November 3rd Market Overview

Happy Monday

China formally lifted rare earth export restrictions over the weekend as part of the trade deal. Good news there, but I'm surprised the market didn't seem to care.

Amazon and OpenAI signed a $38 billion computing deal, but over 320 names in the S&P 500 were red today. Five companies doing all the heavy lifting.

Market breadth (how many stocks are up vs. down) flashing some warning signals for this week.

Let's dig in...

Today's Big Picture

1. Amazon Breaks Into OpenAI Computing

OpenAI signed a $38 billion deal with Amazon $AMZN for computing power, their first partnership. This breaks OpenAI's near-total dependence on Microsoft $MSFT and gets AWS into the AI infrastructure race. The agreement deploys hundreds of thousands of Nvidia $NVDA GPUs starting now.

2. AI Infrastructure Land Grab Accelerates

IREN $IREN locked a $9.7 billion Microsoft deal to supply Nvidia GB200 GPUs, using just ten percent of its capacity. Cipher Mining $CIFR separately signed a $5.5 billion AWS lease for AI capacity. Capital is flooding into whoever controls power and rack space, and these companies are printing money before even turning on the servers.

3. U.S.-China Trade Deal Formalized

The White House detailed the weekend agreement with China. Beijing suspends all retaliatory tariffs since March 4 and lifts rare earth export controls. The U.S. drops tariffs by ten percentage points starting November 10. Trump told CBS: "We got no rare earth threat….that's gone, completely gone." U.S. rare earth miners got crushed on the news.

Market Overview

Index Performance

Stock Spotlight

IREN $IREN ( ▲ 12.03% ) 
signed a $9.7 billion five-year deal with Microsoft $MSFT to supply Nvidia GB300 GPUs. Microsoft is prepaying twenty percent and the deal uses only ten percent of IREN's total 3GW capacity.

Cipher Mining $CIFR ( ▲ 22.23% ) 
signed a $5.5 billion 15-year lease with Amazon Web Services for 300MW of AI capacity starting in 2026.

Kenvue $KVUE ( ▲ 12.63% ) 
shares jumped after the Kimberly-Clark $KMB acquisition announcement. Kimberly-Clark stock had its biggest one-day drop since the 1980s.

Big Name Updates

Berkshire Hathaway $BRK.B ( ▼ 0.07% ) 
reported operating earnings jumped after insurance underwriting income more than doubled. Warren Buffett didn't buy back any stock and the cash pile hit a record $381.6 billion.

Microsoft $MSFT ( ▼ 0.38% ) 
received approval from the Trump administration to ship Nvidia $NVDA chips to the United Arab Emirates. The company said its total UAE investment will reach $15.2 billion by end of 2029.

Tesla $TSLA ( ▲ 2.59% ) 
got a price target increase to $470 from $440 at Deutsche Bank after CEO Elon Musk said there should be 1,000 or more robotaxis in the Bay Area by year-end.

Amazon $AMZN ( ▲ 4.32% ) 
hit all-time highs after the OpenAI computing deal was announced. The stock is up about seventeen percent this year.

Other Notable Company News

Palantir $PLTR ( ▲ 3.27% ) 
reports earnings after the bell today.

On Semiconductor $ON ( ▲ 0.87% ) 
advanced after third-quarter results beat estimates.

Beyond Meat $BYND ( ▼ 13.6% ) 
fell after delaying third-quarter results to November 11.

Costco $COST ( ▲ 1.82% ) 
is back to being a top pick at Oppenheimer after recent underperformance.

JPMorgan $JPM ( ▼ 0.64% ) 
got a price target increase to $350 at Wells Fargo, which calls the bank the "Nvidia of Banking."

Adeia $ADIA ( ▼ 12.5% ) 
fell after suing AMD $AMD for patent infringement over semiconductor technology.

Sector Watch

Bond Market

Yields barely moved Monday. Fed speakers keep saying December's rate decision hinges on incoming data. Problem is the government shutdown is blocking some of those reports from coming out.

Policy Watch

Government Shutdown

The shutdown becomes the longest in U.S. history overnight Tuesday when it hits 36 days. Polymarket bettors give it less than one percent chance of ending today and fourteen percent by Friday. Democrats are pushing Trump to get directly involved in talks.

Fed & Rates

San Francisco Fed President Mary Daly backed last week's cut but wants caution on December. She sees labor market softness without real weakness. Inflation is still above two percent. Separately, Treasury Secretary Bessent said high rates may have already pushed housing into recession.

China Trade Deal

Formal terms announced over the weekend:

• China suspends all retaliatory tariffs since March 4

• Lifts rare earth export controls and issues licenses for critical minerals like gallium and graphite

• Commits to 12 million metric tons of U.S. soybeans this year, 25 million tons annually through 2028

• U.S. drops tariffs on Chinese imports by ten percentage points starting November 10

• U.S. extends Section 301 exclusions through November 2026

• U.S. suspends port fees on China-linked vessels for one year

U.S. rare earth miners got hammered on the news. MP Materials $MP, USA Rare Earth, and Energy Fuels all fell double digits.

International

OPEC+ is adding 137,000 barrels per day in December but pausing increases through March. China is talking to U.S. wheat suppliers for the first time in a year, looking at December through February shipments.

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What to Watch

This Week's Earnings

Over 100 S&P 500 companies report this week including McDonald's $MCD, Palantir $PLTR, and AMD $AMD. More than 300 companies have reported with over eighty percent beating expectations.

Tesla Shareholder Vote

Thursday brings results of the vote on CEO Elon Musk's pay package. This has been contentious and could move the stock.

ISM Manufacturing Data

October's ISM manufacturing index came in at 48.7, below estimates and showing continued contraction. Employment remains weak despite edging higher.

Shutdown Record Watch

If no deal is reached, the shutdown becomes the longest in U.S. history overnight Tuesday when it surpasses 35 days.

Thanks for reading 🙂

- John

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