Market Snapshot

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📉 Banana Bits

• Dow jumped 1,569 points (+3.03%) to 53,356, its best day since April 2025, after Democrats won control of the House and Senate.

• Oil prices plunged as the election results raised hopes for an end to the Iran war. Brent fell 8.7% to $94.62 a barrel.

• Apple closed at a record $349.51, gaining 5.3% and overtaking Nvidia as the world's most valuable company.

• AI infrastructure stocks tumbled as Texas's governor-elect called for tighter data center restrictions. Comfort Systems fell 15%, while Vistra lost nearly 14%.

• Treasury yields declined, with the 10-year yield falling to 4.89% from 4.95% and the two-year slipping to 4.58% from 4.61%.

• Bank of England expected to raise rates to 4% today, its first hike in over three years, as inflation remains elevated.

Market News

Crude Plunges, Equities Rally

Following Tuesday's election results, the Dow tacked on 1,569.40 points and closed at 53,356.12. It was the Dow's best day since April 2025, and CFRA says it's the biggest post-midterm gain since 1982. The S&P 500 rose 1.58%, its best session in three months, while the Nasdaq added 1.44%. The VIX fell about 20%.

The reasoning for all of this is pretty old school. Investors welcomed a more predictable policy outlook, and markets are pretty fine with that because they hate surprises. Bond traders joined in. The 10-year Treasury yield fell to around 4.89% from 4.95% as plunging oil prices eased inflation fears and investors anticipated more restrained government spending. The dollar slipped too.

Oil was by far the wildest chart of the day. Brent sank 8.7% and WTI lost 8.3%, extending a sharp selloff in crude prices. Brent is now down roughly 17% in three sessions. Energy was the worst sector by a mile, with Exxon off 4.6% and ConocoPhillips off 5.2%. Gold went the other direction, up about 3% and back over $4,000.

Tech split right down the middle. Apple rose to a record close, Microsoft gained 6.7%, Amazon 6.1%, and Alphabet 3.2%, but much of the AI infrastructure trade got dumped. Nvidia slipped, while CoreWeave, Vistra, and Comfort Systems were hit hard. A lot of that traces back to Texas, where Governor-elect Gina Hinojosa has proposed a moratorium on new data center approvals. Investors worry that fewer new projects could mean less business for the companies supplying the AI buildout, even as Big Tech faces less pressure to keep spending.

Barely anyone cared about the economic data, but ADP said private employers added 86,000 jobs in October, more than expected. ISM services slipped to 54.5, while the prices-paid index eased to 73.0 but remained elevated, which the Fed won't love. Jobless claims are out Thursday, and the October jobs report drops Friday. CPI comes Nov. 10, and the Fed, which hiked in September, meets again Dec. 8–9.

Across the pond, the Bank of England is expected to raise interest rates to 4% today, its first hike since 2023, as stubborn inflation keeps policymakers on edge.

Peel Take: We wouldn't read too much into the Dow number. Falling oil prices helped fuel the rally, but crude can turn right back around if supply concerns resurface. The thing we'd actually watch is the AI split. If new data centers get harder to build, companies with existing capacity could benefit, while chipmakers and construction suppliers face slower demand. That's part of why investors favored Microsoft and Amazon over much of the AI infrastructure trade on Wednesday.

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What's Ripe

Block (XYZ) 15.32% 

• Q3 gross profit grew 22% to $3.24 billion, ahead of the roughly $3.1 billion analysts expected. Cash App gross profit was up 27% to $2.07 billion.

• Block raised its 2026 gross profit forecast to $12.63 billion from $12.51 billion and lifted adjusted EPS guidance to $4.15. It also said gross profit should grow at least 15% in 2027.

• Peel Take: Jack Dorsey laid off around 40% of Block's workforce back in February, and eight months later adjusted operating income is up 92% to $923 million. Great news if you own the stock. Less great if you're a new grad hoping to work there. Cash App continues to deliver strong growth, and management's raised outlook suggests the restructuring is paying off. Losses on transaction, loan, and consumer receivables did jump 65.6%, and the company disclosed a proposed DOJ settlement, but investors focused on the stronger profitability and growth prospects.

