>>> US Close Dow +0.17% S&P +0.06% Nasdaq +0.39% Russell +0.66%

Closing Market Summary: Stock market continues to overlook government shutdown
The stock market opened on a strong note, lifting the S&P 500 (+0.1%) and Nasdaq Composite (+0.4%) to fresh intraday record highs. With little news to drive action amid the ongoing government shutdown, the market moved sideways for most of the day, but some late afternoon buying interest helped the major averages notch record closing highs as well.

The DJIA (+0.2%) notched a record closing high, though it failed to surpass its all-time high level from last Tuesday. Meanwhile, the small-cap Russell 2000 (+0.7%) outperformed, and the S&P Mid Cap 400 (+0.1%) captured a modest gain after spending most of the day in negative territory.

Only four S&P 500 sectors finished in positive territory, though a healthy gain in the top-weighted information technology sector (+0.5%) masked broader losses and contributed to the Nasdaq Composite's outperformance.

Chipmakers fueled much of the move, propelling the PHLX Semiconductor Index (+1.9%) to another record high, while Fair Isaac (FICO 1784.68, +271.97, +17.98%) topped the S&P 500 leaderboard after unveiling a direct license program that allows tri-merge resellers to calculate and distribute FICO Scores directly to clients.

The materials (+1.1%), communication services (+0.3%), and industrials (+0.2%) sectors also finished with gains.

The energy sector (-1.0%) widened its week-to-date loss to 4.0% (the worst among the eleven S&P 500 sectors), as crude oil futures settled today's session $1.31 lower (-2.1%) at $60.48 per barrel. Occidental Petro (OXY 44.23, -3.49, -7.31%) moved lower after news that Berkshire Hathaway Inc. (BRK-B 495.96, -2.24, -0.45%) entered into an all-cash agreement to acquire the company's chemical unit, OxyChem, for $9.7 billion.

Tesla (TSLA 435.97, -23.49, -5.11%) also moved lower today after reporting over 497,000 vehicles delivered in Q3. The headline figure was record-setting, but it was largely pulled forward by the expiration of the $7,500 EV tax credit, raising questions around Q4 demand. The consumer discretionary sector retreated 0.7% in response despite broader strength throughout its other components.

On the macro front, Senate Majority Leader Thune said that it is unlikely that the Senate will have enough votes over the weekend to reopen the government, meaning the shutdown is on course to continue into next week. The shutdown has done little to keep the major averages from pushing further into record territory so far, though the blackout of key economic data today certainly added to the lethargy of today's action.

Nonetheless, the data that the market did receive before the nearly cemented odds of another rate cut later this month, keeping the market trending higher as earnings season approaches.

U.S. Treasuries finished Thursday with modest gains, pressuring yields on 5s, 10s, and 30s to their lowest closing levels in two weeks. The 2-year note yield settled up one basis point to 3.55%, and the 10-year note yield settled down two basis points to 4.09%.
  • Nasdaq Composite: +18.3% YTD
  • S&P 500: +14.2% YTD
  • Russell 2000: +10.2% YTD
  • DJIA: +9.3% YTD
  • S&P Mid Cap 400: +5.1% YTD

The Information : Anthropic Says Its AI Can Replace Enterprise Apps Like Slack

Anthropic Says Its AI Can Replace Enterprise Apps Like Slack

When AI coding tools came into vogue in 2023 and 2024, chief information officers salivated at the idea of using them to develop their own versions of Salesforce and Slack and stop paying a fortune for enterprise apps. But the AI wasn’t accurate or consistent enough to do that.

Now Anthropic is reawakening these app-replacement dreams. In a recent test, Anthropic used its Claude AI model to create a workplace chat app similar to Slack, said Sholto Douglas, the company’s tech lead for reinforcement learning, at The Information’s AI Agenda Live event Tuesday.

Douglas said Anthropic has been sharpening Claude’s coding skills using RL, where the AI gets automatic feedback from another AI model on how well it solved specific technical problems. In a separate video this week, Anthropic showed how its new model might copy enterprise apps: the company used it to clone the Claude chatbot app, which competes with ChatGPT.

Anthropic is increasingly marketing these capabilities to its corporate customers.

“We think that coding is the most economically important and immediately tractable area [for AI], so it's where Anthropic has devoted its focus,” Douglas said.

Anthropic isn’t alone—Elon Musk has been making a similar pitch, claiming in several posts since August that his company xAI will take aim at Microsoft and other enterprise software vendors and “simulate them entirely with AI.” Musk dubbed the effort “Macrohard,” but said that despite the jokey name, “the product is very real.”

