Market review from UTEX — week 46

The major U.S. indices closed down for the week: SPY lost 1.63%, Nasdaq 3.07%. It could have been worse if the market hadn’t risen on Friday.

Investors are doubting the effectiveness of billion-dollar AI investments amid sky-high valuations of tech companies. The combined market cap of the eight most expensive AI companies dropped by $800 billion over the week. Palantir -11%, Oracle -9%, NVIDIA -7%.

“AI-related capital expenditures are substantial, increasingly debt-financed, and reminiscent of the 2000 tech bubble’s frenzy of questionable investments,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers.

The labor market is cooling. According to the Chicago Fed, U.S. unemployment rose to 4.4% in October, a four-year high. October recorded the highest number of layoffs in 20 years, driven by AI and cost-cutting.

Bitcoin has dropped to $100,000 several times but bounced back after each breach. BTC is currently trading at $106,300. Ethereum fell to $3,100 but rose on Sunday. ETH is currently trading at $3,600. 

The earnings season continues, with most companies reporting results above forecasts. The most notable reports this week: CoreWeave, Rocket Lab, AST Space Mobile, Oklo, Nebius Group, Cisco Systems, Circle Internet Group, Walt Disney. 

Top ideas for trading this week

🔴 Oklo (OKLO). Earnings report on November 11 after market close. Oklo develops the Aurora micro-reactor, which can power data centers, industrial sites, and military bases. The stock surged 56% in the quarter — rising from $70 to $193 before pulling back to $100. Very high volatility both intraday and on the daily chart. Prices are reasonable for the medium term, but risks remain very high.

🔴 Circle Internet Group (CRCL). Earnings report on November 12 after market close. The second report of the USDC issuer as a public company. The stock has lost 31% in a month. Excluding the first two growth waves after the IPO, the stock has been in a downtrend since July 18. On Friday, CRCL tested the $100 level. The price may go lower.

🟡 Cisco Systems (CSCO). Earnings report on November 12 after market close. Since April, a slow uptrend has formed. If prices improve, it might be worth considering for the long term.

🔴 Firefly Aerospace (FLY). Earnings report on November 12 after market close. Developer of light launch vehicles for small satellites and CubeSats. On November 5, the company announced it acquired defense contractor SciTec for $885 million. Another recent IPO, the stock fell 63% during the quarter; it could be worth watching for a buy. But it’s better to wait for the report — there is no sign of a reversal on the daily chart. The bottom is likely not reached yet.

🟡 Walt Disney (DIS). Earnings report on November 13 before market open. The last time we suggested this stock was on May 5 when it traded around $90. Overall, prices around $109 are still reasonable, but this is more for the long term; no quick movement should be expected.

Choose what suits you best:

🔴 high risk, for the pros;

🟡 medium risk, for traders with little experience.

Profitable deals!

[button label="Trade on UTEX" url="https://margin.utex.io/stocks-usdt/exchange?utm_medium=website&utm_source=utmedia_en&utm_campaign=post"]