Good morning,

Wall Street is debating whether this holiday season will deliver the usual year-end rally in stocks… or something closer to a lump of coal.

That’s the top line, but there’s plenty of news breaking beyond multiples and valuations.

Elon Musk managed to knock 2% off Netflix with a single post, Ford is bracing for an EV sales cliff now that rebates have expired, and Amazon is coming for the budget grocery aisle with 1,000+ items under $5.

Meanwhile, ADP data shows the biggest private payroll drop in two and a half years — not the best stat to lean on as the shutdown keeps official numbers off the board.

But the big story this morning is gold.

Bullion is rewriting history textbooks with a record-breaking 50% gain this year, ETFs are seeing their strongest inflows in three years, and the Treasury’s gold stash just crossed the $1 trillion mark.

Add in supply squeezes lifting copper and silver headlines of their own, and the metals trade is officially on fire.

Plenty of reasons for markets to stay twitchy as Q4 kicks in. Let’s dig in.

P.S. I get a lot of messages asking for more investment ideas. So for today’s quiz, I’m leaving an open question: What would make IO an even better, more actionable newsletter for you?

Quote of the day 

Five things to know before opening bell

🛢️ Crude slips on supply fears

Oil has dropped every day this week as forecasts of excess supply pile up. OPEC+ looks set to open the taps sooner than expected, while US stockpiles climbed to 1.79 million barrels last week. Gasoline demand also hit a six-month low. “Any added barrels to global supply will be taken as a major negative by traders,”said BOK Financial’s Dennis Kissler.

📉 Musk tweet sends Netflix lower

“Cancel Netflix for the health of your kids.” With that one post on X, Elon Musk sent NFLX shares down more than 2%. Musk took aim at a series director’s comments and the themes of an anime show, amplifying posts that accused the platform of “pushing pro-transgender on children.” 

🚗 Ford buckled up for EV demand cliff

EV demand gave Ford a strong Q3, but CEO Jim Farley is warning of a cliff ahead now that $7,500 tax credits have expired. Without the subsidy, he said the share of EV sales tumble from 10–12% to just 5%. Farley added that consumers aren’t willing to pay a $30,000 premium for a $50,000 SUV, but they’ll buy a $30,000 EV if it saves them $2,000 a year on gas.

🛒 Amazon goes bargain hunting

Amazon is taking another swing at groceries... this time at the budget end. Its new “Amazon Grocery” label will roll out more than 1,000 products priced at $5 or less, consolidating the Happy Belly and Amazon Fresh brands. VP Jason Buechel says it will help customers “stretch their grocery budgets further.” 

₿ Crypto rebound or head fake?

Bitcoin has ripped back from September’s slump, closing above $118,000 midweek, up 4% on the day and nearly 8% since the weekend. Analysts call it a textbook “September Effect” reversal, with Glassnode’s founders pointing to a “major bottom confirmation” and urging patience: “The biggest move is ahead.”

🎄 Will this holiday season be different?

We’re coming off a third quarter that ended with the three major stock indexes near or well above double-digit year-to-date percentage gains. 

Historically, the fourth quarter is great for stocks, with holiday spending giving earnings a lift. But some analysts think this year could be the exception…

🔀 Diverging forecasts

Fears of a bubble grow with each new S&P 500 record, but seasonal trends suggest the current rally could last through the end of the year.

For starters, September is typically the worst-performing month of the year but was the fifth-straight month of gains for the big three indexes. 

If history is any guide, that's bullish:

• S&P 500 gains during Q1-Q3 have preceded a bullish Q4 nearly 9 out of 10 times over the past three-quarters of a century
• The odds are historically even higher when the mega-cap index broke new records in September, as it did this year
• After finishing last month 3.5% higher than August’s close, the S&P 500 opened October 14% higher than at the start of the year
• The final quarter has, on average dating back to 1928, wrapped up with 2.9% gains for the S&P 500

LPL chief strategist Adam Turnquist thinks the outlook is positive for 2025.

“Earnings momentum, a good enough economy, the resumption of the rate-cutting cycle, and continued signs of runway for the AI secular growth theme have been the primary catalysts supporting stocks,” he said.

