Crossing Wall Street

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We finally had some good news out of Washington. It appears that the government shutdown will soon come to an end. As I write this, Polymarket shows 95% odds that the shutdown will end between November 12th and 15th. The Senate has already passed a bill that will end the shutdown.

Now it’s the House’s turn. They’ll start voting on the Senate’s bill tomorrow afternoon. If that passes, all it needs is the president’s signature and the government can reopen.

The stock market celebrated the news yesterday with a big rally, and it was largely concentrated in tech and High Beta stocks.

On Monday, the S&P 500 rallied over 1.5% while the Nasdaq was up more than 2.2%. The High Beta Index was up 1.69% and the Low Vol Index was up 0.08%. The tech sector gained almost 2.7% on the day. This is close to the inverse of what we’ve seen over the past two weeks.

So what happened to break the political deadlock? Eight senators who are normally on the Democratic side of the aisle broke ranks and voted for a plan to fund most of the government through January.

The shutdown was starting to add a level of chaos to certain parts of the economy. For example, about 5,000 flights were canceled from Friday through Sunday. According to the New York Times, “By Monday morning, more than 1,400 flights had been canceled for the day, more than 5.5 percent of scheduled trips.” There have been 602 reports of short staffing since October 1, more than six times as many as were reported on the same dates last year.

I’m glad that will soon be behind us. I’m also looking forward to seeing some of the recent economic data that’s been left unattended.

The stock market had an interesting day today because many stocks did well. The Dow rallied over 550 points to a new record. The weak spot is that the Nasdaq didn’t do so well today. It closed lower by 0.25%.

Within the Nasdaq are many tech stocks and they’re influential enough to bring down the entire Nasdaq Composite. We can go further and see that a small group of very large companies can sink the entire tech market. In fact, Nvidia (NVDA) is big enough to do it by itself.

In today’s trading, Nvidia closed lower by 2.96%. That’s a loss of around $145 billion which works out to around 18 points in the entire S&P 500. The tech sector was the only market sector to close lower today.

Thanks to Nvidia’s loss, many Low Vol stocks gained back some relative strength they lost on Monday. High Beta’s relative performance peaked on October 24th. Low Vol has outperformed since October 29th. I can’t say if this is the start of a long-term rotation for these sectors, but High Beta has held the spotlight for a long, long time. All cycles on Wall Street come to an end.

Interestingly, on Tuesday, the High Beta sector closed lower by 0.92% while Low Vol closed higher by 0.92%. Nice symmetry.

Even though the stock market is near all-time highs, I do have some growing concerns about the state of the economy, especially the jobs market. For example, it appears that many of the job numbers are distorted by “ghost jobs.” These are jobs that are listed as being open but are never actually filled. It makes the labor market appear stronger than it truly is.

Last week’s ISM Manufacturing report showed further contraction in the factory sector of the economy. This was the eighth monthly drop in a row.

Wendy’s said it’s going to close 300 stores starting at the end of this year. The burger chain recently reported a 4.7% drop in same-store sales.

U.S. companies recently announced the largest October jobs cuts in 20 years. Intel said it will reduce its workforce by 15% by the end of the year. Amazon plans to cut 14,000 corporate jobs. Walgreens cut its pay for hourly store workers after a $10 billion buyout.

President Trump has floated the idea of giving all Americans, except high income folks, a check for $2,000.

The October jobs report was scheduled to be released last Friday, but that’s been put on ice thanks to the government shutdown. Without the government data, we’re forced to rely on other sources. For example, the ADP private payrolls reports said that companies added 42,000 workers last month. Revelio Labs said the economy shed 9,100 jobs in October.

This morning, ADP said that U.S. companies lost an average of 11,250 jobs over the last four weeks through October 25.

The National Association of Realtors decided to replace a photo it was going to use in a new report because it showed a young couple. These days, those folks aren’t typical home buyers. Instead, the NAR used a photo of a couple near retirement age. The average home buyer is now 59 years old.

