S&P fwd estimated ESP is 280$ and at index price value of 6800 the current PE is around 25 (4% earning yield), the markets are expensive from a historical perspective (avg pe has been 16-18) . There are few important events this week which could lead to small correction. I will discuss below few catalyst that can bring down markets or lead to volatility & one of those catalyst can even lead to upside. Earning reaction to momentum darlings like $PLTR was not good and goldman ceo did say negative things about markets.
The catalyst are as follows: 1. Challenge to Donald Trump’s tariff regime (U.S. Supreme Court) Key facts A case before the Supreme Court of the United States will examine whether President Trump’s sweeping import tariffs—imposed under the International Emergency Economic Powers Act (IEEPA)—are legally valid. spectrumlocalnews.com +2 yahoo.com +2 The tariffs affect broad sectors of manufactured goods, and firms in states like South Carolina—especially manufacturing & supply-chain firms—are already expressing concern. scholars.org +1 Market implications Uncertainty premium: Because the legal outcome is uncertain, companies dependent on imports or on global supply chains (e.g., manufacturing, automotive, aerospace) may face a risk premium. Higher input costs, margin pressure, and deferred investment are possible. Supply-chain segments in focus: Regions like South Carolina—where many automotive and EV supply-chain plants operate—appear vulnerable. For example, one battery-plant project paused citing “policy and market uncertainty” including tariff risk. AP News Trade-exposed firms likely hit: Stocks of firms with large import exposure or global supply chains may face elevated volatility; conversely, domestic-manufacturing oriented firms may gain relative advantage. Macro ripple effects: If tariffs are upheld, inflationary pressures (via higher import prices) may persist, potentially affecting consumer-goods sectors. If struck down, a reversal may benefit import-reliant companies (and hurt those positioned for protection). Investor takeaway Watch companies with large input imports, supply-chain exposure (especially in Carolina region). Monitor sectors like automotive, EV supply chain, aerospace for margin risks and investment pulls. Consider “hedge” positions in firms with domestic manufacturing strength or less import dependency.
2. NY Mayoral elections & potential Mamdani’s victory : New York City’s mayoral election could mark a turning point in Democratic politics. Why it matters: Frontrunner Zohran Mamdani (D) has led former New York Gov. Andrew Cuomo in recent opinion polls in the closely watch contest. A win for Mamdani, a Democratic socialist, would signal a generational and ideological shift that could reverberate beyond the Big Apple. State of play: President Trump endorsed Cuomo on Monday night, and said on Truth Social that a vote for Republican Curtis Sliwa, who is also on the ballot, “is a vote for Mamdani.” The president doubled down, suggesting that he would withhold federal funding to the city if Mamdani wins. He also called Mamdani’s Jewish supporters “stupid.” Several Democratic leaders who called on then-Gov. Cuomo to resign amid sexual harassment allegations ultimately endorsed Cuomo’s mayoral bid. Meanwhile, Mamdani has drawn support from prominent progressive figures Sen. Bernie Sanders (I-Vt.) and Rep. Alexandria Ocasio-Cortez (D-N.Y).A case before the Supreme Court of the United States will examine whether President Trump’s sweeping import tariffs—imposed under the International Emergency Economic Powers Act (IEEPA)—are legally valid. Polymarket | New York City Mayoral Election.
My take : (only for short/medium term traders) in short term the results of these events + high valuations+ weakness in momentum names/crypto demand your attention if you are afraid of drawdown. I think 1st 2 weeks of nov would hv some volatility but we would rally in dec to close at least near 7k & i expect a big drawdown starting in Q1 2026. (similar to what happened Q4 2021- Q3 2022). I keep an eyes on 10 yrs yield because i hv an impression that despite rate cuts yields want to go higher in medium to long term as current undercurrents of inflation + big deficit & debt are not going away. Crypto/BTC sentiment is my favorite liquidity/risk on gauge & the current price action is signaling alarm. Mamdani is in fringe left in political spectrum (almost communist) and his win would show that hard left democrats have some momentum building before midterms but as NY is the financial capital of the world. I think markets would not like it.
TLDR : Mamdani win + Trump losing in Supreme court + crypto momentum loss, although better for economy in long term, may be seen negatively especially from names that get trump boost (crypto, momentum, AI & tech in general and PLTR) in context of expensive markets.
we can see SPY is tring to fill gaps and its sandwiched b/w 8 & 21 ema which denotes indecision. my guess is it touches atleast 50 dma at 6650
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