Chips Carry a Narrow Election-Day Rally
A handful of chip and mega-cap tech names lifted the S&P 500 while most stocks fell, and the signal table is thin ahead of the midterm results.
The Signal
The S&P 500 ended a three-day slide and the Nasdaq rose more, while the Dow slipped. Only about a third of stocks closed higher. Broadcom, Microsoft, Nvidia, Meta and Amazon did the lifting on a chip rebound and lower crude; Apple, Tesla and JPMorgan lagged. Technology and communication services led, while consumer staples and materials were the weakest sectors. No name reached the top tier.
The Noise
The headline reads like a relief rally. Underneath, it was a narrow one, carried by a few giants while defensives and consumer names sold off. Cash is still flowing into more stocks than it leaves, but lower highs outnumber higher highs, so the repair is unfinished. With midterm results overnight, the thin table argues for waiting.
Multi-Signal Confluence
AppLovin: ad-tech platform for app and game developers, reporting Wednesday after the close. Up about seven percent today but down sharply over the past year amid short-seller criticism. Lower low, deeply oversold, improving volume pattern; cash still leaving and projected fair value well below price.
Take-Two Interactive: publisher of Grand Theft Auto, with GTA VI set for November 19 and earnings expected next Monday. Lower low, oversold, improving volume pattern, fair value somewhat below price. A single launch carries the year.
Pfizer: the bearish counterpart. Raised full-year revenue and adjusted EPS guidance on today's third-quarter report, but the new high comes on fading volume and fair value sits at the price.