Pakistan signaled positive progress in Iran diplomacy, an under-the-radar story. Crude oil futures fell nearly 3% to 93.20. Yields moved lower and the dollar moved lower, giving a strong macro setup.
The split tape after the election
Dow futures (YM) rose 1,124 to start the day. The E-mini gained over 1.1%. The Nasdaq, heavy with information technology, rose only 0.2%. The Dow itself was up over 2%, so the Nasdaq clearly lagged.
Elections leave a lot to settle before direction is clear. Overnight trade flipped: stocks tied to Elon Musk moved from a surge in expectations to pressure. Tesla (TSLA) fell 5%. The weak pre-market tech names drove the Nasdaq's underperformance: CoreWeave (CRWV) down, Broadcom (AVGO) down, Nvidia (NVDA) down 1.5%. Amazon (AMZN) and Boeing (BA) rose. The market favored different parts of the economy, with clear winners and losers.
It is historic basic pattern seen over decades for a sitting president's party to lose in the midterms, and that is playing out now.
Were voters rejecting data centers?
A worry grew that voters are rejecting AI data centers, which would explain the tech slowdown, with Texas and data-center buildout in mind. A professional pollster reviewing 19 points voters cited said data centers did not even rank in the top 10. Voters cared most about affordability: food costs, gas costs, health care, and housing. The idea that data centers will be turned down looks more like a knee-jerk reaction than what voters actually focused on. The point came from polls and exit polls, not politics.
ADP private payrolls
ADP reported 86,000 private payroll jobs created, above consensus near 70,000. Last month was revised from 90,000 to 86,000, so this print came in identical to the revised prior month.
By company size:
- 1 to 19 employees: 21,000 added
- 20 to 49: 7,000
- 50 to 249 (mid-size): 22,000
- 250 to 499: 11,000
- Over 500: 24,000
By industry:
- Trade, transportation, and utilities: +39,000
- Education and health services: +28,000
- Leisure and hospitality: +19,000
- Financial activity: +15,000
- Construction: +13,000
- Professional and business services: -27,000 (the biggest loser)
Wages were unchanged from last month: all workers +3.2%, job stayers +3%, job changers +4.8%. A solid number. Attention now turns to the nonfarm payroll data due Friday.
AMD's record quarter
AMD (AMD) posted its largest and most profitable quarter in company history. Adjusted earnings per share came in at $2.09, beating the $1.95 expected, up 74% year-over-year. Total revenue was $13.38 billion, up 45% year-over-year, also a beat. The AI and data center segment drove growth, with revenue nearly doubling, up 97%. Gaming dragged, down about 40%.
CEO Lisa Su gave a strongly bullish forecast, guiding fourth quarter revenue to roughly $17 billion. Despite the beats and strong guidance, the stock swung hard overnight on one-minute charts and was up only 0.4% in the morning.
Analyst targets: UBS set a $700 target with a buy rating, and DA Davidson raised its price target to $600.
