Market Briefing For Monday, Nov. 2, 2026

Wall Street closed out a brutal 'Roctober - with a textbook "growth scare" on Friday, as tech-heavy Nasdaq plunged 2.84% in its worst single-day rout since June. The S&P 500 shed 1.82% and the Dow surrendered over 570 points, wiping out billions in market value as investors aggressively rotated out of high-flying tech names and into defensive safe havens a bit too late.

I discussed this all week and really even before the September-October rough patch that is traditionally difficult anyway. Earlier in the year we had a rally; we thought the mega-caps needed to be 'risk-off' with the forecast rally into July a culmination of the trend. Of course almost 'all' major money managers stayed loaded to the gills with the mega-caps; and a couple media pundits (I'm being nice and didn't say 'carnival barker types') kept encouraging high-priced buys.

For sure we're not feeling heroic because the macro overall backdrop got so bad it didn't favor small-caps either (which typically are difficult when rates are climbing; part of why the few we picked generally have low debt profiles and are not anticipated to dilute by offerings or borrowings; as acquisitions making money are not the same because they are generally accretive).

In a last hour 'X' comment (below) I mentioned some nibbling in the throes of harsh selling ; because we were in a 'buyer's strike and I thought perhaps this was not necessarily a low for S&P (with residual fund sales and margin calls likely coming Monday); but rather just in-case something favorable happened I thought these prices will look good weeks or months from now. I think so; of course a problem with the future is it's 'history's not yet known' so we'll see.

The primary catalyst this week was what I've warned of for months regarding the humongous data-centers; and insane CapEx that I've believe isn't even a necessity because the combination of Quantum and optical will bring massive improvements in 'compute per dollar' basically with less power and heat too.

This calamitous end to the month was catalyzed by a harsh reality check in Big Tech earnings, where hyperscalers like Alphabet (GOOGL) and Amazon (AMZN) revealed staggering increases in capital expenditures. Investors, growing increasingly impatient for tangible returns, severely penalized these nosebleed valuations. Alphabet suffered its worst single-day drop on record, Amazon reported negative free cash flow due to heavy AI infrastructure spending; Intel (INTC) plunged nearly 29% following a dismal outlook, fueling widespread panic the massive, debt-fueled AI CapEx boom is becoming unsustainable (as we've foreseen).

Meanwhile new-era tickers are just down with the outgoing tide; no problems per se; and probably more attractive is my take for now.

Market X-ray: finally wrapped-Roctober with harsh reality check surrounding Big Tech AI capital expenditures. Tech giants Alphabet and Amazon reported staggering increases in AI infrastructure spending, but not positive cash flow.

Investors are growing deeply impatient for tangible revenue returns on these massive investments; unlike our small (also struggling but not over-valued we must note) cap growth speculations . Intel and Alphabet suffered essentially unprecedented single-day collapses. The consensus on Wall Street for sure rapidly shifted; and the Street 'acts as if' this was new; which it's not. Actually not fun, but has been my theme here for some time now about debt-fueled AI CapEx craziness is facing intense scrutiny, while nosebleed valuations really are getting penalized (often in stocks we once owned but at lower levels and sold for gains too soon but in almost all cases for gains).

Looking ahead to next week, the path of least resistance remains skewed to the downside for S&P; although you never know over the weekend. Trump is now resuming his 'campaign rallies' (a sign that no attack on Iran imminent?); the market faces a dense cluster of political and corporate catalysts you know.

The technical damage from October is severe, although we have evidence in history of market's bottoming right as or after an October swoon. While macro uncertainty eased slightly following the Federal Reserve's decision to hold interest rates steady, a major clearing (or muddy) event looms directly ahead with Tuesday's midterm elections. Furthermore, tech's earnings gauntlet is far from over; Apple (AAPL) reports numbers next week, while the Street's big bellwether Nvidia (NVDA) is not scheduled to report until mid-month.

Until the market can absorb the election results and establish a firm technical floor, the pundits capitulated (they anticipated nothing generally and thus are reactive); and now tell folks to brace for continued turbulence and potential further downside in the days ahead. We may get that; but they cheered during the upside (blow-off; AI CapEx bubble; whatever you call it); and only now 'de-risk'. I'm not inclined to buy those big-caps but the small ones we like .. yes for sure where nothing has changed aside a 'Bordello Raid' effect I talked about.

Last hour Friday:

3 pm ET: yesterday's Daily Briefing pondered a Black Friday ... with next week debatable (war risk & midterms). But for new-era tickers recently revised and now testing lows ... contemplate a good spot to cover shorts if bearish and go long ... regardless of Monday ... for the small caps.. led by ONDS and maybe UMAC.. I bet these prices look great by next year and perhaps a lot sooner.

So, be (at least slightly) bullish with blood in the street ... not so much the big mega-caps I warned about for months, but the small tech growth like OPTX, PDYN, and KOPN. None are assured winners, but these prices look great if you’re fundamentally optimistic.

Bottom-line: 'orthodox' behavior would see more downside then washout; oh maybe by mid-morning Tuesday of the coming week. But this isn't the typical market slide; so we'll see. It's only because prices of new-era tickers were so attractive that my last hour X comment though some ought to find buyers.

For sure much remains up in the air. Everything basically. Even Poland; which saw an MP burn an EU flag in front of their Parliament. It's not a 'coup' in the traditional sense; but might be a sort of movement to divorce from the EU ... of course many politics in the EU are changing or on the cusp of change. Really interesting dynamics ... which remain fluid, as do market prospects for now; but I would emphasize 'if anything' buying under-valued/under-radar tickers cheap with limited risk apparently, whether or not they return gains in the near-term.

Stay safe over Halloween; and join us Monday for more tricks, then look for a series of treats; at least optimistically.

Gene