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Capitalist Insider: Trump teases “Mr. Veto” role and preemptive pardons if Dems sweep
Palantir slides as new contract growth slows despite the beat
Dow futures drop on Election Day as Apple and Palantir slide
Blue wave to freeze AI centers dead on Election Day ballot
Americans vote Tuesday with prediction markets giving Democrats a 94% chance of the House and 78% of the Senate, as Ed Yardeni warned a sweep could deliver a cold shower for stocks and AI data-center anger put Oracle and utilities at risk.
Markets not pricing the sweep: CNBC noted stocks are not fully pricing a Democratic sweep, so a blue wave could hit shares Wednesday while a GOP hold may spark a relief rally.
Historical post-midterm pattern: The S&P 500 has risen in the year after every midterm since 1982, averaging about 0.2% after a day and 1.1% after a month across elections from 1980 to 2024.
Yardeni cold-shower warning: A Democratic sweep could chill equities through gridlock and pressure on valuations, unlike the usual preference for divided government.
AI data centers on ballot: Voter anger over AI data centers could show up in results, putting Oracle and utility stocks in the crosshairs.
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Capitalist Insider: Trump teases “Mr. Veto” role and preemptive pardons if Dems sweep
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Ternus Apple beats but memory costs crush holiday margins
In John Ternus’s first quarter as CEO, Apple posted record September-quarter revenue of $114.5 billion and $2.10 EPS, yet shares slid about 3% after he guided December gross margin to 45%-46% on unprecedented memory prices.
iPhone and services lead the beat: iPhone revenue rose 17% to $57.58 billion and services hit a record $31.6 billion, though growth slowed to 9.8%, the lowest since 2023.
Margin guide trails Street: December gross margin of 45%-46% versus 46.3% expected, driven by higher memory costs and the Siri AI ramp; Ternus called prices unprecedented.
Inventory and China flags: Inventory surged 154% to $14.5 billion and Greater China missed in reports, while Duo supply timing remains hard to predict.
Analysts mostly constructive: Several raised targets despite the soft outlook after the 12% revenue gain to a record fiscal year of $478.8 billion.
Anthropic’s $17B quarter hides an $895B compute bomb
Anthropic’s amended S-1 showed third-quarter revenue near $17 billion, up more than 1,100%, yet the company swung back to a $567 million operating loss while disclosing $895.4 billion in spending commitments.
Revenue explosion versus loss: Q3 revenue of $16.96 billion rose 1,127% year-over-year, but GAAP operating profit lasted only one quarter before the $567 million loss.
Compute commitments dominate: Nearly $900 billion committed, $69.8 billion due within 12 months and extending to 2045, second only to Google, with plans to double capacity toward 7 gigawatts.
Valuation pressure mounts: Investors pushed for a more cautious $1.5 trillion to $1.6 trillion IPO range; Dan Ives called an expected junk rating a gut punch.
Governance and red flags: Public shareholders lack voting power and nine-month net losses reached $104 billion amid the growth.
Qeshm strike erases Monday’s biggest oil drop since July
Crude plunged Monday on hopes of U.S.-Iran diplomacy, the largest decline since July, then rebounded Tuesday after reports of a U.S. strike on Iran’s Qeshm Island renewed supply concerns.
Monday’s sharp selloff: Brent fell about 3% to $101.54 and WTI toward $94, with accounts of a 7-8% plunge on circulating peace drafts and Trump comments.
Tuesday rebound on strike: January Brent rose 1.8% to $106.63 after the reported Qeshm Island action dimmed near-term deal hopes.
Goldman lifts 2027 forecast: Struyven raised December 2027 Brent to $105 from $90, citing a larger geopolitical risk premium even as output recovers.
Backwardation and flows: Brent 1-month/6-month ratio near war-era levels; some notes that reported normal flows exclude Iranian barrels and diesel/LNG shortfalls.
AI bounce dies as tech enters Election Day correction
The information technology sector entered correction territory, down more than 10% from its recent record, after Monday’s AI rebound collapsed and the Nasdaq fell 1.1% in its largest intraday reversal since January.
Equal-weight outperformance: The equal-weight S&P rose 1.1% versus 0.2% for the cap-weighted index, showing most stocks holding up as megacap AI names faltered.
Nasdaq 100 in correction: The Nasdaq 100 closed more than 10% below its Oct. 6 peak, with chip stocks reversing early gains.
VIX and calm fear: The VIX touched its highest since April but closed at 19.4 after a near-2% S&P drop, leaving options pros noting an unreactive gauge.
Defensive rotation: Buying in Walmart, Berkshire and Lilly added hundreds of billions while chips sold off; Santoli argued the bull market still needs tech recovery.
Marvell plunges on $115B all-stock Lumentum deal
Marvell fell sharply after unveiling a $115 billion all-stock acquisition of Lumentum, with the stock punished as investors digested the large AI optical bet amid a broader tech selloff.
Deal size and structure: The all-stock transaction valued Lumentum at $115 billion, with exchange terms that left both names under pressure on the announcement.
Market reaction: Marvell dropped about 13% and Lumentum fell hard as the AI trade faltered and oil plunged on the same day.
Strategic rationale: The combination aims to expand addressable market in optical and AI infrastructure, though timing and integration risks weighed on shares.
Broader context: The deal landed as chip stocks reversed earlier gains and the info tech sector moved into correction territory.
Palantir slides as new contract growth slows despite the beat
Palantir reported strong quarterly results but the stock tumbled as new contract growth slowed and deal lengths shortened, adding to pressure on AI software names heading into Election Day.
Revenue strength: The company posted solid top-line growth with commercial momentum, though total contract value growth decelerated sharply from prior quarters.
Contract slowdown: New contract growth cooled and average deal duration shortened, raising questions about the sustainability of the AI software ramp.
Stock reaction: Shares fell in after-hours and premarket trading alongside Apple as investors rotated out of high-multiple AI names.
Market context: The drop fit a broader pattern of AI-related stocks giving back gains as the Nasdaq moved into correction territory.
Dow futures drop on Election Day as Apple and Palantir slide
Dow futures fell 0.8% as Americans headed to the polls, with investors de-risking defensively and Apple and Palantir leading premarket declines after their earnings reports.
Premarket pressure: S&P 500 futures slipped while the Dow took the brunt of selling as blue chips faced Election Day caution.
Earnings movers: Apple and Palantir weighed on tech after their reports, while other names like Pfizer showed relative strength on guidance.
Defensive posture: Investors reduced risk heading into results, with the broader AI trade still under pressure from the prior session’s reversal.
Oil and geopolitics: Mixed signals from Iran added to the cautious tone as futures traded mixed to lower.
If not the wave but MI and Minnesota’s
and Alaskan election should be frozen until all legalities are corrected