The Biggest Story of the year – The McRib lawsuit. Next of course we have to discuss the election. For good measure let’ dive into the AI and Semi meltdown A couple of important announcementsas well. PLUS we are now on Spotify and Amazon Music/Podcasts! Click HERE for Show Notes and Links DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar. Love the Show? Then how about a Donation? PayPal.Donation.Button({ env:'production', hosted_button_id:'JJJHP2GDEJC7J', image: { src:'https://www.paypalobjects.com/en_US/i/btn/btn_donateCC_LG.gif', alt:'Donate with PayPal button', title:'PayPal - The safer, easier way to pay online!', } }).render('#donate-button'); Follow John S. Dvorak on X Follow Andrew Horowitz on X ELECTION NIGHT IN AMERICA Warm-Up - WORLD PEACE - Thank you Melania ! - Big Disruptions in the Communications space - ELECTIONS - McRib Lawsuit Update Markets - Oooofah - quite the ugly moves last week - at least bonds got a big (YUGE) bid - OIL - OMG have you seen pricing. Worst offensive move to say we won't attack until after the midterms. - META - good earnings, but stock tumbles - Starting to worry - Bond crisis is France could spillover --- But encouraging that safety trade leading to bonds again DHU MAILING LIST! - Go to DHUnplugged.com Two more important announcements ! 1. NEW PODCAST - Party Line with the Dvorak Family 2. ASK ANDREW - This week's TDI Podcast - YOU GET FREE FINANCIAL ADVICE - Send questions to Askandrew@thedisciplinedinvestor.com ELECTION INFECTION - Early but it looks like a blue wave - somewhat surprising - Markets not so happy (QQQ Down 1.7%, S&P Down 0.80) - What is going to be the fallout -> IRAN, Exec Orders, Reconciliation process? OIL HITS $115 Last Week - Brent touched $115, a five-month high; WTI above $100. - Attacks on Saudi Arabia threaten regional oil supplies. - Higher fuel and transportation costs squeeze consumers, raise inflation pressure and complicate central bank policy. - This is not temporary at this point and the longer this goes on the more entrenched inflation becomes. - FOLLOW UP - 7% drop Monday as President Trump says something about diplomacy FAV STORY! MELANIA BROKERS CEASEFIRE - WORLD PEACE? NOT QUITE - Headlines trumpet Melania Trump brokering a Russia-Ukraine ceasefire. Sounds like the war is ending, right? Not exactly. - Agreement covers ONE city: Russian-occupied Oleshky in southern Ukraine. The rest of the war continues. - Temporary ceasefire begins October 29 to allow humanitarian aid and civilian evacuations. Not a nationwide peace agreement. - White House claims diplomatic victory, but neither Russia nor Ukraine had independently confirmed the deal when announced. - Quite the headline: "Melania Brokers Russia-Ukraine Ceasefire." Apparently the fine print is that the ceasefire covers one city. At this rate, only a few thousand more municipalities to go! MCRIB, HOLD THE RIB - A federal judge allowed key claims in a proposed class action against McDonald's to proceed over alleged misleading McRib marketing. - Customers say its name and rib-shaped patty suggest actual rib meat, causing them to overpay for the roughly $7 sandwich. - McDonald's denies using heart, tripe or stomach and calls the claims meritless; the ruling does not establish wrongdoing. MICROSOFT OFFERS AN EXIT - Microsoft offered voluntary buyouts to roughly 60,000 employees, about 27% of its global workforce. - Eligible teams include Copilot, Xbox, Windows, finance and HR across the U.S., Canada, India and U.K. - The cost-cutting move comes alongside planned calendar-year capital spending of $175 billion. - These are buyout offers, not 60,000 confirmed departures. --- IF YOU ARE ONE OF THESE PEOPLE - CONTACT US BEFORE MAKING ANY DECISIONS AI TRADE FACES A CREDIBILITY TEST - Nasdaq plunged 2.6% last Thursday ; semiconductor stocks led declines. - Meta fell 7%, reporting $2.12 billion negative free cash flow after spending $34.9 billion on capital expenditures. - Lam Research plunged nearly 12% despite strong results; Tesla dropped 3.1% after reducing its 2026 capex outlook. - Investors demanding measurable returns on AI spending, not simply larger infrastructure budgets. - Serious worries about where the next tranche of money is going to come from to pay for this party - Intel whacked - down 30% on earnings report - blaming PC weakness TELECOM STOCKS FACE A NEW THREAT - SpaceX exploring a nationwide wireless network with spectrum reportedly covering nearly 100% of the US population. - AT&T, Verizon and T-Mobile face a potential fourth competitor. - Starlink satellites offer a unique competitive advantage, while cell tower operators could benefit from expansion. FURTHER UPDATES - SPACEX - THE FOURTH WIRELESS GIANT? - This is a major story - could be mega industry disruption. - BUILDOUT COSTS - Analysts estimate SpaceX could spend more than $80 billion building a nationwide wireless