The question… about SPX price behavior (including high, low, open and close) as well as its option daily contracts (both calls and puts) statistics. the objective is to find out a pattern on options contracts volumes to predict when is there going to be 5% or more drawdown on SPX.
–Abraham
The growth of 0DTE options is skewing total market volumes to the shortest terms. This is causing traditional use of Put/Call ratio as a sentiment indicator to be less effective.
While implied volatility is not a directional indicator, it does show when demand for options is growing. This allows us to used implied volatility as an indicator for future expectations of big moves. The VIX index is based on SPX options that expire on Friday’s between 23 and 37 days into the future. The goal is to get a 30 day expectation from market participants.
Earnings
BIDU 11/18 BMO
DIS 11/13 BMO
MU 12/15 est
NVDA 11/29 AMC
O 11/03 AMC
PLTR 11/03 AMC
TGT 11/19 BMO
UAA 11/06 BMO
WMT 11/20 BMO
https://www.briefing.com/the-big-picture
The Big Picture
Another rate cut in December would be absurd
Briefing.com Summary:
*A December rate cut isn’t a foregone conclusion, but the market still expects one.
*By one measure, financial conditions are as easy today as they were in 1998 and 2020.
*The Fed should not be cutting rates again at its December meeting.
In the Market View we published September 25, we shared our house view that two rate cuts before year-end is at least one too many. Well, the Fed cut rates at its October meeting, so that leaves just the December FOMC meeting before year-end, which means our house view now is that one more rate cut before year-end is one too many.
It sounds like the Fed may be having second thoughts about cutting rates again in December, too. Fed Chair Powell said it is not a foregone conclusion, “far from it,” as there were strongly differing views at the October meeting about how to proceed in December.
The fed funds futures market looks less conflicted. Notwithstanding the acknowledgement by Fed Chair Powell, the CME FedWatch Tool shows a 65.0% probability of a 25-basis-point cut in the target range for the fed funds rate to 3.50% to 3.75%. That is down from just over 90% a week ago, but it is far from a white-flag raising after the Fed Chair’s remark.
The market, from our vantage point, looks self-serving.
A Step Back in Time
Why would the Fed cut rates? Before we answer that, we are going to take you back to The Big Picture column we published in November 2021: An absurd monetary policy position is a risk we should all see coming.
The gist of that column is that it made no sense for the Fed to be at the zero bound and still embracing quantitative easing with the inflation rate at 6.2%, an economy averaging 5.0% real GDP growth, and the unemployment rate at 4.6%. It was the same policy position the Fed embraced in the throes of the Covid pandemic when the inflation rate stood at 0.2%, real GDP was negative 31.2%, and the unemployment rate was close to 13.0%.
In other words, we were imploring the Fed to raise rates and end quantitative easing. We called its ultra-accommodative position an absurd policy position and said it was a risk we should all see coming. Well, CPI inflation eventually peaked at 9.0% in June 2022, and the Fed raced to catch up with a series of rate hikes over the course of 2022, upending stocks and bonds in the process.
Nearly one-third of S&P 500 components saw a decline of at least 25% that year, as the S&P 500 in aggregate declined 19.4%. As an aside, Warren Buffett’s Berkshire Hathaway (BRK.B), the same one currently sitting on over $340 billion in cash and cash equivalents, increased 3.3% in 2022.
We digress. But now we are back. The situation today is different but risks being the same.
Briefing.com Analyst Insight
CPI inflation is 3.0% year-over-year. Real GDP growth was 3.8% in the second quarter and is projected to be 3.9% for the third quarter, per the Atlanta Fed GDPNow model. The unemployment rate, at the last check before the government shutdown, was 4.3%.
For added measure, the AI investment cycle is booming, the stock market has raced to record highs, led by the mega-cap stocks but energized by the meme stocks, and junk bond spreads are about as tight as they have been in the last 30 years. Simply put, financial conditions are easy.
The Chicago Fed’s National Financial Conditions Index (NFCI), which provides a weekly update on U.S. financial conditions in money markets, debt and equity markets, and the traditional and “shadow” banking systems, supports the latter claim.
Positive values have been historically associated with tighter-than-average financial conditions, while negative values have been historically associated with looser-than-average financial conditions. The NFCI sits at -0.55 as of the week ending October 24, the same as it did in the week ending June 26, 1998, and the week ending November 20, 2020.
Fed Chair Powell also said at his press conference that he believes monetary policy is “modestly restrictive,” shortly before adding that he doesn’t see anything in the available data today that indicates the economy is seeing a significant deterioration. In his view, we are seeing a gradual cooling in the labor market and not much more than that.
