Speaker 1Welcome to the Saxo Market Call. Before we get started, it's important we emphasize that the views and opinions expressed in this podcast are those of the host and guests and do not constitute investment advice or recommendations. All information provided is for educational and entertainment purposes only. Everyone, it's Monday, 2nd of November, 2026. And I want to start off by saying thank you very much for the many of you who provided feedback on the midterms episode, the very long one I recorded on Friday previewing next, well, tomorrow's midterms and what is at stake and sort of ventured off into a few different directions there. Of course, I guess it was a bit funny that I asked whether you liked the long format about 70 minutes in. Of course, anybody hanging. Around at that point would have been maybe happy with it. And those that weren't happy with it, wouldn't get the chance to have heard my request for feedback or my appreciation for some feedback. Any case, whatever. No worries. I'm not planning on having an 85 minute podcast on a super regular basis, but it is cool to get positive feedback when I did take so much effort to put that one out there. So it's obviously something I will consider around bigger topics to indulge in a much longer form. So I hope that you enjoyed that version of the podcast. So again, thanks very much for that. You know, I talk a lot about potential future developments for the podcast, production value, adding video, more guests and things like that. Something I really would like to do if I can put together the team and the time to get that into motion. So I won't try to promise anything now, but I just want to flag that it is something I'm very much hoping to add to the podcast, certainly in the new year. All right. And there's something else I really need to mention, and I can't say what it is because I'm not allowed to talk about it. It's a very important topic. The market is very much obsessed with in coming weeks, but I have been, for compliance reasons, I'm not allowed to talk about it. It'd probably be quite obvious from my not talking about it what it is in the coming days. So I just want to put that rather mysterious idea out there. You probably know what I mean when there are big news days for this topic, and I'm not saying anything on it. Nothing more on that. And we have to talk about the crazy. Crazy market activity on Friday. Huge, huge intraday drawdowns. We didn't end anywhere near the lows, fortunately, and very much concentrated in the tech space once again with a huge market sell-off. I mean, the SOX semiconductor index down 7.2% on the close. I don't even know what that was intraday. Obviously down more. NASDAQ 100 down almost 3.5%. The S&P 500 minus 1.8. Our good old equal weight S&P 500 index much less bothered by things. But it was also finally a day on Friday where everything was pretty much down. I think it's this oil price, the concerns around the Iran war that were driving a lot of this. A lot more on that in a second. But just an ugly day, and we're sitting here now on a Monday morning with things trying to brighten again. It's the push and pull of this constant headline risk. The latest is Bloomberg running the story that Trump is going to give oil diplomacy more time. It's unbelievable if we really react to these headlines. And still, but we have to, I guess. We've got nothing else to go on. But that's obviously helping things out here on a Monday morning. And sentiment out in the Asian session on Monday stabilized somewhat. Although the Nikkei actually ended the day a little bit down while the Kospi was up solidly after its miserable performance last week. Yeah, and things like crazy VIX intraday spike to almost 24 intraday before ending the day. Solidly below 20. It was pretty shaky stuff here. Now, what is going on? There's still signs that a lot of this is the high momentum names that continue to get crushed. And then the relative performance of some weaker stocks out there, which even on Friday, some of these had a positive day. You're seeing private equity names. I had a very nice week last week, right? That doesn't make sense if we're supposed to be really concerned about the credit cycle. I mean, look at credit spreads. They blew out 26%. They blew out 27 basis points, actually, on Friday to 340 basis points. That's a new high for the cycle since back into the spring. The Liberation Day tariff timeframe was the last time we saw those levels. And then only briefly, I struggle to bring this topic really onto the podcast. But we need to talk about it because it's very much out there. A lot of people are talking about it. And that is Tucker Carlson's long post on X that the Trump administration is concerned. Considering a nuclear strike on Iran. And I guess you can add to that the, you know, the Chris Murphy, Senator Chris Murphy of Connecticut, his comments on, you know, he's seen the latest war plans. They're insane, et cetera. As far as I understand, I mean, just practically speaking, we're talking about nuclear weapons here, whether they're tactical, quote unquote, tactical or otherwise. Just unimaginable to see this coming into the Overton window of something we can even discuss. But my understanding is. You know, a nuclear weapon, it creates an enormous blast, but it's not necessarily something that's very penetrative unless you're using ridiculously large ones, because, again, it's just a general blast. Whereas some of these dedicated weapons for, you know, bunker busters or whatever they're called, they're meant to sort of, you know, dive down in as far as possible into solid rock before they then explode, sort of a directional explosion. Yeah, I'm not going to get into the technicals of all. It's just crazy to see this mentioned by somebody of as high a profile as he is. But I do wonder, just