Last week, while headline performance was solid, there was some pronounced movement in FOMO/MOMO/meme/high-beta plays like rare earths, nuclear, quantum computing and short baskets. Many of these stocks went parabolic in the early part of the week before reversing sharply when the floor fell way in the later part. This Momentum Meltdown continued this week as the same group of stocks continued to come under pressure in the beginning of the week. The meltdown wasn’t just taking place in equity markets. Gold and other precious metals, which have been on an absolute tear, also came under heavy pressure. However, the MOMO/FOMO selling pressure subsided in the back half of the week across assets. The VIX eased below 20. The S&P 500 shot through the 20d ma and hit hit 6800 for the first time. The dips are getting bought. The momentum meltdown…melted down. For the week, the S&P was up 1.9%, ending just below 6800. Another all-time high. The equal-weight lagged slightly. Small caps fared even better with the Russell 2000 and S&P 600 up around 3%. Bitcoin stabilized and treasury yields didn’t move all that much, further reinforcing conditions. In addition, like the Blue Jays in the World Series, federal government data made its long-awaited return on Friday. The CPI print came in slightly cooler, cementing not only a 25bp cut at next week’s Fed meeting but also additional cuts into next year. Looking ahead, the World Series kicks off tonight and we could have a champion next week. We're all winners next week with the Fed rate decision on Wednesday. The Trump/XI meeting is scheduled for Thursday (Oct 30). Earnings will continue to be a catalyst, and the big mega caps and tech stocks will be posting results. Halloween on Friday. Have a great weekend. Trick or Treat!

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