Closing Recap

Wednesday, November 05, 2025

US equities faded slightly overnight on the heels of yesterday’s pullback and saw little reaction to a modestly better headline number from the ADP Employment report. Futures steadied into the open with brief rotations between red and green before expanding to modest gains by mid-morning. Breadth favored advancers by almost 2:1 as small caps outperform with IWM versus SPY and QQQ. In sector ETFs, performance was relatively balanced with Energy (+0.94%), Technology (+0.64%) and Communications (+0.61%) outperforming while Consumer Discretionary (-0.19%), Real Estate (-0.21%) and Consumer Staples (-0.37%) underperformed with six sectors gaining versus five declining. In sentiment today, the Fear & Greed Index registered 24/100 (Extreme Fear) versus 40 (Fear) last week, 53 (Neutral) last month and 43 (Fear) at this time last year. Have to get that fear out before the Santa rally? We shall see. Stocks ended the day positively but saw a mild pullback in the final minutes of trading behind selling MSFT and NVDA.

In data of interest today, of 383 S&P 500 companies to have reported thus far, 85% beat EPS estimates by an average of 21% versus 79% and 29% last year, respectively. Year/year earnings growth across all companies to have reported thus far is 18% with a median of 10% versus 14% and 7% last year, respectively. On valuation, per @DataTrekMB, the S&P 500 trades at a 42% premium to its 25-year average forward PE multiple. That may not surprise, but it is interesting to note that every sector is contributing to the premium, not just tech, and related. In the spirit of how quickly things change, consider also that ChatGPT did not exist just three years ago. Lastly, on sentiment, @KobeissiLetter reminds that the Extreme Fear reading is NOT what you tend to see before a crash with the S&P 500 2% off all-time highs.

Heading into the final hour of trading, US equity futures held solid gains in a reversal from yesterday. Breadth had expanded to almost 5:2 still in favor of advancers as small caps continued to lead. All eleven sector ETFs had recovered to green, with Consumer Discretionary (+1.3%), Technology (+0.6%) and Industrials (+0.6%) leading the way. The remainder of the week brings a couple more rounds of heavy earnings and several more Fed speakers, though without any incremental data it is tough to expect any new insights on policy stance.

• 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.

• December WTI crude slipped as the day progressed, settling -$0.96/bbl, or -1.59%, at $59.60. Today’s EIA data showed a build versus an expected inventory draw, adding to excess supply fears. Many investors continue to expect a global supply glut to pressure prices into 2026. Beyond the EIA data today, yesterday’s budget plan release in Canada indicated Canada could potentially kill its cap on oil and gas emissions, thus adding to supply fears. On the demand side, the ongoing government shutdown is sure to keep any rebound expectations limited.

• ORLY was upgraded to Outperform from Market Perform at Raymond James following a Clean Q325 report and a better entry after the recent ~14% pullback from the 52-week high.
• RIVN 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.
• TSLA shares outperformed all day, rising more than 5% late day as tomorrow after the close, we find out about the Musk pay package. Gene Minster said he “believes it will pass because shareholders win along with Elon. If I’m wrong and it gets voted down, $TSLA shareholders will slowly lose out."

• Bank America said in a note today that consumers spent less at Restaurants over the past year, though Independent and local dining experiences outperformed chains, according to Bank of America. Spending at Restaurant chains decelerated to minus 1.9% over the past year, while Independent and local Restaurants decelerated to 0.8%, the Institute said, citing aggregated Credit and debit Card data.
• 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.
• In Building Products: TREX 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.

• Renewables: BW shares rallied 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.
• In Solar: SEDG shares tumbled this morning and then ripped more than 25% after reported Q3 adj EPS loss (-$0.31) vs. est. loss (-$0.04) on better revs $340.2M (est. $332.4M) and guided Q4 revs $310M-$340M below estimates $345.9M. The solar space was generally higher in reaction.

• FIS Q3 rev $2.72B (+~6% y/y) and adj EPS $1.51 (+8% y/y), both ahead of Street ($2.66B / $1.48); FY25 raised to revenue $10.60–$10.63B, EPS $5.74–$5.78
• KW 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.
• SCHW CEO Rick Wurster says the company plans to launch crypto trading in the first half of 2026.
• UPST shares fell as 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.