Buffett Says Goodbye

On Wednesday, Warren Buffett sent a letter to shareholders of Berkshire Hathaway. In it, Buffett said that he will no longer be writing Berkshire’s annual report or speaking at the annual shareholder meeting. I can hardly blame him for having some time off. After all, he’s 95 years old. At the end of the year, Greg Abel will take over.

In his letter, Buffett gives us a lovely paean to Omaha and growing up in the heartland. Here’s a sample:

Let’s look at a few other kids from that era, who grew up very nearby and greatly influenced my life but of whom I was for long unaware.

I’ll begin with Charlie Munger, my best pal for 64 years. In the 1930s, Charlie lived a block away from the house I have owned and occupied since 1958. Early on, I missed befriending Charlie by a whisker. Charlie, 6 ⅔ years older than I, worked in the summer of 1940 at my grandfather’s grocery store, earning $2 for a 10-hour day. (Thrift runs deep in Buffett blood.)

The following year I did similar work at the store, but I never met Charlie until 1959 when he was 35 and I was 28. After serving in World War II, Charlie graduated from Harvard Law and then moved permanently to California. Charlie, however, forever talked of his early years in Omaha as formative. For more than 60 years, Charlie had a huge impact on me and could not have been a better teacher and protective “big brother.”

We had differences but never had an argument. “I told you so” was not in his vocabulary. In 1958, I bought my first and only home. Of course, it was in Omaha, located about two miles from where I grew up (loosely defined), less than two blocks from my in-laws, about six blocks from the Buffett grocery store and a 6-7-minute drive from the office building where I have worked for 64 years.

Buffett also discussed his philanthropic plans for his estate. Buffett’s children will be looking after most of the funds in their respective trusts.

Lastly, he added this note: “Berkshire will always be managed in a manner that will make its existence an asset to the United States and eschew activities that would lead it to become a supplicant.”

This reminds me of Charles Wilson, who was often called “Engine Charlie.” Wilson was the CEO of General Motors, and he later become Ike’s Secretary of Defense.

At his confirmation hearings, Wilson famously said, “What’s good for General Motors is good for the country.” Except that’s not what he said. This has become a famous misquotation.

Wilson was asked if he could make a decision that was not in the interest of General Motors. Wilson said he could, but it would be unusual “because for years I thought what was good for our country was good for General Motors, and vice versa.” That’s quite a different answer and I’m glad to see Buffett endorse that tradition.

Here are the last 30 years for Berkshire (BRK-A)

That’s all for now. The government’s econ reports may be out soon. Until then, several Fed officials will be speaking this week. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Morning News: November 11, 2025

Eddy Elfenbein — Tue, 11 Nov 2025 12:06:29 +0000

Trump Tower Plans in Belgrade Draw Thousands in Serbian Protest

How Should Canada Respond to Trump’s Tariff Threats?

Where the Taste of Home Comes With a Tariff Charge

End the Shutdown, Buy the Dip

It’s Going to Be Really Hard to Work Out How Much the Shutdown Hurt the Economy

Dollar Carry Trades Set to Trounce World’s Booming Stock Markets

Japan’s ‘Megabanks’ Seen Posting Solid Q2 Profits, On Track for Record Annual Earnings

Never Have Federal Tax Cuts Ever “Starved the Beast”

A High Corporate Tax Rate Would Heighten NYC Unaffordability

Groups Sue to Reverse Trump’s Cuts to Energy Projects in Democratic States

This Justice Department Is Redefining Who the Enemy Is

Low-Income Shoppers Cut Spending and Businesses Worry

A 50-Year Mortgage? It’s Not a Terrible Idea

Why First Brands Has Sparked So Many Concerns on Wall Street

‘Going Quiet’: Nine Big Takeaways From Warren Buffett’s Last Letter as CEO

Berkshire’s Buffett Plans to Keep Class A Shares Until Successor Wins Over Investors