The Fed, however, cut rates in September and again in October this year, citing its concerns about downside risks to the labor market. Some Fed officials are sounding a bit more circumspect about cutting rates again in December, but not all of them are.
We know which side the stock market is on, which presumably leaves us offside with our view that the Fed should not cut rates again in December. Financial conditions are easy, and the Fed would be making them more so with another rate cut at this juncture.
That would be absurd. Not as absurd as sticking at the zero bound and continuing with QE in November 2021, but in the zone of foolhardy with inflation well above target, animal spirits stirring in the stock market, quantitative tightening ending, stimulative tax policies in force, and GDP growth still above potential.
That sounds like a backdrop better suited for a rate hike than a rate cut. We know a rate hike isn’t going to happen, but neither should a rate cut.
—Patrick J. O’Hare, Briefing.com
Where will our markets end this week?
Higher
DJIA – Bullish
SPX – Bullish
COMP – Bullish
Where Will the SPX end November 2025?
11-03-2025 +2.0%
10-27-2025 +2.0%
Earnings:
Mon: CLX, DENN, HIMS, JELD, PLTR, O
Tues: ADT, BP, RACE, HOG, HTZ, TAP, MAR, PFE, SHOP, UBER, YUM, MOS, RIVN, SWKS, STUB, SMCI
Wed: CNK, MCD, OC, ALL, AMC, CF, DVN, LZ, VAC, MUR, QCOM, HOOD, JCI
Thur: GOOS, CMI, H, PZZA, RL, TPR, ABNB, AKAM, DKNG, HTZ, PTON, UAA, XYZ
Fri: DUK, FLR, WEN
Econ Reports:
Mon: Construction Spending, ISM & PMI Manufacturing,
Tue Trade Balance, Factory Orders, JOLTS
Wed: MBA, ADP Employment, ISM & PMI Services & Composite,
Thur: Initial Claims, Continuing Claims, Wholesale Inventories, Productivity, Unit Labor Costs,
Fri: Average Workweek, Non-Farm Payrolls, Private Payrolls, Unemployment Rate, Hourly Earnings, Michigan Sentiment, Consumer Credit
How am I looking to trade?
Time to start protecting for earnings
www.myhurleyinvestment.com = Blogsite
info@hurleyinvestments.com = Email
Questions???
https://sherwood.news/markets/options-markets-signal-optimism-peaks-for-magnificent-7-stocks/
Trump cuts fentanyl tariffs on China to 10% as Beijing delays latest rare earths curbs by a year
Published Thu, Oct 30 202512:53 AM EDTUpdated 5 Hours Ago
Kevin Breuninger@KevinWilliamB
Anniek Bao@in/anniek-bao-460a48107/@anniekbyx
Evelyn Cheng@in/evelyn-cheng-53b23624@chengevelyn
Key Points
- U.S. President Donald Trump said he has reached a one-year agreement with China on rare earths supplies.
- Trump also cut fentanyl-linked tariffs on Beijing by half, taking overall duties on Chinese goods down to 47%.
- The American leader said he will be going to China in April, followed by Xi’s trip to the U.S.
- China’s Commerce Ministry said U.S. will postpone measures that blacklisted majority-owned subsidiaries of Chinese companies on the U.S. entity list.
President Donald Trump and Chinese President Xi Jinping emerged from a high-stakes meeting touting agreements on tariffs and export controls that amount to a tangible de-escalation of the contentious trade war between the two superpowers.
But many details about what was achieved remain unclear, while other key sticking points in the U.S.-China trade relationship appear not to have come up at all. The overall U.S. tariff rate on Chinese imports, meanwhile, will stay at a historically high level.
The agreements struck during the meeting in Busan, South Korea, do not amount to a comprehensive trade deal — though Trump claimed after the meeting that one would be ready to sign “pretty soon.”
He nevertheless hailed the summit with Xi as “amazing,” and rated it a 12 out of 10.
It was the two leaders’ first face-to-face meeting in six years. They spoke for one hour and 40 minutes.
Tariffs, fentanyl, rare earths and soybeans
The top-line outcomes include an agreement by the U.S. to immediately cut fentanyl-related tariffs on China in half, to 10% from 20%.
Trump told reporters on Air Force One after the meeting that he believes Xi is “going to work very hard to stop the flow” of the addictive opioid fentanyl and its precursor chemicals into the U.S. China has repeatedly promised to reduce fentanyl trafficking to the U.S., but has been accused by experts of not following through.
Trump did not provide additional details. A Chinese Commerce Ministry spokesperson said in a translated statement that “both sides reached consensus on issues such as cooperation in fentanyl control,” without elaborating.