• BHVN 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 shares fall after reported early data from a Phase 2 trial showing that its investigational drug for sleep disorders helped patients stay awake more.
• MDGL was upgraded to Overweight from Neutral at Cantor after another very strong quarter for Rezdiffra outperforming High investor expectations.
• NVO reported Q3 sales below consensus at DKK74,976m and operating profit of DKK23,682 was also below consensus, while EPS of DKK4.50 was 1% below consensus, as the operating profit miss was offset by consensus underestimating the FX benefit within financial items. Later in the day the drugmaker said its MTSR deal structure is consistent with U.S. Antitrust law and that it is in a constructive dialogue with the Us Federal Trade Commission regarding that agency’s concerns about the proposed merger.
• PTCT reported stronger-than-expected Q3 results driven by robust early Sephience sales and solid performance from the legacy Duchenne muscular dystrophy franchise.
• TEVA 3Q revs were $4.48B (vs. $4.34B est.), EBITDA $1.39B (vs. $1.24B est.) and EPS $0.78 (vs. $0.68 est.) while the company narrowed its revenue guidance, raised bottom end of its EBITDA and EPS guidance.

• GH 3.33M share Spot Secondary priced at $90.00
• HUM reported Q3 adj EPS $3.24 tops consensus $2.93 on revs $32.65B vs. est. $32.01B, reaffirmed its forecast for medical costs for the full year, with the outlook below the average analyst estimate.
• TECH Q1 sales drop 1% to $286.6M, missing analysts’ estimates of $291.2M
• ZBH 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%.

• EXPD was upgraded from Underperform to Neutral at bank America as they see solid execution in a volatile trade backdrop and productivity upside from Ai process improvements.
• JCI reported Q3 adj. EPS: $1.26 vs. $1.20 est. and Q3 sales $6.40B vs. $6.33B est.
• UPS shares slumped after a cargo plane that erupted into a fireball moments after takeoff in Louisville, Kentucky on Tuesday has risen to nine, city and state officials said.

• JOBY said it initiates power-on testing of its first FAA-conforming aircraft to be built for Type Inspection Authorization (TIA); TIA testing is part of final stage of FAA type certification process.
• KTOS Q3 revs, adj EPS and EBITDA beat expectations and management increased its 25/26 rev growth outlook while also guiding to 2027.

• UUUU was downgraded from Neutral to Sell at Roth Capital as it believes the momentum around the company’s Rare Earth business potential has subsided and that near-term economic studies are likely to return the company’s valuation to fundamentals.

• LYV Q3 rev $8.49–$8.50B (+~11% y/y) missed Street (~$8.58B) and EPS $0.73 missed $1.32 as mgmt flagged robust global stadium demand and a strong 2026 pipeline (~26M tickets sold already) despite softer arenas/amphitheaters.
• PINS 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.

• LITE 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.
• QLYS was upgraded to Neutral at Piper after results last night amid accelerating ST billings growth and record operating margin while the FY guidance was also raised.
• RPD was downgraded to Hold from Buy at Jefferies saying it has struggled to execute relative to its annual recurring revenue guidance.
• SONY was upgraded to Outperform from Peer Perform at Wolfe Research, highlighting what the firm calls a “triple threat” across Gaming, anime, and Music. Wolfe says Sony’s Gaming and Music divisions hold leading positions in Fast-growing markets, positioning the company for sustained earnings momentum.
• TDC reported better-than-expected Q3 financial results and raised its FY25 EPS guidance above estimates. Also, the company issued Q4 EPS guidance above estimates.
• Unity (U) 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.

• AMD reported a solid quarter, beating across all metrics and importantly in the data Center Line item; the DC business grew 22% Y/Y, growing both for MI and EPYC servers sequentially and Y/Y; for the December quarter, AMD guided above consensus by roughly $400M on the top Line.
• CRUS delivered better-than-expected results with revenue beating by 4%, and EPS 19% ahead of consensus with the sales outlook 3% better largely driven by smartphone strength and increasing traction in adjacent markets. Despite the upside, the full year volume and sales outlook remain unchanged.
• IPGP was double upgraded to Buy from Sell at Citigroup (tgt to $105 from $68) after Q3 results saying they see the company’s business recovery in Q3 continuing due to improving demand for welding and micromachining.
• 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%.
• MU is reportedly redesigning its sixth-generation high-bandwidth memory (HBM4) after facing yield and performance issues, a setback that could push back supply until 2027 – Digitimes reported.
• SMCI shares fell after 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.
• SWKS posted a Q3 beat on better iPhone mix and Android strength and guided Q4 above Street, with Broad Markets steady, GM a touch below consensus, and management leaning into AI driven RF content and a seasonal mobile downtick.
• Dutch chipmaker Nexperia is warning clients that shipments from its Chinese factory are halted indefinitely. The company also says it cannot guarantee the quality of products from the plant, according to a letter obtained by Reuters