Mid-Morning Look

Friday, November 07, 2025

U.S. stocks showing additional weakness, pulling back after Thursday’s tech driven profit taking decline.  Optimism around artificial intelligence (AI) has pushed markets to all-time highs this year (led by tech) but concerns over monetization of the technology and circular spending within the industry has dampened enthusiasm for U.S. stocks in recent days. The weakness started Tuesday after bank CEOS at Goldman and Morgan Stanley warned that a market correction could be on the way, while notable investor Michael Burry (the “big short” investor in financial crisis) made large bearish bets against shares of PLTR and NVDA saying the move in AI related stocks was too fast. Also weighing on sentiment overnight and pushing down Asian markets was weaker export data out of China which collapsed -1.1% in October, the first contraction since February as U.S. shipments plunged -25.17% in a single month. Regarding the government shutdown, the 38^th day now and longest in history, Politico reported Majority Leader John Thune has a plan to end the shutdown — that, seemingly, does not involve extending the enhanced Affordable Care Act Subsidies. Today, Thune plans to bring up the House-passed continuing resolution that Democrats have repeatedly rejected and then seek to amend it with a new expiration date, likely in January, as well as a package of three full-year spending bills. The airline industry has been hit hard due to the shutdown. For the first time in a while, equities seeing a “risk” off, flight to safety trade as Consumer Staples seeing a bounce while tech, consumer discretionary and communications decline and crypto remains weak as Bitcoin holds around $100,000, down from all-time highs just a few weeks ago above $126,000. AI related plays, data centers, nuclear power and colling stocks, the biggest winners of 2025 are seeing the biggest drawdowns this week. Earnings season near complete outside of some big retailers and software companies in recent weeks with 449 of the S&P 500 having reported and an 84% beat rate.

• University of Michigan surveys of consumers sentiment prelim Nov 50.3 (below consensus 53.2) vs final Oct 53.6; current conditions index prelim Nov 52.3 (consensus 59.2) vs final Oct 58.6 and expectations index prelim Nov 49.0 (consensus 50.3) vs final Oct 50.3
• University of Michigan surveys of consumers 1-year inflation outlook prelim Nov 4.7% vs final Oct 4.6% while the consumers 5-year inflation outlook prelim Nov 3.6% vs final Oct 3.9%.

• In Chemicals: CE Q3 results came in ahead of expectations, while Q4 guidance of $0.93 was modestly below, but 2H EPS of ~$2.27 is largely tracking in line (consensus $2.22); CC shares decline on earnings miss as Q3 adj EPS $0.20 vs. est. $0.28 and adj net Income $30M vs. est. $43.2M while seeing Q4 consolidated net sales to decrease 10-15% sequentially; HUN headline Q3 EBITDA came in ahead of expectations ($94M vs $71M consensus),Q4 guidance is light while reduced its quarterly dividend by 65%.
• In Casino & Gaming: DKNG reported Q3 revenue of $1.114B, increasing 4% y/y which was 8% below consensus, and (-$126M) of EBITDA, missing estimate of around (-$102M). The company missed sports betting revenue expectations by 16% and Citizens estimate by 12%. WYNN mixed quarter as Q3 adj EPS $0.86 below consensus $1.10 on revs $1.83B vs. est. $1.75B. PENN was downgraded to Hold from Buy at Needham after the company announced the early termination of their partnership with DIS ESPN and new Interactive strategy focused on iGaming and omnichannel in the U.S. and maintaining their strategy with theScore in Canada. While Stifel upgraded PENN to Buy from Hold at Stifel saying sees room for Penn shares to “grind steadily” into the $20s as major overhang has been lifted.

• EXPE +16%; shares advanced after better Q3 results and management raised its ’25E EBITDA guidance ~7% on B2B strength (bookings +26%), a better US backdrop (nights HSD), and B2C marketing leverage, the B2B travel platform, which grew 26% y/y and is now the key driver of margins and bookings momentum.
• FROG +23%; after posting strong Q3 results, marking the biggest beat in company history, underpinned by Cloud growth of 50% Y/y and driven by growing adoption of Security and converting customers to higher annual commitments; saw acceleration of >$1M ARR customers, which grew 54% Y/y.
• GMED +32%; shares jumped after results/guidance; were upgraded from Neutral to Buy at Bank America (tgt to $91 from $65) after the company posted records in revenue, EPS and cash flow in Q3, showed the ability to deliver profits and cash flow and ability for these profits to compound higher.
• MDLZ +2%; along with gains in other defensive food stocks such as CAG, CPB, GIS, HSY, KHC, THS as investors rotate out of riskier tech this week.
• TNDM +20%; on results as Q3 sales of $249.3M (+2.2%), ahead of consensus $235.8M estimates as US revenue +2.3% year/year to $176M, OUS revs +1.8% Y/y to $73.6M and reiterated guidance.

• FOXF -24%; shares tumble after Q3 EPS $0.23 misses the $0.55 estimate; Q3 revs rose 5% Y/y to $376.4M vs. est. $383M; guides Q4 EPS/revs below views and sees FY25 adjusted EPS $0.92-$1.12, below consensus $1.70 and guides FY25 revenue $1.445B-$1.475B, below consensus $1.48B.
• NTLA -21%; the FDA has paused its two main late-stage trials for a gene-editing treatment after a patient died from severe liver complications. NTLA was downgraded to Underweight at JP Morgan and cut tgt to $5 from $12 after results saying they walked away from last night’s call with more questions than answers.
• OPEN -6%; shares tumbled after reporting Q3 results amid a change in strategy (are refounding Opendoor as a software and AI company), filed for a registered direct stock offering to repurchase its outstanding 7% convert notes due 2030 and also announced a special dividend distribution of warrants.
• SMR -12%; shares fell after reported Q3 revenue of $8.24M, missing analysts’ estimate of $11.2M and posted a net loss of $532.65M vs. $45.55M a year ago and also enters sales agreement for up to $750M of Class A common stock.
• TMCI -43%; was downgraded by a few analysts on Wall Street after revenue of $50.2M (+11%) came in slightly ahead of the Street and saw good volume growth, but shares fell on guidance as sees next quarter revs moving to $211-$213M, a decline from $224-$230M prior.
• TTWO -8%; reported mixed Q3 results on better guidance but shares slipped initially after the video game maker delayed the launch of “Grand Theft Auto VI”, as now expects to release the game on November 19, 2026, from its previous launch date of May 26.
• XYZ -9%; as Q3 gross profit rose 18% to $2.66B, slightly above estimates of $2.60B while adj operating income came in at $409M, missing consensus estimates of $473M and Ebitda +3% to $833M vs. est. $840M; increased its full-year GP growth outlook and adjusted Operating Income view.