More Market Observations
This morning the S&P futures are flat and the Nasdaq futures are -150 handles (up considerably from the evening lows).
While investors embraced the Mag 7, as noted and expected below, component tech (memory and chips) fell dramatically.
I suspect the return back to Mag 7 will be limited (going forward) and memory/chips will continue to underperform — leaving the Nasdaq to struggle absolutely and relative to the S&P Index.
I wanted to repost my Market Observation column from yesterday:
Market Observation
As it relates to heavily weighted large-cap technology, the election will likely delay the construction of data centers.
This means an entire portion of large cap (the “component” companies like Broadcom (AVGO), Nvidia (NVDA), Micron (MU), Advanced Micro Devices (AMD), Intel (INTC), Sandisk (SNDK), etc.) all face an increasingly uncertain sales and profit outlook. (Peripheral AI/data center “plays” like GEV, CAT et al will likely suffer, too). The neoclouds (like Coreweave CRWV) have even more serious problems ahead.
These memory and chip stocks represent a meaningful portion of the QQQs.
This is an abrupt development and with so many long the newly vulnerable areas a more pronounced period of underperformance may occur over the next few weeks.
Ergo, the Nasdaq may lose its leadership role that it has had for a decade.
Positions: None.
BY Doug Kass · Nov 4, 2026, 9:31 AM EST
Position: Short SPY (S)