Emerging-Market FX Set for Fifth Day of Losses This Month So Far

Morgan Stanley Adds KKR-Backed Wealth Tech to Speed Up Trades

Why the GAIN Act Is a Net Loss for U.S. Technology

CoreWeave Reports Doubling of Revenue From AI Boom

Gamma, a PowerPoint for the A.I. Era, Raises $68 Million

SoftBank Sells Nvidia Stake for $5.8 Billion to Fund AI Bets

Nebius Sales Soar as Neocloud Provider Inks AI Deal With Meta

The 20-Somethings Who Raised $121 Million to Build Military Drones

Drugmakers Pile Into a Cancer Gold Rush With Questionable Payoff

The Silicon Valley Beauty Brand Biohackers Are Obsessed With

How Beauty Behemoth Ulta Conquered the American Strip Mall

IKEA’s First Non-Swedish CEO Vows to Preserve Its Frugal Roots

Paramount Reports Streaming Growth in First Earnings Since Skydance Merger

Holes Grow in Hollywood’s Safety Net When It Is Needed Most

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Morning News: November 10, 2025

Eddy Elfenbein — Mon, 10 Nov 2025 12:06:42 +0000

Europe’s Economic Recovery Hopes Hang on Scarred Consumers

China Tightens Controls on Fentanyl Precursors After Summit

The True Cost of China’s Falling Prices

Tariffs Are Hurting the People They’re Meant to Help

US Ports Facing ‘Goods Recession’ Amid Holiday Lull, Tariff Woes

Trump Administration Demands States ‘Undo’ Work to Send Full Food Stamps

Airport Disruptions May Get Worse This Week

US Flight Delays Set to Escalate on Chicago Snow, Tighter Limits

As Flight Cancellations Rise, People Are Turning to Trains, Car Rentals and Creative Solutions to Get to Their Destinations

It’s Trump’s Economy Now and Americans Don’t Seem to Love It

Feeling Great About the Economy? You Must Own Stocks

The Three ’A’s in the Trump Economy: AI, Asset Prices and the Affluent

Senate Advances Plan to End Shutdown After Some Democrats Agree

Bounty Hunters? They’re the Last Thing ICE Would Need

The Trillionaires Are Coming. They Can Pay Their Workers Now.

Will the Growth of Stablecoins Drain Bank Deposits?

Hedge Fund Man Group Hails New Era After $13 Billion Mandate

As Jimmy Carter Rises In Right’s Esteem, Let’s Remember Why He Lost

Tricolor’s Frantic End Was Sparked by a Phone Call From JPMorgan

AI-Trained Grads Edge Out Costly Advisers at Indian Wealth Firm

Perplexity Is AI’s New Pit Bull

Data Centers in Nvidia’s Hometown Stand Empty Awaiting Power

Iron Ore Kingpins Head to Guinea as Giant Simandou Mine Nears Startup

Alaska’s New Mining Rush Chases Something More Coveted Than Gold

Tesla’s Cybertruck Chief Is Departing Electric-Vehicle Maker

Glass Skin and Snail Mucin: South Korea’s Journey to Global Beauty Power

Italian Pasta Is Poised to Disappear From American Grocery Shelves

Instacart Gives Rosy Outlook Following Grocery Orders Beat

Burger King Strikes Joint Venture to Double Presence in China

Can the Tallest Running Shoe Out There Chart Path for Nike’s Comeback?

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Morning News: November 7, 2025

Eddy Elfenbein — Fri, 07 Nov 2025 12:03:07 +0000

China’s Exports Unexpectedly Falter as Prices Keep Falling

China Suspends Some Export Controls on Critical Minerals but Retains Others

Bank of Mexico Cuts Interest Rate for 11th Straight Time

The Job Market Is Cooling but Not Collapsing (if Private Data Can Be Trusted)

Mass Layoffs Are Scary, but Probably Not a Sign of the A.I. Apocalypse

Cleveland Fed’s Beth Hammack Skeptical of Further Cuts

The Fed’s Recent Rate Decisions Have Been Divisive. It Is Likely to Get Worse.

Steven Miran Is Why We Can’t Trust Economists With the Economy

Cash Is Not King. It’s Cringe.