Trump said the overall tariff rate on Chinese goods will fall to 47% from 57%.
The tariff cut addresses “a key Chinese grievance,” said Han Shen Lin, China director at advisory firm The Asia Group, showing that “Beijing’s efforts to curb exports of fentanyl precursors, long unrecognized by Washington, are finally being acknowledged.”
Trump and Beijing also confirmed that China agreed to pause recently announced export controls on its valuable rare earths minerals for one year.
Those controls were announced on Oct. 9, prompting a furious reply from Trump, who threatened to hike tariffs on China by 100% starting Saturday.
The U.S. is dropping that tariff threat, Trump confirmed on Air Force One. He added that he believes that the one-year postponement of the Chinese export controls will be “routinely extended.”
But the Chinese Commerce Ministry’s statement says only that Beijing will suspend the measures for a year, and then “study and refine specific plans.”
China also made no mention of other export control measures it had imposed earlier in the year, which remain in place.
Chinese companies control the majority of the global supply chain for rare earths, which are critical for producing a range of products from semiconductors to missiles. Beijing has ramped up restrictions on exports of critical minerals over the last two years, with a particular focus on limiting their use for military purposes by other countries.
“China’s leverage in rare earths and critical minerals processing will continue to surface episodically, effectively capping any escalation in bilateral tensions,” Louise Loo, head of Asia economics at Oxford Economics, said in a note Thursday.
Trump also said “tremendous amounts” of U.S. soybeans and other farm products will be purchased by China “starting immediately.”
China has been the top buyer of U.S. soybeans. Earlier this year it halted all purchases of the staple crop for months amid the tit-for-tat tariff war, costing American farmers billions of dollars in lost revenue.
Ahead of the Trump-Xi summit, China-owned COFCO bought three U.S. soybean cargoes for December and January shipment, equating to about 180,000 metric tons of product — though experts note that is a fraction of prior years’ purchases during the autumn harvest. By comparison, in October 2024 China bought nearly 6 million tons of U.S. soybeans, according to USDA data. For all of 2024, China purchased nearly 27 million tons.
Soybeans are not specifically mentioned in the Chinese Commerce Ministry’s statement, though it says both sides reached consensus on “expanding agricultural trade.”
U.S. tariff investigations on China’s maritime and shipbuilding industries, and Beijing’s countermeasures, will also be delayed for one year, the Chinese government said after the meeting.
Trump said he will be going to China in April, followed by Xi’s trip to the U.S., without specifying a timeline for his Chinese counterpart.
Left unclear: Nvidia chips, TikTok, Russian oil, Taiwan
Multiple key issues went unaddressed in the meeting, Trump said.
On the sale of Nvidia’s chips to China, Trump said the two sides had discussed “a lot of chips,” but not the most advanced Blackwell chips. “They are going to be talking to Nvidia and others about taking chips,” he said.
Taiwan was not part of the discussion, Trump said.
The two leaders also avoided the subject of Chinese purchasing of Russian oil, a financial lifeline to the Kremlin as it continues to wage war in Ukraine.
“Ukraine came up very strongly,” Trump said, but “we didn’t really discuss the oil.”′
Trump also gave no hint that he and Xi had struck a deal to keep the popular social media app TikTok from going dark in the U.S.
China’s government said it would “work with the U.S. to properly resolve issues related to TikTok.”
Global stocks were lower and gold prices rose 1.2% as investors assessed the ramifications of the trade truce, which comes after several months of economic confrontation.
While the trade truce is “welcome news,” any indication of addressing underlying structural matters of concern is missing — such as China’s industrial excess capacity and nonmarket economy practices — said Wendy Cutler, senior vice president at Asia Society Policy Institute.
That means that the truce is “fragile and tensions are certain to heat up again,” Cutler added.
‘Partners and friends’
Before the meeting, the two leaders struck a conciliatory tone, with Trump calling Xi “an old friend” with whom he has a “very good relationship,” and Xi stressing that China’s economic growth ambitions would not undermine Trump’s vision to “Make America Great Again.”
Tensions between the world’s two economic superpowers have been on a boil this year. The latest escalation came this month, with Beijing export controls and Washington threatening to ban software-powered exports to China.
The U.S. had in recent days shared details about deals it hoped to achieve with China – from restricting the flow of fentanyl to the U.S. to TikTok’s divestiture from its Beijing-based parent ByteDance. Tariffs, tech curbs and rare earths were also on the table for discussion.
