Are We Bottoming?

Analyzing the markets with Richie Naso, a Wall Street veteran of over 40 years and former member of the NYSE.

• DJIA 52-wk: +6.82% | YTD: +10.44% | Wkly: -1.21%
• S&P 500 52-wk: +12.23% | YTD: +14.40% | Wkly: -1.63%
• NASDAQ 52-wk: +19.28% | YTD: +19.13% | Wkly: -3.04%
• Palantir Technology 52-wk: +204.73% | YTD: +135.26% | Wkly: -11.24%

Market Performance

• The Nasdaq Composite posted its worst weekly percentage drop since early April, falling about 3%. Reuters
• The S&P 500 and Dow Jones Industrial Average also fell, dragged by tech and growth-stocks, valuation concerns, and economic worries. Reuters+1
• Early in the week (Nov 3), markets had an upbeat start — S&P up ~0.2%, Nasdaq up ~0.5%, driven by major AI-/cloud deals. AP News+1
• But sentiment reversed mid-week as concerns about tech valuations and macro data took hold. Reuters+1

Key Themes & Drivers
1. Tech / AI sector pull-back

• Stocks tied to AI and tech pipelines (e.g., chips, cloud) underperformed. The rally in that space is being questioned, and this weighed broadly. Reuters+1
• Example: Some companies like Palantir Technologies, despite reporting strong results, saw big drops due to investor concern about forward momentum. Investopedia

2. Macro and policy uncertainty

• With the U.S. government shutdown ongoing and key data releases delayed, markets are uneasy about how much clarity they have on the economy and the path for the Federal Reserve. S&P Global+1
• Warnings from major banks about possible market drawdowns or corrections added to the caution. Reuters
  

3. Valuation concerns and market breadth

• The fact that only a relatively small number of large stocks were supporting the rally raised questions about how broad the market’s strength is. Reuters
• Market breadth indicators dropped, suggesting fewer stocks were participating in gains. Stage Analysis

EV Maker Approves CEO’s $1 Trillion Package:

Elon Musk thanked Tesla shareholders after they approved an unprecedented pay package making the world’s richest person a trillionaire for meeting certain business targets. Tesla shareholders, who have overcome political drama and competitive challenges, apparently believe it’s a fair payoff to keep Musk happily at the company.

• More than 75% of the votes cast approved the pay, which gives Musk approximately 425 million incentive-laden shares that vest when milestones are met over the next decade. Musk wanted 25% voting control of Tesla stock, but he has 15% now. The package is 12% of current shares outstanding.
• Thursday’s vote shows that investors considered the prospect of Tesla without Musk at the helm unfathomable. Wedbush analyst Dan Ives said Musk is Tesla and that the vote cements Musk as a “wartime CEO” as the artificial intelligence revolution boosts Tesla’s opportunities.
• Barron’s asked more than a dozen analysts and investors about Musk’s pay package. Zacks Investment Research stock strategist Andrew Rocco said the incentives are constructed so that if Musk wins, “shareholders win.” If Tesla stock doesn’t increase, Musk makes essentially nothing.
• Tesla must sell 20 million EVs cumulatively, have 10 million subscriptions for its “Full Self Driving” assistance, deploy one million robo-taxis, and sell one million robots. The targets culminate in an $8.5 trillion market capitalization and $400 billion in annual earnings before interest, taxes, depreciation, and amortization.

What’s Next: Musk said he’s optimistic that AI-trained Optimus robots will lower labor costs and increase production, making more goods accessible to many. He believes that within months, Tesla’s “Full Self-Driving” will let users text while driving, and said that Cybercab production will begin in April 2026.

Betting Markets Suggest the Government Shutdown Could End in November

Airline Stocks Are Hinting at the Same Thing

There’s another interesting signal: airline stocks. The FAA has already warned that it may need to scale back flights at more than 40 airports ahead of Thanksgiving if the shutdown drags on. In theory, that should be terrible for airlines. Yet despite all the volatility iån the market this week, stocks like American Airlines (AAL), United (UAL), and Delta (DAL) are all up. As Stanley Druckenmiller likes to say, “The inside of the stock market is the best economic indicator I know.” If airlines are green in the middle of this mess, it suggests investors aren’t pricing in a long, painful shutdown.

Risks & What Could Go Wrong

• If business travel remains weak, airlines heavily reliant on corporate clients will be hit.
• Fuel price spikes or major geopolitical disruptions quickly erode margins.
• Over-capacity (too many seats) can squeeze pricing and profitability.
• Sentiment risk: the sector tends to flip from “cheap” to “risk-on” or “risk-off” quickly. For example, many stocks were down significantly YTD in 2025. Seeking Alpha

Last week, MSFT fell 4.1%, TSLA dropped 5.9%, AVGO slid 5.5%, NVDA & ORCL slumped 7.31% and 8.9% respectively. PLTR tumbled 11%. All of them fell despite the absence of any news that might be considered “bad”. Not a good sign.

— Richie

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