But then you have those like Omega Family Office CEO Leon Cooperman, who recently channeled the Oracle of Omaha in describing the ongoing groundswell of Wall Street investment.

“Once a bull market gets underway, and once you reach the point where everybody has made money no matter what system he or she followed, a crowd is attracted into the game that is responding not to interest rates and profits but simply to the fact that it seems a mistake to be out of stocks," Warren Buffett warned more than a century ago. 

Cooperman declared that this is “what’s going on now” with valuations “ridiculously high” across the massively influential AI sector. 

🏦 Wall Street strikes a balance

Most of the major financial institutions are still forecasting a strong year-end S&P 500 target, but there is some nuance in the latest batch of outlooks.

Analysts at Bank of America cited the final quarter’s “most wonderful time of the year for stocks” status as reason for optimism but noted that it’s actually the final few weeks that make all the difference. 

Since the majority of Q4 gains are “dependent on December outperformance and some sector rotation,” it’s anybody’s guess how the economic variables at play right now will impact the final month of the year. 

BofA sees most sectors headed higher this quarter, with energy and real estate as the main exceptions.

Goldman Sachs adds that a potential "Santa Claus rally" (thanks to holiday bonuses and seasonal optimism) makes it worth buying dips in stocks through year-end.

📊 Private data rules October

Heading into an uncertain October, investors are hungry for data. But now that the government is shut down, some of the expected reports won’t arrive on schedule. 

That leaves analysts leaning on private sources, starting with yesterday’s jobs data from HR giant ADP.

❄️ More signs of a slowdown

With Washington in pause mode, we’re missing some key government numbers. But ADP’s report still offered a snapshot of labor trends. 

September payrolls saw the steepest single-month drop in two and a half years:

• Private companies shed a seasonally adjusted 32,000 jobs

• August totals revised from +54,000 to -3,000

• Economists had expected a 45,000 gain

“Despite the strong economic growth we saw in the second quarter, this month’s release further validates what we’ve been seeing in the labor market, that US employers have been cautious with hiring,” said DP chief economist Nela Richardson.

Without weekly jobless numbers or tomorrow’s nonfarm payrolls, ADP’s data carries extra weight for investors, economists, and central bankers plotting their next moves.

🔍 An insatiable quest for data

Economic forecasts are only as good as the stats behind them. That’s why Fed chair Jerome Powell emphasizes the “totality” of economic data when setting policy.

Oxford Economics’ chief U.S. economist Ryan Sweet notes the shutdown is making that harder.

“The Fed is always setting monetary policy in a data fog, but then it just thickens when you’re not getting the employment numbers,” he said.

Private data is also in demand because of questions about the BLS jobs reports in recent months. “It is more important than ever to possess robust, multifaceted approaches to economic analysis,” said DoubleLine strategist Ryan Kimmel.

🥇 Gold... yes, again

All-time highs have become all but the new normal for gold and 2025 is shaping up as a monumental year for the yellow metal.

📈 By the numbers:

• Bullion is up nearly 50% after three quarters, the biggest full-year percentage gains since 1979

• ETF inflows hit three-year highs on elevated demand

• The Treasury’s gold stash just crossed $1 trillion

Ya Wealth director Anuj Gupta says that historical patterns hints at another leg up ahead. 

“If history repeats in the US and a shutdown occurs after a gap of nearly 107 years, it would put US dollar rates and US Treasury yields under pressure," he said.

"This dip in the currency and bond markets may fuel demand for equity, gold, and mutual funds.”

Although both Treasury yields and the dollar ticked down on the news, the move hasn’t been significant so far as markets appear to be taking the shutdown in stride.

🛠️ More metal movement

Precious metals aren't the only commodities making waves these days.

Supply disruptions — including a deadly mudslide that shut down Indonesia’s Grasberg mine — have also piqued Wall Street’s interest in copper.

After news broke, JPMorgan Chase, joining Bank of America and others, turned bullish on the metal.

“This supply-driven tightening now makes us optimistic about copper prices, and we now see [London Metal Exchange] prices averaging $11,000 per ton in the fourth quarter of 2025 before rising further to an average of $11,250 per ton in the first quarter of 2026,” JPM analysts wrote.