Summary
Highlights
November is historically a strong month for the S&P 500. Years where the S&P 500 has gained more than 15% by October's end typically see an upward trend in November, with markets ending higher 81% of the time. The overall odds of a year-end rally are high, with the last two months of such years historically ending green 95.2% of the time. This strong outlook is supported by increased capital expenditure, potential rate cuts, a dovish future Fed chair, and a melting USD. However, potential risks include sudden trade policy shifts, Powell's commentary, tax loss harvesting, and unforeseen black swan events. The advice is to be a cautious bull, focus on owning great assets, and utilize dollar-cost averaging.
A major US-China trade deal signed on November 1st, 2025, is expected to create a significant risk-on sentiment boost, leading to a broader market rally beyond just big tech. This deal reduces geopolitical risk premiums, encouraging capital rotation into cyclical and growth sectors. It also brings supply chain relief for manufacturing, tech, and EV stocks (like Nvidia, AMD, Intel), agricultural and commodity rebounds, and increased confidence and liquidity, leading to higher corporate investment and buybacks. This shift is anticipated to broaden the bull market rally.
China controls 85-95% of global rare earth supply, making it a national security issue for the US and its allies. Rare earths are crucial for data centers, defense systems, electronics, and medical equipment. The Trump administration has supported domestic rare earth suppliers, but recent Chinese export restrictions created volatility. While the recent US-China deal temporarily suspended these restrictions for a year, the long-term thesis for US-based rare earth companies remains strong due to ongoing government efforts to reshore production and reduce dependence on China.
Energy production, especially cheap energy, is a critical front in the AI arms race. China is significantly ahead in nuclear reactor construction. The Trump administration has focused on countering this, backing new nuclear plants. HD Haun (now IMSR on NASDAQ) is highlighted as a public opportunity, having seen an anticipatory run before its merger and now settling. The prediction is for its long-term value to be much higher, with a potential bottom around $14-$15 before an uptrend into the $20s and $30s by 2026.
Fermy Inc. (FRMI) is an AI-focused infrastructure REIT planning to build massive data center campuses powered by on-site energy, including next-gen nuclear. Its 'powered shell lease' model addresses the growing energy demands of AI. A key factor is its co-founder, Rick Perry, former US Energy Secretary under Trump, who brings political connections to expedite regulatory processes. The company is even naming its Texas campus after President Trump, aligning with 'America First' energy policies and national security priorities. Fermy aims to deliver up to 11 gigawatts of capacity, has strategic leadership, and its REIT structure could make it a future dividend powerhouse. Institutional investors showed confidence at IPO, and its US-based, energy-independent design aligns with critical infrastructure onshore efforts.
TSMC (Taiwan Semiconductor) is the world's largest chip foundry, with clients like Nvidia, AMD, Apple. It's considered a long-term 'buy and hold' due to its essential role in the AI boom, manufacturing every AI chip. TSMC has shown record growth (over 40% year-over-year revenue), and demand from AI and high-performance computing is exploding. Its global expansion (new fabs in Arizona, Japan, Germany) reduces geopolitical risks and secures subsidies. TSMC has a massive competitive moat due to decades of R&D and advanced process leadership. Despite its dominance, it trades at a reasonable multiple compared to US peers, offering upside in the AI supply chain.
Applied Materials (AAT) is positioned for a breakout, being critical to the chip manufacturing process. AAT builds the tools that enable TSMC and other foundries to produce chips. It's seen strong growth and momentum, supported by surging revenue boosts from its partners. AAT provides advanced equipment and materials to companies like TSMC, Samsung, and Intel. The AI and foundry expansion boom directly boosts AAT's order book, with record-high orders and backlog. Their diversified dominance across logic, memory, display, and packaging equipment, combined with strong financial momentum and appealing valuation, makes it a compelling 'picks and shovels' play on the global AI and chip fabrication race.