Google misses Search & Ads revenue by ~ $1.5B. These misses will get worse. Keep in mind, Search & Ads are still the primary business. No one clicks blue links anymore. Moreover, the exponential rise in use of agentic AI poses a deeper threat: AI agents don't watch ads. $GOOGL

Yields were suppressed this morning, with the 10-year falling below 5.2%, allowing for equities to get off the mat and follow-through. However, they've reversed intraday and are now up, again, materially. 10-year yield was down 5 basis points yesterday, which opened the door for this rally. Now it's up 6 basis points today, almost back to 5.3%, and equities are fading from the highs. Impressive bounce this week for many risk-on names, but where do we go from here? Well, yields will have to settle in order to allow a *trending regime* to form. You will still have the crowd that says they don't matter, but that's simply not true. They absolutely still matter, in spite of equities whistling past them (for now). The pace & directionality of yields pose a repricing threat to forward expectations for risk assets, and they also put pressure on debt-driven capex, which has been the lifeblood of this economy. This morning's soft jobs data wasn't enough to keep yields down, which means that bond vigilantes are still looking for more resolution, in other places. The Treasury buybacks haven't worked either, and so logically, the only other potential catalyst on the table is, once again (and I know I sound like a broken record here), ending the war in Iran. If President Trump wants a clearer market backdrop, with less intraday fades and less week-to-week volatility, he will have to get this done. The sooner, the better.

FORGENT POWER SOLUTIONS $FPS initiated at 'Outperform' at Bernstein, with a $48 price-target: "FPS trades at a steep discount to peers, but the market is missing three structural earnings drivers: higher content per MW as modular adoption rises, share gains with new & existing customers, and margin expansion as utilization scales. Through 2030, FPS is set to generate an EPS CAGR of 70% vs. ~60% street. The positive revisions ahead are the catalysts to close the valuation gap. 1) Right markets, right time. FPS is a pure play electrical OEM with 80% of sales coming from data centers and the grid, while increasingly protectionist trade policy is raising the strategic value of domestic manufacturing capacity. 2) Built for the shift to modular and the content gains that come with it. As modular data center construction rises from 40% today to 60% by 2030, FPS’s shift from selling discrete products to integrated systems increases the content opportunity by 55% to $2.8M/MW. FPS has reorganized around that opportunity by changing its go to market, expanding front-end engineering, and adding modular manufacturing capacity. 3) Speed to market is a competitive advantage. FPS’s lead times are 30-50% below industry averages, a meaningful advantage when every month of delay equals millions of dollars of foregone sales. That speed is enabled by available capacity, a custom approach that can design around bottlenecks, and vertical integration that cuts supply chain risks. 4) Multiple paths to share gains. FPS has ~7% share among non-hyperscalers vs. 4% overall, giving it high exposure to where much of the incremental capacity is being developed. Its first hyperscaler win adds a second avenue for share growth. 5) Growth unlocks margins. We forecast a 500bps increase in EBITDA margin to 28% by 2030, driven by higher utilization, SG&A leverage, and a richer mix of modular revenue."

The reason many are doubtful of the ability for equities to rally from here is because, in spite of rising yields, major indexes $SPY & $QQQ have not moved far off all-time-highs. On the surface, it doesn't look like a market that has shaken off froth. But indeed, it has. The real story is under the hood in individual stocks. June-August saw the *worst momentum selloff in recorded history* in spite of resilience in the major indices. Jefferies Tech Momentum Index recorded a whopping -57% drawdown, while Goldman Sachs High Beta Momentum Index and Morgan Stanley Tech Momentum Index also saw their worst drawdowns in history, falling more than -40% peak-to-trough. That carnage continued and broadened well past momentum in September to affect most of the individual stocks in the market. 78% of stocks in the S&P-500, or nearly 4 out of every 5, traded down for the month of September. For the last 12 consecutive sessions of the month, there were more new 52-week lows than 52-week highs. The $NYSI or NYSE McClellan Summation Index, which is a long-term breadth indicator, has fallen off a cliff to -752, which is relatively in-line with other local market bottoms over the past 5-years, almost all following significant market corrections or crashes over that period. The only difference this time is, the indexes barely budged because most of the single-stock carnage was off-index or under-weighted. In the backdrop, we've set a record streak of 7 consecutive months where yields have risen, tied for an all-time-record, and the selling in bonds has become parabolic, signaling the potential for some imminent relief. This is the type of backdrop where even a sliver of good news, a slight abatement in fear, or a mild softening of the worst-case scenario can lead to a broad & aggressive snapback rally like we've seen many times before. Weaker economic data, good news about the war in Iran, or both, could easily serve as that catalyst.

The 10-Year Treasury yield fell 5 basis points today, opening the door for a broad rally in stocks. Odds for a rate hike at the upcoming October 28 Fed meeting fell dramatically to 26% vs. 69% just a week ago, partially on the back of Fed commentary that patience was warranted for further hikes. Tomorrow morning, we have jobs data (nonfarm payrolls) and U.S. unemployment rate report. Soft numbers for jobs will likely lead to further softness in yields, allowing for continuation of today's move. On the other hand, strong numbers could interrupt follow-through of today's rally. In the backdrop, we have continued mixed headlines around the Iran war, but it has been widely reported this week from several news outlets that Iran is losing leverage over the Strait as crude oil exports from other Gulf nations are getting closer to pre-war levels, which would be positive for U.S. leverage in securing an optically favorable deal. Lots of moving pieces, but the charts are setting up nicely and today's action was fantastic. The equity market has been acting like a beach ball held under water lately, and the selling in bonds is starting to look extended to the downside. Let's hope for a good close to the week!