Still, many software executives aren’t sold. Large companies are likely to resist tossing out the legacy applications they use because overhauling how most of their employees work, and moving business data into the new, vibe-coded apps would be too costly and time-consuming, according to AMD head of global markets Keith Strier, who previously served as a vice president at Nvidia and EY.

“I don‘t think a large scale $10 billion or $50 billion company is gonna suddenly drop ServiceNow and drop SAP and say, ‘Oh, we’re gonna just use the agents. That’s just not going to happen,’” Stier said during a separate panel at AI Agenda Live.

But he noted that vibe coding enterprise software will likely prove more useful in replacing legacy enterprise apps for younger startups that “have huge valuations but have 50 times less people.”

Some AI startup founders are similarly skeptical. Kabir Nagrecha, cofounder and CEO of IT software startup Tessera Labs, said he thinks automation will focus more on building agents that can use existing apps like Salesforce or SAP rather than replace them.

“The deal disruption is not at the software level, it's at the user level of that software and rethinking what is the role of that user to interact with an SAP, what is the role of a maintainer of SAP, how do we interact with software, not the software itself,” Nagrecha said during the same panel.

As Anthropic tries to push the boundaries of what AI coding can do, we wouldn’t be surprised to see a similar effort from OpenAI, which has pitched its own AI coding tools as capable of creating anything from websites to internal company apps.

JPMorgan Launches PR Offensive

It’s that time of the cycle again: Big banks are talking publicly about how tech-forward they are, this time with AI.

JPMorgan Chase & Co., for instance, told CNBC it has big plans for using AI to operate more efficiently and get an edge on rivals. Derek Waldron, the bank’s chief data analytics officer, said the bank is using AI to help employees create presentations and complete work projects that involve multiple steps.

Waldron went even further, saying JPMorgan will soon use AI from OpenAI and Anthropic to handle interactions with customers, like helping them find information.

His comments are the latest example of how banks, which used to be reluctant to talk publicly about their adoption of new tech for competitive reasons, are now being more open about using AI in customer-facing situations. Wells Fargo is also using AI from Google in a virtual assistant it provides to customers.

But that doesn’t necessarily mean they’re spending all that much on the technology. When banks like JPMorgan began talking about how much they were embracing cloud-based servers, in reality, they were spending relatively little compared to many other types of cloud customers.

JPMorgan also has a big financial incentive to talk up OpenAI in particular: the bank has committed $10 billion to finance data centers OpenAI will use in Texas.

All of which is to say that Waldron's comment about JPM being “fundamentally rewired” for AI might not mean it will be a heavy spender on the technology in the foreseeable future.

CrunchBase : OpenAI’s $6.6B Secondary Share Sale Gives It Record $500B Startup V

OpenAI’s $6.6B Secondary Share Sale Gives It Record $500B Startup Valuation, Topping SpaceX

OpenAI on Thursday completed a secondary share sale amounting to $6.6 billion, Bloomberg reported. The sale gives current and prior employees the ability to sell stock at a $500 billion valuation.

The transaction and resulting valuation also grant OpenAI the distinction of now being the world’s most valuable private, venture-backed company, surpassing SpaceX, which was reportedly valued at $400 billion after its own secondary share sale this summer.

According to CNBC, OpenAI had authorized up to $10.3 billion in shares for sale, which was up from its original $6 billion target. But only about two-thirds of what it had authorized ultimately got sold.

Besides OpenAI and SpaceX, several other high-valued private companies have turned to secondary sales, which are often used to reward employees and as a retaining tool for companies not ready to go public.

In February, fintech giant Stripe announced a tender offer in which investors would buy shares from past and present employees at a valuation of $91.5 billion. Last December, Databricks raised $10 billion at a $62 billion valuation in a deal that included a secondary share sale aimed at providing liquidity for current and former employees.

In April, OpenAI also made headlines for an investment of up to $40 billion from Japanese investment conglomerate SoftBank in a deal that marked the largest startup financing ever and valued it at $300 billion.

>>> Rumble announces new partnership with Perplexity, including the integration

Rumble announces new partnership with Perplexity, including the integration of Perplexity’s AI-powered tools to drive more discoverability on Rumble.com (7.39 +0.24)
  • Co announces a strategic partnership with Perplexity, the AI-powered answer engine. The partnership includes several initiatives, including the integration of Perplexity's AI-powered tools to drive more discoverability on Rumble.com, the introduction of a new subscription bundle combining Rumble Premium with Perplexity Pro, and the promotion of Perplexity's new product Comet across the Rumble ecosystem, including the Rumble Advertising Center.
  • The collaboration addresses a fundamental product challenge in digital video: helping users discover relevant content in an increasingly crowded media landscape.
  • By integrating Perplexity's AI search technology into Rumble.com, the partnership aims to improve content discoverability for both creators seeking to reach their audiences and viewers looking for specific topics or discussions.

