- The S&P 500 and Nasdaq Composite rallied Monday on an AI rebound, and the iShares Semiconductor ETF was on pace to snap a nine-day slump.
- The S&P 500 fell nearly 2% last week, its worst weekly decline since late June, and the Nasdaq Composite dropped 4.5% over the same five days.
- Of 47 S&P 500 companies that have reported Q3 results, 85% beat expectations, and the index is on track for a blended earnings growth rate of 29%.
- Meta Platforms and Tesla report major earnings this week, and investors want them to clear worries about the sustainability of the AI trade.
- Barclays says fundamentals are unchanged but has turned neutral on risk assets and neutral on duration, citing fragile price action.
- LNW expects dispersion among AI stocks, with neocloud platforms at risk of selling off over their debt-funded build-outs.
- Wells Fargo Investment Institute views the AI selling as a reality check rather than a full unraveling, and says the selling is not fully done.
Quotes
“Tech earnings are key this week. Fundamentals are unchanged, but given fragile price action, we turn neutral [on] risk assets and stay neutral duration”
“We have an earnings-expectation-potential bubble in this cycle.”
“we don't think it's fully done and may last through the midterms given the politicization of AI/data centers”