Page One
Briefing.com Summary:
*A buy-the-dip effort has taken root ahead of the open.
*Elon Musk has raised concerns about the neoclouds.
*Brazil's surprise election results have provoked big losses for Brazilian stocks.
The buy-the-dip impulse was lacking on Friday, but it is showing some life this morning.
Currently, the S&P 500 futures are up 20 points and are trading 0.2% above fair value, the Nasdaq 100 futures are up 138 points and are trading 0.4% above fair value, and the Dow Jones Industrial Average futures are up 197 points and are trading 0.3% above fair value.
The simple connection for the positive disposition is that oil prices are lower (WTI -2.3% to $100.91/bbl) and that stocks operating under the umbrella of the "AI trade" are on the rebound. It all feels a little forced, however, which is to say there is life in the buy-the-dip trade but not a lot of vigor—not at this point anyway.
The concerns about the payoff/payback for the AI buildout were not put entirely to rest over the weekend. In fact, Elon Musk stirred the pot with an observation that SpaceX (SPCX) managed to close a $40 billion debt deal for the purchase of GPUs because it is investment grade and has other sources of revenue independent of AI data centers. That means, he said, "the 200+ neoclouds are going to see guppy-level death and consolidation. Some will make it through, but not many."
Meta Platforms (META), for its part, is launching a $35 billion equity financing plan to support its AI infrastructure and personal superintelligence investments. It won't be facing guppy-level death, because META is a whale.
Size is a key distinction in the battle for capital, and that idea is increasingly coming into focus in a market that is getting more discerning about where to allocate capital.
That discernment will drive volatility and place a premium on the quality factor.
This distinction should be prominent throughout the week, which will feature earnings reports from Microsoft (MSFT), Alphabet (GOOG/GOOGL), and Amazon (AMZN), policy decisions by the Fed, ECB, and Bank of Japan, the September Personal Income and Spending report, and several Treasury auctions, starting with today's $69 billion 2-yr note auction.
There is a lot yet to unfold then, which is perhaps why there is less vigor in the buy-the-dip trade ahead of the open.
That is working against Verizon (VZ), which posted better-than-expected Q3 earnings results and raised its FY26 guidance above consensus. Shares of VZ are down 0.5%.
That hurts only a little, though. The real pain is in Brazilian equities. The iShares MSCI Brazil ETF (EWZ) is down 28% in pre-market trading in response to the surprise runoff election victory of President Luiz Inacio Lula da Silva.
The fallout there is isolated, fortunately, but U.S. politics will certainly be in focus throughout this week in the final campaigning ahead of the November 3 midterm election.
