Jobs Boom Meets Chip Rout as Rotation Trade Firms Up

Record Payrolls, Diverging Economies

The US labour market set a new October record. Nonfarm payrolls reached 159,293 thousand last month, the strongest October reading since 1997. Average hourly earnings hit $38.00, also an October record since 2006. Canada moved in the opposite direction. Total employment fell to 21,100.1 thousand, the third straight monthly decline. The gap between the two economies is now three months wide and growing.

Chips Get Crushed; Energy and Defensives Get Bought

Options flow this week drew a sharp dividing line. NVDA, AMD and MU all topped the bearish bets table. NVDA's RSI sits at 25, deep in oversold territory, yet put premiums kept rising. The stock is down 2.6% year-to-date. At the same time, EOG Resources, Shell and Waste Management each recorded 100% positive options bets over the past seven days. EOG is up 38% year-to-date. The tech-to-energy rotation is showing up in both options markets and analyst calls. Barclays lifted Airbnb's target by $45 to $195, while trimming Albemarle to $95 from $109.

Automakers in the Spotlight

A busy earnings week starts Monday with Mazda and SoftBank. German car registrations, a dataset ORTEX tracks as a leading indicator for Mazda revenue with a 30-day lead, are running 32% above the same quarter last year. Honda and Nissan follow Tuesday. Japanese registrations point 6% and 12% ahead respectively for Honda and Nissan. Polestar faces a harder read: Dutch registrations, which lead its revenue by 60 days, are running 68% below last year.

Index Radar: MSCI World Decision Due Wednesday

The MSCI World November review announces on 11 November. About eight deletions are expected. Flutter Entertainment and Textron look most exposed, sitting 11% or more below their exit lines with probabilities of 78% and 79%. In Europe, CVC Capital Partners' tender for Recordati carries a 93% completion probability, with an FTSE MIB deletion announcement expected Sunday and a forced $220M of index selling to follow.