Closing Breadth

Sectors

% Movers

Nasdaq 100 Heat Map

I'm reestablishing my PepsiCo  (PEP)  long at $142.72.

Oracle  (ORCL) .

End of message.

My sentiment completely:

cjsolus

When you start hearing CEOs spending time talking about short sellers and how outsiders just "don't understand the business" such as I have heard from the likes of Altman and Karp in the last few days....that is a big tell to me... seems there are to many "markers" being floated on the street...

Buying out-of-the-money Kimberly-Clark  (KMB)  calls in the event the company calls off the Kenvue  (KVUE)  deal at some point.

* I know this is probably tough to follow

* But the gains are starting to add up...

As I mentioned in this morning's Shifting Sands column and my "descending staircase" expectation, a steady saw tooth move lower could provide an ideal trading environment:

With S&P cash -75 handles, I am back to delta neutral on the indices. Added back long (to match up on a delta-adjusted basis to my short Index calls):

*  (SPY)  $675.81

*  (QQQ)  $621.41

From earlier:

Trading Update

On the rally to -34 handles I went back to delta-adjusted small short — by lifting (selling) a portion of my long index positions (against the short index calls):

* (SPY) $679.49

* (QQQ) $626.33

Sorry for the delay but I have been on research calls!

Position: Long SPY common (VS) and QQQ common (VS); Short SPY calls (S) and QQQ calls (S)

By Doug Kass Nov 4, 2025 11:21 AM EST

We have consistently downplayed the attraction of companies that serve the pet industry (food, medicine, toys, leashes, collars, etc.) — as it's tough out there with accumulating end-market weakness.

This morning Zoetis  (ZTS)  missed and guided lower.

The shares (a favorite of panelists on the FIN TV shows), which I owned at one point over the last 12 months (along with Freshpet (FRPT) and Elanco (ELAN)) before our research indicated growing pet industry weakness, are trading -$18/share (-12%).

We remain short Petco  (WOOF) .

I have a lunch meeting with an investor between 11:30 a.m. and 1 p.m. today.

Run, don't walk to watch the boyz — Carter, Dan and Guy — on "MRKT CALL" at 11 a.m.

It is a rich resource for us at Seabreeze as they spell out actionable options ideas and are very transparent — always taking ownership for their investment boners and not gloating about their winners.

And they give us a nice shout out!

Let's go to the tapes. 

On the rally to -34 handles I went back to delta-adjusted small short — by lifting (selling) a portion of my long index positions (against the short index calls) :

*  (SPY)  $679.49

*  (QQQ)  $626.33

Sorry for the delay but I have been on research calls!

I just covered  (HOOD)  ($4) at $142.79 for a profit.

I plan to reshort on strength.

* What goes up, must come down - as a mean reversion of returns may lie ahead

* Did the Gerstner/Altman/Nadella interview ring the bell to the top in large-cap technology equities? Instagram

What goes up must come down

Spinning Wheel got to go 'round

Talkin' 'bout your troubles

It's a cryin' sin

Ride a painted pony

Let the Spinning Wheel spin

You got no money, you got no home

Spinning Wheel all alone

Talkin' 'bout your troubles and you

You never learn

Ride a painted pony

Let the Spinning Wheel turn

- Blood Sweat & Tears - Spinning wheel

The "set up" for this morning's decline and mean reversion (at 5:10 a.m. S&P futures are -93 handles and Nasdaq futures are -440 handles) was conspicuous (but ignored) over the last month:

* Narrowing market participation:

While the S&P Index has climbed (spurred by large-cap tech and semiconductors), the equal weighted S&P Index is flat since mid-September and down -3% over the last 10 days:

RSP | Invesco S&P 500 Equal Weight ETF Advanced Charts | MarketWatch

* A steady erosion in market breadth

Monday's market breadth was a continuation of at least a week long period of foul breadth:

And other technical breakdowns/divergences:

* An increasingly bold/breathless/euphoric investor sentiment - filled with hubris and over confidence:

That uber confidence transcends bullish investor optimism/exuberance - it is now corporate (especially of an AI-kind) was clearly seen by Sam Altman in the Gerstner/Altman/Nadella podcast in which a bona fide question is asked... and a petty response was delivered. Was the bell rung to a top in large cap technology equities?

* The absence of fear:

Peter Boockvar on Investor Optimism: "After seeing the number of Bears in the weekly Investors Intelligence survey fall to just 13.5 last week, the lowest since January 2018, the updated Citi Panic/Euphoria index at .74 is now almost double the .41 Euphoria threshold and literally off the chart seen below. In the short term, it’s always good to be aware of one’s investing surroundings and can be currently defined as euphoric, exuberant, giddy, etc..."

