Some understandable "chop" ahead to digest +2% October gains. But we see multiple reasons for S&P 500 to gain in November.

The S&P 500 is on track to close up 2% for October. Looking back at the month, the Oct 10th swoon (-3%) triggered many to become cautious. But as we have highlighted many times this month, we are in the seasonally strong 4th quarter, so we are buying dips.

• Looking at November, the 6 things that we are focusing on are:
  1. 3Q25 EPS: 83% beat, best in several years
  2. AI continues to gain visibility
  3. Crypto suffers from Oct 10^th deleveraging, but tokenization driving adoption
  4. Fed “dovish” and inflation weakening
  5. Private credit lingers in background
  6. Sentiment remains muted = fuel for YE rally
• We are halfway through 3Q25 earnings season with 244 companies reporting. 83% of companies are beating and overall beats are +4.3%, which implies overall 12% EPS growth YoY. There are many sectors posting double digit growth, so this is not only an AI story but rather demonstrates US corporates and multinationals are able to generate strong earnings gains despite the largest tariff increases in US history. Recall many economists predicted US profit margins would collapse by 3Q25 due to tariff cost surges.
• Fundamentally, the US earnings picture remains strong and supported by these 3 factors:
  – AI spending visibility remains strong and Amazon’s AMZN -1.94%  strong 3Q25 report is the latest
  – Financials are driving innovation via blockchain
  – Fed is dovish and lowering interest rates
  – and QT (quantitative tightening) is ending Dec 1.
• Media outlets reported OpenAI plans an IPO in 2027, valuing the company at $1 trillion. This is a staggering value for a company which was essentially founded 7 years ago. But this is also testament to the supercycle ahead driven by AI.
• As for lingering concerns, the two most likely concerning markets are:
  – private credit problems widening
  – US govt shutdown is nearing 30 days and no signs of improvement
• The FAA is issuing some groundstops due to personnel shortages and this is the latest signs of the ripple effects from the prolonged shutdown. The ripple effects will likely start to spread, and in our view, amplify uncertainty in the short term. This in turn, could slow hiring further. While this is ultimately transitory, we expect this to further pressure the Fed to lean more dovish as we move into December. Thus, the Dec cut is probably more likely than the Fed’s “far from a foregone conclusion.”
• Next week is a busy week in terms of macro data. While we are unlikely to receive the Employment data due to the shutdown, we will still be receiving valuable PMI and Inflation data.
  – 11/3 Mon 11:00 AM ET: Crypto & AI Webinar
  – 11/3 Mon 9:45 AM ET: Oct F S&P Global Manufacturing PMI   
  – 11/3 Mon 10:00 AM ET: Oct ISM Manufacturing PMI    49.1e
  – 11/4 Tue 8:30 AM ET: Sep Trade Balance   Delayed due to Shutdown
  – 11/4 Tue 10:00 AM ET: Sep JOLTS Job Openings   Delayed due to Shutdown
  – 11/4 Tue 10:00 AM ET: Sep F Durable Goods Orders MoM   Delayed due to Shutdown
  – 11/5 Wed 9:45 AM ET: Oct F S&P Global Services PMI   
  – 11/5 Wed 10:00 AM ET: Oct ISM Services PMI    50.9e
  – 11/5 Wed 11:00 AM ET: Fundstrat Annual Forum Webinar
  – 11/6 Thu 8:30 AM ET: 3Q P Nonfarm Productivity QoQ   Delayed due to Shutdown
  – 11/6 Thu 8:30 AM ET: 3Q P Unit Labor Costs   Delayed due to Shutdown
  – 11/7 Fri 8:30 AM ET: Oct Non-farm Payrolls   Delayed due to Shutdown
  – 11/7 Fri 9:00 AM ET: Oct F Manheim Used Vehicle Index
  – 11/7 Fri 10:00 AM ET: Nov P U. Mich. 1yr Inf Exp   
  – 11/7 Fri 11:00 AM ET: Oct NYFed 1yr Inf Exp
• For November, while there may be some understandable chop, to digest the strong gains of October, we expect November to be an up month.

BOTTOM LINE: Still “most hated rally”

Seasonals remain favorable, and we see at least 5% upside into year-end which implies S&P 500 7,000. And this is arguably the base case, given that in 2025, the Fed only started cutting in September. This mirrors Sept 1998 and Sept 2024. In both instances, S&P 500 gained 13% in the 4th quarter. This still remains the “most hated” V-shaped stock rally. As for what we would buy

• MAG7 & Bitcoin & Ethereum
• Industrials
• Financials: Large-cap and regional banks
• Small-caps

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50 SMID Granny Shot Ideas: We performed our quarterly rebalance on 8/17. Full stock list here -> Click here

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Key Incoming Data November:

