latin and South America segment of our business; and cuts FY25 revenue view.
• LEVI -8%; shares fell on results/guidance; reported a solid Q3 with compelling revenue and gross margin upside (EPS $0.34/$1.5B vs. est. $0.30/$1.49B and gross margin was 61.7%), while Barclay’s noted Q4 guidance was short of expectations while raising its year outlook.
• MOS -7%; said it sees Q3 phosphate production about 1.7 million tonnes, below its forecast following mechanical issues at its Riverview sulfuric acid plant and utility interruptions at the Bartow facility in mid-September cut output for the rest of the month.
• QCOM -2%; shares dipped early on reports China has launched an antitrust investigation into Qualcomm over its acquisition of Israel’s Autotalks, China’s market regulator said on Friday.
• RCAT -3%; shares fell after short seller blog Fuzzy Panda Research said it is short drone company Red Cat, telling investors it believes management has been misleading investors about the size of its Army contract, its new FANG drone, and its prospects for landing sales to NATO allies.
• SERV -8%; after agreed to sell 6.25M shares to certain institutional investors in registered direct offering as the purchase price equates to around $16, a roughly 9.5% discount to stock’s last close.
• USNA -23%; after saying Q3 forecast was softer-than-expected sales, brand partner productivity during rollout of enhanced brand partner compensation plan; said slowdown during transition was more pronounced than anticipated and negatively affected our quarterly results.
• VG -18%; shares tumbled after BP won its arbitration case against the co over the U.S. supplier’s failure to deliver liquefied natural gas under a long-term contract that was due to start in late 2022.