CNBC Television
Seasonal strength still in store? Here's what investors should know
11/6/2025, 6:02:21 PM
Economic Summary
- Biotech/healthcare ETFs have outperformed year-to-date (XBI ~+20%, IBB ~+19%), partly driven by the interest rate narrative making speculative sectors more attractive.
- Earnings have generally been strong: an 83% beat rate was cited and LSEG reported Q3 earnings up ~17% year-over-year; overall earnings growth is expected to finish the year around 7–8%.
- Macro and seasonal context: S&P showed positive seasonality (September +3.5%, October +2.3%), Atlanta Fed indicator at 4% was noted, and a December Fed cut probability was described as lower (about 60%).
- Market structure risks: momentum-led rallies produced extreme winners (many up 200%+), increasing vulnerability to sharp corrections as sentiment and positioning unwind.
- Policy/other risks: a prolonged U.S. government shutdown would be increasingly negative for markets; referenced future stimulative measures (OBBB) could be supportive next year.
Bullish
- Earnings season has shown strong beats and positive year-over-year growth supporting market direction.
- Biotech ETFs (XBI, IBB) have outperformed as lower rates boost speculative sectors.
- LSEG reported strong Q3 results, reinforcing the earnings backdrop.
Bearish
- Momentum unwind in high-flyers leading to sharp pullbacks and technical breakdowns.
- Stretched valuations and extreme bullish positioning make stocks vulnerable to corrections.
- Consumer weakness and planned higher spending could pressure DoorDash (DASH) margins.
- Skepticism around large, flashy corporate partnership announcements (e.g., Oracle) that may not deliver.
Bullish tickers
XBIIBBLSEGDASH
Bearish tickers
HOODORCLDASH
DASH
5 price targets
192285201230180
Bullish
Strong recent results (EPS +44%, revenue +27%, orders +25%) and was a winning position for the fund.
Bearish
Consumer weakness and planned higher spending in 2026 could pressure margins; momentum reversal risks given large run-up.
HOOD
Bullish
Reported impressive numbers and generated large prediction-market activity (~$100M), reflecting strong growth expectations.
Bearish
Trades down sharply despite strong earnings; extremely high run-up leaves it vulnerable to momentum unwind.
XBI
Bullish
ETF up ~20% YTD as part of rate-driven appetite for speculative/interest-sensitive sectors.
Bearish
Biotech contains many unprofitable, lower-quality companies vulnerable if rate/investor sentiment shifts.
IBB
Bullish
IBB up ~19% YTD, benefiting from the interest-rate backdrop and sector momentum.
Bearish
Similar quality concerns as XBI — heavy exposure to unprofitable biotech names.
ORCL
Bullish
Large partnership announcements can drive short-term excitement and potential commercial opportunities.
Bearish
Example of an outlandish partnership announcement that may not be economically credible or sustainable.
LSEG
Bullish
Reported strong Q3 earnings (~17% YoY), supporting the broader earnings-driven market narrative.
Bearish
Earnings have limited short-term correlation with individual stock moves; not a near-term market panacea.
People mentioned
JennyJoeFrankBrynShivSam AltmanJensen