Inside Markets

The rotation out of the momentum factor and AI themes picked up yesterday on reports that ChatGPT’s VP for Science misrepresented the model’s capabilities in solving complex math problems.

Oracle’s pullback following last week’s analyst meeting could signal market doubt around AI capex ROI or the usual profit taking/de-risking that occurs before a known catalyst (Friday’s CPI report).

The SPX may be nearing the end of the consolidation phase we flagged on October 7.

Maybe it goes without saying that this is an extremely dynamic market environment with tail risk on both sides of the distribution.

Long equity positioning across discretionary investor groups is just slightly above neutral, while positioning in the systematic community (CTAs/vol-targeting) looks nearly full.

Our bullish fundamental outlook requires more US macro resilience, positive Q3 earnings growth and trade war de-escalation.

A building backlog of government data could present a potential near-term risk for equity markets as the shutdown-induced calm could abruptly end once the data is released.

The SPX has extended into technical resistance in the 6725-6805 zone ahead of Q3 earnings season.

The SPX has extended into technical channel resistance in the 6725-6805 zone and will likely consolidate gains in the information vacuum preceding Q3 earnings season.

Reports about a potential AI bubble aren’t surprising, given that high private company valuations and performance concentration in public markets were also present in late ’99-early 2000.