By Doug Kass Nov 3, 2025 7:45 AM EST

*Ignoring questionable fundamentals (circuitous financings) of leading AI actors:

My opening missive on Monday provided a detailed and skeptical view of Sam Altman, OpenAI and AI financing:

Doug's Daily Diary - TheStreet Pro

My Playbook for the Next Few Months

My investing and trading playbook was summarized in my Diary yesterday:

A Descending Staircase May Lie Ahead

* My investing/trading plan and my market expectations.

My baseline assumptions for the next few months:

* Stocks will likely display much more daily and weekly volatility

* Equities will no longer exhibit a one-way and steady rise in prices

* Following the steady breadth deterioration, a downward bias may start to develop in the very near term

* Equities will likely resemble a descending staircase (pattern)

Ideal for trading, not so much for the buy and hold crowd.

This is why I am trading the indices so aggressively — and plan to continue to do so .

By Doug Kass Nov 3, 2025 1:04 PM EST

I have covered my trading short rental in Palantir  (PLTR)  at $187.12 (-$20 today) for a profit.

From Peter Boockvar:

The 'AI infrastructure tsunami'/Give the consumer value or else

With the Bank of Japan still dragging its feet on another rate hike and the coincident weakness in the yen which further weighs on the standard of living of the populace, the Japanese government is left with no other choice to stem the yen drop by using verbal intervention, again. Finance Minister Katayama today said “I’m seeing one-sided and rapid moves in the currency market. We continue to monitor the situation with a high level of urgency.” 

She said pretty much the same thing on Friday but I guess saying it now twice within a week has the yen stronger in response.October auto sales according to Wards totaled 15.32 at a SAAR, below the estimate of 15.5mm and compares with 16.04mm seen in October 2024 and 16.4mm in September 2025. Of course October was missing the $7,500 EV tax credit where purchases were front loaded in September. With growing subprime credit issues, many eyes on the auto sector for sure.

From Clorox and who beat both top and bottom line estimates:“Category growth rates have stabilized but remain below historical averages, while competitive intensity continues to be high as companies compete for share of wallet. Consumers remain under pressure, and this is driving value seeking behaviors across all income segments. At the same time, consumers are continuing to prioritize experiences and convenience.”“Consumers are also buying larger sizes for better value and convenience. This has continued to fuel outsized growth in our large sized formats especially in Club and eCommerce channels. This trend is evident particularly in our Glad business through strong growth in our ‘Super Mega’ size format, as well as in our Cleaning business through growth in our multi-pack wipes. We also continue to see a strong response to our twin packs in Kingsford.”On guidance, “Our fiscal year 2026 outlook assumes the external environment will continue to be dynamic, volatile and uncertain. We expect consumers will display heightened value seeking behaviors, and overall category consumption will remain sluggish for the year with variability business-to-business and period-to-period. We expect elevated competitive activities will continue and the tariff environment will continue to be uncertain.”

From On Semicondutor, up slightly yesterday:“Shifting to the demand environment, we are seeing stabilization in the near term with automotive which grew 7% and industrial which grew 5% sequentially and our design wins in both markets continue to reflect a broad global engagement.” Industrial was helped by aerospace, defense and security. With automotive and its growth, “What we’re seeing in automotive is really stabilization, which is a positive from where we were. So the quarter on quarter, I don’t think I read anything into it. It’s purely between seasonality and design ramps.”“As far as 2026, look, we’ll let you know as we get closer. A lot of things going on out in the world, so we’re not guiding specifically by market into 2026. But what I can tell you is demand is stabilizing. We’re starting to see seasonal trends. But one thing I would highlight is we haven’t seen a restocking cycle yet. So that’s still out there.”“We continue to ramp our AI revenue which again approximately doubled y/o/y in Q3 and is now becoming material with almost $250 million expected in 2025.”

Lattice Semiconductor had numbers right in line with expectations and was upbeat on their call:“In general, we continue to see data center investments expand across all payers and applications in the AI infrastructure tsunami. Lattice is benefiting from a corresponding revenue growth, evidenced by increasing bookings now and into 2026.”With respect to end markets in the third quarter of 2025, communications and computing grew 8% sequentially and 21% on a y/o/y basis to a record level. The computing subsegment growth is being driven by our expanding footprint and increased use cases in both general purpose and AI optimized servers. And the communication subsegment growth continues to be driven by wired data center infrastrucutre, including network interface cards, switches, routers, and security appliances.”“As expected, the industrial and automotive segment increased 6% sequentially. The growth rate is tempered as we continued to strategically ship under true demand to normalize channel inventory.”

