CLOSING BELL
Investment Banks’ Roaring Twenties

The market climbed Wednesday, after more big bank earnings beat estimates, and updates to the trade showdown building between the U.S. and China.

The government shutdown is going nowhere, with the White House pledging to pay soldiers and some federal workers this week anyway. A California U.S. District Court Judge temporarily paused Trump’s plans to fire employees. It’s one less bargaining chip to get lawmakers to end what will be the third-longest shutdown in history by Friday.

Earnings are coming in hot, with record profit jumps from Bank of America and Morgan Stanley. Taiwan Semiconductor is trending in anticipation of its morning report Thursday. Look for what to expect below.

In tariffs, President Trump said he is looking to cut back on used oil imports, which is beans compared to the $14B soybean exports China is boycotting. 👀

Today’s RIP: Big Banks ripping, United misses Rev, Levered ETFs are flying off the shelves, and more. 📰

7 of 11 sectors closed green. Real Estate $XLRE ( ▼ 0.26% ) lead and materials $XLB ( ▼ 0.94% ) lagged.

 $SPY ( ▼ 0.96% )  $QQQ ( ▼ 0.71% )  $IWM ( ▼ 2.23% )  $DIA ( ▼ 0.99% ) 

STOCKS
United Airlines Posts Earnings Beat, Rev Miss ✈️ 

United Airlines $UAL ( ▼ 7.08% ) was falling after the market closed, reporting a slight miss in its third quarter revenue.

The carrier boosted capacity 7% while other airlines pulled back, but overall bookings fell 3.3% domestically and 7.1% internationally. Like Delta reported last week, United’s premium seating revenue climbed 6%, and loyalty program sales grew 9%.

After a spring filled with air traffic control delays out of United’s hub in Newark Airport, United said NJ is running on time. It better be, I’m flying to Stocktoberfest on Monday! Delays from the Federal AA are on traders’ minds during the government shutdown.

"We've invested in customers at every price point: Seatback screens, an industry-leading mobile app, extra legroom, a lie-flat United Polaris seat, and fast, free, reliable Starlink on every plane by 2027. Our customers value the United experience, making them increasingly loyal to United," CEO Scott Kirby said in a statement.

Overall, the firm posted EPS of $2.78 adj. v. $2.62 expected, Revenue $15.23B vs. $15.33 estimates. Looking forward, the frequent flyer expects adj. $3-$3.50/share in Q4, above avg. estimates at $2.87/share.

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INDUSTRY NEWS
Insane Levered ETFs Popping Up for Everything 💰️ 

This weekend, Bitcoin saw a sudden drop from $121k to $106k after a Trump tweet, a tumble that sent degenerate levered crypto traders to the poor house. $19B in leveraged positions were wiped out in just one day, the largest blowup in history, according to Yahoo Finance.

Miss out on the fun? Have no fear, the ETF market is here! Ultra-levered products are surging in popularity on the equities side of trading. A third of all ETFs launched this year feature some form of Leverage, according to Bloomberg Intelligence.

Volatility Shares filed Wednesday for 27 new levered ETFs, including the first-ever batch of 5X ETFs for equities like AMD, AMZN, NVDA, and TSLA. The U.S. SEC has only ever approved single stock levered ETFs with a max of 2X leverage, meaning every price jump in an underlying stock is doubled on the ETF. Sellers keep this up with huge cash deposits, closing positions rapidly to make up when prices fall. 🤩 

JPMorgan estimated levered ETFs also helped push down the rash sell-off Friday in public markets, owing to a $26B sell-off that drove prices further into the red. ETF and technical strategist Todd Sohn told Barron’s that the market soared 35% since April, and risk appetite is in the air. When prices climb with low volatility, levered products become more attractive, he said.

“These are especially effective when it’s a market that just goes straight up,” Sohn said.

Too good to be true? Well for one thing, these products are filing for a 75-day go-to-market strategy: the SEC is away from their desks during the government shutdown. For another, these ETFs reset their target 2x, 3x, ect. Every day, according to Barrons, so over multiple days, you might miss out. Directions TSLA 2X product is lower this year compared with the underlying by a significant margin, according to Barron’s.

“After a volatile nine months, Tesla shares are up about 6% on the year. But Direxion’s 2X Tesla ETF is down almost 35% in 2026. The extreme losses from earlier this year have weighed down the ETF for anyone who tried to hold it consistently for the past nine months.”

