This Simple Indicator is Calling the Market… Here’s What Happens Next[Stocks](https://moneymorning.com/category/article/stocks/) # This Simple Indicator is Calling the Market… Here’s What Happens Next  by Chris Johnson  November 7, 2025  Share it: ## What’s Driving Stocks This Morning There’s no rush to buy yesterday’s weakness. Futures remain soft, pointing to a second straight lower open as **earnings exhaustion and valuation pressure** weigh on growth and technology stocks. Earnings continue to deliver wide swings — **Expedia (EXPE)** and **Affirm (AFRM)** are standout winners after strong reports, but **Sweetgreen (SG)**, **Block (XYZ)**, and **DraftKings (DKNG)** are deep in the red following misses and weak outlooks. That split reflects a market returning to **stock-picking mode**, not index momentum. **Tesla (TSLA)** is down modestly after shareholders approved Elon Musk’s **$1 trillion compensation package**. Musk’s comments about potentially building an AI chip fab and partnering with Intel (INTC) have yet to excite investors, especially as chip headlines turned negative again — the **U.S. will block Nvidia’s scaled-down AI chips for China**, cutting off what was left of that market. **China’s October trade data** added to the cautious tone, showing weaker-than-expected imports and exports, signaling global demand softness. Europe followed with **Germany’s trade surplus miss** and broad equity weakness. Back home, the **Senate** faces another contentious funding vote to end the ongoing **government shutdown**, which is now impacting air travel and some consumer-facing sectors. The **University of Michigan Consumer Sentiment Index** at 10 a.m. ET and **Consumer Credit** at 3 p.m. could give the market fresh catalysts — but right now, liquidity and momentum are tilted bearish. Beneath the surface, the **rotation into defensives** continues: energy, utilities, and consumer staples remain relatively firm as traders unwind crowded positions in growth. ## What to Watch Today - University of Michigan Consumer Sentiment (10 a.m. ET): Consensus 54.0 vs prior 53.6 - Consumer Credit (3 p.m. ET): Consensus $8 billion vs prior $0.4 billion - Senate funding vote on government shutdown resolution - Follow-through in growth/tech weakness after earnings volatility - China data + Nvidia export ban shaping semiconductor sentiment - Potential safe-haven rotation into energy, utilities, and gold ## Stocks on the Move (Pre-Market) - **JFrog (FROG)** $58.51 +23.8% – Big software winner after a clean beat and raised guidance; developers spend again. - **Expedia (EXPE)** $253.00 +15.2% – Strong Q3 beat and higher FY25 revenue outlook; travel demand holding firm. - **Affirm (AFRM)** $70.73 +7.2% – Beats both lines; investors reward conservative but steady Q2 outlook. - **Airbnb (ABNB)** $124.95 +3.7% – EPS miss offset by stable demand outlook; GBV expected to grow low double digits. - **Sweetgreen (SG)** $5.29 –15.4% – Weak comp sales and lowered outlook; business model reset needed. - **Block (XYZ)** $60.16 –15.2% – Missed both top and bottom lines; fintech momentum fading. - **DraftKings (DKNG)** $26.22 –6.3% – Strong EPS overshadowed by soft revenue guide and slowing growth. - **Tesla (TSLA)** $443.20 –0.6% – Musk’s trillion-dollar pay plan approved, but investor focus shifts to delivery trends and chip comments. ## Upgrades & Downgrades #### **Upgrades:** - **JFrog (FROG)** – _Oppenheimer to Outperform, PT $75_ _:_ Analysts call FROG’s quarter “a turning point” for recurring revenue momentum; strong dev-tools tailwinds. - **Globus Medical (GMED)** – _Truist & BofA both to Buy_ _:_ Double upgrade after blowout results; orthopedics growth accelerating on strong procedure volume. - **The Trade Desk (TTD)** – _Benchmark to Buy_ _, PT $65:_ Rebound call after post-earnings dip; ad-tech secular trends remain intact. - **Unity Software (U)** – _Macquarie to Outperform,_ _PT $50:_ Analysts see restructuring risk priced in; new AI and gaming initiatives improving visibility. - **Expedia (EXPE)** – _Piper Sandler to Neutral from Underweight_ _:_ Major sentiment shift after strong beat; analysts concede execution is improving. #### **Downgrades:** - **CarMax (KMX)** – _Needham & RBC cut to Hold/Sector Perform_ _:_ Used-car demand cooling; higher rates continue to choke affordability. - **BlackLine (BL)** – _Baird to Neutral_ _:_ Post-earnings disappointment as management guides cautiously into year-end. - **Sweetgreen (SG)** – _William Blair to Market Perform_ _:_ Severe guidance cut undermines growth narrative; execution concerns mounting. - **Intellia Therapeutics (NTLA)** – _JPMorgan to Underweight_ _, PT $5:_ Clinical setbacks and valuation risk prompt downgrade. - **Treace Medical (TMCI)** – _BTIG & JPMorgan cut to Neutral/Underweight_ _:_ Post-earnings margin compression drives lowered confidence in FY26 growth. ## Today’s Bottom Line – Today’s word is **momentum** — and the market has lost it. The last two weeks have delivered a clear tell: volume is fading as prices roll over. Buyers are stepping in with less conviction, and when the indices pulled back from recent highs, there was no surge in dip-buying volume. A month ago, every 1–2% pullback triggered aggressive inflows. Now? Weak hands, light tape, and no urgency. That combination — prices turning lower on muted volume, followed by momentum slipping negative while volume stays subdued — is a classic sign that we are not at a tradable bottom. Volume is a simple indicator most investors ignore, but when it diverges from price like this, it becomes a highly effective signal: institutions are easing off the gas, not loading up. Add Bitcoin to the evidence file. As it threatens to break back below the $100,000 mark it previously cleared on the way up, it’s signaling risk capital quietly heading for the exits. Bitcoin remains a proxy for speculative appetite; weakness there confirms what we’re seeing in growth and high-beta tech, the speculative bid is fading. Seasonally, this pattern looks more like the September-to-October washout we’re used to, but it’s hitting late. The tailwind window has shifted, and for now the trade winds are in the market’s face, not at its back. Tactically, this puts the focus on 50-day moving averages for the liquid leaders, Apple, Amazon, Palantir, and other mega-cap anchors. Those levels are the next logical test. Until we see real buying pressure and heavier upside volume emerge at or near those supports, talk of a powerful fourth-quarter rally is premature. For now, the signals say: respect the downside, fade blind dip-buying, and let the momentum reset play out.  **Beat the market, without relying on brokers or biased institutions.** Email(Required) Company This field is for validation purposes and should be left unchanged. 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