Mid-Morning Look

Wednesday, October 15, 2025

U.S. stocks kicking off the day strong, with big gains across the board as all eleven S&P sectors higher (after 10 of 11 sectors rose Tuesday despite the S&P and Nasdaq endling lower on tech weakness) as tech rebounds led by gains in semiconductors after better ASML bookings lifted the space/equipment stocks. The Russell 2000 Smallcap index also making new record highs on rising bets of aggressive rate cuts by the Fed. Momentum plays continue to drive markets each day, mainly semiconductors and AI related plays such as data centers, water cooling, and nuclear related power names (OKLO, SMR, NNE, LEU). Outside of the AI derivate plays, drones/air taxis/space (ASTS, RKLB, JOBY, ACHR), bitcoin miners that have turned energy focus to AI vs. crypto (IREN, CIFR, WULF, CLSK) have surged; quantum names (IONQ, RGTI, QBTS), in a relentless push higher over the last month and up big YTD. The Mag 7 have taken a breather but have stayed steady keeping major averages strong. Add strength in banks the last few days after strong earnings from C, WFC and today, BAC, MS on better trading revs boosting financials. Gold and silver also making new record highs in straight move higher over the last few months (Gold +55% YTD and tops $4,200 an ounce for the first time ever while Bitcoin lags). Treasury yields dip and the dollar slips. US Treasury Secretary Bessent said in CNBC interview at “Invest In America” forum that “we’re going to grow more, spend less or constrain spending to bring down the deficit; Bessent says he’s optimistic about China and they’re in communication with them; he believes we are in the third inning on the Tech investment boom. After stocks slipped the last 30 minutes on Tuesday after President Trump threatened to terminate “business with China having to do with Cooking Oil, and other elements of Trade”, causing some confusion amongst investors – markets quickly rebounded overnight. Just massive chasing and dip buying after the Friday market dip on tariff/trade fears with China, which were quickly toned down over the weekend.

• US MBA mortgage applications fell 1.8% for the week ending Oct. 10, easing from -4.7% the prior week. US mortgage purchase index falls 2.7% to 166.0, mortgage refinance index falls 1.0% to 1,168.0 in Oct 10 week as the average 30-year mortgage rate falls 1 bp to 6.42% in Oct 10 week.
• China’s September inflation data largely met expectations, featuring another deflation episode with slight moderation in the declines of both headline and producer price indices. Headline CPI fell -0.3% from a year earlier, compared with -0.4% YoY in August, while PPI declined -2.3% YoY vs -2.9% previously.

• In Industrials: HI shares jumped after agreeing to be acquired by Lone Star Funds in an all-cash deal valued at $3.8B, with shareholders to receive $32 per share (confirmed an overnight report by Bloomberg); FTV was downgraded to Neutral from Overweight at JP Morgan (tgt to $53 from $58) as part of a Q3 earnings preview for the electrical equipment/multi-industry sector as sees “subpar” growth and below-average return on invested capital. The firm also downgraded ROP to Underweight from Neutral (tgt to $541 from $577) as sees risk of disruption in Roper’s core software businesses justifies a lower than historical multiple.
• In AI/Data Centers: OpenAI is working on new revenue lines, debt partnerships and further fundraising as part of a five-year plan to make good on the more than $1tn in spending it has pledged to create world-leading artificial intelligence. Investors led by BlackRock Inc.’s Global Infrastructure Partners agreed to buy Aligned Data Centers in a deal that values the company at $40B, including debt. MGX, an AI investment company established by sovereign wealth fund Mubadala Investment Co., will invest alongside GIP, according to a statement that confirmed an earlier Bloomberg News report. The buyers are purchasing the company from Macquarie Asset Management, which made its first investment in Aligned in April 2018. GIP and its partners, which also include Microsoft Corp. and Nvidia Corp., are targeting a major beneficiary of AI spending in the biggest data deal ever.

• BAC +4%; shares rise on results; Q3 EPS $1.06 tops $0.95 est.; Q3 net interest income $15.23B, vs. est. $15.03B; Q3 trading revenue ex. DVA $5.35B vs. est. $5.01B; Provision for credit losses of $1.3B decreased from $1.5B in 3Q and $1.6B in 2Q25; return on average common shareholders’ equity ratio of 11.5%.
• BG +11%; after guidance and news last night Trump said his administration was considering terminating some business with China connected with cooking oil and “other elements of trade.
• HI +17%; shares jumped after agreeing to be acquired by Lone Star Funds in an all-cash deal valued at $3.8B, with shareholders to receive $32 per share (confirmed an overnight report by Bloomberg).
• MS +6%; reported Q3 EPS $2.80 vs. est. $2.10 while Q3 net revs $18.22B vs. est. $16.64B, Q3 FICC sales & trading revs $2.17B vs. est. $2.07B and Q3 equities sales & trading revs $4.12B, vs. est. $3.41B; Q3 wealth management net revs $8.23B, vs. est. $7.78B.
• OMER +139%; as NVO entered into asset purchase and license agreement for the candidate drug zaltenibart in clinical development for rare blood and kidney disorders; VO will be granted exclusive global rights to develop and commercialize zaltenibart as Omeros is eligible to receive $340M in upfront and up to $2.1B in milestones.
• PZZA +8%; after reports APO submitted a fresh bid within the last week to take pizza chain private at $64 per share, according to people familiar with the matter. Street Insider first reported the offer on Monday. https://tinyurl.com/3c486r8n
• RUN +5%; was upgraded to Market Perform from Underperform at BMO Capital and raised tgt to $19 from $10 saying they see the solar company now in a better cash position to be able to boost shareholder returns via share buybacks or dividend in 2026.
• TE +25%; as NXT and TE sign multi-year agreement for supply of advanced solar panel frames engineered and made in the USA in an agreement valued at over $75M.

• APEI -2%; after saying it is unable to determine full impact that U.S. government shutdown will have on its Q4 and FY 2025 operating results.
• ASPI -5%; priced a 17.2M share secondary at $12.25, a 13% discount to prior close, raising $210.3M in gross proceeds.
• FFIV -2%; after saying a hacker breached systems including its engineering-knowledge management platform and its product-development environment for its BIG-IP suite of application-delivery products.
• MTZ -1%; was downgraded to Neutral at Guggenheim ahead of earnings and removed the firm’s prior $215 price target saying strong recent performance, paired with expectations for the Q3 earnings report, suggest to the firm that shares are fairly valued at the current valuation.
• PGR -9%; worst mover in the S&P after results after EPS miss; net premiums written jumped 10% to $21.38B during the quarter ended September 30; combined ratio was 89.5%, compared with 89% a year ago.
• SOC -17%; shares tumbled after a California judge ruled against the company’s request to lift the state’s cease-and-desist order on repairs it had made to an onshore pipeline system linked to the Santa Ynez project. The tentative ruling marks a major setback for Sable.