• 11/3 9:45 AM ET: Oct F S&P Global Manufacturing PMI
• 11/3 10:00 AM ET: Oct ISM Manufacturing PMI
• 11/4 8:30 AM ET: Sep Trade Balance
• 11/4 10:00 AM ET: Sep F Durable Goods Orders MoM
• 11/4 10:00 AM ET: Sep JOLTS Job Openings
• 11/5 9:45 AM ET: Oct F S&P Global Services PMI
• 11/5 10:00 AM ET: Oct ISM Services PMI
• 11/6 8:30 AM ET: 3Q P Unit Labor Costs
• 11/6 8:30 AM ET: 3Q P Nonfarm Productivity QoQ
• 11/7 8:30 AM ET: Oct Non-farm Payrolls
• 11/7 9:00 AM ET: Oct F Manheim Used Vehicle Index
• 11/7 10:00 AM ET: Nov P U. Mich. 1yr Inf Exp
• 11/7 11:00 AM ET: Oct NYFed 1yr Inf Exp
• 11/11 6:00 AM ET: Oct Small Business Optimism Survey
• 11/13 8:30 AM ET: Oct Core CPI MoM
• 11/14 8:30 AM ET: Oct Core PPI MoM
• 11/14 8:30 AM ET: Oct Retail Sales
• 11/17 8:30 AM ET: Nov Empire Manufacturing Survey
• 11/18 10:00 AM ET: Nov NAHB Housing Market Index
• 11/18 4:00 PM ET: Sep Net TIC Flows
• 11/19 9:00 AM ET: Nov M Manheim Used Vehicle Index
• 11/19 2:00 PM ET: Oct FOMC Meeting Minutes
• 11/20 8:30 AM ET: Nov Philly Fed Business Outlook
• 11/20 10:00 AM ET: Oct Existing Home Sales
• 11/20 11:00 AM ET: Nov Kansas City Fed Manufacturing Survey
• 11/21 9:45 AM ET: Nov P S&P Global Services PMI
• 11/21 9:45 AM ET: Nov P S&P Global Manufacturing PMI
• 11/21 10:00 AM ET: Nov F U. Mich. 1yr Inf Exp
• 11/24 8:30 AM ET: Oct Chicago Fed Nat Activity Index
• 11/24 10:30 AM ET: Nov Dallas Fed Manuf. Activity Survey
• 11/25 9:00 AM ET: Sep S&P Cotality CS 20-City MoM SA
• 11/25 10:00 AM ET: Nov Conference Board Consumer Confidence
• 11/25 10:00 AM ET: Nov Richmond Fed Manufacturing Survey
• 11/26 8:30 AM ET: Oct P Durable Goods Orders MoM
• 11/26 8:30 AM ET: 3Q S GDP QoQ
• 11/26 10:00 AM ET: Oct Core PCE MoM
• 11/26 10:00 AM ET: Oct New Home Sales
• 11/26 2:00 PM ET: Fed Releases Beige Book

Key Incoming Data October:

• 10/1 9:45 AM ET: Sep F S&P Global Manufacturing PMI Tame
• 10/1 10:00 AM ET: Sep ISM Manufacturing PMI Tame
• 10/2 10:00 AM ET: Aug F Durable Goods Orders MoM Delayed due to Shutdown
• 10/3 8:30 AM ET: Sep Non-farm Payrolls Delayed due to Shutdown
• 10/3 9:45 AM ET: Sep F S&P Global Services PMI Tame
• 10/3 10:00 AM ET: Sep ISM Services PMI Tame
• 10/7 8:30 AM ET: Aug Trade Balance Delayed due to Shutdown
• 10/7 9:00 AM ET: Sep F Manheim Used Vehicle Index Tame
• 10/7 11:00 AM ET: Sep NYFed 1yr Inf Exp Tame
• 10/8 2:00 PM ET: Sep FOMC Meeting Minutes Mixed
• 10/10 10:00 AM ET: Oct P U. Mich. 1yr Inf Exp Tame
• 10/14 6:00 AM ET: Sep Small Business Optimism Survey Tame
• 10/15 8:30 AM ET: Oct Empire Manufacturing Survey Tame
• 10/15 2:00 PM ET: Fed Releases Beige Book Mixed
• 10/16 8:30 AM ET: Oct Philly Fed Business Outlook Tame
• 10/16 8:30 AM ET: Sep Core PPI MoM Delayed due to Shutdown
• 10/16 8:30 AM ET: Sep Retail Sales Delayed due to Shutdown
• 10/16 10:00 AM ET: Oct NAHB Housing Market Index Tame
• 10/17 9:00 AM ET: Oct M Manheim Used Vehicle Index Tame
• 10/17 4:00 PM ET: Aug Net TIC Flows Delayed due to Shutdown
• 10/23 8:30 AM ET: Sep Chicago Fed Nat Activity Index Delayed due to Shutdown
• 10/23 10:00 AM ET: Sep Existing Home Sales Tame
• 10/23 11:00 AM ET: Oct Kansas City Fed Manufacturing Survey Tame
• 10/24 8:30 AM ET: Sep Core CPI MoM Tame
• 10/24 9:45 AM ET: Oct P S&P Global Services PMI Tame
• 10/24 9:45 AM ET: Oct P S&P Global Manufacturing PMI Tame
• 10/24 10:00 AM ET: Oct F U. Mich. 1yr Inf Exp Tame
• 10/24 10:00 AM ET: Sep New Home Sales Delayed due to Shutdown
• 10/27 8:30 AM ET: Sep P Durable Goods Orders MoM Delayed due to Shutdown
• 10/27 10:30 AM ET: Oct Dallas Fed Manuf. Activity Survey Tame
• 10/28 9:00 AM ET: Aug S&P CS home price 20-City MoM Tame
• 10/28 10:00 AM ET: Oct Conference Board Consumer Confidence Tame
• 10/28 10:00 AM ET: Oct Richmond Fed Manufacturing Survey Tame
• 10/29 2:00 PM ET: Oct FOMC Decision Dovish
• 10/30 8:30 AM ET: 3Q A GDP QoQ Delayed due to Shutdown
• 10/31 8:30 AM ET: 3Q ECI QoQ
• 10/31 8:30 AM ET: Sep Core PCE MoM

Economic Data Performance Tracker 2025:

Economic Data Performance Tracker 2024:

Economic Data Performance Tracker 2023: