Welcome to The Sunday Pleb. Markets move fast, and some weeks are noisier than others. We make sense of the Week in the rearview and what’s ahead in five minutes or less. A few important callouts on changes before we continue:
- We’ve added a new Weekend Read—Stonk Saturday —where we will highlight one or more companies that caught our eye in the past Week.
Thanks for reading that quick update. Let’s recap the first Week of November and look ahead to year-end. 2026 is on the horizon.
The Week in Review (11/3/25)
We are almost through the 3rd quarter’s earnings! 92% of the S&P 500 have reported. Overall, earnings are strong and sustainability is in focus. How long and how far can equities run? Had we written on April 8th that stocks would have six positive months thereafter, return positive YTD, and be up 16%, I think most would’ve disagreed. But alas, here we are. This week saw a bit more volatility than usual.
Markets at a Glance
There’s something about this week that stands out to us in particular. Every major market and asset class was negative, aside from Gold. Much of the fresh cash entered the market on Friday, resembling a relief rally after many assets reached oversold levels (RSI < 30).
The S&P fell 3.11% at its low this week, then recovered a bit on Friday. There’s quite a bit of negative sentiment in some asset classes (e.g., crypto), so we still see a year-end contrarian rally in the cards.
| Market | Week’s Return |
|---|---|
| S&P 500 | -1.92% |
| Dow Jones Industrial Average | -1.22% |
| Nasdaq 100 (QQQ) | -3.52% |
| Plebdex | -3.27% |
| Gold | 0.13% |
| Silver | -0.34% |
| Brent Crude Oil | -1.47% |
| Bitcoin | -5.47% |
| U.S. Dollar (DXY) | -0.24% |
| Treasuries (TLT) | -0.81% |
Q3 ’25 Earnings Season
Q3 earnings season is beginning to wind down. Nvidia’s earnings report on 11/19 will mark the closing of Q3 earnings. Here’s a recap of where we are.
- 92% of the S&P 500’s companies have been reported so far.
- 82% earnings beat rate is well above the 5-yr (78%) & 10-yr (75%) avgs.
- 77% revenue beat rate is well above the 5-yr (70%) & 10-yr (66%) avgs.
- 13.1% y/y earnings growth, higher than last week’s 10.7%.
- 8.3% y/y revenue growth, which is the highest since Q3 2022.
- 20th straight quarter of y/y revenue growth for the overall index.
AI Valuation Concerns
Our Stonk Saturday: Nvidia highlights this past week’s market theme. There’s been a lot of noise about whether the CAPEX guidance from AI players and hyperscalers is sustainable and what the ultimate return on that investment will be.
Palantir’s CEO Alex Karp slammed short sellers on CNBC after Michael Burry, famous for shorting the subprime mortgage market, revealed a $1.1 billion bet against Nvidia and Palantir. Palantir posted an earnings beat, with the stock reaching $230 premarket Tuesday morning and closing at $178 Friday (a 23% swing in a week).
Both Alex Karp & Michael Burry are right in some sense. Karp says Palantir is growing at an incredible rate (61% revenue growth), but, from Michael Burry’s perspective, Palantir’s stock remains detached from normal pricing mechanisms.
Boeing’s forward PE ratio is a different story for a different time, a turnaround story where free cash flow and profit are expected to recover rapidly: read < 3 Quarters.
The metric we’d like to highlight in this chart is price-to-sales (P/S). It’s a valuation metric we particularly like to use when evaluating companies. The way to think of this metric is how much revenue you get per dollar. Historically, a P/S below 1 was considered a good bargain. If the company had $465 billion in sales/revenue in a year, the total market capitalization would be $465 billion for a P/S ratio of 1. The stock price is simply the market cap divided by the total outstanding shares.
What’s interesting about this chart is that it tries to highlight Palantir’s forward P/S (next year’s estimates) as outrageous, meanwhile Nvidia sits near 20. Meaning you must spend $20 to get $1 of revenue from Nvidia.
The metric worked very well historically because businesses have generally had low margins until the tech revolution of the 2000s. Nvidia boasts 70% margins, much higher than the historic 5-10%, which is why it fetches a higher P/S multiple. You’re getting a high return on revenue, so you must pay a premium for it.
It’s still a very useful metric for old-economy companies with low margins. For example, UnitedHealth Group is trading at a P/S of 0.6842, which means $0.68 gets you $1 of revenue. There are always other factors to consider, but it’s important to ensure you’re getting the most bang for your buck.
Crypto
Crypto markets remained relatively weak, but Bitcoin and Ethereum saw strong inflows on Friday. In a snub to Michael Saylor’s Bitcoin Treasury ($MSTR), JPMorgan revealed a stake in Tom Lee’s Bitmine Immersion ($BMNR), a nod to asset tokenization on the Ethereum network.
Economic Data
Monday: ISM Manufacturing PMI – a reading above 50 signals economic expansion, while a reading below 50 signals contraction
- 52.5 better than consensus 52.2. The U.S. industrial sector is growing.
Wednesday: ADP private payrolls – government shutdown numbers and continued tech layoffs should begin to show up
- +42k vs +20k consensus; the job market is growing but weakly.
Friday: University of Michigan Consumer Sentiment – this measures how willing the consumer is to spend money; a very important gauge heading into the holidays
- 50.3 vs. 53 expected.
The Week Ahead (11/10/25)
The coming Week is set to be a bit more tame, but Q3 earnings season continues.
Q3 ’25 Earnings Season Continued
“You will never find a more wretched hive of scum and villainy” – Obi-Wan Kenobi.
As stated in our Halloween special, there’s a lot of junk in the small cap space. This week, many of those companies will report their Ghost Revenues and Phantom Profits. We look forward to seeing the results.
Economic Data
The U.S. government enters the 40th day of the shutdown as Trump promises a $2,000 tariff dividend for U.S. taxpayers. The government reopening would provide markets with upward momentum.
Closing Thoughts
Earnings remain strong, and S&P 500 constituents are guiding their 2026 estimates higher. We have two rate cuts (0.50% total) in the rear-view mirror, with room for more in the future, and ample liquidity on the sidelines. Any dip in the markets should be viewed as healthy, not as a change in macro sentiment.
For many of the factors above, we believe the market is poised for a strong year-end rally. We would not be shocked by an S&P 7,000 and DOW 50,000. We expect a brief 10%-15% correction around the beginning of 2026.
We view robotics as the superset of AI. We also view old economy, low margin companies as egregiously undervalued. Automation and robotics can boost some boring company margins from a range of (3-6%) to a conservative 5-10%. This type of margin improvement would see 100%+ stock price gains.
Nvidia, for example, already earns 70% margins. Growing them further would be difficult. A law of diminishing returns. For Nvidia to increase its share price, it must continually grow revenue. Old-economy stocks could keep revenue flat while growing margins and seeing massive share price upside. Any new revenue would be an added bonus.
May the odds be ever in our favor. If you haven’t already, please like and subscribe.
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