DYNATRACE $DT price-target raised to $74 (from $65) at UBS, while maintaining a Buy rating: "Demand for AI/agent observability is inflecting, boosted by recent AI governance/safety concerns, which could be a material catalyst for DT/DDOG shares and with this initial deep-dive we focus on DT's Arize acquisition but we also offer insights relevant for DDOG. Net, we conclude that both DT and DDOG will likely be key beneficiaries of rising AI observability spend which our checks suggested could reach 20-25% of total observability spend over the next few years, enough to drive at least a few points of growth for both DT/DDOG in each of the next few years. We spoke with 4 F500 customers of Arize and overall we came away more positive on both the AI observability opportunity and the strategic rationale for the Arize acquisition with all 4 existing Arize customers expecting an aggressive spend ramp over the next several years (3 of 4 were customers of both DDOG+DT). Our work suggested that Arize + AI observability will be key to DT’s ability to drive high-teens c/c ARR growth over the next few years (UBSe 19%/18%/19% in FY27-29)."

*IRAN LOSING LEVERAGE OVER STRAIT OF HORMUZ AS CHOKEHOLD BREAKS *U.S. NAVY & GULF OIL PRODUCERS HAVE RESTORED CRUDE EXPORTS TO 13 MILLION BARRELS PER DAY VS. 19 MILLION BARRELS PRE-WAR *SAUDI ARABIA, IRAQ & UAE MOVING OIL WHILE U.S. BLOCKADE INHIBITS IRAN - WALL STREET JOURNAL

*PRESIDENT TRUMP CALLS FOR JEROME POWELL TO RESIGN FROM FEDERAL RESERVE BOARD OF GOVERNORS, OR BE SUED BY UNITED STATES GOVERNMENT Full statement: "The Inspector General’s Report just came out on Jerome “Too Late” Powell’s “renovation” of the Federal Reserve Headquarters in Washington, D.C. The IG’s Report states that there were “deficiencies in the management of the renovation project.” The Building is over budget, at a Record Setting rate and, at a minimum, “Too Late” Powell should be forced to resign from the Board. He can’t manage a Building, and he certainly shouldn’t be allowed to manage his High Interest Rate Policy (only on “TRUMP!”). I have asked Attorney General Todd Blanche to study the report, and make a determination as to what to do about a relatively small Building Complex that is Hundreds of Millions of Dollars over budget, and is now going to cost, according to the Report, at least 2.5 Billion Dollars, with no end in sight. The Report states, “We were concerned to find that the Board did not obtain a project cost estimate from the [construction manager] until January 2026, which was 3.5 years after construction began and after the Board had awarded more than $2 billion in construction costs. As of July 2026, more than 4 years after construction began and $2 billion has been awarded for construction, the Board had yet to set a [guaranteed maximum price]” — An absolutely unheard of situation! — “The Board therefore still does not have cost certainty and has not transferred material risk to the [construction manager]." In actuality, I think that the 2.5 Billion Dollars will be 3.5 Billion Dollars, and maybe 4 Billion Dollars by the time they’re finished, and may never get properly built. Soundproofing, and all other elements of the Building, will be inferior to what was previously there. In particular, the magnificent beauty, sculptured ceilings and walls, and so many other things which made the Federal Reserve Building stand apart, will never be captured again, and are only being replaced by flat, boring, less than midlevel finishes. I could have done a far better Renovation for 25 Million Dollars, completely maintaining the MAGNIFICENCE of the structure, and had money left over. They completely destroyed the Beauty and Glorious History of the Building. This is Jerome Powell’s fault, and he should be forced to resign, IMMEDIATELY! If he doesn’t resign, he should be sued, at the highest level, by the United States Government, for either corruption or incompetence, both of which are completely unacceptable…And no, I do not want this Building named after President Donald J. Trump, ME! Thank you for your attention to this matter. President DONALD J. TRUMP"

MICRON $MU EARNINGS REVENUE: $54.23B vs. $51.07B est. EPS: $33.42 vs. $31.61 est. GROSS MARGIN: 87.0% vs. 86.1% est. Q1 FY27 REVENUE GUIDE: $60B - $63B vs. $57.02B est. Q1 FY27 EPS GUIDE: $37.15 - $39.15 vs. $35.40 est.

GENERAC $GNRC price-target raised to $290 (from $285) at Stifel, while maintaining a 'Buy' rating: "We are raising our 2027 forecast and our target price on Generac to reflect the recent Amazon award and the company's accelerating data center capacity expansion. In our view, the $2.4 billion of initial Amazon orders on top of the roughly $1.6 billion data center backlog exiting 2Q26, and plans to triple data center capacity to $3.75 billion per year by 2H27 position GNRC well for robust multi-year growth. We are increasing our 2027 adjusted EBITDA forecast to $1,174 million from $1,150 million, reflecting a higher C&I revenue forecast which could have upside depending on the exact timing of initial Amazon shipments. We are increasing our target price to $290 from $285 based on 15-16x our revised 2027 adjusted EBITDA forecast and reiterating our Buy. We believe the rapid C&I ramp should erode the "hurricane play" perception some investors hold on GNRC, and underpin multiple expansion."