From Eastman Chemical and who missed numbers last night:“As expected, in the third quarter we realized a slowdown in orders due to normal seasonality and customers unwinding inventory that was prepositioned to avoid tariff risk in a weakening consumer environment.”

From the Marriott earnings release where they beat both top and bottom line estimates:“Global RevPAR rose .5% in the third quarter, impacted by calendar shifts and ongoing macroeconomic uncertainty. International RevPAR increased 2.6%, led by APEC, which delivered nearly 5% growth fueled by strong performance in key markets like Japan, Australia and Vietnam. In the US and Canada, RevPAR declined .4% due to weaker demand in the lower chain sales, largely reflecting reduced government travel. Globally, our luxury hotels continued to outperform, driven by robust demand and strong rate performance, with luxury RevPAR rising 4% in the quarter.”

From Martin Marietta Materials whose numbers look light this morning:“First, demand trends across our key end markets remain broadly constructive. Infrastructure activity continues to be strong, supported by record levels of federal and state investment. Second, nonresidential construction is benefiting from accelerating data center development, a recovering warehouse sector and early signs of renewed momentum in domestic manufacturing. Third, light nonresidential demand, while typically more interest rate sensitive, has demonstrated notable resilience.”Also, “While near term residential demand remains subdued, moderating mortgage rates suggest a gradual path toward normalization.”The Reserve Bank of Australia kept its cash rate at 3.6% as expected and Governor Michele Bullock was as non-committal as one can be. She said, “We think we are pretty close to neutral. We may be a little bit restrictive, we may not be. We don’t have a bias.”Not giving the market a more definitive path to lower rates has the Aussie 2 yr rising to the highest level since early April and the ASX was down .9%. The Aussie$ though is lower by a touch.

Upside:

-IHRT +23% (reportedly Netflix in talks to license video podcasts from iHeartMedia)

-HTZ +22% (earnings)

-VITL +12% (earnings, guidance)

-WSR +12% (MCB Real Estate Proposes Acquisition of Whitestone REIT for $15.20/shr cash)

-SANM +9.0% (earnings, guidance)

-LTH +8.5% (earnings, guidance)

-HSIC +8.1% (earnings, guidance)

-EXAS +7.5% (earnings, guidance)

-SEE +4.8% (earnings, guidance)

-FN +4.7% (earnings, guidance)

-WAT +4.2% (earnings, guidance)

-YUMC +3.3% (earnings, guidance)

-APO +2.9% (earnings)

-CLX +2.6% (earnings, guidance)

-EXC +2.1% (earnings, guidance)

-HOG +2.0% (earnings, guidance)

Downside:

-SRPT -36% (earnings)

-NSP -25% (earnings, guidance)

-ZTS -13% (earnings, guidance)

-MX -12% (earnings, guidance)

-SNDL -12% (earnings)

-ADTN -10% (earnings, guidance)

-BYND -9.4% (downside momentum following delaying Q3 earnings report)

-GETY -9.0% (issues statement on ruling in Stability AI UK litigation)

-CIFR -8.6% (files to sell proposed offering of $1.4B of senior secured notes)

-NCLH -8.6% (earnings, guidance)

-UBER -8.0% (earnings, guidance)

-PLTR -7.9% (earnings, guidance)

-ADM -7.7% (earnings, guidance)

-MPC -7.4% (earnings, guidance)

-IAC -5.6% (earnings, guidance)

-PGY -5.1% (signs auto forward flow agreement with Castlelake for purchase of up to $500M in automobile loans)

-BWXT -5.0% (earnings, guidance)

-LYFT -4.5% (lower in sympathy with UBER)

-SHOP -4.4% (earnings, guidance)

-GPK -4.2% (earnings, guidance)

-ETN -4.0% (earnings, guidance)

-TSLA -3.1% (Norway's oil fund said to vote against Musk's $1T Tesla pay deal; reports prelim Oct China deliveries)

-PTLO -2.9% (earnings, guidance)

-VSCO -2.8% (reportedly BBRC disclosed 13% position and seeking seat on company's board)

-WING -2.8% (earnings, guidance)

-EMN -2.2% (earnings, guidance)

Treasury Auctions

11 a.m.: Treasury Announces a 4 and 8 Week Bill Auction; 

11: Treasury buyback announcement (liquidity support);

11:30: Treasury hosts a $95B 6-Week Bill Auction

Economic Calendar

From Big Pete:

Pete

'Big Short' Michael Burry bet against Palantir and Nvidia

By Huileng Tan

Michael Burry recently broke a long silence on X to post a bubble warning. 

