October 2nd Market Overview

Happy Thursday

We are notching fresh highs while Washington keeps the federal budget shut.
Weird combo, but nobody seems worried yet so I’m not.

Fair Isaac(FICO) built the credit scoring system everyone uses, then let Equifax and TransUnion charge lenders a markup to access it for decades. Today they said "we're going direct" and cut out the middlemen. The bureaus just lost their toll booth.

AI deals kept tech costing to near or at all time highs. Everything else just kind of drifted.

Let's dig in...

Let's dig in...

Today's Big Picture

FICO rewires mortgage score distribution

Fair Isaac $FICO ( ▲ 21.5% ) launched direct licensing for mortgage scores, letting lenders bypass Equifax and TransUnion markups entirely. The move shifts pricing power back to FICO and threatens billions in annual bureau revenue.

Lenders can now access FICO scores without paying the middleman.

Berkshire buys OxyChem, Occidental targets debt

Berkshire Hathaway agreed to buy Occidental Petroleum's $OXY OxyChem unit for $9.7 billion in cash—Berkshire's largest deal since 2022. Occidental plans to use about $6.5 billion of proceeds to cut principal debt below $15 billion after the CrownRock acquisition. The market sold Occidental shares as investors assessed what's left after the best asset gets carved out.

Shutdown lengthens, data goes dark

The federal funding lapse hit day two with no resolution ahead. Treasury Secretary Scott Bessent warned of a GDP hit. The Bureau of Labor Statistics paused all data releases—Friday's jobs report won't happen, and weekly jobless claims are scrapped. Prediction markets price a 63% chance the shutdown lasts beyond October 10. If it drags past 29 days, this becomes the second-longest in history.

Market Overview

Index Performance

Stock Spotlight

Fair Isaac $FICO ( ▲ 21.5% ) 
Launched direct licensing that lets lenders get FICO scores without paying bureau markups. The company took back pricing control. The question: how fast do major lenders switch over.

Equifax $EFX ( ▼ 7.94% ) 
The mortgage score business just got threatened. The bureau needs alternative data products and enterprise contracts to replace that revenue. Watch what management says about the path forward.s.

Occidental Petroleum $OXY ( ▼ 7.46% ) 
Selling OxyChem to Berkshire for cash. Management plans to pay down debt after the CrownRock deal closed. Watch for ratings upgrades and lower interest costs over the next few quarters.

Tesla $TSLA ( ▼ 3.36% ) 
Q3 deliveries came in at 497,099—above estimates and up year over year. The beat happened because U.S. buyers rushed to grab the expiring EV tax credit. Shares drifted lower anyway. Pricing and margins matter more than delivery numbers now.

Big Name Updates

Apple $AAPL ( ▲ 1.06% ) 
Morgan Stanley raised its target to $298 from $240 on stronger iPhone 17 demand. The firm lifted FY26 iPhone revenue by 4% but said the stock already moved on this news over the past three weeks. Bloomberg reported Apple killed the Vision Pro update to focus on AI smart glasses instead.

Alphabet $GOOGL ( ▼ 0.11% ) 
Jefferies lifted its target to $285 from $230. The case: Google can combine Gemini, AI overviews, and search into one system. Circle to Search and Google Lens expand what the search engine can handle. The firm thinks Google controls the path from question to purchase.

Meta Platforms $META ( ▲ 1.16% ) 
Oppenheimer says Apple's hardware advantage holds for 2-3 years. Ray-Ban Display isn't ready to challenge phones or even the Apple Watch. Meta's custom chip plans hit delays—orders are uncertain and production won't start until late 2026 at the earliest.

Nvidia $NVDA ( ▲ 0.85% ) 
Hit an all-time high above $191 as AI deals picked up. Samsung Electronics and SK Hynix partnered with OpenAI on the Stargate project, lifting chip stocks across the board. The stock's up over 41% this year.

Other Notable Company News

Nike $NKE ( ▲ 0.62% ) 
KeyBanc upgraded to Overweight with a $90 target. The call points to better results from recent changes, new products coming, and fixing retail distribution. Tariffs and China remain problems.

DigitalOcean $DOCN ( ▲ 7.58% ) 
Launched an AI Partner Program at the Deploy London conference. The platform now offers Nvidia and AMD GPUs, models from OpenAI, DeepSeek, Meta, and Mistral, plus integrations with LangChain and dStack.

Warner Bros. Discovery $WBD ( ▼ 0.36% ) 
Raymond James lifted its target to $22 from $13 ahead of the planned split. Reports say Paramount Skydance might bid $22-24 per share, though CEO David Zaslav wants $40. Raymond James thinks Paramount Skydance is moving fast before other bidders show up.

Bloom Energy $BE ( ▼ 0.09% ) 
Mizuho downgraded to Neutral while raising the target to $79 from $48. The Wyoming data center project shows clear demand, but the company can't build units fast enough to meet it.

Sector Watch

Bond Market

U.S. Treasuries: The 10-year sits at 4.091%, down 1 basis point. Not much action.

Gold: Near record levels at $3,870. Goldman says it could hit $5,000 if 1% of household Treasury holdings rotate into gold.

Japan: Weak auction. Yields hit 1.65%—near 2008 highs. Markets price 58% odds of a BOJ rate hike this month. If Japan tightens, U.S. rates could follow higher.

Policy Watch

Shutdown hits day two

• No deal coming soon. Prediction markets say 10+ days minimum

• BLS paused everything—no jobs report Friday, no weekly claims

• Fed's flying blind heading into October meeting

Trade moves

• EU plans to double steel tariffs to 50%

• Taiwan rejected U.S. proposal for 50-50 chip production split

Fed leadership

• Supreme Court scheduled January arguments on Lisa Cook

• Timing overlaps with Powell's term ending in February

• Could shift FOMC control to Trump picks

Today’s Sponsor

Free email without sacrificing your privacy

Gmail is free, but you pay with your data. Proton Mail is different.

We don’t scan your messages. We don’t sell your behavior. We don’t follow you across the internet.

Proton Mail gives you full-featured, private email without surveillance or creepy profiling. It’s email that respects your time, your attention, and your boundaries.

Email doesn’t have to cost your privacy.

Ditch the Gmail data grab

What to Watch

Earnings season starts October 14

Tech companies start to report in two weeks. The market wants to hear if AI spending is paying off and what margins look like. Position now because guidance will move stocks fast. Semiconductor and cloud names matter most.

Japan rate decision this month

Markets price 58% odds of a Bank of Japan hike. If they tighten, the yen strengthens and U.S. Treasury yields could move higher on global spillover. Watch the decision and any commentary—it affects currency and rate positions.

Shutdown duration

Prediction markets say 10+ days minimum. The longer it runs, the more economic data disappears. That clouds Fed rate cut decisions.

Check Kalshi and Polymarket for odds shifts—>they move before the headlines do.

Thanks for reading 🙂

- John