GoAI Market Morning Wrap - 5th Nov

Stock Market  

As the pricey valuation issue in U.S. stocks was brought to the forefront by the "big short," the anticipated adjustment happened last night into this morning.  

 

At the close, the S&P 500 fell 1.17% to 6,771.55 points; the Nasdaq Composite fell 2.04% to 23,348.64 points; the Dow Jones Industrial Average fell 0.53% to 47,085.24 points.  

 

(Nasdaq Composite daily chart, source: TradingView)  

 

Tuesday's representative case was the AI application bull stock Palantir. Despite the company releasing new earnings that fully exceeded expectations and raising performance guidance, it still closed down 7.94% on Tuesday. After the company's stock price quadrupled in the past year, it has become a concrete representative of the "AI bubble."  

 

(Palantir daily chart, source: TradingView)  

 

Adding to the worries, the prototype of the movie "The Big Short" and hedge fund manager Michael Burry happened to disclose the day before that he bought put options on Palantir and Nvidia in the third quarter.  

 

For U.S. retail investors who love day trading, Tuesday was also the worst day since April. The retail preference index compiled by Goldman Sachs Group fell 3.6% on Tuesday, about 3 times that of the S&P 500. The index tracks stocks such as Palantir, Tesla, Reddit, and Robinhood Markets.  

 

For key levels in a potential pullback, BTIG's chief market technical analyst Jonathan Krinsky said that since April, the S&P 500 has not retraced to its 50-day moving average (currently around 6,654 points), nor has there been a single-day drop of more than 3%.  

 

Krinsky said that these two points could both be minimum targets, but given that "recent divergence has become so extreme," the market is likely to fall back to the 6,400-6,500 level.  

 

The statements from the heads of Goldman Sachs and Morgan Stanley also weakened investor confidence. Goldman Sachs Chairman and CEO David Solomon said on Tuesday that in the next 12 to 24 months, the stock market is very likely to experience a 10% to 20% pullback. Morgan Stanley Chief Executive Officer Ted Pick echoed that if it is not driven by some kind of macro cliff effect, a 10%-15% pullback would be welcome.  

 

Similar to U.S. stocks, crude oil and commodities fell collectively on Tuesday, and even gold became the object of selling.  

 

In the cryptocurrency market with the most extreme risk appetite, Bitcoin temporarily fell nearly 6% on Tuesday, and Ethereum plunged more than 10%. Coinglass statistics show that in the past 24 hours, 450,000 wallet addresses were liquidated, with liquidation amounts approaching $2 billion.  

 

(Ethereum daily chart, source: TradingView)  

Global Hotspots  

Funding bill "fails to pass" again, U.S. government about to refresh "shutdown" record  

 

The U.S. Senate failed again on the 4th to pass a temporary federal government funding bill. This means that the current round of federal government "shutdown" that started on October 1 is about to break the 35-day "shutdown" record from late 2018 to early 2019, becoming the longest "shutdown" in U.S. history.

 

The Senate attempted for the 14th time that day to advance a temporary funding bill that had already passed the House of Representatives to maintain normal federal government operations, but the related procedural vote failed to obtain the 60 votes required to advance the bill.

 

This has led to the continuation of the fiscal impasse that triggered the government "shutdown," and the "shutdown" duration record will be refreshed starting at 12:00 a.m. Eastern Time on November 5.  

 

U.S. credit explosion incident follow-up: Former CEO accused of privately transferring and squandering company property  

 

In September this year, U.S. auto parts supplier First Brands announced bankruptcy, and the company's chaotic financial situation and billions of dollars that went missing once triggered a sell-off in bank stocks.

 

"Wall Street's top brother" Jamie Dimon even made the classic "cockroach theory" because of this: when you see one cockroach, it often means there will be more cockroaches.  

 

U.S. "late home buying" trend intensifies: Average age of first-time home buyers rises to record 40 years  

 

The latest data shows that the proportion of first-time home buyers among all home buyers has fallen to a historical low of 21%. At the same time, the average age of first-time home buyers has also climbed to a historical high. On Tuesday local time (November 4), the National Association of Realtors (NAR) released the "2025 Profile of Home Buyers and Sellers" on its official website.

 

The report shows that the median age of first-time home buyers in the United States has climbed to a record 40 years.  

Company News  

Amazon issues "eviction order" to Perplexity's AI agent  

 

According to the latest news early Wednesday morning, Amazon has issued a cease-and-desist letter to Perplexity, requiring this artificial intelligence search startup to prohibit its AI browser Comet from shopping on behalf of users on Amazon's online mall.  

 

Apple reportedly preparing to enter the low-cost laptop field  

 

Well-known Apple leaker Mark Gurman said in his latest post that Apple is preparing to enter the low-cost laptop market and develop an affordable Mac to attract consumers who originally used Chromebooks and entry-level Windows computers.  

