Mid-Morning Look

Wednesday, November 05, 2025

U.S. stocks were weaker overnight, adding to the prior day weakness on AI valuation concerns, but stocks recover on the open, with the bounce being led by tech (which led the one-day decline Tuesday), Energy and crypto (after Bitcoin rebounds 3% after dipping below $100K yesterday). Market expectations are improving that the government shutdown, which entered its 35^th day today (longest shutdown ever) may come to an end soon after President Trump had a meeting with Republican Senators. US ADP private payrolls rebound in October, but some industries continue to shed jobs. Treasury yields jumped along with a further bounce in the dollar following the ADP data and stringer ISM Services data. In politics, the Supreme Court weighs legality of tariffs in major test of Trump’s power today, while yesterday, Democrats swept a trio of races in the first major elections since Donald Trump regained the presidency. In New York City, Zohran Mamdani, a 34-year-old democratic socialist, won the mayoral race, while in Virginia and New Jersey, moderate Democrats Abigail Spanberger, 46, and Mikie Sherrill, 53, won their elections for governor with commanding leads, respectively. Another very busy morning of earnings, with top movers listed below. Dow components MCD, AMGN both higher after earnings.

• U.S. S&P Global October final composite PMI at 54.6 and U.S. S&P Global October final Services PMI at 54.8.
• ISM report on U.S. non-manufacturing sector shows PMI 52.4 in October (above consensus 50.8) and vs 50.0 in September; ISM non-manufacturing business activity index 54.3 in October vs 49.9 in September, prices paid index 70.0 in October vs 69.4 in September, new orders index 56.2 in October vs 50.4 in September and ISM non-manufacturing employment index 48.2 in October vs 47.2 in September.
• U.S. MBA mortgage applications declined -1.9% in the week ending October 31, after bouncing 7.1% in the week prior. That had been the first improvement since the week ending September 19. Purchases corrected -0.6%, after a 4.5% jump in the week ending October 24. Refinancing dropped -2.8%, after rising 9.3% and 4.0% through the weeks ending October 24 and October 17 respectively.

• In Retail/Consumer Products: EL 11.3M share Spot Secondary priced at $90.00; SNBR shares tumbled after the mattress retailer reported weaker Q3 results; BURL was downgraded to Hold from Buy at Gordon Haskett with a $270 price target as the firm views the lack of a recovery in foot traffic recently at Burlington is disappointing. WWW shares tumble as Q3 results and guidance not well received.

• BW +39%; after signed limited notice to proceed for a more than $1.5 billion contract with APLD to deliver and install one gigawatt of efficient energy for AI Data Center project; also reported Q3 mixed results (revs $149M miss $155.5M est.) and filed to sell up to $200M of common stock.
• KW +30%; received an acquisition proposal from its chief executive and Canadian Insurance company Fairfax Financial to be bought for $10.25 a share, valuing the company around $1.5B.
• LITE +17%; shares rose as reported Q1 results that beat expectations and gave an outlook that is above consensus; showed acceleration across datacom transceivers, telecom and data center interconnect components, and datacom chips and guided Q2 revenue $630M-$670M, above consensus $561.5M.
• MCD +3%; reported Q3 adj EPS $3.22 vs. est. $3.33 on in-line revs of $7.08B and global comp sales up 3.6% vs est. 3.55% and US comp sales up 2.4% vs est. of up 2.03%.
• MNRO +15%; following earlier disclosure that Carl Icahn has bought a 14.79% stake in the company, purchasing 4.44M shares on 10/29.
• OI +8%; after results as Q3 adj EPS $0.48 Vs. est. $0.42; Q3 revs $1.7B Vs. est. $1.66B; raises FY25 adjusted EPS View to $1.55-$1.65 from $1.30-$1.55 (est. $1.47) and backs FY25 free cash flow View Of $150M-$200M.
• RIVN +10%; shares rose on results as Q3 revenue of $1.56B beat consensus $1.51B, posted positive gross margin of 1.5% in 3Q, while Piper said COGS-per-unit (of ~$96k) was probably the most encouraging metric in the Q3 results; Q3 EBITDA loss of $602M missed consensus slightly (est. -$581M) and maintained FY25 Ebitda guide.
• SNDK +7%; Memory stocks MU, SNDK, WDC, STX shares jumped after Sk Hynix has raised the price of HBM4, the 6th Generation High-bandwidth memory (HBM) to be supplied to Nvidia, the World’s largest artificial Intelligence (AI) Semiconductor company, by more than 50%.
• U +6%; shares jumped after Q3 results as revs $471M top street at $452M and guide above $480M-$90M vs street at $477M; grow revs $318M vs $302M and +6% y/y vs expectations of close to flat growth. Create revs accelerated to +3.4% from 2% last qtr.

• AXON -18%; miss Q3 gross profit and bookings expectations due to timing-related weakness in Software & Services, though Connected Devices performed solidly, while guided to a strong Q4 rebound, reiterating high bookings growth and highlighting growing international and retail demand, including overseas deals
• BHVN -43%; shares tumbled after saying the rejected its application to approve troriluzole, a drug for spinocerebellar ataxia. The FDA said in its complete response letter (CRL) they were concerned about the design and reliability of co’s main study, citing bias and flaws in real-world data vs. standard trial methods.
• CNTA -17%; after reported early data from a Phase 2 trial showing that its investigational drug for sleep disorders helped patients stay awake more.
• PINS -19%; shares fall as Q3 results for user/engagement and EBITDA beat, but UCAN softness and tariff headwinds kept revenue merely in line and the 4Q guide below; guides Q4 revs $1.313-1.338B vs. est $1.34B, adj EBITDA $533-558Mm vs. est $544.5Mm.
• SMCI -7%; announced Q1 revenue that came in Line with its preliminary update but provided a mixed outlook for Q2; guide for Dec quarter gross margin (6.5%, -300bps q/q) was below consensus.
• TREX -26%; shares tumbled as reported lighter than anticipated Q3 results (total sales were ~5% lower than the guided midpoint and up ~22% y/y), while management revised FY25 guidance lower to reflect the broad-based demand slowdown it experienced during the quarter.
• UPST -13%; beat on EPS/EBITDA but missed on fee revenue and guided 4Q below Street as its AI models tightened underwriting on a temporary UMI uptick, compressing conversion.
• ZBH -16%; shares fell after results and guidance; lowered the upper end of its organic growth outlook to 4.0% from 4.5%, while keeping the floor constant at 3.5%.