October 9th Market Overview

Happy Thursday

We're in an "anything but cash" bubble.

Markets pulled back from record highs today but barely. Gold hit all-time highs. Treasury is buying Argentine pesos. Investors are piling into rare earth miners, AI chips, and whatever else isn't denominated in dollars.

Everyone's running from cash into everything else at the same time that's inst clear diversification, it’s fear wearing a bull market costume.

I'd like to see the dollar strengthen into year's end. That would help rationalize some of these enormous market caps. The Nasdaq 100 is up 46% from its April lows. At some point, gravity matters again.

My #1 hedge signal is when the 45% of the S&P 500 crosses below their 200 day average. Thats why I built this dang tool in the first place. To visualize the health of the market FAST.

Anyways, sorry for the rant today but had some things on my mind.

Let's dig in...

Today's Big Picture

U.S. Backs Milei With Peso Purchase

Treasury Secretary Scott Bessent disclosed the U.S. bought Argentine pesos to support President Javier Milei's economic overhaul. Bessent called the reforms "of systemic importance." This is the White House deploying Treasury funds to back a foreign political ally's domestic policy.

U.S.-Gulf AI Chip Exports Advance

The U.S. approved billions in Nvidia chip exports to the UAE after months of delays. Saudi Arabia deal is also progressing. Both deals were held up by China access concerns. The UAE agreement moved forward after the Emiratis committed to U.S. investments. These chips will power AI data centers across the Gulf.

China Tightens Rare Earth Exports

China imposed new export controls on rare earths effective December 1, requiring licenses for products containing just 0.1% domestically-sourced materials. Companies must also disclose end-users and destinations. China controls most global supply. The move came with zero advance warning.

Market Overview

Index Performance

Stock Spotlight

Delta Air Lines $DAL ( ▲ 3.85% ) 
beat estimates and raised full-year guidance to around $6 per share. Holiday travel outlook remains strong. CEO said shutdown hasn't impacted operations yet.

PepsiCo $PEP ( ▲ 4.15% ) 
beat on earnings and lifted guidance. North American beverage volumes still declining but higher prices are offsetting the drop.

Costco $COST ( ▲ 3.07% ) 
posted $26.58 billion in sales for the five weeks ended Oct. 5, up 8% year-over-year. U.S. comp sales grew over 5%.

Akero Therapeutics $AKRO ( ▲ 16.33% ) 
will be acquired by Novo Nordisk $NVO for $54 per share in cash—$4.7 billion total. Akero's lead drug treats obesity-linked liver disease and is in phase 3 trials.

Big Name Updates

Oracle $ORCL ( ▲ 3.07% ) 
initiated at Buy by Baird with $365 target on AI infrastructure positioning. Stock rebounding after recent concerns about cloud margins..

TSMC $TSM ( ▼ 1.54% ) 
Q3 revenue came in at NT$989.9 billion, slightly above consensus. Year-to-date revenue up 36% year-over-year.

Tesla $TSLA ( ▼ 0.72% ) 
faces an NHTSA probe into FSD running traffic lights. 2.9 million vehicles under review for traffic violations using the self-driving system.

Robinhood $HOOD ( ▲ 1.21% ) 
price target raised to 170 from 130 at Citizens. Strong Q3 expected with upside barely in models yet.

Other Notable Company News

GoodRx $GDRX ( ▲ 6.38% ) 
is in talks to join the TrumpRx website, per Reuters. The platform offers discounted prescription medications.

DraftKings $DKNG ( ▲ 3.59% ) 
upgraded to Buy at Berenberg. Stock sold off on prediction market concerns, but analysts see the threat as overdone.

Coinbase $COIN ( ▼ 0.17% ) 
maintained at Market Outperform with 440 target at Citizens. Firm expects improved core Q3 results.

Oklo $OKLO ( ▲ 2.28% ) 
initiated Buy at Canaccord with 175 target. Sees strong long-term demand for distributed nuclear energy.

Disney $DIS ( ▼ 0.87% ) 
raised ticket prices at Disneyland and Disney World, citing higher labor costs. Top-tier Disneyland one-day ticket now $224.

Sector Watch

Bond Market

The 10-year Treasury yield sits at 4.146% after another calm session. Dollar strengthened to its highest level since August.

Policy Watch

Fed

Fed Governor Michael Barr pushed back hard on more cuts. He said two more years to hit 2% inflation "would be a long time to wait." Many Fed officials now project inflation won't reach target until end of 2027. Barr voted for the cut last month—this is a reversal.

New York Fed President John Williams told the NYT he supports "lower rates this year" but refused to say how many. The September consensus is fracturing.

BlackRock's Rick Rieder, the firm's chief investment officer of global fixed income, reportedly interviewed "very well" for Fed chair with Treasury Secretary Bessent, per FT.

Government Shutdown

Day 9. Senate failed for the seventh time to pass funding bills.

• IRS furloughed nearly half its workforce

• FAA controller shortages delaying flights nationwide

• Economic data releases stalling—labor stats went unpublished Wednesday

• Delta CEO: impacts could appear within 10 days

Fiscal & Trade

Fiscal 2025 deficit matched prior year despite historic tariff revenue. Interest on the debt topped $1 trillion for the first time.

Tariffs are breaking companies:

• First Brands Group (auto parts): bankruptcy, cited tariffs

• Marelli (auto parts): bankruptcy, cited tariffs

• At Home Group (home décor): bankruptcy, blamed China tariffs

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What to Watch

PepsiCo Earnings Call

Management commentary on 2026 outlook and whether pricing power holds as volumes decline. If they guide cautiously, that's your consumer spending canary.

JPMorgan's Jamie Dimon Warning

Dimon told the BBC he sees 30% odds of a major correction within the next six months to two years. The market is pricing in 10%. When the CEO of the largest U.S. bank gives odds three times higher than consensus, that's not noise.

Fed Speakers This Week

After Barr and Schmid pushed back on cuts, watch if other Fed officials echo the hawkish tone. If this becomes coordinated messaging, the two remaining cuts markets expect are off the table.

S&P 500 Volatility Streak

33 consecutive days without a 1% move—longest since early 2020. That ended badly. Extreme calm usually precedes volatility, not more calm. If you haven't trimmed positions, you're betting nothing breaks.

Thanks for reading 🙂

- John