Mid-Morning Look: October 07, 2026

Mid-Morning Look

Wednesday, October 07, 2026

U.S. stocks opens lower, retreating from record territory for the S&P 500 index (SPX) and Nasdaq Composite as oil and bond yields jump again. The yield on 10-yr U.S. Treasury notes climbs to highest since 2002 at 5.36% and oil prices resume their upward momentum ahead of this afternoons 10-year Treasury auction at 1:00 pm and the Fed Minutes from prior FOMC policy meeting at 2:00 pm. European markets pressured as French government bonds came under renewed pressure as budget talks remain in focus. The 10-year French OAT yield rose almost 14 basis points to 4.889%, while the 10-year German Bund yield was up 3.3 basis points to 3.507%. Brent crude oil prices rose over 1% back above $102 a barrel while WTI prices hovered around $90 after Houthi militants attacked Saudi airports. In macro headlines overnight, VP Vance said Iran must cut nuclear enrichment capacity to end war; unclear how Tehran makes decisions; US remains open to a deal but wants concrete nuclear concessions; we’re not going to trade words for actions. The dollar continued to strengthen as oil prices rose, prompting a fall in bitcoin and gold and silver prices. Dollar index +0.5% to 102.35 as Euro extends declines -0.64% to 1.185 (lowest levels since mid-May). The euro is not only weaker versus the dollar, but against all its G10 peers. Investors are concerned about France’s budget deficit and the overall state of public finances. Seeing the biggest declines early in financials/banks, gold/silver miners, housing stocks on the spike in yields.

• Beverage sector: STZ reported Q2 adj. EPS $3.74 above est. $3.56 n better sales $2.63B vs. est. $2.54B, and guided FY adj. EPS guidance $11.20-$11.90 vs est $11.71; Q2 Beer net sales rose over 5% on 5.5% shipment volume growth, while beer operating margin fell 160 basis points to 39.0%; ABEV downgraded to Underperform at Bank America noting shares went up by 3% since the first round of Brazil’s presidential election, vs Ibovespa +7.6%, but the firm sees a less favorable setup for Ambev given its limited leverage to lower rates, muted earnings momentum amid weak beer trends.
• Auto Retailers: StoneX said they were trimming Q3 estimates across the group for auto retailers (GPI, LAD, PAG) to reflect front-end GPU pressure and a slower aftersales trajectory. However, with the group having de-rated toward the low end of its historical range, they think the current setup more than discounts those headwinds — the structural earnings base in parts and service, F&I and captive finance is intact, and what we see forming is dispersion by franchise mix rather than a sector-wide downcycle. UBS also cuts 2027 estimates across the franchise dealers (ABG, GPI, PAG, LAD, CARG, CARS) by a mid-single-digit percentage on slower parts & service growth and higher floor-plan interest expense.
• Transport sector: Citigroup upgraded shares of XPO to Buy in Transports while previewed the sector into Q3 earnings saying recent declines across Transports have created a more favorable risk-reward setup into Q3 earnings, even as macro risks (higher fuel prices, rising interest rates) seem likely to keep many investors cautious. Among the biggest stories in transports over the past month was JBHT’s mid-September profit warning; top picks CHRW, SAIA, TFII, GXO and Parcels (UPS). ODFL was upgraded to Peer Perform from Underperform at Wolfe Research noting that the stock has pulled back by 28% since early June and says the stock has historically outperformed materially following similarly large pullbacks, and no longer sees absolute downside for Old Dominion.

• LPCN +20%; after Health Canada approves Tlando for testosterone replacement therapy, with partner Verity Pharma set to launch the drug in Canada by end of 2026.
• NTAP +3%; was upgraded to Outperform from In Line at Evercore ISI and raised tgt to $300 from $210 saying guidance for about 17% growth appears conservative given it implies a steep second half deceleration to 9%.
• PENG +15%; after raising its FY27 net sales outlook to about $2.43B at midpoint of range vs prior forecast of about $2.17B at midpoint; FY revenue growth expected at 40% YoY, plus/minus 10% and guided FY27 adj EPS at $4.45, plus or minus $0.70 vs. est. $3.38 following Q4 top and bottom line beats.
• VLO +2%; along with gains in other refiners MPC, PBF, DINO, DK with many at or near all-time highs again amid rising energy costs, crack spreads.
• ZIM +3%; raised its guidance for the year reflecting continued strong market demand and favorable momentum in freight rates; now expects to generate Adjusted EBITDA of between $2.7B-$3.0B vs, prior view $2.0B-$2.4B and adj EBIT of $1.4B-$1.7B vs. prior $700M-$1.1B.

• BLDR -4%; was downgraded to Sector Perform from Outperform with a $62 PT (from $88) at RBC Capital on risk to Q4 and FY’27 estimates driven by volume weakness, gross margin pressure, and fierce competitive dynamics.
• BULL -19%; after CNBC reported that a congressional committee found the digital investment platform’s ties to China’s government pose a national-security threat to U.S. finance. The bipartisan House Select Committee on China found a gap between how Webull markets itself as an American company versus how it is actually controlled.
• CRBU -49%; after announced it is exploring strategic alternatives and plans to discontinue further development of both of its allogeneic Car-T programs Vispa-cel (anti-CD19 for LBCL) and Cb-011 (anti-BCMA, R/r MM) citing challenging financing environment for allogeneic Car-T cell Therapies and lack of capital availability as reasons for today’s decision
• FCEL -14%; after appoints Matthew Latino as CFO, who succeeds Michael Bishop as part of a planned leadership transition. Latino joins FCEL from water technology firm XYL, where he served as senior vice president of finance and segment CFO for its Measurement & Control Solutions business.
• OC -5%; was downgraded to Sector Perform from Outperform with a $127 PT (from $172) at RBC Capital on worsening cost backdrop and downside risk to Q4 and 1H’27 estimates following another weak storm season; was also downgraded to Sell from Hold with a $106 PT at Vertical Research Partners.
• WS -8%; in steel sector after earnings results last night.