I.R.S. Halts Free Online Offering for Filing Taxes Directly

The Executive Is Weakened No Matter SCOTUS Tariff Ruling

Japanese Automakers Warn of Billions in Tariff Losses

Facing Trump’s Tariffs, Swiss Farmers Find Themselves With Too Much Milk

Chipotle Isn’t Serving Tariff Inflation — for Now

Trump Administration Must Fund Full SNAP Benefits for November, Judge Rules

Egregious Errors by Kings FDR and Mom Jeans Gave Us 2025 Shutdown

Senate Democrats Want Fiserv to Detail Trump Official’s Tenure

Flight-Cancellation Plans Prompt Scramble Across Travel Industry

Another Victim of the Shutdown: Tourism in the Nation’s Capital

Accountability: The Secret to Successful Leadership

Businesses That Don’t Study Customers Have Unhappy Customers

A $1.4 Billion Rare-Earth Deal With a Trumpian Twist

OpenAI CEO Says U.S. Shouldn’t Bail Out AI Companies

The Men Who Shaped the Internet Won’t Be Able to Fix It

The AI Revolution Is an Afterthought for Phone Buyers

Musk Wins $1 Trillion Pay Package, Creating Split Screen on Wealth in America

Musk Answers $1 Trillion Tesla Payday With Over-the-Top Promises

Some Tesla Shareholders Want It to Invest in xAI. The Board Isn’t So Sure.

Obesity Drugs for All? White House Deal Is Just a Start

What Trump’s New Drug Pricing Deal Means for People With Obesity

Bayer Weights Roundup Exit as Cancer Legal Bill Nears $18 Billion

World Cup Stadium Builder Plans Morocco IPO to Fund Order Boom

Why Everyone in Hollywood Wants Their Movie in IMAX

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Morning News: November 6, 2025

Eddy Elfenbein — Thu, 06 Nov 2025 12:09:01 +0000

A Skeptical Supreme Court Puts Trump’s Economic Agenda in Question

Five Key Takeaways From the Supreme Court Tariff Argument

Bank of England Diverges From Fed With Rate Hold

Bank of Canada Gov. Macklem Tells Lawmakers Rate Policy at ‘Right’ Level

JPMorgan CEO Says Argentina May Not Need Bank Loan, Fed Will Likely Remain Independent

The Fed’s New Patience Recognizes Reality

Commerzbank Raises Interest Income Guidance Again

Stablecoin Rewards Are the Shortcut to Financial Trouble

Wise Shares Recover After Solid Results Ahead of U.S. Listing Move

H-1B Visa Hopefuls Are Being Shut Out of Jobs by Wary Recruiters

Rich Donors Bankroll Redistricting Fights Ahead of 2026 Elections

Zohran Mamdani Is a Logical Effect of a City That Won’t Stop Booming

Jamie Dimon of JPMorgan Says He Has Reached Out to Zohran Mamdani

High Power Bills Are Now Swaying Elections in the US

Builders Are Offering Mortgage-Rate Discounts. Home Buyers Aren’t Biting.

Trump to Raise Food Benefit Payments After Calculation ‘Error’

US Companies Announce Most October Job Cuts in Over 20 Years

‘Jenga Tower’ US Economy Teeters as Middle Class Pulls Back Spending

AI Is Eating All the Earnings

In An AI-Driven World, Human Connection Will Still Be King

Snap Cuts Deal With Perplexity to Gain a Piece of the AI Action

The UAE Is Winning the Race to Sequence an Entire Country’s DNA

OPEC Output Rose Last Month as Restart Continued

Brazil Is Developing a Weapon for Trade Wars: Fertilizer in the Amazon

How Sparsely Populated Norway Amassed $1.8 Trillion

U.S. to Reduce Flight Traffic by 10% at 40 Airports Because of Shutdown

Air France-KLM Posts Lower Net Profit After Costs Rise

Saga of Chinese Trucking Firm Exposes US National Security Gaps

Would Elon Musk Work Harder for $1 Trillion Than $1 Billion?

The Hurdles Elon Musk Must Clear to Unlock $1 Trillion in Tesla Pay

Is Gen Z Romanticizing Cigarettes Again?