by sort of the indirect and inference way of, you know, reasoning through all of this, why the sell-off was so vicious last week. I mean, we did have some really concerning things, especially the concerns around the AI spend. The Google news, I think, was really, you know, here you are, Mag 7 platform, which is being eroded by AI. And actually, it's really fascinating that it's finally coming to light now. There's a lot of stories around the Alphabet. I should call it Alphabet, but Google, of course, is the operative part of the company that we're talking about here. We, you know, very early on in the chat GPT, post-chat GPT launch era, we talked about how much time we're spending on these, on chat GPT and its competitors for doing research, for doing search, just getting answers to questions. And even Google's own AI mode, you're just looking at the AI answer. You're not drilling into the search results. So it was something we posited quite early on that this would really risk a dramatic impact on their search business. And yet, it didn't seem to be any problem until suddenly we're starting to finally see this. And there's been some news reports circulating, some analysis done that they were doing some kind of, you know, somewhat dodgy things to sort of stuff. I don't know if stuff is the right word. Sort of. To get the people that are buying search terms, they would sort of keep the bill high by, you know, piling in all other parallel search terms. I'm not sure of the specific accusations. I haven't actually drilled down a lot into this issue. I've just seen a lot of headlines on that. But it's just interesting. It took this long for this moment of discovery. But it doesn't really explain why the whole AI space was down when you're still seeing the staggering commitments to the spend on infrastructure, et cetera. But, you know, putting, trying to put two and two together, Iran war, this talk, this chatter of tactical nuclear whatever, maybe, and this wouldn't surprise me, maybe somebody on the inside would like to manipulate markets a little bit by pretending that they could do something hyper dramatic. And, you know, circulated that around to make a little money on insider trading. And then here we have Monday and suddenly everything's thawing and we're going to give diplomacy more time. I would not put it past the people in power that this is. This is what is going on here. What can you use it for? Not much. It's just to be extremely aware of the last headline and, you know, wait for the owl of Minerva to tell us what the heck is going to happen beyond, you know, today and tomorrow. But what happens with what seems to be an existential situation for Israel, at least, that Iran has this possession of potentially nuclear weapons, certainly the nuclear material to not far from being enriched to a sufficient degree to use them. There is the whole bit about. But, you know, Russia has been showing that it's been willing to give a helping hand on on many things. So who knows? Just want to put it all out there as a and I will put a link to the Tucker Carlson post. I'm sure most of you have found it and have read it already. It's not to encourage the idea that he has his finger on the pulse 100 percent with what's going on inside the administration. But it's just something that's circulating out there. All right. Where else to go with all of this? Yeah, I mean, there's the single names. That did really poorly on on Friday into the month as well. Let's keep in mind quite a bloodbath and read it. Minus twenty nine percent Intel minus twenty eight percent. It's just a staggering numbers. SanDisk, it was down 15 percent. Datadog was down heavily. AMD on collateral damage down 11 percent. And they haven't even reported their earnings yet. That is out tomorrow. And today we have some massive names really critical maybe for for market confidence because quite quite different stripes. But but a bit oddball couple of companies because you have Apple, which, of course, is not indulged in. the AI spend that the other hypercaps have done and how is its new phone performing, the foldable phone, this whole thing about it cracking. I don't understand if that's really something there. The market has been really rewarding that company in relative terms as well because of the lack of AI angle to it. So you have Apple sitting there in your all-time highs when all these other companies, or many of them in any case, have really drawn down a bit. And speaking of drawdowns, I should really just bring that into the frame here. I mean, you have the NASDAQ getting not that far. What was the low on Friday on the cash index was 28,100, just below that. And the 200-day moving average is at 27,927. So only 100, let's call it 180 points. So that's not much more than half a percent away from the 200-day moving average before it bounced. The SOX index, as far as I could tell, I was trying to pull up a chart. Here on my mobile, and I couldn't, so I was looking at a finance.yahoo. But caveat, hopefully accepted. It looks like it closed just below its 200-day moving average, the SOX index. Pretty remarkable stuff. When you look at the drawdowns of where we are, so the NASDAQ 100 now has drawn down a total of a minus 9.5%. The SOX is down 27%. So these have been really damaged from, admittedly, that massive run-up. In the case of the SOX, it peaked. It peaked back in June, June 22nd, in fact, and we're 27% away from that high, whereas the NASDAQ 100 drawdown has been quite brutal, but quite local. So that 9.5%-ish is from a recent, you know, a couple weeks back. I don't have the date in front of me. The S&P 500 has only drawn down, as of Friday's close, 3.3%. I mean, it's hardly anything to even blink at. So we're talking about all this carnage, and it is big in terms of market cap. It is big in terms of, you