Investor letter, for the week of 11/2/25

Hello investors, I just wanted to give a thanks to the investment club and here is the pre-market weekly newsletter.

Stocks opened November on a positive note, with all three major U.S. indexes showing small gains after a strong October. Investors are encouraged by steady earnings from large technology companies and optimism that the Federal Reserve will keep interest rates stable for the time being. However, there’s still caution in the market as valuations remain high and most of the recent strength has come from just a handful of big tech names. While the broader economy continues to show mixed signals, traders seem willing to stay optimistic as long as corporate profits hold up and inflation keeps cooling.

What's driving markets?

1. Earnings momentum: Investors are chasing large-cap companies that are pulling much of the country's firepower. Investors splurge to show growth instead of hype right now.

2. The Fed's monetary policy has softened on cutting rates. Investors are waiting to see what happens.

3. Geopolitics include: a weaker-than-ideal data backdrop, a strong U.S. dollar (which puts pressure on global growth & emerging markets), and concentrated risk in a few mega‐cap stocks.

Key Risks and themes to watch:

The forward P/E on the S&P is quite high relative to historical norms, which means less margin for error.

Concentration risk: A small number of companies are driving a large portion of market gains. If any of those stumble, the broader market could feel it quickly.

• Base case: Markets are likely to continue grinding higher in the near term, supported by earnings and AI/tech momentum, provided there are no major shocks.

• Cautious note: Because of elevated valuations and risks, this isn’t a “free ride” - expect higher volatility.

• What could derail the rally: disappointing earnings from tech/AI, a bearish surprise from the Fed, or a global growth shock.

• 
  People yelling to buy in the 1980s

• Hand gestures to trade.

• Index Moves Today

• S&P 500 (SPY): up about +0.36%

  • Nasdaq-heavy QQQ: up about +0.53%

  • Dow Jones (DJI): up about +0.18%

  Stocks to Watch:

• JPMorgan Chase & Co. (JPM) is showing strength and setting up a potential buy point.

• Eli Lilly and Company (LLY) released strong earnings and is gaining momentum.

• MongoDB, Inc. (MDB) has broken out recently, benefiting from AI tailwinds.

• Amazon.com, Inc. (AMZN) big catalyst stock from recent earnings; watchers expect further upside.

• All other larger caps, AI companies: Palantir, Google, Apple, etc.

Overall Market Sentiment;

Market equities lean cautiously bullish. Investors are focused on AI and technology as long-term growth drivers, but most recognize that the market’s strength depends heavily on a few mega caps. Earnings season has been better than feared, yet with valuations stretched, the next few months could bring more selective buying rather than broad rallies.

𝒩𝒶𝓁𝒾𝓃 𝑀𝒶𝓁𝒽𝑜𝓉𝓇𝒶,

𝒱𝒾𝒸𝑒 𝒫𝓇𝑒𝓈𝒾𝒹𝑒𝓃𝓉, 𝐼𝓃𝓋𝑒𝓈𝓉𝓂𝑒𝓃𝓉 𝒞𝓁𝓊𝒷 $$