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Morning News: November 5, 2025

Eddy Elfenbein — Wed, 05 Nov 2025 12:05:09 +0000

Thailand Is Hunting Down ‘Gray Money’ Behind Baht’s Odd Strength

Lasting Economic Damage From the Longest Shutdown in US History

Longest Shutdown in History Costs US Economy About $15 Billion Each Week

Lawmakers See Hope for Ending Record-Setting Shutdown

Wall Street Drops Fear of ‘Hot Commie Summer’ in Overture to Mamdani

Wall Street Laments Mamdani’s Victory and Plots Its Next Move

Election Day Sent an Unmistakable Warning to Republicans

Thoughts On a Socialist Triumph In the World of Capitalism

Almost Half of U.S. Imports Now Have Steep Tariffs

Supreme Court Confronts Trump’s Power to Disrupt World Trade

Contra Brookings, Tax Increases Won’t Shrink the Debt

Trump Aides Raise Recession Fears, and Point Fingers at the Fed

As US Rally Pauses, Global Stocks Enjoy Historic Outperformance

Global Chip Stock Rally Founders on Concerns Over Valuations

Bitcoin Shaken by Long-Term Holders Dumping $45 Billion

Sahm: How the Fed Can Change the K-Shaped Economy

Wall Street Bonuses Expected to Be Highest in Four Years, Consultancy Says

Bank of America Raises Return Target in Bid to Catch Up with Rivals

Why ‘Payment-In-Kind’ Debt Is So Appealing — and Risky

Jensen Huang and Donald Trump Are Correct About Chinese Students

Why Is Nvidia the King of AI Chips, and Can It Last?

Palantir’s Market Value Skyrocketed. See How Its Revenue Is Still Catching Up.

IBM to Cut Thousands of Workers Amid A.I. Boom

AI’s Power Rush Lifts Smaller, Pricier Equipment Makers

There’s a $10 Trillion Antidote to Trump’s Climate Backlash

Kazakhstan As the Solution to the ‘Rare Earths’ Problem

Google Clears DOJ Antitrust Hurdle for $32 Billion Wiz Deal

There’s No ‘Hate Speech,’ and No Holding Tech Companies Liable For It

Europe’s Self-Driving Cars Aren’t Even at the Starting Line

Drug Distributor Cencora to Invest $1 Billion in U.S. Supply Chain

McDonald’s Says Deals Are Delivering Sales

Burger King Braces for the Demise of the Penny

KPop Demon Hunters Is Netflix’s Biggest Hit Ever. Where Are the Toys?

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CWS Market Review – November 4, 2025

Eddy Elfenbein — Wed, 05 Nov 2025 00:16:07 +0000

The stock market finally got a little pushback today. This was the second-worst day for the market in over two months. The S&P 500 was down 1.17% for the day while the Nasdaq was off by 2.04%.

Of course, there have been other down days recently, but this is the first one that damaged a lot of key stocks. The High Beta sector was especially hurt today (-3.10%). This is notable because this area of the market has been nearly unstoppable since the April low.

At one point earlier today, the S&P 500 came very close to falling below its 20-day moving average. The index has now gone every day for over six months without trading below its 50-day moving average. That shows you how long and low-key this rally has been.

Even Bitcoin has been slumping. Today it fell below $100,000 for the first time since June. Gold was down as well.

Shares of Palantir (PLTR) were down more than 10% earlier today after Michael Burry revealed that he had a short position. If you recall, Burry gained fame after he shorted the housing market before the financial crisis. He was played by Christian Bale in the movie The Big Short.

I think Wall Street tends to overrate famous gurus and their bold calls. Even with Burry, he was wrong on the trade for a long time before it paid off. I favor quiet consistent investing rather than looking for the big home run. The few ones that do get the big home runs can expect to be treated as geniuses for a long time, no matter what their future record is.

Alex Karp, Palantir’s CEO, went on Squawk Box to criticize the shorts and said they were using market manipulation. I’ve always noticed that it’s only stocks that are down where the management blames shorts and manipulation. Ever notice that bulls are never blamed for manipulating the price upward?

