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*                       FIEND'S SUPERBEAR MARKET REPORT                     *

*                                November 3, 2026                           *

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*                       e-mail: fiendbear@fiendbear.com                     *

*                    web address: http://www.fiendbear.com                  *

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Fiend Commentary
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Election Day: A Market Looking for Direction

November began with an attempted recovery that didn't last.

The Nasdaq initially rallied Monday, extending hopes that Friday's technology washout had exhausted the sellers. Instead, the gains disappeared, leaving the index down another 1.1%. The S&P 500 lost 0.5%, while the Dow managed a 214-point advance.

The encouraging development was market breadth. Advancing stocks outnumbered decliners in the S&P 500 by more than two to one, and most sectors finished higher.

The discouraging development was that technology continued sinking.

Oracle fell nearly 9% after announcing plans to raise another $20 billion through debt and equity financing. Intel lost almost 9%, extending Friday's 29% collapse. AMD dropped 7.5%, while Marvell Technology plunged 13%.

Investors are becoming increasingly concerned about the enormous financing requirements of the AI boom. Companies announcing additional investment are no longer automatically rewarded. In some cases, investors are now treating the announcements as warnings about future cash flow and shareholder dilution.

That is a significant change from earlier this year.

Despite the damage, the S&P 500 remains only about 3.5% below its October record. The Nasdaq has suffered considerably more, falling nearly 9% from its high.

The broader market is holding together better than the companies that have been leading it.

Oil Finally Offers Some Relief

The biggest economic development Monday was the collapse in oil prices.

Brent crude plunged 7.6% to approximately $104.77, while West Texas crude dropped to $96.46.

The reason was renewed optimism that diplomatic negotiations involving Iran might finally produce an agreement capable of ending the Middle East conflict.

That would be enormously welcome news for an economy that has endured months of extraordinary energy prices.

Lower oil should eventually reduce gasoline and diesel costs, relieve some pressure on transportation and manufacturing, and provide households with additional disposable income.

It could also improve the Fed's inflation outlook.

But we've seen this before.

Oil has repeatedly fallen on hopes of negotiations, only to rebound following another attack or diplomatic breakdown.

Sure enough, prices were already moving higher overnight after reports of a limited American strike on Iran's Qeshm Island. The latest diplomatic progress may prove meaningful, but there is still a considerable distance between agreeing to negotiate and securing a lasting settlement.

The important distinction is that one day of cheaper oil doesn't reverse months of higher prices throughout the economy.

Businesses have already absorbed elevated freight and energy costs. Many have passed those increases to customers. Others have reduced margins or postponed hiring.

Even if crude eventually falls toward $80, the accumulated damage won't disappear immediately.

Metals Still Cannot Find Their Footing

Gold and silver enjoyed a modest recovery Monday after Friday's liquidation.

Gold recovered toward $3,970, while silver moved back above $50.

Unfortunately, the improvement was short-lived.

Overnight selling pushed gold back toward $3,900, while silver surrendered another 3%.

The recent declines have been relentless, particularly in silver, which has lost much of its extraordinary advance from earlier this year.

Yet the long-term monetary arguments haven't changed dramatically. Federal deficits remain enormous, government debt exceeds $40 trillion, and inflation is still well above the Fed's 2% objective.

The immediate problem is that investors remain more concerned about protecting capital and reducing speculative exposure than accumulating inflation hedges.

The same uncertainty has affected Bitcoin and the mining shares.

Eventually the metals will find a bottom. Whether the current prices represent that bottom remains unanswered.

An Election With Much of the Outcome Priced In

Tuesday's midterm elections are the immediate political focus.

Prediction markets currently give Democrats approximately a 94% probability of winning the House and 74% of taking the Senate.

If those expectations prove accurate, Republicans will suffer a substantial defeat only two years after regaining the White House.

The political explanation is fairly straightforward.

High prices have remained an enormous burden for consumers. Gasoline never returned to anything resembling normal summer prices, while expensive food, housing, insurance and borrowing costs continued pressuring household finances.

Voters experiencing those conditions tend to hold the party in power responsible, regardless of how much responsibility properly belongs to monetary policy, government spending, war or international supply disruptions.

That is not particularly unusual in American politics.

The market consequences are less obvious.

A Democratic Congress would constrain much of the administration's legislative agenda. Investors might welcome reduced prospects for additional deficit-financed spending, while worrying about investigations, government shutdowns and increased regulatory uncertainty.

A Republican victory, particularly in the House, would be a considerably larger surprise and could produce an immediate repricing of expectations for taxes, spending and regulation.

But neither outcome would eliminate the existing fiscal problems.

Washington would still be borrowing enormous amounts of money.

Interest expenses would still be growing.

And the Fed would still be confronting stubborn inflation alongside signs of a weakening labor market.

The election can change the political direction. It cannot repeal the economic arithmetic.

November's Larger Test

There was another overlooked economic development Monday.

The ISM manufacturing index rose to 55.5 in October, stronger than expected and indicating continued expansion. Its prices index remained elevated at 75.2.

That hardly suggests inflation pressures are disappearing.

Strong manufacturing activity is encouraging, but it complicates the assumption that economic growth is slowing enough to solve the Fed's problem without additional tightening.

The December rate hike remains the market's favored outcome, although probabilities have weakened considerably from the near-certainty assigned only weeks ago.

Friday's employment report will provide another important clue.

If job growth remains weak, Warsh may find himself with another reason to wait. If employment strengthens while inflation remains elevated, December's hike becomes much harder to avoid.

For now, the market seems to be drifting between competing possibilities.

Technology stocks are undergoing a meaningful correction, but most other stocks have held up relatively well.

Oil finally experienced a major decline, but the geopolitical situation remains unsettled.

Gold and silver continue struggling despite persistent inflation concerns.

Treasury yields have retreated sharply from their October highs, although the longer-term bond bear market may not be finished.

And now Americans go to the polls.

The election may provide a temporary distraction, but the real test for November will be whether the technology correction remains contained while the economy absorbs the consequences of expensive energy and high interest rates.

October ended with an ugly selloff.

November has begun without much improvement in the former market leaders.

The question is whether the rest of the market can continue carrying the load.

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