network, beyond its massive spectrum purchases. - WINNERS AND LOSERS - When the clarification and updates were made end of last week, AT&T, Verizon and T-Mobile fell 3%-5%, while Crown Castle surged over 13% and American Tower gained as SpaceX reportedly seeks access to 80,000 cell sites. - THE BIG CATCH - Satellite service still cannot match traditional cellular capacity or indoor coverage; regulatory approvals and an expensive terrestrial network buildout remain major hurdles. THE FED PAUSE - BUT OIL CHANGES THE EQUATION - Fed meets October 27-28; most economists expect no rate change. - Current target range: 3.75%-4.00%; another 25-basis-point increase remains possible in December. - Oil near $115 threatens inflation expectations and could force the Fed to maintain a tightening bias. - It seems that December guidance may matter more than October's decision. - PLUS - this close to the mid-terms would invite way too much fire and scrutiny FRANCE REMAINS EUROPE'S PRESSURE POINT - French 10-year yield crossed 5%, highest since 2002. - Moody's reviewing France's Aa3 rating with negative outlook. - Budget gridlock, political instability and borrowing needs are widening yield spreads versus German bonds. - Potential spillover to European banks, sovereign debt and euro. - This is a problem FRANCE - THE NEXT EUROPEAN DEBT CRISIS? - France's debt near 119% of GDP; 10-year yields above 5%, highest since 2002. Spread over Germany reached nearly 178 basis points, a euro-crisis-era level. - Deutsche Bank reports French 10-year government bonds are experiencing their WORST YEAR IN 223 YEARS, based on historical returns. - Moody's reviewing France's Aa3 rating October 23; political gridlock, massive deficits and 2027 elections make spending cuts extremely difficult. - Contagion risk spreading toward Italy and Greece. Banks holding government bonds face losses, higher funding costs and potential forced selling. - H&C's Take - France is the eurozone's second-largest economy, and ECB intervention is not guaranteed. A French debt crisis could be far harder to contain than Greece in 2012. VOLVO CARS - A BRUTAL QUARTER - Volvo shares plunged nearly 30%, a record decline. - Q3 operating loss of 3.7 billion Swedish crowns; revenue declined 23%, with China down nearly 50%. - Another 2,500 layoffs following 3,000 announced in 2025. - New 5 billion crown cost-cutting plan as tariffs, Chinese competition and weak EV demand squeeze profitability. META HIT WITH $25 BILLION PRIVACY PENALTY - New Mexico judge ordered Meta to pay $25 billion over the Cambridge Analytica privacy scandal. - Nearly 44 million consumer-law violations identified. - Original calculated penalty of $219.5 billion was reduced; judgment includes 15% annual interest. - Meta expected to appeal the decision. - Bigger issue was earnings report - which was GREAT - BUT (as we have feared) now cash flow NEGATIVE APPLE BEATS, BUT MARGINS BITE - Revenue rose 12% to $114.5 billion; EPS of $2.10 beat expectations near $2.00, including a $0.05 boost from tariff refunds. - iPhone sales reached $57.6 billion versus $56.5 billion expected; China revenue missed at $17.5 billion versus $18.8 billion. - Services hit a record $31.6 billion, essentially matching estimates. - Holiday-quarter gross margin forecast of 45%-46% disappointed as higher memory costs squeeze profits; shares fell during the call. AI-DISCOVERED BUG THREATENS THE INTERNET - AI tools discovered critical PHP vulnerabilities, some reportedly undetected for more than a decade. - PHP powers roughly 75% of identifiable website backends. - European government sites reportedly disrupted, along with Wikipedia and Internet Archive. - Emergency patches issued, but an estimated 1.5 million PHP hosts reportedly remain exposed. - AI increasingly used to discover security flaws that traditional software testing missed. MODERNA - GOOD DATA, TERRIBLE STOCK REACTION - Moderna shares plunged 17.6% despite positive cancer data. - Merck partnership showed a 42% reduction in melanoma recurrence or death risk. - Two-year cancer-free survival: 82.2% versus 70%. - Trial results reportedly leaked ahead of conference; shares had already gained over 500% earlier this year. Lesson: WHY MODERNA PLUNGED DESPITE GOOD RESULTS - EXPECTATIONS TOO HIGH - Moderna shares had surged more than 500% in 2026, pricing in nearly perfect cancer vaccine results. - KEY DATA DISAPPOINTED - Vaccine reduced melanoma recurrence or death risk by 42%, but distant metastasis risk reduction was only 38%, versus 59%-65% in earlier trials. - EARLY DATA LEAK - Results appeared on an oncology website before the scheduled presentation, triggering heavy selling and a 17.6% stock plunge. INDIA'S MASSIVE JIO IPO - Mukesh Ambani's Jio launched a $3.2 billion IPO, valuing the business near $108 billion. - Investor bids exceeded $77 billion, more than 13 times the available shares. - Trad
