Mid-Morning Look: October 09, 2026

Mid-Morning Look

Friday, October 09, 2026

U.S. stock futures were higher overnight and holding gains early as oil prices have retreated as President Trump pledged not to attack Iran before the mid-term elections and yesterday’s AI volatility has cooled on fresh optimism over OpenAI revenue expectations. There was a lot of criticism about the initial Financial Times report regarding OpenAI from Thursday noting the whole $50B in revs vs. $70B debate is simply a function of math and how one calculates ARR, not an issue of demand slowing sharply, which is what the headline initially implied. A Bloomberg report overnight talked about how OpenAI is aiming to have ARR (on a net basis) of $70B by the end of the year vs. ~$50B as of Sept. Oil prices extend losses in afternoon European trading, even as tensions in the Middle East remain elevated and Hurricane Isaias threatens production in the U.S. Gulf Coast. In stock news, CMS released its 2027 Medicare Advantage Star Ratings overnight and drove sharp dispersion across managed care: HUM, CLOV shares surge while ALHC tumbles after its flagship California plan dropped to 3.5 stars. Tower operators AMT, CCI, SBAC surge and Telco giants VZ, T, and TMUS tumble after SpaceX’s roughly $8B purchase of low-band spectrum from Grain Management. Airlines sliding on weaker earnings/guidance cut from Delta (DAL).

• University of Michigan surveys of consumers 1-year inflation outlook prelim Oct 4.7% vs final Sept 4.6% and 5-year inflation outlook prelim Oct 3.5% vs final Sept 3.4%.

• Managed care sector: shares of HUM jump and ALHC decline after CMS announces start ratings for plans. Humana said 95% of its Medicare Advantage members are enrolled in plans rated at least four stars for 2027, an improvement that could make more of its membership eligible for quality-related bonus payments. ALHC shares tumbled after saying one of its 2027 Medicare Advantage plans received a 3.5-star rating (down from prior 4-star) from the Centers for Medicare & Medicaid Services. UNH’s UNH will have 67% of its MA members enrolled in 4+ Star plans, down 11% from 78% in the prior year. CVS will have 69% of its MA enrollment in 4+ Star plans, compared to ~81% last year. The 2 largest contracts retained 4.5 and 4.0 stars, respectively. ELV will have 45% of its MA enrollment in 4+ Star plans, compared to ~55% last year. The y/y decline was primarily related to contract H3655, which represents 7.6% of MA membership. CNC now has only 9% of total MA enrollment in 4+ Star plans, vs. 16% last year. CLOV shows H-5141 improving from 4.5 to 5 Stars, putting ~98% of its membership in a 5-Star contract.
• Multi-Industry sector: ITW downgraded Illinois Tool Works to Neutral from Overweight (tgt to $270 from $350) following a transfer of coverage citing concerns around decelerating short cycle industrial demand into 2027. The firm favors names that offer high OSG in ’27 (FPS, GEV, RRX, SPXC, TT), consistent ‘compounders’ (PH), later-cycle end-market plays (EMR, HON), and Self-help stories where consensus factors in little improvement (MMM, RRX). JPM downgrades DD (remove from Analyst Focus List) amidst concerns over decelerating Short Cycle Industrial demand into 2027.
• In the eVTOL sector: Barclay’s upgraded ACHR to Overweight and EVTL to Equal Weight from Underweight while downgraded JOBY to Underweight as the firm rolled out coverage of the aerospace and defense group, saying the U.S. is in the early innings of a modern day industrial revolution and they have a positive view of the sector, preferring defense technology.

• CLOV +4%; rises on CMS rating changes; shows H-5141 improving from 4.5 to 5 Stars, putting ~98% of its membership in a 5-Star contract.
• FSLY +6%; upgraded to Outperform at Oppenheimer with 435 tgt saying their bullish stance is predicated upon its strong industry checks that indicate growing contract values (growing attach of newer Security products) and early monetization of agentic Ai traffic.
• HUM +14%; said 95% of its Medicare Advantage members are enrolled in plans rated at least four stars for 2027, an improvement that could make more of its membership eligible for bonus payments. About 42% of Humana’s Medicare Advantage members are enrolled in 4.5-star plans.
• LITE +6%; CEO said optical parts are ‘completely sold out’ through early 2029; expects significant supply shortfalls for some products through 2028; Nvidia invested $2B each in LITE and COHR earlier this year; shares of other optical stocks AAOI, CIEN, COHR also strong off commentary.
• SPCX +3%; as agreed to acquire Grain Management’s 800 MHz portfolio, up to 14 MHz of paired spectrum for Starlink Mobile, subject to FCC approval.
• TEVA +6%; said it had received approval from the US FDA for Weltruza, a once-monthly injection for adults with schizophrenia. Weltruza is the second US-approved product from Teva’s partnership with French biotech company MedinCell.

• ALHC -18%; shares tumbled after saying one of its 2027 Medicare Advantage plans received a 3.5-star rating (down from prior 4 star) from the Centers for Medicare & Medicaid Services. CVS health-insurance business, Aetna, said more than 69% of its Medicare.
• DAL -2%; after Q3 adj EPS $1.72 misses the $1.89 consensus on revs $17.59B vs. est. $17.66B; cuts adjusted annual EPS to $5.10-$5.60, down from the $6.50-$7.50 it forecast in July as the new midpoint of $5.35 is below analysts’ average estimate of $5.46.
• TMUS -9%; along with weakness in other telecom carriers T, VZ after SPCX is set to acquire a portfolio of low-band wireless spectrum licenses from PE firm Grain Management for approximately $8B in cash, as the assets include up to 14 megahertz of paired spectrum in the 800 MHz band.