Big Tech Brings the Heat

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👋 ICYMI

Markets rallied last week to close October on a strong note after a series of solid Big Tech earnings results. Amazon $AMZN ( ▲ 9.58% ) soared ~9% on strong AWS growth, Alphabet $GOOG ( ▼ 0.03% ) posted robust ad revenue, while Meta $META ( ▼ 2.72% ) tumbled ~12% after signaling heavier AI spending, despite posting solid growth figures as well.

🔁 Market Movers

• 📈 Amazon’s Earnings Lift the Rally

  Amazon’s third-quarter beat propelled its shares ~11% higher, helping drive the broader indexes. The strong cloud business (AWS) and AI-related infrastructure growth gave the S&P and Nasdaq fresh lift.

• 🚀 AI Cap-Ex Boom Widens the Rally

  The world’s top tech firms — Amazon, Microsoft, Alphabet Inc., Apple Inc. and Meta Platforms — signalled rapid expansion in AI infrastructure spending. Meta forecast a roughly $71 billion cap-ex for 2025, nearly double 2024. The scale of investment is fueling sector momentum and broadening market participation.

• 🌐 Global Stocks Jump on U.S.–China Trade Optimism

  Signals of a thaw in U.S.–China relations lifted global equities, while the U.S. dollar eased — showing that trade diplomacy remains a major market driver.

• 🤖 Chip/AI Momentum Gains Boost Tech Infrastructure

  Huge upgrades and bullish commentary from key players in the chip/AI infrastructure space (see Nvidia Corporation hitting a $5 trillion market cap) helped lift semiconductor and hardware peers.

👀 Signals I’m Watching

• 📈 Breadth and Earnings Revisions Widen

  FactSet data shows 70% of S&P 500 companies beat Q3 estimates, and analysts have raised 2025 EPS forecasts by ~5% YTD — breadth is finally catching up to mega-cap momentum.

• 💳 Consumer Credit Growth Slows Sharply

  Total U.S. consumer credit rose only ~$0.36 billion in August — the smallest monthly gain in six months — driven by flat credit-card activity and slower non-revolving borrowing. 

  Why it matters: Slowing credit growth may signal consumers growing cautious ahead of the holiday season — a check on the growth narrative.

• 🌐 Global Trade Momentum Flags a Shift

  According to the World Trade Organization, world merchandise trade volume growth in 2025 is expected at ~2.4%, and cautions that the front-loaded boost from tariff anticipation is fading into a slower pattern. 

  Slowing trade often precedes earnings and growth hits—if the global backdrop weakens, even strong U.S. equity momentum could face headwinds.

⚠️ Red Flag to Note

Positioning has turned euphoric: equity exposure and call-option volume are at their highest since 2021. Yet, with the government shutdown halting key data releases, investors are rallying without confirmation. When markets stretch this far with no fresh inflation or jobs data to anchor expectations, even a small surprise could spark an outsized correction.

🔍 Insider Transactions I’m Watching

→✨NEW ✨ My framework for reading insider moves — when buy signals outweigh noise (and when they don’t)

🚀IPO Watch

🗓️Upcoming Offerings

• 🧠 Exzeo Group ($XZO) — AI-driven data-analytics software provider serving insurance and risk-modeling markets. Targeting $168M raise at a $367M valuation.

• 🧬 BillionToOne ($BLLN) — Precision-genomics company offering blood-testing solutions for cancer and prenatal diagnostics; seeking $200M at a $2.3B valuation.

• 💊 Evommune ($EVMN) — Clinical-stage biotech developing therapies for inflammatory and autoimmune diseases; looking to raise roughly $150M.

📬 Closing Note

Look for companies that can expand margins and earnings under multiple scenarios. The best signals are often quiet — until they compound.

Until next Sunday —

George