Zimmer Biomet (ZBH) 13.44% 

• Orthopedic implant maker Zimmer Biomet reported adjusted EPS of $1.90 vs. the $1.88 estimate, while revenue of $2.063 billion beat the $2.04 billion forecast. Sales grew 3.7% in constant currency.

• On a constant-currency basis, hip sales grew 7.0% and the technology and surgical group gained 13.0%, while knee sales fell 2.6%. Zimmer also raised its 2026 organic growth guidance to 3.0%–3.5% and adjusted EPS guidance to $8.50–$8.60.

• Peel Take: Hips up, knees down. Shakira tried to warn us. A two-cent earnings beat doesn't usually get you a 13% rally, but Zimmer's raised outlook gave investors plenty to cheer about. After a challenging year for the stock, stronger hip sales and growth in its technology and surgical business are encouraging signs. Knee sales remain a weak spot, but Wednesday's rally suggests investors are growing more confident in the company's outlook.

What's Rotten

Fidelity National Information Services (FIS) 23.65%

• FIS cut its 2026 adjusted EPS outlook to $5.82–$5.89 from $6.15–$6.24. That's its second cut this year, and it also said CFO James Kehoe is leaving.

• JPMorgan downgraded the stock to Neutral and dropped its price target to $38 from $53.

• Peel Take: Lowering guidance and announcing your CFO's departure on the same day is a tough combination, and investors reacted accordingly. At $29.76, FIS trades at roughly 5x its new adjusted EPS guidance, a valuation that may catch the attention of value investors. The company still benefits from its established relationships with banks, which are typically reluctant to switch core banking software. But after two guidance cuts this year, investors will be looking for signs of more consistent performance and stability in the quarters ahead.

Trimble (TRMB) 17.31%

• Revenue rose 7% to $966.8 million, slightly below expectations, while adjusted EPS of $0.86 matched estimates. Annualized recurring revenue (ARR) hit a record $2.56 billion.

• The problem was the outlook. Trimble now sees full-year ARR growth of about 10%, down from 12%–14%, because Field Systems and Transportation & Logistics are weaker.

• Peel Take: The company delivered solid revenue growth and record recurring revenue, but its softer outlook overshadowed the results. As Trimble continues shifting from hardware toward subscription software, annualized recurring revenue (ARR) has become an important measure of its progress. Wednesday's selloff highlights how closely investors are watching that transition and the company's ability to sustain growth.

🧠 Technical Trip

Interview Q&A from Evercore

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🦈 Deal Dispatch

M&A, IPOs, And Other Notable Transactions

• Marvell agreed to buy Lumentum in a $115 billion all-stock deal, one of 2026's biggest acquisitions.

• AstraZeneca reportedly made a non-binding $10 billion offer for Rhythm Pharmaceuticals. The obesity drugmaker jumped 28%.

• CVS plans to split into two companies by mid-2028, separating its drugstores from Aetna and Caremark. Shares sank about 12.5%.

• ARRAY and Shoals agreed to merge in a $1.32 billion all-stock deal, combining their solar equipment businesses.

• OXO parent Helen of Troy rejected a $37-a-share bid from Spectrum and Oaktree's Empower Brands.

• Revolut completed a share sale valuing the fintech at $115 billion, up 53% from its previous valuation.

📊The Daily Poll

Previous Poll:

40 hours for $150K or 80 hours for $300K?

• 40 hours for $150K: 58.7%

• 80 hours for $300K: 41.3%

Student Success Corner

Banana Brain Teaser

Previous

A trader's strategy has a 50% probability of making money on any given trading day, with outcomes independent across days. The trader wants to achieve three consecutive profitable days. Starting fresh, how many trading days should the trader expect to wait, on average, before achieving that streak?

Answer: 14 trading days on average

Today

You have 25 horses and a track that allows only five horses to race at once. You have no stopwatch, and each race reveals only the finishing order. Assuming consistent speeds and no ties, what is the minimum number of races required to identify the three fastest horses?

How Would You Rate Today's Peel?

Happy Investing,
Elie, Mitchell, Fernanda, Nick, & Patrick

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