FT : Two killed in attack at Manchester synagogue

Two killed in attack at Manchester synagogue
UK authorities step up security at Jewish sites after what Starmer denounces as a terrorist incident

Two people have been killed in a knife and car attack at a synagogue in Manchester that took place on Yom Kippur, the holiest day in the Jewish calendar, in what Prime Minister Sir Keir Starmer denounced as a terrorist incident.

The assailant in Thursday morning’s attack drove a car into members of the public outside Heaton Park Hebrew Congregation Synagogue and then stabbed people with a knife.

Greater Manchester Police said its officers fatally shot the attacker at 9.38am, seven minutes after being called to the synagogue, as worshippers barricaded themselves inside.

The attacker was wearing a vest that “had the appearance of an explosive device” but was later found to be “not viable”, the police said.

In a televised address to the nation, Starmer described the attacker as a “vile individual who committed a terror attack, who attacked Jews because they are Jews, and attacked Britain because of our values”.

In comments aimed at the Jewish community, he added: “I promise you I will do everything in my power to guarantee you the security you deserve, starting with a more visible police presence protecting your community.”

The prime minister had returned to London early from a summit in Copenhagen to chair the UK government’s Cobra emergency response group.

The Manchester attack is the first fatal incident targeting Jewish people in the UK in at least 30 years, according to data from the Community Security Trust, a UK charity that tracks antisemitism.

However, it comes against the backdrop of a sharp rise in antisemitic incidents in the country in the wake of Hamas’s October 7, 2023 attack on Israel and the subsequent Gaza war. The CST recorded 1,521 incidents in the first half of the year.

In a post on X, Gideon Sa’ar, Israel’s foreign minister, said UK authorities had “failed to take the necessary action to curb this toxic wave of antisemitism and have effectively allowed it to persist”.

Israeli Prime Minister Benjamin Netanyahu later said on X that Israel grieved with the Jewish community in the UK after the attack in Manchester.

“As I warned at the UN: weakness in the face of terrorism only brings more terrorism. Only strength and unity can defeat it,” he added, referring to his speech at the UN General Assembly in New York last week.

UK home secretary Shabana Mahmood said the government had stepped up security at synagogues across the UK.

“We will do whatever is required to keep our Jewish community safe,” she added, speaking at the scene of the Manchester attack on Thursday evening.

Greater Manchester mayor Andy Burnham said the city region “will never let acts that are designed to cause hatred, division in our communities, violence, we will never let them succeed”.

Communities needed to redouble efforts to stand united and work together in the aftermath of the atrocity, he added.

The police believed officers knew the attacker’s identity but did not immediately disclose it. Two arrests have been made.

In addition to the two people killed by the attacker, four remained in hospital after suffering a variety of serious injuries.

Witnesses told police that one of the people attacked was a security guard at the synagogue.

Footage of the scene shared on social media showed the attacker writhing on the ground within the gates of the synagogue when police shot him. An officer shouted to a nearby crowd “he has a bomb” and “move back”.

Shortly after the attack, specialist counter-terrorist police, officers armed with machine guns, and members of the army were seen at the site, as well as a damaged black Kia car near the gates to the synagogue that had been driven off the road.

On Thursday afternoon, a large police cordon was in place in Crumpsall, the Manchester suburb where the attack occurred, which is multicultural with a large Jewish community.

A helicopter flew overhead and members of the public had gathered.

A Jewish woman who lives nearby told the Financial Times that all the nearby synagogues were on “lockdown”, adding the situation was “very worrying”.

