Insiders Buying. Housing Is Firming.
Published
Back at the desk. This week’s big picture feels better than the headlines suggest. Markets have been choppy, but most of that is sentiment, not fundamentals, see the data below which validates that view. The debate over whether the Fed cuts in December or January is doing more to move screens than anything tied to earnings or demand.
Underneath the noise, several signals are pointing in the right direction:
Housing is showing early green shoots as rate cuts finally start flowing through. This is the beginning of the easing cycle, not the end of it.
Corporate insiders are buying again, and historically that setup has delivered strong forward returns.
Consumer mechanics remain steady heading into 2026. No meaningful cracks in the data.
More on this below, lets get into it!
Here is the summary if you want just that:
Block one of 23 companies
Nvidia revenues continue on, questions linger.
Sentiment big driver.
Corporate indicators buying.
Spent the weekend in San Francisco for Block’s Investor Day. Really well done. We had time with the team, dug into the roadmap, and got both the short and long-term view. I’ll be putting out a full summary soon, but overall a productive week.
I’ll leave you with one stat.
Block is one of only 23 companies in the entire market generating $10B in gross profit with 15% growth and +20% margins. That puts them in rare air, and it’s why we remain medium and long-term believers. This week only emphasized our view.
Focusing on what’s top of mind. Most people look at the labor market through a simple hire or fire lens. But there’s something bigger happening underneath.
Hiring rates have moved from roughly 32% in 2022 to about 26% today.
At the same time though, the share of job-switchers moving into entrepreneurship has climbed sharply and is now sitting near multi-year highs.
So while the hire to fire ratio is fairly flat, the entrepreneur side is creating further activity in the economy that won’t show up quickly in labor stats.
Updating a stat from last week. 70% of the Nasdaq is down in 2025, the lowest ever, a fact that most haven’t seen.
Most of this is sentiment driven rather than anything tied to real changes in fundamentals.
The cleanest explanation you’ll hear is that investors are debating whether the Fed cuts in December or January. That’s really what’s moving screens right now.
Big picture… I don’t think that timing nuance changes the outlook all that much. We remain constructive on consumer mechanics heading into next year.
This chart makes it pretty clear that what we’re seeing is sentiment, not fundamentals.
Fed stance and sentiment together are dragging more than 6% of market moves.
That’s the whole story right there. Markets aren’t repricing earnings or demand.
We’re also seeing insiders step in and buy again.
That matters.
Corporate insiders buy for one reason… they think the stock is undervalued. They can sell for a dozen reasons, but they only buy when they are constructive.
And historically this setup has been a positive signal. The data in the chart says it clearly:
1 month later: +4.45% median
3 months later: +5.24%
6 months later: +6.96%
1 year later: +16.57% with a 96% win rate
So history has been on the side of the investor when insiders are buying into weakness. Another sign that sentiment, not fundamentals, is what’s been driving this pullback.
We also did some work with the markets to see what happens when you get volatility like we saw this week.
In all but one case, SPX was positive after 1 month.
Now onto more economic facts. We have been constructive on the path forward, and housing is one reason why.
Existing home sales are already showing green shoots, growing to 4.10m. That’s what happens when rates finally start to filter through the system.
Rate cuts take time to show up, but once they do, they tend to act as an accelerant. The hiking cycle was cushioned. The easing cycle should flow faster. What we’re seeing now is just the early stage of that.
Now I want to touch on Nvidia. The market remains skeptical to some degree, which is actually healthy. But this chart shows the scale shift that’s hard to ignore. Nvidia was essentially a gaming company for most of its life. Now the data center business has gone vertical.
Jensen has outlined a path to $500B in revenue by the end of the decade. That at least gives investors a framework to underwrite. The challenge now is digesting the circular nature of AI CAPEX and what it means for Nvidia’s long-term economic model.
Historically, chips go through boom cycles where supply eventually overwhelms demand. The down cycles tend to be sharp.
So the real question today isn’t whether Nvidia can generate revenue. It’s whether the buyers of these chips will fully utilize what they’re buying, creating a durable refresh cycle and reducing the cyclicality investors are used to.
That’s the debate.
Next week Zoom reports, and bunch of conferences before Thanksgiving!
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Any insider buying occurring within XYZ itself or is it moreso just strictly S&P500?