NEWS
All Eyes Turn To America’s Election

Stocks rebounded today on the back of big tech as investors and traders prepared their portfolios for U.S. election-related volatility. Now, we all sit and wait for the U.S. election results, plotting how we’ll adjust our portfolios once the outcome is known. 👀

Today's issue covers Super Micro’s shadowy future, traders and investors hedging election volatility, and other noteworthy pops and drops. 📰

Here’s the S&P 500 heatmap. 11 of 11 sectors closed green, with consumer discretionary (+1.77%) leading and materials (+0.15%) lagging.

And here are the closing prices: 

Most bullish/bearish symbols on Stocktwits at the close: 📈 $QLYS, $ZCAR, $TSHA, $TDUP, $XMTR 📉 $VRCA, $NXPI, $SQNS, $CPS, $LSCC*

*If you’re a business and want to access this data via our API, email us.

EARNINGS
Super Micro Further Sullies Its Reputation 🙃 

The embattled semiconductor company has fallen from grace over the last six months, with investors hoping for answers during its latest earnings report. Unfortunately, instead of providing clarity, management stirred up more confusion.

For the quarter ending September 30th, the company reported net sales of $5.9 to $6 billion, well under analysts’ expectations of $6.45 billion. Adjusted net income of $0.75 to $0.76 per share. These numbers are not audited, so they could eventually be worse (or better?) than initially reported. 😐️ 

Still, the company has far more pressing issues than selling its servers and computer systems right now.

Last week, its auditor, Ernst & Young (EY), resigned. And if Super Micro doesn’t file its delayed annual report with the Securities and Exchange Commission (SEC) by mid-November, it faces potential delisting from the Nasdaq exchange. 😱 

On the earnings call (which thousands of investors tuned into live on Stocktwits), management said it wouldn’t discuss any questions related to EY’s decision and that it’s actively in the process of hiring a new auditor.

CEO Charles Liang said, “We are working with urgency to become current again with our financial reporting…” Additionally, the company’s board of directors commissioned a special committee to look into EY’s concerns, but the three-month investigation found “no evidence of fraud or misconduct” from management. 🤷 

Liang continually shifted the focus back to Nvidia’s latest GPU, Blackwell, saying that demand is strong and its capacity is ready. Management reiterated its “deepest of relationships” with Nvidia, trying to quell fears about the companies’ relationship.

With shares down 80% from their March highs and urgent issues facing the company, management failed to renew investors' confidence. $SMCI shares fell 15% in the after-hours session. For now, the clock ticks as the SEC, Nasdaq, and investors await audited financials and more clarity about the future. ⌛️ 

CHART OF THE DAY
Market Participants Race For Protection 😨 

The Stocktwits election poll continues to pop off, with over 70,000 users voting and Donald Trump maintaining his lead over Kamala Harris. With this expected to remain a tight race, let’s see how market participants are positioning. 😬 

Stocktwits user @allstarcharts shared a chart of the CBOE put/call ratio rising to new 52-week highs even as stocks sit near all-time highs, signaling a rush for “protection” through at least the end of this week’s events.

J.C. sees this as a bullish sign that the market could be caught flat-footed if stocks continue higher. However, many others view this less as a contrarian signal and instead as a sign that any downside, if it does occur, could be somewhat limited given that many market participants grabbed protection in the options market. 🛡️ 

For more charts & trade ideas like this, get today’s “Chart Art” newsletter. 🎯