Good Morning,
I hope everyone had a great Halloween weekend! It's a big college football rivalry weekend here in Michigan as the Wolverines host the Spartans on Saturday. I'll do my best to remain bipartisan on that one. 😉
Stocks opened higher this morning following last week's sharp technology selloff, which reflected growing skepticism surrounding the extraordinary level of AI investment, even as underlying infrastructure demand and broader corporate earnings remain strong. The distinction between strong demand and sustainable returns has clearly become the market's central debate, with earnings season helping investors determine which companies can justify their significant spending.
More broadly, the market enters November amid a pronounced rotation away from technology leadership, with value stocks breaking out and defensive sectors attracting renewed interest. It will be a busy week, with Apple and Palantir reporting earnings tonight, the midterm elections taking place tomorrow, and October's employment report being released on Friday.
As it relates to the midterms, I believe the most likely outcome is renewed gridlock in Congress, which would result in more incremental policy changes. Regardless of the outcome, I think markets will gain greater clarity and ultimately refocus on corporate fundamentals as we head toward year-end.
I continue to believe that a resolution with Iran, coupled with lower crude oil prices, is the biggest pending catalyst for the market. All things considered, I still view any near-term volatility as a longer-term buying opportunity.
As always, please don't hesitate to reach out with any questions or comments.
Attached is this week's Market Strategy Radar Screen Report from John Stoltzfus, Chief Investment Strategist at Oppenheimer Asset Management.
Have a great week!