know, half a trillion. It's down an alphabet, et cetera. But the broader index is really not down that much, folks. Minus 2%. Minus 2.2%, I should say, on the S&P 500 equal weight. The Russell 2000, by the way, I don't have the full drawdown picture in front of me, but it did close. I think it tested and closed just above its 200-day moving average on Friday. So I thought I'd talk about that a little bit as well. Okay, transitioning over to a few items here on politics. It was really interesting. It was interesting to see that in Michigan, sort of the establishment pick, the party pick to run for the Senate seat there that was opening up because the old Democratic incumbent was retiring, this character Stevens, she has gone to the extent of being so against al-Sayed, supposedly on his comments on Israel, that she is endorsing the Republican candidate there. And even the establishment is shocked at this. The likes of Charles Schumer of New York and the Senate leader, Democrat leader, saying that this is a wrong move that she is making. I don't remember the exact words he said, but certainly not approving of that. Again, I talked on Friday's very long podcast on the bid terms. I don't want to repeat too much of that now at all. Super curious how this turns out. I give a decently high beta or delta, I should say, a decently high delta. to this dramatic blue wave scenario if this is positioned as a referendum on Trump because there are profound signs that the population is against Trump on A, corruption, and B, cost of living. A huge double whammy. But if the Democrats are failing, is it because of, again, this discomfort with that establishment versus the progressive wing of the party and those key and decisive slice, that slice of independent voters could be. You know, I don't want to vote for the Republican. I really don't like what Trump is doing here. I can't stand the persona, the corruption, the cost of living. But my goodness, I cannot get myself to vote for somebody that might raise my taxes. So are they going to stay away or will they vote? Whereas, on the other hand, those that are motivated by the left-leaning progressive wing could be getting out in record numbers. I really don't know how this will turn out. I'm giving it a cautious that the odds are a problem. I think the Democrats are maximally right and they, of course, will take the House. But by what margin? And that I think they're quite solidly positive chances for the Democrats to take the Senate by at least that one seat. But I'm more curious about if this is a more massive blue wave than that. I will be shocked if, not shocked, but we'll be surprised if they don't get the Senate. It would be a real show of weakness given how historically unpopular this president is. Okay. And maybe I should spend a little bit more time on this. I'm going to spend a few moments at least in the macro space. I mean, not getting any strong read on things really on Friday and the currency market with – or rates really. I think a bit loud on the risk or safe haven front for treasuries that we did not see a better bid into treasuries given that horrific markdown in risk assets. Did see yields falling, but it was not by much. I think part of that was the fact that oil was hitting those new cycle highs, the fears around inflation that that causes, et cetera. But still. I was not very impressed there. And then on the currency market, it was sloppy. It was all over the place. Dollar kind of finding a safe haven bid, but not really consistently. And here this morning, it makes sense, though, with this fade in oil prices to see the euro-dollar rebounding back above 112. We've got dollar-yen a little bit bid again. That must be really difficult for Japan's officialdom to watch. But no strong read. I'm getting an FX at the moment. And all this could flip on a headline. So let's just park that. We do have the RBA, so Australia's central bank, out meeting tonight. And they are supposed to hike one more time. I think they're getting a bit too far with their hiking. And the Australian economy is starting to pay for it, especially on the housing front. And if you look at consumer confidence, it's in the cellar near really the lows that it's had in the modern era. And unemployment rate is rising as well. But they've sounded quite consistently hawkish. I'm a bit curious if they're not priced for anything more beyond about an 87% odd that they're going to hike tonight, or overnight, I should say, into Tuesday with, again, little additional hiking priced in. So guidance will be really important here. Two-way risk on this. I think they're getting a bit too far. But again, the market is already kind of pricing them to stop. So it would have to be a bit of a pivot in their rhetoric to get a notable effect. On the Aussie, on the downside here. We also have three other central banks this week. The Riksbank of Sweden. Steady as she goes with where short-term rates are. So they're on schedule to administer that next rate hike. Guidance will be obviously key there. And then Norris Bank. You've seen rates starting to come down there. I wonder if that's the very profound currency strength of late that is changing the tune, sees the market anticipating the change of tune there. So I wouldn't be surprised. They're confirming that. And this Norwegian Corona rally has gotten really pretty almost overdone, overstretched, and very much linked, I think, to energy prices, however. Bank of England. Now this one's curious because you've kind of seen Bailey pushing back against the market's pricing of as much tightening as the market is pricing, which is around four rate hikes, if you can believe it, for the next 12 months. I don't think they're going to confirm that in any way. But they are expected to hike this week. So guidance will be important there. We've seen a