Auto Week Meets Index Shake-Up as Bears Pile Into Housing

Auto Earnings Front and Centre

The week's biggest earnings cluster sits in the auto sector. Ferrari reports today, with Austrian car registration data running 75% below the same quarter last year. That is a weak-fit lead, but the direction is hard to dismiss. Honda Motor follows on Thursday. Japanese car registrations, a strong-fit leading indicator with a 65-day lead, are running 10% below the same quarter last year across all three months. Renault and Polestar also report Wednesday. Polestar gets a split signal: German registrations are up 32% year-on-year, but Dutch data, also a strong-fit lead, is down 68%.

Bears Target Housing and AI Chips

Short sellers are pressing hard on two names this week. Dream Finders Homes hit a record 33.8% short interest as a percentage of free float, up 26% in seven days. Cost to borrow is just 0.69%, keeping the trade cheap. Cerebras Systems also drew fresh shorts. Its SI climbed to 19.8% of float, up 4.6 percentage points in a week. Bears appear sceptical of the company's $12.3bn valuation.

MSCI Index Flows Building

The 11 November MSCI review announcement is six sessions away. Moderna carries an 88% probability of joining the MSCI World index. That would force an estimated $5.9bn of buying from trackers. On the exit side, Flutter Entertainment and Textron face 72% and 71% deletion odds respectively, with a combined $1.7bn of potential forced selling attached.

Europe: Recordati Deal and Italy Exit

CVC Capital Partners' cash tender for Italian pharma group Recordati carries 93% completion odds within a window closing 20 November. ORTEX Index Rebalance Radar puts the probability of a FTSE MIB deletion at 65%, which would force $219M of selling over roughly 10 days of normal volume. An index announcement could come as early as today.