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Luke Kawa

Investors are worried about the US election, but not enough to flee the stock market

Investors are clearly bracing for the US election to leave a mark on markets.

Jeff Jacobson, equity-derivatives strategist at 22V Research, flagged that options markets are pricing in a 2.6% move for the SPDR S&P 500 Trust for the week, and an even larger 3% swing for the iShares 20+ Year Treasury Bond ETF.

But even so, investors aren’t worried to the point of being paralyzed by inaction or sizing down risk ahead of this event, according to Deutsche Bank.

“Our measure of equity positioning has continued to go sideways modestly above neutral, in contrast to sharp declines into underweight territory heading into the last two elections,” wrote strategists led by Parag Thatte.

DB equity positioning
Source: Deutsche Bank

The S&P 500 also fell less in October than the benchmark normally does ahead of a tight election, they observed. That’s a continuation of a welcome trend that has seen the stock market do much better in 2024 than it has in a typical presidential election year.

DB election year performance
Source: Deutsche Bank

And to repeat one of our favorite quotes: performance is a magnet for assets.

DB equity flows election year
Source: Deutsche Bank

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Luke Kawa

Trump’s “impossible trinity” on AI and energy


Everyone loves a good trilemma.

In economics, the most famous of the genre was developed by Fleming and Mundell, which posits that you can only successfully achieve two of the following three objectives: the free flow of capital, a fixed exchange rate, and independent sovereign monetary policy.

George Pollack, senior US policy analyst at Signum Global Advisors, proposed a trilemma of his own to describe the Trump administration’s competing policy aims as a red-hot AI boom devours power and leaves households miffed by rising electricity bills.

He wrote:

This note flags what we believe to be a simple reality whose salience will continue growing in US politics in coming months: the Trump administration, in its remaining three years will face a trilemma as the nation waits for its energy bet to play out – proving able to achieve two, but not all three, of the following objectives:

-Fulfill AI’s energy-appetite.
-Keep repressing renewable sources of energy.
-Appease American electricity consumers.

Trump AI trilemma

As for evidence that the Trump administration is taking a fossil fuels first approach while stunting renewables, Pollack pointed to the One Big Beautiful Act, which shrinks access to tax credits for green energy, as well as the end to the federal pause on LNG export permits. However, it would be “inaccurate and unfair” to blame Trump’s policies for surging electricity prices in recent months, he added.

While the government has pursued the expansion of nuclear power as a way to solve this trilemma, the long lead times involved are incongruent with a short-term fix.

Palantir reports Q3 earnings results

Palantir climbs toward a fresh record high ahead of earnings report

Traders and Wall Street are waiting to see whether Palantir’s latest numbers after market close today will continue to beat expectations.

Matt Phillips4h
Max Knoblauch

Joby’s UAE reported certification delay stokes fears that air taxis may be further off than thought, sending eVTOL stocks down

Commercial air taxi service may be on a slower path than investors previously thought.

Shares of Joby Aviation fell more than 9% on Monday morning amid a report from The National that the company’s UAE certification will be completed by the third quarter of next year. That’s a significant delay from Joby’s own projected timeline in February, when it said it planned to carry passengers in Dubai in “late 2025 or early 2026.”

Rival Archer Aviation, which also recently suffered a hit to its UAE certification timeline, fell more than 9%. Joby and Archer each are expected to report their earnings results later this week.

Also potentially causing some investor pullback is the planned IPO of Beta Technologies on Tuesday. Beta, a manufacturer of electric aircraft, received a $300 million investment from GE Aerospace in September.

Luke Kawa
5h
Options markets signal “optimism peaks” for Magnificent 7 stocks

“The number of stocks in the S&P top 100 trading with inverted call skew (a sign of extremely bullish sentiment where the OTM call trades at a higher volatility than the ATM call) has surged to a high of ~20% (vs. historical average of just 3%),” per Cboe.

Close-up Of Snow-Dusted Zugspitze Massif Peaks In The Wetterstein Mountains In Tyrol
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Matt Phillips

Micron jumps on report of surging memory chip prices

Micron, the US memory chip specialist, is up more than 4% in early trading Monday after a report that Samsung Electronics was temporarily pausing new pricing on contracts for the latest version of ubiquitous short-term computer memory: Dynamic Random Access Memory, or DRAM. The chip giant wants to see where the market settles after a recent spike in spot prices for memory chips driven by the AI boom.

DRAM and memory chips of all sorts have pricing power because of how much demand is outpacing supply. Last week, South Korean memory chip behemoth SK Hynix said it had already “sold out” all of its 2026 production.

Such signs of ongoing AI-related demand for IT hardware also gave a lift to other data storage device makers, such as Seagate Technology Holdings and Western Digital. The duopoly dominate the hard disk drive market, and have ridden a boom in demand for the affordable data storage devices to gains of more than 200% in 2025.

Exclusive: Samsung delays DDR5 contract pricing to mid-November as spot prices triple

Exclusive: Samsung delays DDR5 contract pricing to mid-November as spot prices triple

DRAM and memory chips of all sorts have pricing power because of how much demand is outpacing supply. Last week, South Korean memory chip behemoth SK Hynix said it had already “sold out” all of its 2026 production.

Such signs of ongoing AI-related demand for IT hardware also gave a lift to other data storage device makers, such as Seagate Technology Holdings and Western Digital. The duopoly dominate the hard disk drive market, and have ridden a boom in demand for the affordable data storage devices to gains of more than 200% in 2025.

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