decent run-up in sterling. Let's see if that can continue. Not a lot more to say. It is the typical first week of the month where we have all the key U.S. data, the ISMs, all the employment-related data through Friday's NARNFON payrolls report. And I will segue a little bit later into some of the links for today because I wanted to talk a little bit about that jobs business. But I'll get to that in a second because I wanted to round up. Somebody said, I think it's a state street spider – what are they called? They're sort of ETFs around a specific theme or a sector. I think it's run by a state street. All of them start with an X. And it was just a screen grab of how they'd done over the last month. Now, I assume this was as of Friday's close, which is conveniently also a month end. And I just jotted these down. It was super interesting to note that for the full month of October, of all of these – 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 that I've jotted down, nine had a positive month. So nine sectors had a positive October. If you look at your portfolio, I don't know if you're feeling the positivity, but nine sectors had a positive run, some of them spectacularly so. Consumer staples up 11% in October. Consumer discretionary up 6% in October. Materials up 7.6%. Health up 10%. Utilities up 10%. Financials up 6%. Real estate up 6%. Energy up 13.2%. Industrials basically flat. And then you have the tech sector, minus 8.3%. And the so-called communication services – I actually don't know what's in that one. I'm sure all the big tech-related stuff in general as well, minus 9.5%. So it's hard to describe this as a general market meltdown just yet when you have that kind of internal divergence within the market. and it does feel like though, that players that are having some kind of long-short combination playing momentum versus stuff they don't think is going to do well have just gotten administered a perfect storm over the last month. And I'm really curious what this means going forward, of course, if this is going to shake the passive bid at some point. I think this is about the active trader being course-corrected, if you will, to put it politely, over the last month. Does the passive bid ever get scared away when we've seen the market coming back from just about everything under the sun? Over, you know, for a generation, basically. It might take a bit more, but we've certainly seen a bit of position squaring in this market with those types of performance figures. Oh, and I forgot to, I think I interrupted myself on my different tangents I got off onto on who's reporting today, but it's Apple, of course. I said that. Palantir also reporting a bit of an oddball stock with its heavy, heavy retail ownership component. And you know, I think it's a good thing that Apple is doing a good job of doing that. And I think it's a good thing that Apple is doing a good job of doing that. Now, that's always entertaining to watch that character, Carp, in these calls. Let's see what kind of crazy quotes we can come in with in the podcast tomorrow. Vertex, they are reporting, by the way, Apple had an insane candlestick on Friday. Have a look at the charts there. Not sure what that is all about, where it sold off quite heavily and then came back most of the way. And then again, there's tons more this week, but I'll just mention that AMD is up on Tuesday. Novo is out on Wednesday. All right, now onto the links in today's podcast episode description. And thank you again for all your comments and a couple of people pointing out they really liked the links. So I'm definitely going to continue doing that. Luke Grohman was on Macro Voices late last week. We all know what he's thinking. He's always skeptical on the dollar, especially on the US's ability to finance itself and what they're going to do about it. But he mentioned something that I think is a little bit, it's very interesting, but is it true? Is it true that the US is going to finance itself? Is it true? He says that we're already starting to see the job cuts related to AI. I'm not so sure that the specific ones he mentions are AI related. They could be, but certainly if we are starting to see job losses systematically because of AI, certainly it's got to show up at some point in some of the statistics, especially the weekly claims, which are still sub 200, levels that were unimaginable really for decades. We're at these crazy low claims levels. Is something structural in the data, but people don't file claims, whatever. It just, it's got to show up in the data at some point. He specifically calls out Kroger. I didn't look into the American Express story he mentioned. He also talked about the Microsoft offers to buy out and the way he positioned it was like they're going to fire 27% of the workforce, but they actually, or whatever the percentage was, but actually what they're doing is offering buyouts to a large percentage of the workforce of whom maybe only a certain percentage will say, okay, sure, I'll do that. And it could be because Microsoft is running these massive CapEx bills. It had the, you know, could indulge in a bit more hiring and having a bit too many heads when it was so insanely profitable, but with all this big spend, it's having to tighten its operations. That's another less, oh, this is AI taking over jobs way to position what Microsoft is doing. Maybe Luca's right. Maybe I'm right. Maybe it's both, but I'm just not ready to go there yet. And then on the Kroger thing, I mean, it could just be about a relatively, still relatively new CEO coming on board in February, who is figuring out ways to, to tighten, you know, tighten finances, run the ship more smoothly to raise profit margins in a very low profit business. I don't know. It's going to take a lot more for me to, to believe that this is the, the signs of