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The AI Tumble and the Search for Value · The SPY Trader

• 0:00
  Welcome back to Spy Trader .
• 0:02
  I’m your host , Barry Bucks , and we’re jumping into the markets early today .
• 0:07
  It's 5 am on Thursday , November 6th , 2025 , Pacific time , and we are tracking an ongoing battle between market resilience and valuation anxiety .
• 0:18
  The US stock futures are nudging slightly positive this morning , attempting to solidify the modest rebound we saw yesterday .
• 0:27
  The S&P 500 managed a 0.37% gain and the techheavy Nasdaq Composite led the charge , rising 0.65% , after suffering a sharp , AIled selloff on Tuesday .
• 0:41
  The overarching theme right now is extreme selectivity .
• 0:44
  Investors are rewarding proven profits and punishing weakness in highflyers .
• 0:49
  Let’s dive into the key drivers .
• 0:51
  The market is struggling with a mixed picture .
• 0:54
  On the one hand , the economy is surprisingly robust .
• 0:58
  Private indicators like the October ADP private employment showed a betterthanexpected rise of 42,000 jobs , and the ISM Services Index climbed to an 8month high .
• 1:09
  This suggests the US economy , particularly the service sector , is resilient .
• 1:15
  On the other hand , the political uncertainty is thick , with the recordlong US government shutdown delaying critical official economic data .
• 1:24
  This forces the market to rely on private indicators , magnifying volatility .
• 1:30
  Corporate earnings delivered a huge shakeup yesterday .
• 1:33
  In the AI space , the rubber met the road .
• 1:37
  Palantir fell over 7% despite beating earnings , and Super Micro Computer , or SMCI , tumbled 11.3% after a disappointing outlook .
• 1:48
  This intensified concerns about the rapid pace of the AI rally and valuation stretches .
• 1:54
  But it wasn't all bad .
• 1:55
  Strong earnings acted as a critical counterweight .
• 1:59
  Healthcare stock Amgen surged up to 8.8% after crushing analyst estimates , boosting the entire Health Care sector .
• 2:07
  And late breaking news showed Snap posting a massive surge in extended trading after announcing a robust 500 million buyback and strong Q4 guidance .
• 2:18
  We also saw some dipbuying confidence in Advanced Micro Devices , or AMD , which managed to rebound 2.5% .
• 2:28
  Our analysis suggests we are in a selective rotation driven by a ‘ Growth at a Reasonable Price ’ philosophy , or GARP .
• 2:36
  The market is distinguishing between companies that have solid earnings justifying their price and those that rely purely on forward growth hype .
• 2:45
  Defensive sectors are showing relative strength .
• 2:48
  Health Care , as evidenced by Amgen's results , is acting as a relative safe haven .
• 2:55
  The Industrial Select Sector SPDR Fund , XLI , is up over 16.6% yeartodate , benefiting from infrastructure buildout driven by AI and a strong economy .
• 3:07
  Meanwhile , Consumer Discretionary is also showing recent daily leadership , suggesting consumers are holding up despite higher mortgage rates , which recently clocked in at 6.15% .
• 3:19
  So , what are the trades today ?
• 3:21
  Given the volatile environment , we advocate for a balanced approach .
• 3:26
  First , protect your core with a defensive hedge .
• 3:29
  We recommend the Health Care Select Sector SPDR Fund , XLV , capitalizing on the strength shown by companies like Amgen .
• 3:37
  For core exposure , stick with a broad market ETF like the Vanguard S&P 500 ETF , VOO , to capture the strong underlying corporate earnings trend .
• 3:48
  Second , target fundamental resilience .
• 3:51
  Buy the Industrial Select Sector SPDR Fund , XLI .
• 3:56
  This sector is benefiting from the AI infrastructure push and general economic strength .
• 4:02
  Third , for tech exposure , avoid chasing volatile single stocks like SMCI .
• 4:08
  Instead , use a diversified ETF like the Invesco QQQ Trust , QQQ .
• 4:14
  The Wednesday rebound , led by stocks like AMD , shows dipbuyers are active , and QQQ provides broad exposure to the concentrated growth of the Nasdaq100 without being reliant on any one company’s disappointing outlook .
• 4:30
  Finally , a quick note on fixed income : Given the strong economic data and sticky inflation , avoid longduration Treasury ETFs like TLT .
• 4:40
  Instead , use a broad , core bond fund like the Vanguard Total Bond Market ETF , BND , for stability .
• 4:48
  That’s it for this morning’s market check .
• 4:51
  Stay nimble , trade smart , and I’ll catch you next time on Spy Trader .