If you are hoping to use short-term products like options on these ETFs, you can avoid longer-term value drains like high expense ratios, not to mention 2X the losses on red days. Though that’s even more like gambling. Wild times. 🎰 

INDUSTRY NEWS
Big Banks Pull In Big Bucks, But Dimon Said There Are Cockroaches In The Rough 🪲 

Morgan Stanley $MS ( ▼ 1.73% ) and $BAC ( ▼ 3.94% ) both posted revenue beats so big their prices were climbing high on Wednesday.

Morgan Stanley said its profit flew 45% to $4.51B, revenue climbed to $18.22B, up 18% from last year. It was the largest margin jump in almost five years, gains led by wealth management and investment banking arms.

Bank of America said its Q3 was also hot, with a 23% jump in profit to $8.5B.

Still, one comment is holding bank stocks back: JPMorgan chief Jamie Dimon said that bankers have to look out for cockroaches- they might step on one. Dimon was referring to his bank’s lending to nonbank institutions that are facing higher threats of a credit crunch. JPM had to pay out $170M after its subprime auto loan client Tricolor declared bankruptcy in Sept.

“I probably shouldn’t say this, but when you see one cockroach, there are probably more,” Dimon told analysts Tuesday. “Everyone should be forewarned.”

BAC CFO Alastair Borthwick said Tuesday his firm’s loans were doing fine, after exposure to First Brands Group, another recently bankrupt auto-parts company that also folded in Sept. Guess time will tell. 🚗 

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MACRO
Fed’s Beige Book Report Shows Slowing Demand 🛒 

The Fed released its time-honored ‘Beige book’ report of the 12 Fed Reserve districts in the U.S. on Wednesday. The FOMC uses this report from correspondents within the economy to help decide on monetary policy.

This time, they found flat growth, tariffs biting, a flat job market with looming layoffs, and a risk to conditions from the government shutdown.

FORWARD LOOKING
Taiwan Semi Report Coming Tm, Look For This: ✅ 

$TSM ( ▼ 1.88% ) earnings are on the way, the world’s largest semiconductor maker is expected to report from the small island nation of Taiwan at 2 am ET, Here is what to look for:

TSMC Q3 Profit Set to Surge 28% on AI Boom

• Taiwan Semiconductor Manufacturing Co (TSMC) is expected to post a record net profit of T$415.4B ($13.55B) for Q3, according to LSEG SmartEstimate

• Driven by relentless demand for AI infrastructure and chips powering Nvidia & Apple, Revenue already flagged as up 30% YoY

• If profit exceeds T$398.3B, breaks record for quarterly net income, and the seventh consecutive quarter of profit growth

• U.S. tariffs loom—Taiwan exports might face 20% duty in Nov.

• TSMC investing $165B in Arizona fabs to diversify production footprint

POPS & DROPS
Top Stocktwits News Stories 🗞️ 

• Elon Musk faces rising competition in physical AI despite early lead.

• Dragonfly Energy jumped 28% amid battery sector buzz.

• Hillenbrand rose 18% after $4B go-private deal with Lone Star affiliate.

• Fluence Energy rose 13% on solar storage project news.

• Microvast climbed 19% as shares hit 3.5-year highs.

• Pfizer CEO said vaccine approvals are tightening under FDA leadership.

Don’t miss a story! Follow @StocktwitsNews for a live feed in real time. ✍️ 

PRESENTED BY STOCKTWITS

WHAT’S ON DECK
Tomorrow’s Top Things 📋

Economic data: Continuing Jobless Claims (8:30 AM), PPI (8:30 AM), Retail Sales (8:30 AM), Philly Fed Employment (8:30 AM), PPI (8:30 AM), Fed Waller Speaks (9:00 AM), Retail Inventories Ex Auto (10:00 AM), Crude Oil Inventories (12:00 PM), Fed’s Balance Sheet (4:30 PM). 📊
Pre-Market Earnings: Taiwan Semiconductor ($TSM), Charles Schwab ($SCHW), U.S. Bancorp ($USB), Infosys ($INFY), KeyCorp ($KEY), Bank of New York Mellon ($BK), and Travelers Companies ($TRV). 🛏️
After-Market Earnings: CSX ($CSX) and Interactive Brokers Gr ($IBKR). 🌕️ 

P.S. You can listen to all of these earnings calls on Stocktwits.

Links That Don’t Suck 🌐

📈 With OpenAI alliance, Walmart inches toward trillion dollar status

🎩  Tariffs are pushing prices higher and consumers are feeling the hit, Fed’s Beige Book show

😨 Bunge shares soar 11% after Trump considers China cooking oil embargo

🚨 Sam Altman says OpenAI isn’t ‘moral police of the world’ after erotica ChatGPT post blows up

🤖 Judge blocks Trump from firing federal workers during government shutdown for now

Get In Touch 📬

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