Good morning! Stocks are up, crypto is up, gold is up — and Big Tech earnings are rolling out. More on that below.

Just when I thought we could put meme stocks like GameStop behind us, the highest-profile one yet is rattling markets.

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Trump Media & Technology is punishing short sellers

Imagine this. A presidential candidate owns so many shares of a public company that people start to view its stock like election odds.

The asset price fluctuates from wins and losses on the campaign trail, rather than the integrity of its balance sheet. 

Supporters like the stock — regardless of its merits as a business — because it's owned by the person they want in the White House. 

This is the position Donald Trump finds himself in as the majority owner of Trump Media & Technology.  

Despite multiple trading halts, the stock climbed 9% on Tuesday to push its October gains to more than 230%.

That rise has coincided with Trump’s surging odds across prediction markets. 

Traditional polls, meanwhile, maintain the race is still a coin-flip.

This is all more simple than it sounds. Trump Media stock has become a proxy for traders who either: 

1. Want to express their support for a second Trump presidency

2. Expect Trump to win, regardless of politics, and they want to place a bet

Sounds like a meme stock, right? 

And yet the parent company to Truth Social now boasts a market capitalization of roughly $10.7 billion — more than a billion dollars more than Trump’s favorite newspaper, The New York Times. 

Trump’s stake is worth more than $6 billion, or about half his net worth, per Forbes. 

In any case, plenty of investors are betting on the stock to fall. 

There are currently 14.5 million shares that are short, or betting against, Trump Media, according to data from S3 Partners. That represents 17% of the shares available for trading. 

However, the stock’s massive gains this month have caused $322 million in recent losses for short-sellers, S3 analysts said in a report Tuesday. 

The research firm’s models suggest that a Trump victory could push the stock abruptly higher and trigger a short-squeeze, which would lead to further losses for short-sellers.  

“Conversely,” S3 analysts wrote, “using the same model suggests that DJT could become worthless if Trump were to lose.”

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Elsewhere:

📈 The Nasdaq hit a record high. Big Tech names pushed the index higher as markets prepare for Wednesday evening earnings from Microsoft, Meta and Coinbase. Meanwhile, the Bureau of Labor Statistics reported the US had 7.44 million jobs open at the end of September, slightly lower than in August.

🪙 Metals are ripping. Gold touched a new high on Tuesday while silver also rallied. Investors are going long on metals as the election nears and macro uncertainty remains for 2025. As one trader put it: “We are really in the early innings still of a multi-year shift toward precious metals.” (Yahoo Finance)

📈 The US budget deficit will keep growing. And that forecast has fueled a sharp climb in bond yields over recent weeks. Investors are betting that neither Trump nor Harris will be able to fix the problem. On Monday, a $69 billion government auction of 2-year notes saw weak demand. (WSJ)

Rapid-fire:

• Alphabet reported stronger-than-expected earnings and its stock climbed in after-hours trading (CNBC)

• US-listed bitcoin ETFs continue to smash records as they help push bitcoin to record highs (CoinDesk)

• Elon Musk’s startup xAI is in talks for fundraising that would value it at $40 billion (WSJ)

• Goldman Sachs sees historic market concentration in the S&P 500 and shrinking sales growth as reasons to expect low returns the next decade (Business Insider)

• Wall Street titans are more worried about inflation than the US election (Yahoo Finance)

• Prediction markets have put gambling at the center of the 2024 election (Opening Bell Daily)

Election odds according to Kalshi, the biggest US prediction market:

Last thing:

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