AI Fears, Elections, Earnings Make a Combustible Week

Good morning and welcome to a week of monumental market catalysts to kick off the new month. November is starting in a positive mood after the brutal AI selloff last week, but a fresh set of challenges faces investors.

Investors will be glad to see the back of October, following the Nasdaq’s 5% monthly fall after reports from Amazon, Alphabet, and Intel hurt tech stocks badly last week. But earnings will play a big part again with Apple the first big name to post after the close Monday, fresh from surpassing Nvidia to reclaim the title of the world’s most valuable company.

Apple has become an anti-AI play but earnings from Advanced Micro Devices , Palantir , Super Micro, Qualcomm, and more will add fuel to the AI debate one way or the other.

Then there are the midterm elections on Tuesday, which could have major implications for energy, healthcare, and other sectors. And we will round off the week with October’s jobs report.

The mood is upbeat to start the week, in stark contrast to Friday, with tech enjoying a rebound. But how long that can last is the big question facing markets.

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📈 Here’s what’s happening in markets today:

Stock futures are rising. Midterm elections and more earnings loom.
Apple, SpaceX, Intel, Palantir, and more stocks that explain today’s market.
Micron stock bounces back, but the market needs more as AI fears linger.
SpaceX looks to disrupt telecom the old-fashioned way.
Nvidia rebounds, but its stock chart is looking really ugly.
Why Bitcoin is shrugging off the $6.3 billion Binance hack.
Estée Lauder is finally moving past recovery mode.
Apple needs flawless results to defend its $5 trillion crown.
Palantir has to top itself again for the stock to keep going.

Created with Highcharts 9.0.1Source: FactSetNote: futures contractsAs of Nov. 2, 7:55 a.m. ET

Created with Highcharts 9.0.1Nasdaq Dow industrialsS&P 500Nov. 1Nov. 200.20.40.60.81.01.2%

🎙️ Be sure to tune into today’s Barron’s Live

Join Barron’s Senior Managing Editor Lauren R. Rublin and Investor Circle Newsletter Editor Josh Schafer today at noon when they speak with Jeffrey Sherman, deputy chief investment officer of DoubleLine, about the macro backdrop for bond investing, where he’s finding value now, and what to expect from the Fed. Sign up here.

Join us on Dec. 10 at noon for a Barron’s Roundtable featuring discussions with Wall Street strategists and money managers about the outlook for stocks, bonds, interest rates, and policy in the year ahead, and the best ways to navigate an uncertain investment landscape. Reserve your spot here.

🚙 Why China is flooding the world with EVs

China’s auto industry has so much excess capacity to make cheap, feature-laden electric vehicles and hybrids that it threatens car companies and their stocks everywhere. The country is exporting 10 million vehicles this year, up from one million in 2020. BYD alone has exported 1.5 million of them so far. Read more about it here.

🗳️ A contested election won’t derail the markets

Polls show Republicans facing a rout in the midterm elections on Tuesday. Some investors are nervous about another possibility: What if the election outcome isn’t immediately known? History shows investors don’t have much to worry about. Read more about what markets have in store here.

🏡 The housing market is a mess, so why aren’t prices rising?

The housing market is struggling with the lowest builder sentiment in 14 years, and the lowest pending home sales on record for September after mortgage rates climbed to their highest level in three years. But economists tell Barron’s that house prices will likely flatten out, or keep rising. Read more about it here.

📅 Put it on your calendar

Every Monday morning Barron’s publishes a rundown of what’s coming up for investors in the week ahead. Don’t miss out on earnings reports, inflation data, and anything that could move the markets. On the agenda:

Apple earnings
Midterm elections
Jobs report for October

🏦 How to borrow against your securities portfolio

Wall Street is encouraging securities-based lending to retail investors with attractive lending rates in the 5% to 6% range—and significant credit lines that can top 70% of portfolio values, allowing anyone to use leverage like Oracle co-founder Larry Ellison. Read about it here.

📰 Don’t miss out on our other newsletters

Review & Preview: Ending on a Down Note
Retirement: The Only Annuities Worth Buying
Energy Insider: These Stocks Have the Muscle to Power AI

🥞 Wendy’s, IHOP face take-private bids. Success isn’t easy.

Private-equity firms are targeting struggling U.S. restaurant chains like Wendy’s and Dine Brands’ IHOP , betting they can acquire the beaten-down businesses, revive their fortunes away from public-market scrutiny, and eventually cash out. But a successful turnaround is not guaranteed. Read more about the trend here.

💬 Quote of the day:

We think markets will be happiest with gridlock. — Steve Englander, Standard Chartered co-head of FX Research, ex-China, and head of North America Macro Strategy

Other headlines moving markets:

While the AI trade is troubled, Microsoft retains its fans.
Mattel and 4 more stocks see action from activist investors.
Oil giants are raking in cash. Here’s what they’ll do with it.
Tech earnings send SpaceX stock below IPO price. No one met Elon Musk’s high bar.
SEC says fake advisors used bogus federal filings in $100 million crypto scheme.
How this under the radar quantum stock could more than double.
Billions of dollars in cryptocurrency was just stolen. Should investors be worried?
Why rich Brazilians are flocking to Miami.
Alphabet’s convertible preferreds are now over 7.5%. There’s a catch.
The Fed is focused on inflation, but the labor market needs attention, too.
Fed officials signal more interest rate increases ahead, and markets believe them.
Cruise stocks had a great weak. They can keep steaming ahead.
Cybersecurity stocks tumble in tech selloff. A crypto theft should have helped.
Thirsty for gains? 2 AI stocks that won’t leave you high and dry.
Charles Schwab’s CEO sees bigger role for retail investors in IPOs.
The Fed’s plan for fewer policy meetings could bring more market whiplash.
Stocks are limping into November. A Santa rally would be a true gift.

— Edited by Liz Moyer, Stacy Ozol, and Patrick O’Donnell

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