the AI job apocalypse coming in. And then there's the Tucker Carlson post again, a massive cinder blocks, a plus of salt to go with that one. There's a New York, New York Times piece. I missed this. This was late last week. This was already, I think on Thursday that they ran the story about some kind of, it's, I don't really have the details of the story here, but it's super interesting. It's, it's basically Jensen Wong and some agent, potentially Chinese agent in Singapore, where there was some kind of information sharing with the Chinese from this person who also apparently became involved personally with Jensen Wong. Very interesting. And the U S administration apparently just decided not to do anything with it, but a, a bit of investigative reporting there, if you want to dig into that or you missed it. Then Reuters talking about, you know, the Trump administration trying to map a path to maintaining power over key aspects of what's going on, even in the case of a democratic Congress. And then it's really important to consider. So the midterms themselves as a pivot point for markets, why could that be? It's the interesting to see the secretary of treasury best sent out threatening because they will still have a lame duck period where they have some control or they have control of Congress and gets some, get some things through. He's threatening that the prospect of a democratically run Congress would want them to see belt tightening and they would do vicious belt tightening to get it all done before they come into office. So you could also, it could be some window dressing for making it look like, see, this is what happens when the Democrats win. We, you know, it tanks the economy, it tanks markets. I don't know. But it is a risk. Apparently, according to treasury secretary, best into and I won't provide links. I just saw a couple of news items flashing up here that I thought were interesting. There was one about a, uh, uh, Australian, is it a shipbuilding yard or, or port some kind of related to military applications being sold to a Chinese company? Uh, what's going on here? People that as Michael every put it, he shakes his head at something like this being possible in this new era. And then Elon Musk talking about grok bot has become, it's just become too expensive, uh, to, to service the number of users. So people are having harsh limits on their ability to access it, uh, because, um, uh, because it requires so many, uh, system resources apparently. Now there was one thing I was actually, I really wanted to cover today, but I'll go ahead and cover it tomorrow since we won't know the midterm elections, uh, until obviously on, you know, Tuesday night and into Wednesday here in Europe. Uh, and that is, uh, there was an internal debate, uh, or talk this morning, at least, internally on one of our internal meetings about, uh, the midterms, uh, the midterms are an especially good time for equity market investors. Uh, you know, as if this has something to do with the midterm cycle and there is, you know, the different splits and how the parties, uh, you know, which parties, whether it's a split Congress or whether it's on the side of the presidency and how markets are performed, you're getting some really tiny number of data observations on that front when you're picking the one or the other. And my point was like, look, we're going to add some midterm elections that have come, uh, in the, in the years since, uh, World War II, for example, in, in the midst and coincidentally, coincidentally. So in the midst of some spectacular, uh, market drawdowns, um, I won't get into it. Uh, the, the specific data, I've got it all here, jotted down in front of me, but I didn't want to extend the podcast too much today. Tune in tomorrow for that. Uh, my, my point would be, we're not going to see much related. Whatever happens is not really related that much to the midterms. And, um, I think the historical record shows that there's been a lot of coincidence, uh, in that, but it's neither especially good nor especially bad when you have midterms, but there have been a handful of midterms that have come at remarkably bad points for the market. And this is not one of those was the S and P 500 down here at the end of October, which was my cutoff point, by the way, end of October before the election with a drawdown of minus 3.37%. All right. I'll shut up for now. It's a massively interesting week ahead because of the midterms, whether that means that it's green lights, something to go, uh, in motion, hopefully not, certainly not nuclear against Iran or whether diplomacy has a chance, whether the Trump administration is just yanking us around to, uh, to get some little trading profits, uh, secured for insiders and friends of the family, et cetera. I don't know, but all this is key. We also get the refresh on the macro side with some key data. And we've just seen a, a, quite a, uh, you know, a meltdown in, at least one section of the market. Can it recover? Is this a sign of something bigger to come? Lots of earnings coming in. There's that big thing that I can't talk about coming up as well. And, uh, yeah, it's, it's going to be a fascinating, not just week ahead, but a month ahead for the markets and, you know, where you can come back to, uh, keep abreast of things. That's right here. The Saxo market call podcast. Thanks for joining us today. Have a great one. Stay careful out there and I'll be back tomorrow with the next Saxo market call. This has been the Saxo market call podcast. Thanks for joining today's episode. We're always happy for your feedback and questions of all kinds to reach out. You can drop us an email at market call at Saxo bank.com that's market call at Saxo bank.com Saxo serious trading worldwide. We'll see you next time.
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