Bear in mind that we’re talking about a stock that’s up 25-fold in the last three years. It’s bound to get nicked along the way. Despite the stock losing ground today, the company posted very good earnings.

Palantir reported earnings of 21 cents per share. That was four cents better than expected. Revenue came in at $1.18 billion. That was $90 million more than expected. For the current quarter, Palantir expects revenue of $1.33 billion, Wall Street had been expecting $1.19 billion.

Palantir’s growth has been very impressive. For Q3, its sales were up 63% and its net income tripled. For this year, the company expected sales of $4.4 billion. Wall Street had been expecting $4.17 billion. CNBC notes that “Government sales, particularly from military agencies, have been central to Palantir’s ongoing ascent.”

Karp said, “I’m not against shorting as a matter of theory, but I’m just saying pick something that is not doing a noble task.” Oh. Well, I guess we should be thanking him.

Over the past few weeks, a few prominent Wall Streeters have sounded the alarm on a rising stock market. David Solomon, the CEO of Goldman Sachs (GS) said, “Markets run in cycles, and whenever we’ve historically had a significant acceleration in a new technology that creates a lot of capital formation, and therefore lots of interesting new companies around it, you generally see the market run ahead of the potential…there are going to be winners and losers.”

I’ve also seen many comparisons of today’s market to the dot-com bubble of 25 years ago. One difference is that during the dot-com bubble and the financial crisis, the parts of the economy outside tech and real estate held up well. This time, the parts of the economy away from AI are not doing so well.

With the government still closed, we’ve had to get a little creative on finding indicators of economic health. Normally, we would get the JOLTS report today, but we did get some jobs data from Indeed, the jobs site. Indeed’s jobs posting index fell to 101.9. That’s as of October 24 and it’s the lowest reading since February 2001.

Since the middle of August, the index has fallen by 3.5%. Indeed’s index also said that since January, wages are down by 3.4%.

If the government were open, then the regular jobs report would come out this Friday. For the ghost report, Wall Street expects a drop of 60,000 jobs last month. It also sees the unemployment rate rising to 4.5%.

The Fed doesn’t meet again for another five weeks but it’s looking as though we can expect another interest rate cut. That would bring the target for the Fed funds rate down to 3.50% to 3.75%.

I’m pleased to say that we had a very good earnings report today from Henry Schein (HSIC), one of our Buy List stocks. I’ll cover it in more detail in our premium letter, but I’ll touch on some highlights here. The company makes all sorts of products for the dental industry.

CEO Stanley M. Bergman said, “We are pleased with our financial results for the third quarter, with sales growth accelerating in each of our reportable segments including solid market share gains in our distribution businesses as we are once again focused on driving growth now that the cyber incident is fully behind us.”

For its Q3, Henry Schein made $1.38 per share. That’s up from $1.22 per share last year. Wall Street had been expecting $1.28 per share. The company raised its full-year guidance to $4.88 to $4.96 per share. The previous range was for $4.80 to $4.94 per share.

So far this year, HSIC has made $3.63 per share. That implies Q4 earnings of $1.25 to $1.33 per share. Wall Street expected $1.29 per share. Quarterly sales rose 5.2% to $3.3 billion.

During Q3, Henry Schein bought back 3.3 million shares at an average price of $68.62 per share for a total of $229 million. HSIC has $980 million left in its current authorization.

Henry Schein has been working with private-equity firm KKR to enhance shareholder value. KKR currently owns 12% of HSIC’s stock. The company gave KKR the right to increase its ownership to 19.9%.

Shares of HSIC gapped higher today. At one point, the stock was up 13.7% for the day. By the closing bell, it was up 10.78%.

Lastly, shares of Denny’s (DENN) soared 50% today on news that’s it’s being taken private.

That’s all for now. The regular econ reports from the government are still on hold, but tomorrow we’re due to get the ADP report on private payrolls. This may give us a look at the strength, or weakness, of the jobs market. I’ll have more for you in the next issue of CWS Market Review.

– Eddy