Heading into the meeting, Xi shook hands with Trump at the photo-op at Gimhae Air Base in Busan, urging that Washington and Beijing be “friends and partners” in his opening remarks.
Sitting across the table from Trump, the Chinese leader said that it was a “great pleasure” to meet the U.S. president for the sixth time, adding that it was only “normal” for the two economic superpowers to have “frictions now and then.”
“China’s development goes hand in hand with your vision to Make America Great Again,” Xi said, according to a readout by the Chinese Foreign Ministry.
That conciliatory tone marked a notable shift from Xi’s meeting with the former U.S. President Joe Biden late last year, during which the speech highlighted more “inevitable competition” between the two countries, said Yue Su, principal economist at The Economist Intelligence Unit.
While the agreement still lacks a “strong structural foundation” and could easily be reversed, both sides are likely to stick with it in the near term to signal goodwill, Su added.
— CNBC’s Sam Meredith contributed to this report.
Here are the five key takeaways from the Fed meeting and Powell news conference
Published Wed, Oct 29 20255:48 PM EDT
Jeff Cox@jeff.cox.7528@JeffCoxCNBCcom
The Federal Reserve meeting that wrapped up Wednesday both delivered on expectations and offered a few surprises. Here are five key takeaways:
- The Federal Open Market Committee, as expected, delivered its quarter percentage point rate cut, but not without some backstage intrigue that included two dissenting votes— one in each direction. While Governor Stephen Miran delivered a widely anticipated “no” vote because he preferred a half-point reduction, Kansas City Fed President Jeffrey Schmid wanted no cut, speaking for what is an apparently growing group of inflation hawks who are worried about the Fed’s easing bias.
- Using uncharacteristically strong language, Chair Jerome Powellpushed back hard on another cut in December for which markets had been assigning about a 90% probability of happening. “In the committee’s discussions at this meeting, there were strongly differing views about how to proceed in December,” Powell said during his news conference. “A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it.” He went on to note there were “strongly different views” expressed by the 19 meeting participants and noted that the tone would be reflected in the meeting minutes, released in three weeks.
- Markets knew the end of QT was coming, but just weren’t set on when. The committee laid that to rest and said quantitative tightening, or allowing assets to roll off the Fed’s $6.6 trillion balance sheet, would end after the November operations. While Powell doused talk of a December cut, ending QT then could have a similar impact. At the same time, the committee indicated it would be reinvesting maturing mortgage notes in short-term bills, which Powell said will tilt the balance sheet to shorter duration with an even stronger lean toward Treasurys.
- On the question of inflation, Powell gave indications that it is drifting back towards the Fed’s 2% goal but remains elevated — around 2.8% by the Fed’s preferred measure. Tariffs are providing a boost to that number in the half percentage point range, but Powell said the view continues to be that the impact from the levies will be temporary. The inflation forecast for October is significant in that the Commerce Department will not be releasing an official number on the personal consumption expenditures price index due to the government shutdown.
- Powell gave a nod towards the uncertainty from the shutdown, but said the lack of public data likely doesn’t change the economic picture, one of moderating growth, rising unemployment and “somewhat elevated” inflation. “Although some important federal government data have been delayed due to the shutdown, the public and private sector data that have remained available suggests that the outlook for employment and inflation has not changed much since our meeting in September,” he said.
What they’re saying:
“He kind of did a WWE slam on those expectations of a December rate cut. [The door is] not completely closed, I guess, but it was expected to be a foregone conclusion. And he came out pretty vociferously and said, ‘Nope, better not think about it that way.’” — Dan North, senior economist at Allianz
“So, regardless of the use of alternative data sources the Fed can draw on, we believe there is an increased chance that December’s meeting may skip a cut, which would push off further accommodative rate moves into the new year, and potentially to a new Chair.” — Rick Rieder, head of fixed income at BlackRock and finalist for Powell’s job when his term as chair expires in May
“He tried to say it is not a foregone conclusion, but a December rate cut still seems likely. No Fed leader wants to be responsible for a slowdown or a recession.” — Heather Long, chief economist at Navy Federal Credit Union
Apple sees big December quarter driven by strong iPhone 17 demand
Published Thu, Oct 30 202512:00 PM EDTUpdated 6 Hours Ago
Key Points
- Apple reported fiscal-fourth quarter earnings on Thursday that beat analyst expectations, and provided a strong forecast for the company’s December quarter.
- CEO Tim Cook told CNBC that the current quarter, which ends in December, would see total company revenue grow 10% to 12% on a year-over-year basis.
- Cook said that Apple was confident in its guidance because of the strong reception for the company’s new iPhone 17 devices, released in September, which he said was “off the chart.”
