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What a week!
AI stumbled on reports of disappointing revenues at OpenAI.
Middle East tensions kept oil prices high.
US Treasury iields hit multi-decade highs.
And Elon Musk's SpaceX might be your new phone company!
Let's jump into it.
October Is Getting Better
September was a very tricky month, with just 113 of S&P 500/SPY stocks up for the month. The average name was down 4.6%, and tech was the only major sector that was in the green.
Things are broadening out in October.
The SPY is up 2.1% for the month, and every sector is in the green, aside from Communications.
And Communications would be positive if not for T-Mobile (TMUS) and Verizon (VZ), which got hit after Elon Musk's SpaceX (SPCX) agreed to buy up wireless phone spectrum.
Speaking of that news...
Elon Musk Wants a Big Piece of the Phone/Internet/Cable Pie
SpaceX is looking to acquire low-band wireless spectrum from Grain Management.
Upon FCC approval, SpaceX Mobile aims to become "a major mobile carrier in the US."
That's because this new spectrum works indoors, unlike SpaceX's Starlink, which generally requires a clear view of the sky.
SpaceX also got FCC approval to launch 15,000 new Starlink satellites that supposedly offer 100 times the bandwidth of the current generation
Americans spend hundreds of billions per year on phone, internet, and television service.
Elon wants a piece of that pie.
So before long, we might be paying Elon for combined phone and data service!
That could mean tens of billions a year in revenue for SpaceX.
By the way, here's JR Romero's take on SpaceX stock:
Jensen Huang Might Be Right About Marvell
In June, Nvidia (NVDA) CEO Jensen Huang said Marvell Technology could be the next trillion-dollar company because of wild demand for networking infrastructure.
It looks like Jensen might be right.
I later bought Marvell stock, because I assume Jensen knows what's getting bought in the world of AI infrastructure. And since Nvidia owns a $2 billion stake in Marvell, I gotta figure the companies will do lots of business together.
Anyway...
At Marvell's Investor Day on Tuesday, the company issued FY2028 revenue guidance of $20 billion, and FY2031 guidance of $70 to $90 billion.
These numbers were well above Wall Street estimates.
This is just the latest in a stream of "all systems go" indicators for the AI industry.
Because in recent weeks, we've seen AI-dependent companies like Micron (MU), Everpure (P), and Penguin Solutions (PENG) deliver huge results and guidance.
This week, the market raised its eyebrows on a report that OpenAI's revenues were lower-than-expected. But observers were comparing OpenAI's reported numbers with Anthropic's, which uses a different method of calculating revenue.
Sentiment Is Neutral
The latest AAII Sentiment Survey shows that 40.3% of investors are bullish.
That's technically above the long-term average of 37.5%.
However, it comes after three straight weeks of bearish readings.
So that's not exactly a sign of an ecstatic crowd.
Plus, CNN's Fear & Greed Index is at just 46/100, indicating neutral sentiment.
So there's not a ton of enthusiasm for a market near all-time highs.
I'd guess people are still smarting from a rough September.
Next Week Will Be Loud
This week was quiet. Next will be loud.
We'll get the critical CPI and PPI reports, and FOMC Chair Kevin Warsh will appear on an IMF Panel on Thursday.
And earning season starts cranking Tuesday with JP Morgan (JPM), UnitedHealth (UNH), Goldman Sachs (GS), Wells Fargo (WFC), and Citi (C).
We also have two major tech reports with semiconductor giants ASML (ASML) and Taiwan Semi (TSM). Investors want them to indicate that AI-driven semiconductor demand remains sky-high.
Rate Hike Expectations Subject to Change
The market is pricing in a 19.4% chance of a 25 bp rate hike at the October 28 meeting, according to the CME's Fedwatch Tool.
And the market expects an 86.4% chance of at least one hike by year-end.
However, based on the busy economic calendar next week, these numbers could change, big time.
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