 

Pfizer, Novo Nordisk acquisition war heats up  

 

U.S. biotechnology company Metsera announced on Tuesday that both Pfizer and Novo Nordisk have raised their acquisition prices, but Novo Nordisk's offer is still better. Among them, Pfizer raised the acquisition offer to a maximum of $8.1 billion, while Novo Nordisk's acquisition price can reach up to $10 billion. Affected by this, Metsera closed up 20.5% on Tuesday, quadrupling its IPO price in January this year.  

 

Metsera said that Pfizer has two business days to negotiate the offer. If after this deadline, the Metsera board still believes that Novo Nordisk's offer is better, it has the right to terminate the existing merger agreement.  

 

AMD Q3 revenue $9.25 billion  

 

AMD Q3 revenue $9.25 billion, analyst expectation $8.74 billion; Q3 capital expenditure $258 million, expectation $219.7 million; Q3 adjusted operating profit $2.24 billion, analyst expectation $2.15 billion; Q4 expected revenue $9.3-9.9 billion, analyst expectation $9.21 billion.  

 

IBM announces thousands of layoffs in Q4  

 

IBM confirmed on Tuesday that the company will implement "an action" in the fourth quarter, which will affect a "low single-digit percentage" of global employees. According to the company's annual report, IBM employed 270,000 people at the end of 2024, and every 1% layoff means 2,700 people lose their jobs.  

 

eVTOL company Beta completes IPO  

 

Electric aircraft company Beta Technologies listed on the New York Stock Exchange on Tuesday, with IPO pricing at $34 per share. Beta said it sold 29.9 million shares, raising more than $1 billion. Amazon and General Electric were the two major investors in the company before the IPO, holding 10.2% and 6.3% of the shares respectively.  

 

In the environment of collective U.S. stock market decline, Beta rose 5.88% against the trend on Tuesday, with a market value of $7.88 billion.  

 

Eli Lilly, Novo Nordisk close to reaching weight-loss drug price reduction agreement with U.S. government  

 

Tuesday's market news said that Eli Lilly and Novo Nordisk may announce an agreement with the White House as soon as this week to provide the lowest dose of weight-loss drug products at $149 per month in exchange for Medicare coverage.  

 

Google to test space data center concept  

 

In a research paper published on Tuesday, Google outlined plans to launch its AI chips called Tensor Processing Units (TPU) to near-Earth orbit. This orbit can keep them in constant view of the sun, allowing them to run continuously on solar power.

 

Google will cooperate with satellite company Planet Labs and plans to launch two test satellites in 2027, each carrying four TPUs.  

Forex & Commodities  

International oil prices fell on November 04. At the close of the day, the New York Mercantile Exchange WTI crude oil futures current month continuous contract settlement price fell $0.49 to $60.56 per barrel, a decline of 0.80%; the London Brent crude oil futures current month continuous contract fell $0.45 to $64.44 per barrel, a decline of 0.69%.  

 

COMEX gold futures current month continuous contract settlement price fell $53.50, a decline of 1.33%, to $3,960.5 per ounce.  

 

USD index rose 0.34% to 100.21, most non-USD currencies fell  

Key Events  

USD breaks through 100 mark to three-month high, Fed internal differences disturb market  

 

On Tuesday (November 4) during the European session, the USD index broke through the 100 mark for the first time since early August, with the highest at 100.21, the highest level in three months.

 

Analysts believe that the main reason for the USD's rise is the emergence of differences within the Fed, prompting traders to lower their expectations for the bank's rate cuts; at the same time, the British Chancellor of the Exchequer hinted that next month's budget will face "difficult choices," and the pound fell in response.  

Cryptocurrency  

Bitcoin 24h down 4.52% to $101,086.08.  

 

Ethereum (ETH-USD) down 8.72% to $3,261.47.  

 

XRP (XRP-USD) down 5.07%, BNB (BNB-USD) down 5.54%, and Solana (SOL-USD) down 6.33%.  

 

Dogecoin (DOGE-USD) down 2.62%, and Cardano (ADA-USD) down 5.25%.  

Key Events  

Bitcoin falls below $100,000 for the first time since late June  

 

On Tuesday, Bitcoin's price plummeted, falling below $100,000 for the first time in more than four months. As investors increasingly worry about the sustainability of continuously rising AI stock valuations, they are selling off this risk asset.  

 

Bitcoin fell 6% that day to $100,870, with an intraday low of $99,966. This is the first time Bitcoin has fallen below $100,000 since June 23.  

 

Compass Point analyst Ed Engel said that retail investors may not buy the dip as actively as before.  

 

He pointed out in a report: "Although long-term holder selling is a common phenomenon in bull markets, retail spot buyers' participation is lower than in previous cycles."  

 

The analyst believes that this decline may further pull Bitcoin's price down, causing it to fall below the key $100,000 support level.