Nov 4, 2025, 1:29 AM ET

• "Big Short" investor Michael Burry bet big against Nvidia and Palantir.
• AI mania sent both stocks soaring, and now Burry is calling the top.
• His hedge fund's latest trades hint that the famed contrarian thinks another bubble is forming.

"Big Short" investor Michael Burry backed his market bubble warning with big money.

Burry's hedge fund, Scion Asset Management, made massive bearish wagers using put options — contracts that profit when share prices fall — on Nvidia and Palantir Technologies, according to a regulatory filing released Monday for the quarter ending September 30.

Scion disclosed a 1 million-share equivalent put on Nvidia valued at about $186.6 million, and a 5 million-share equivalent put on Palantir worth roughly $912 million.

Scion didn't respond to a request for comment from Business Insider sent outside regular business hours. The filing shows trades from the last quarter, and Scion's current holdings may differ from the disclosure.

Burry's wagers came on the back of massive gains in Nvidia — the world's first $5 trillion company by market cap — and Palantir, thanks to investor euphoria for artificial intelligence.

Nvidia, the AI chip giant and world's first company to hit a $5 trillion market cap, has jumped 54% this year, extending a three-year surge fueled by demand for AI hardware. The stock closed 2.2% higher on Monday.

Meanwhile, Palantir, the AI-powered data analytics company, has skyrocketed 174% this year amid a boom in AI and defense spending. The stock closed 3.4% higher on Monday, then fell 4.3% in after-hours trading, after it reported earnings.

Scion held no positions in either company during the previous quarter, signaling a pivot in Burry's portfolio.

The filing came just days after Burry broke a long silence on X with a warning.

"Sometimes, we see bubbles," he wrote in a post. "Sometimes, there is something to do about it. Sometimes, the only winning move is not to play."

Burry rose to fame for predicting and profiting from the US housing market crash of 2008. His massive bet against the housing bubble at the time was featured in the book and movie "The Big Short."

Bonus —Here are some great links:

Whenever in Doubt, Zoom Out

Two-Thirds of S&P Win Streaks Have Extended Moves

Bull Market for Earthlings

Trick or Treat

A Technical Look at the Consumer

I am adding to  (KMB)  at $102 in premarket trading.

From JPMorgan:

US: SPX and NDA both closed in the green, but with a narrow market breadth. 319 out of 503 SPX companies (63%) finished lower today; only 4 out of 11 sectors closed higher today. Mag 7 (mostly AMZN and NVDA) did the heavy lifting on today’s price actions. AMZN added 4% since the announcement of its $38bn deal with OpenAI. Verizon said they will build fiber route to connect AWS data centers. On macro, ISM-Mfg missed on headline index, but the report sent a positive signal on inflation and demand; see our full analysis below. Trump admin said they will partially fund food stamps as shutdown continues.

and...

Four main focuses of the US market today… (i) market breadth continues to be narrow: SPX once again finished higher with over 60% of the underlying stocks actually closed lower. Mag 7 single-handedly held today’s price actions given another Mag 7 AI announcement; (ii) macro data are holding well: ISM-Mfg sent some positive signals on inflation and demand, despite the index level miss; (iii) government shutdown entered into November: while negotiation progress remains stalled, we have seen more impacts on air traffic and food stamps, indicating increasing pressure on the resolution; (iv) Fedspeak today (Cook, Daly, Goolsbee and Miran) presented a wide range of on the balance for inflation vs. labor market: Goolsbee “more inflation than jobs” vs. Cook “labor market concerns outweigh inflation risks.”

* Of a Michael Burry-kind

* The Big Short Part 2?

Wolf Street howls about Office CRE losses.

The S&P Short Range Oscillator stands at 0.23% vs. 2.17% -— that's neutrally positioned.

With S&P futures -75 handles I have purchased  (SPY) / (QQQ)  common longs against the short index calls I put on (below) — locking in a large and very quick gain.

* SPY $675.94 (-$7.40)

* QQQ $623.08 (-$9.00)

From early yesterday afternoon:

Back Short Index Calls for December

With S&P cash +18 handles I am back short index calls for December (monthlies in the money).

Given the rising volatility (a good feature when selling calls short), I will be selling slowly on a scale higher as I give Mr. Market a wider berth in these times of changing price action.

Position: Short SPY calls (VS) and QQQ calls (VS)

By Doug Kass Nov 3, 2025 1:07 PM EST