>>> US Research Calls II

Research Calls II
  • Upgrades
    • Mercury Systems (MRCY) upgraded to Outperform from Sector Perform at RBC Capital, tgt $90
    • Moody's (MCO) upgraded to Buy from Hold at Deutsche Bank, tgt $528
    • Polaris (PII) upgraded to Neutral from Sell at Citigroup, tgt $60
    • RenaissanceRe (RNR) upgraded to In Line from Underperform at Evercore ISI, tgt $244
    • Samsara (IOT) upgraded to Outperform from In Line at Evercore ISI, tgt $50
    • SkyWest (SKYW) upgraded to Strong Buy from Outperform at Raymond James, tgt $140
    • Sunrun (RUN) upgraded to Buy from Hold at Jefferies, tgt $21
    • United Rentals (URI) upgraded to Outperform from Neutral at Robert W. Baird, tgt $1,050
  • Downgrades
    • MYR Group (MYRG) downgraded to Sector Weight from Overweight at KeyBanc
    • Palmer Square Capital BDC (PSBD) downgraded to Neutral from Overweight at JPMorgan, tgt $12
    • Sixth Street Specialty Lending (TSLX) downgraded to Neutral from Overweight at JPMorgan, tgt $24
    • Tetra Tech (TTEK) downgraded to Neutral from Buy at Northcoast
    • ViaSat (VSAT) downgraded to Underweight from Equal Weight at Barclays, tgt $23
  • Others
    • Klaviyo (KVYO) initiated with an Overweight at Wells Fargo, tgt $40
    • LTC Properties (LTC) initiated with a Neutral at Cantor Fitzgerald, tgt $38
    • MAA (MAA) initiated with a Neutral at Cantor Fitzgerald, tgt $150
    • Macom (MTSI) initiated with a Buy at TD Cowen, tgt $150
    • MongoDB (MDB) initiated with an Overweight at Wells Fargo, tgt $430
    • Monday.com (MNDY) initiated with an Overweight at Wells Fargo, tgt $260
    • Moody's (MCO) initiated with a Buy at Seaport Research, tgt $528
    • MSCI (MSCI) initiated with a Buy at Seaport Research, tgt $650
    • National Health Investors (NHI) initiated with an Overweight at Cantor Fitzgerald, tgt $90
    • Netgear (NTGR) initiated with a Buy at Seaport Research, tgt $40
    • Netstreit (NTST) initiated with an Overweight at Cantor Fitzgerald, tgt $21
    • Omega Healthcare (OHI) initiated with an Overweight at Cantor Fitzgerald, tgt $50
    • Oxford Lane (OXLC) initiated with a Buy at Clear Street, tgt $21.50
    • Park Hotels & Resorts (PK) initiated with a Neutral at Cantor Fitzgerald, tgt $12
    • Pebblebrook Hotel Trust (PEB) initiated with a Neutral at Cantor Fitzgerald, tgt $12
    • Pool Corp (POOL) initiated with a Sector Weight at KeyBanc
    • QXO (QXO) initiated with an Overweight at KeyBanc, tgt $28
    • Realty Income (O) initiated with a Neutral at Cantor Fitzgerald, tgt $64
    • Repligen (RGEN) initiated with a Buy at HSBC, tgt $150
    • Rexford Industrial (REXR) initiated with an Overweight at Cantor Fitzgerald, tgt $50
    • RingCentral (RNG) initiated with an Equal Weight at Wells Fargo, tgt $32
    • Ryman Hospitality (RHP) initiated with an Overweight at Cantor Fitzgerald, tgt $108
    • Safehold (SAFE) initiated with a Neutral at Cantor Fitzgerald, tgt $17
    • Sabra Health Care (SBRA) initiated with a Neutral at Cantor Fitzgerald, tgt $20
    • Semtech (SMTC) initiated with a Buy at TD Cowen, tgt $75
    • Snowflake (SNOW) initiated with an Overweight at Wells Fargo, tgt $275
    • Solventum (SOLV) initiated with a Neutral at UBS, tgt $77
    • Sound Point Meridian Capital (SPMC) initiated with a Buy at Clear Street, tgt $20
    • S&P Global (SPGI) initiated with a Buy at Seaport Research, tgt $540
    • Stag Industrial (STAG) initiated with a Neutral at Cantor Fitzgerald, tgt $37
    • Strawberry Fields REIT (STRW) initiated with an Overweight at Cantor Fitzgerald, tgt $14
    • Target Hospitality (TH) initiated with a Hold at Texas Capital, tgt $9
    • Terreno Realty (TRNO) initiated with an Overweight at Cantor Fitzgerald, tgt $70
    • TransUnion (TRU) initiated with a Neutral at Seaport Research
    • Twilio (TWLO) initiated with an Overweight at Wells Fargo, tgt $130
    • UDR (UDR) initiated with a Neutral at Cantor Fitzgerald, tgt $40
    • UMH Properties (UMH) initiated with a Neutral at Cantor Fitzgerald, tgt $15
    • Ventyx Biosciences (VTYX) initiated with a Buy at Clear Street, tgt $11
    • Ventas (VTR) initiated with an Overweight at Cantor Fitzgerald, tgt $77
    • Verisk Analytics (VRSK) initiated with a Buy at Seaport Research, tgt $280
    • VICI Properties (VICI) initiated with an Overweight at Cantor Fitzgerald, tgt $37
    • Welltower (WELL) initiated with an Overweight at Cantor Fitzgerald, tgt $195
    • ZoomInfo Technologies (GTM) initiated with an Underweight at Wells Fargo, tgt $10