Apple reported fiscal-fourth quarter earnings on Thursday that beat analyst expectations, and provided a strong forecast for the company’s December quarter.
Shares of the iPhone maker rose in extended trading.
Here’s how Apple did versus LSEG consensus estimates for the quarter ending Sept. 27:
- EPS: $1.85 vs. $1.77 estimated
- Revenue: $102.47 billion vs. $102.24 billion estimated
Here’s how Apple’s main business lines did versus consensus estimates:
- iPhone revenue: $49.03 billion vs. $50.19 billion estimated
- Mac revenue: $8.73 billion vs. $8.59 billion estimated
- iPad revenue: $6.95 billion vs. $6.98 billion estimated
- Other Products revenue: $9.01 billion vs. $8.49 billion estimated
- Services revenue: $28.75 billion vs. $28.17 billion estimated
Apple CEO Tim Cook told CNBC’s Steve Kovach that revenue in the current quarter will increase by at least 10%.
“We expect total company revenue to grow by 10 to 12% year over year, we expect iPhone revenue to grow double digits, year over year, and we expect that that would make the December quarter the best ever in the history of the company,” Cook said.
Analysts polled by LSEG expect Apple to guide to $132.31 billion in December quarter sales and earnings of $2.53 per share. Apple’s guide surpasses those expectations. With 11% growth over last year’s December quarter, revenue for the upcoming period would be $137.97 billion.
Cook said that Apple was confident in its guidance because of the strong reception for the company’s new iPhone 17 devices, released in September, which he said was “off the chart.”
“We look at the results to date, the reception of the consumer on the very strong iPhone lineup,” Cook said. “We’re looking at traffic in our stores, which is up significantly year on year. We see enthusiasm around the world.”
The company had $27.46 billion in net income during the quarter versus $14.29 billion in the year-ago period, which was lower because of a one-time tax charge.
For Apple’s fiscal 2025, it had $416 billion in total revenue, a 6% increase over 2024. Sales in the September quarter rose 8% on an annual basis.
Overall iPhone revenue was up 6% to $49.03 billion, the first sign of how iPhone 17 sales are faring. Apple’s newest phones went on sale on Sept. 19, so there is just over a week of sales in this quarter.
However, LSEG analysts were looking for $50.19 billion in iPhone sales for the period.
Cook said that several iPhone models were supply constrained during the quarter — both for the iPhone 17 and last year’s iPhone 16 models.
“Currently, we’re supply constrained on several models of the iPhone 17,” Cook said.
Apple’s iPad business was also flat during the quarter, with $6.95 billion in sales. Apple didn’t release a new model during the quarter, but it introduced an upgraded iPad Pro with an updated M5 chip in October.
The company’s services business, which includes online subscriptions such as iCloud, Apple Music, as well as App Store fees, Google search licensing, payment fees, and AppleCare warranties for hardware, grew 15% to $24.97 billion in sales. The unit is Apple’s fastest-growing and important for investors because it represents recurring revenue with a higher profit margin than hardware.
Cook said that most of the components in the Services business were seeing accelerating growth.
“It was a run of the table,” Cook said. Apple CFO Kevan Parekh said on an earnings call with analysts that Apple expects similar Services growth in the current quarter.
Other Products, a category that includes Apple Watch, AirPods and Vision Pro, declined very slightly during the quarter with sales of $9.04 billion.
Apple’s Mac business showed strong 13% growth to $8.72 billion in sales. Cook attributed the growth to strong sales of the company’s MacBook Air laptop, which were refreshed in March alongside a $100 price cut, lowering its starting price to $999.
The company’s sales in Greater China, which includes Hong Kong and Taiwan, fell 4% on an annual basis to $14.5 billion in sales.
“We expect China to return to growth this quarter because of the reception of the iPhone there, or the iPhone 17 family,” Cook said.
Cook said that the company still plans to release an updated version of Siri next year, and said that there were more forthcoming partnerships like the company’s agreement to integrate OpenAI’s ChatGPT into Apple Intelligence.
“Our intention is to integrate with more people over time,” Cook said.
Cook said that Apple had not changed its prices in response to Trump administration tariffs. Parekh said the company incurred $1.1 billion in additional costs related to tariffs during the September quarter. He said Apple expects $1.4 billion in tariff costs on an earnings call with analysts in the December quarter, and that the company’s gross margin would be between 47% and 48%.
“We held the pricing that we would have done without any tariffs, and we’re just absorbing the tariffs in gross margin,” Cook said. Apple’s gross margin was 47.2%, better than LSEG expectations of 46.4%.
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