Good morning investors,
Today is Veterans Day, a time to honor the men and women whose service and sacrifice have secured the freedoms we often take for granted. As I write about markets and investments from the comfort of my office, I'm very much aware that this opportunity exists because of those who stood watch, fought, and in too many cases gave their lives for the freedom around the world, and I am eternally grateful. To every veteran reading this, and to the families who supported them, thank you. Your courage and dedication made the free lives possible. We owe you a debt that can never be fully repaid.
Opening Bell: Risk-On Returns
Futures trade mixed with Dow futures flat while S&P ($SPY ( ▲ 0.23% )) and Nasdaq ($QQQ ( ▼ 0.32% )) futures dip 0.2% and 0.4% respectively as CoreWeave's disappointing guidance weighs on AI sentiment. The company's 10% premarket plunge after trimming revenue forecasts due to data center delays reminds investors that even red-hot AI demand faces operational realities.
Monday's rally saw the Nasdaq surge 2.3% and S&P 500 gain 1.5% as the Senate passed a funding bill to end the 40-day shutdown. Bitcoin reclaimed $105,000 while gold jumped on Trump's floating of $2,000 stimulus checks or tax breaks. The 10-year Treasury yield rose to 4.12% as risk-on sentiment returned, though bond markets remain closed today for Veterans Day.
SoftBank's $5.8B Nvidia Exit
SoftBank sold its entire 32.1 million share Nvidia stake for $5.83 billion in October, using proceeds to fund its $22.5 billion OpenAI investment. The sale helped Vision Fund post a blowout $19 billion gain, doubling quarterly profit. CFO Goto emphasized this isn't bearish on Nvidia but rather asset monetization to fund aggressive AI investments.
The timing looks smart - taking profits near peaks to redeploy into earlier-stage opportunities. SoftBank needs $30.5 billion this quarter alone, more than it invested over the prior two years combined. With Nvidia up over 200% this year, harvesting gains to fund the next wave makes strategic sense. The stock's 1% premarket dip is noise.
AMD's AI Day Opportunity
AMD hosts its analyst day at 1 p.m. ET, outlining plans for its AI chip business as it challenges Nvidia's dominance. The company's MI400 series launching in 2026 will include complete server racks similar to Nvidia's GB200 NVL72. October's $100 billion OpenAI deal over four years validates AMD as a legitimate alternative.
At 29x forward earnings, Nvidia trades reasonably given its growth. AMD at similar multiples offers diversification within AI infrastructure. The company's data center CPU business already benefits from AI spending while steadily taking share from Intel. Today's presentations could catalyze a rerating if execution roadmaps impress.
Paramount Skydance's Streaming Bet
The newly merged media giant announced $1.5 billion in incremental streaming investments for 2026 while raising cost-cutting targets to $3 billion from $2 billion. Revenue projections of $30 billion in 2026 show confidence despite Q3 revenue missing at $6.7 billion versus $6.97 billion expected.
The strategy mirrors successful streaming pivots elsewhere - invest heavily upfront while cutting legacy costs aggressively. With CBS, Comedy Central, Nickelodeon, and MTV under one roof, Paramount has content depth rivals lack. The stock's Monday surge suggests investors buy the transformation story.
Government Reopening Timeline
The Senate's 60-40 passage sends the funding bill to the House, where votes could begin Wednesday at 4 p.m. ET. The deal funds government through January without extending ACA subsidies but promises a December vote on healthcare. Trump supports the compromise, making signature likely.
Data releases will gradually resume but October's jobs report and inflation data may be permanently compromised. The 40-day blackout leaves the Fed flying partially blind into December's meeting, though private data like Challenger layoffs and ADP payrolls filled some gaps. Markets clearly prefer certainty over perfect information.
Buffett's Final Bow
Warren Buffett announced he'll no longer speak at Berkshire's annual meeting or write the famous shareholder letter after 60 editions, though he'll continue Thanksgiving letters while able. At 95, the Oracle's transition to Greg Abel accelerates with another charitable giving announcement.
His parting wisdom resonates: "Choose your heroes very carefully and then emulate them. You will never be perfect, but you can always be better." Even addressing "the jerks," noting "it's never too late to change." Classic Buffett - mixing investment wisdom with life lessons, reminding us that character compounds like returns.
Final Thought
November's chop continues but the underlying trend remains firmly higher. With 80% of fund managers underperforming and forced to chase into year-end, every dip gets bought. The shutdown ending removes a major overhang while potential stimulus or tax cuts add fuel.
My S&P 500 target of 7,000 by mid-2026 looks increasingly achievable in 2025. Nvidia at 29x forward earnings is cheaper than many consumer staples, hardly bubble territory for a company growing 50%+. Market breadth is improving with small caps and cyclicals ready to play catch-up. Manufacturing data trends toward expansion, signaling a growth bottom.
The AI trade has legs because the spending is real and accelerating. SoftBank selling Nvidia to buy OpenAI isn't bearish, it's capital recycling within the theme. AMD's analyst day could unlock value in the obvious Nvidia alternative. Even struggling media companies like Paramount see streaming AI as salvation.
Stay long quality tech, add small caps on weakness, and use any shutdown resolution rally to position for year-end strength. Fed cuts in 2026 remain my base case, supporting risk assets broadly. November volatility creates opportunity, not danger.
As we honor our veterans today, remember that the freedom to invest, build wealth, and pursue prosperity exists because of their service. That's worth more than any market gain.
As always, feel free to reach out with questions about positioning for the weeks ahead.
Best regards,
Dan Sheehan
This newsletter is for informational purposes only and should not be considered as investment advice. Please consult with your financial advisor about your specific situation.