Mid-Morning Look

Friday, October 03, 2025

U.S. stocks are looking to make it a 6^th straight day of gains for the S&P 500, Nasdaq, Dow Jones and Russell 2000 (all sitting at or near record highs)! Buying optimism remains astounding with major averages surging, as upside market momentum remains spurred by bets on AI growth/investment, and expectations for further interest-rate cuts by the Fed. We are in Day 3 of the U.S. government shutdown after Republicans and Democrats failed to reach a deal that would allow them to resume government funding. Democrats say any funding package must also expand pandemic-era healthcare subsidies due to expire at the end of December, while Republicans say that issue should be dealt with separately. The shutdown, the 15th since 1981, has suspended scientific research, economic data reports, financial regulation, and a wide range of other activities. Specifically, both today’s expected non-farm payroll data and yesterday’s jobless claims were the economic data first casualties of the shutdown, both delayed. On track to end the week with more gains, nearly all eleven S&P sectors are in positive territory (big gains in Healthcare, Utilities, REITs), while Smallcaps are leading. Oil prices are higher, but tracking for their worst week since April, down over -7%, while the dollar (DXY) is heading for its worst week since July, and gold prices are on track for the 7th straight weekly advance, holding near record highs at $3,900 an ounce. Bitcoin prices are up 7% on week and holding around $120,000 as investors continue to pile into risk assets.

• ISM report on U.S. non-manufacturing sector shows PMI 50.0 September (below consensus 51.7) and vs 52.0 in August; business activity index 49.9 in September (consensus 51.8) vs 55.0 in August; prices paid index 69.4 in September vs 69.2 in August; new orders index 50.4 in September vs 56.0 in August and employment index 47.2 in September vs 46.5 in August.

• In Casinos/Online betting: a rough week for OSB players DKNG, FLUT, SRAD, GENI, etc. on competition fears as Prediction markets have drawn increased attention following Kalshi’s record trading volumes and the quiet introduction of its same-game parlay (SGP) product. Investors are questioning whether these developments signal competitive pressure for regulated sportsbooks. Today, short seller SprucePoint said they see 35%-60% potential long-term downside on DKNG citing serious concerns regarding the impact from Prediction markets.
• In Crypto: CAN shares extend yesterday’s gains after saying it received a purchase order for over 50,000 of its Avalon A15 Pro Bitcoin mining machines; COIN was upgraded to Buy from Neutral at Redburn (tgt to $417 from $325) pointing to accelerating institutional adoption as a key driver, while the firm initiated stablecoin issuer CRCL at Neutral. Bitcoin mining updates: CLSK said it produced 629 Bitcoin in September/reached 30 EH/s in October 2024 and 50 EH/s in June 2025; MARA said it produced 736 Bitcoin in September/produced 218 blocks, a 5% increase over August/ Energized hashrate increased 1% m/m

• FCX +2%; was upgraded to Buy from Neutral at UBS and raised tgt to $48 from $42.50 saying shares are over-discounting the company’s Grasberg challenges.
• HUM +5%; as managed care stocks leading in the S&P 500 with CNC, UNH, CI among leaders.
• JNJ +2%; was upgraded to Buy from Hold at Wells Fargo saying the existential risks around tariffs and drug pricing policy changes are now off the table and is also upbeat on J&J’s cancer franchise.
• RDDT +3%; shares rebound after a few analysts (Piper, Opco) defend shares as Oppenheimer said based on its work, “believes certain 3P data providers indicating reduced ChatGPT/ Gemini usage of Reddit data in September is a measurement issue, and not reflective of actual user/LLM behavior.”
• USAR +23%; after CNBC reported that the company is in close communication with the Trump administration, when asked whether the company would be open to a deal with the US government.
• Z +3%; was upgraded to Buy at Gordon Haskett with a $90 price target, citing the belief that the negative sentiment weighing on the shares over the past two weeks creates “a favorable risk/reward.” Notes shares have declined 17% over the past two weeks following concerns regarding competitive encroachment after COMP announced it was acquiring HOUS as well as a recent FTC lawsuit.

• LVS -6%; along with weakness in WYNN, MLCO in Macau related casino names after Citigroup noted this morning that national passenger data from China’s travel ministry for the first 2-days of Golden Week have been weaker than expected.
• PLTR -4%; shares fell after Reuters, citing a recent internal Army memo, said the modernization of the U.S. Army’s battlefield communications network being undertaken by Anduril, Palantir and others is rife with “fundamental security” problems and vulnerabilities, and should be treated as a “very high risk.
• RBLX -5%; shares were pressured by analyst commentary as M Science said bookings growth slowing in the U.S. to low 30s in Sept from high 40s in Aug citing back-to-school (Wells Fargo raised tgt to $155 and had positive bookings growth comments).
• TROX -2%; was downgraded to Neutral from Overweight at JP Morgan, saying conditions in the titanium dioxide industry have become more difficult near term.
• UEC -3%; as 15.5M share Spot Secondary priced at $13.15