October 5th Market Overview

Happy Monday

Tech led stocks higher today even as bonds kept selling off. The market has had plenty of reasons to pull back lately, and buyers keep showing up anyway.

I like that kind of stubbornness. It might not feel like it but this year has been a strong market considering what its faced.

Let’s dig in...

Today's Big Picture

1. Tech Hits a Record While Bonds Sell Off

The Nasdaq set a record the same day the 10-year Treasury yield hit its highest level since 2002. Rising rates usually hurt growth stocks. Infrastructure Capital's Jay Hatfield says tech now works like "the inverse bond trade." He argues AI demand is so strong that big tech barely cares what it costs to borrow.

2. Brazil Rallies on Bolsonaro's First-Round Lead

Brazilian stocks had their best day since March 2020 after Flávio Bolsonaro edged out President Lula on Sunday. The dollar fell to 4.99 reais, its lowest since at least May. Investors like Bolsonaro's promise to cap Brazil's public debt, and JPMorgan upgraded Brazilian stocks to overweight. The runoff is Oct. 25.

3. Schneider Agrees to Buy PTC for $22.6 Billion

France's Schneider Electric will pay $205 a share in cash for PTC $PTC. PTC had its best day on record, while Schneider sold off in Paris. Citi said the deal could be seen as "opportunistic," since AI disruption fears had already knocked industrial software stocks down. It also gave other AI stocks a lift.

Market Overview

Index Performance

Stock Spotlight

SpaceX $SPCX ( ▲ 6.53% )  
rallied after Morgan Stanley's Adam Jonas called the stock "cheap and getting cheaper" ahead of Starship Flight 15. Musk also floated renaming the AI unit SpaceXSI after Trump told the government to use "Super Intelligence" instead.

RXO $RXO ( ▲ 23.12% )  
agreed to sell itself to C.H. Robinson for $5.8 billion in cash and stock, or $30.25 a share. C.H. Robinson shareholders weren't sold, even with a plan to save $300 million a year within two years.

Vaxcyte $PCVX ( ▲ 28.79% )  
said its 31-strain pneumonia vaccine held up against Pfizer's and Merck's shots in a big late-stage trial. It missed on just two strains and plans to file with the FDA in the first half of 2028.

Big Name Updates

Nvidia $NVDA ( ▲ 2.46% )  
broke above its May 14 record close of $235.74, trading near $239 late in the day.

Taiwan Semiconductor $TSM ( ▲ 2.83% )  
hit an all-time high after Elon Musk confirmed talks about helping run his Texas chip plants. Musk called it "just discussions, but something may come of it."

Blue Chips
MarketBeat lists “7 Blue-Chip Stocks to Add To Your Forever Portfolio”

Chevron $CVX ( ▼ 0.29% )  
named CFO Eimear Bonner head of its oil and gas business starting January 2027. New energies chief Jeff Gustavson becomes CFO, and both are seen as contenders to replace CEO Mike Wirth, 65.

Intercontinental Exchange $ICE ( ▲ 1.3% )  
and crypto exchange OKX filed to offer 24/7 trading in blockchain versions of U.S. stocks. Nvidia, Apple and Tesla are among the 60-plus names, and each company can object within 30 days.

Other Notable Company News

Western Digital $WDC ( ▲ 5.68% )  
and fellow memory maker Seagate were among the S&P 500's biggest gainers.

DraftKings $DKNG ( ▲ 5.92% )  
got a Buy upgrade from Bank of America, which sees $400 million in prediction market fees in 2027.

Ambev $ABEV ( ▲ 8.86% )  
rode the Brazil rally, since it does most of its business there and a stronger real helps local shoppers.

Harley-Davidson $HOG ( ▲ 6.84% )  
got a Citi upgrade to Buy with a $33 target. Citi likes a big product launch on the way, cost cuts and its LiveWire electric bikes.

Samsara $IOT ( ▲ 4.06% )  
picked up a Buy rating and $50 target from Jefferies. It charges by the asset, not the employee, so AI job cuts pose less risk to sales.

Today’s Sponsor

The ice cream shop that makes money when it's cold

28 Wishes sells ice cream in Los Angeles. Below 70°F, sales fall about 20%. The weather is out of their hands. Rent isn't.

So the owners started putting about $20 a day into Kalshi weather markets, taking the cold side. The days that keep customers away now pay something back.

This is hedging. Big companies have done it for decades, buying protection against bad weather, fuel spikes and rising rates. It used to take a broker, a trading desk, and an order size no corner shop could meet.

Kalshi opens it up. Contracts on weather, fuel prices, inflation, tariffs and regulation, starting at a few dollars. Take a position on the outcome that would hurt you. If it hits, the payout softens it. If it doesn't, the contract expires and the good month was the point.

See how other owners are doing it at Kalshi.com/hedging

Sector Watch

Bond Market

Bonds sold off again without a clear trigger, though this week's $119 billion in Treasury auctions likely played a part. First up is $58 billion in 3-year notes tomorrow.

Policy Watch

Fed

The ISM services survey showed businesses kept growing in September, but costs are climbing.

• Prices paid hit 74, the highest since July 2022.

• The hiring gauge moved back above 50, the line between growing and shrinking.

• Traders still expect the Fed to hold rates this month after Friday's weak jobs report.

International

• Iran's parliament speaker said the Strait of Hormuz stays closed until Iran's terms for ending the war are met.

• Brent slipped to about $100 after G-7 nations agreed Friday to tap their emergency oil reserves.

• Insuring $10 million of French debt against default now costs $84,000 a year, nearly double two weeks ago

What to Watch

Fed Minutes Wednesday

We get the notes from the September meeting, when the Fed raised rates for the first time in three years. Look for how many officials wanted to keep hiking. New York Fed President John Williams and two other Fed officials speak tomorrow.

A High Bar for Earnings

A record share of S&P 500 stocks now carry Buy ratings, according to FactSet. Analysts expect an eighth straight quarter of double-digit profit growth as reports roll in from mid-October. With expectations this high, guidance will matter more than beating estimates.

Thanks for reading - you are now the more informed 🙂

- John

Today’s Sponsor

Blu Dot surpasses 2,000% ROAS with self-serve CTV ads

Blu Dot used Roku Ads Manager to drive incredible results for its furniture sales event. Its strategy hinged on custom audiences and retargeting, where intent was strongest.

“Roku has been a top performer,” said Blu Dot’s Claire Folkestad. “We have seen…CPMs lower than any other CTV partner we've worked with.”

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