In this February 3, 2026 morning market update, Kenny Polcari and co‑host SPEAKER A deliver a rapid‑fire briefing on the latest U.S. macro data, equity market moves, bond yields, commodities, crypto, and corporate news. They highlight a surprisingly strong ISM Manufacturing PMI (52.6) and easing inflation pressures, which they label a “Goldilocks” economy, and note that major indices closed at fresh highs (Dow +1%, S&P +0.5%, Nasdaq +0.6%). Sector performance is broken down with industrials up 1.25% and energy down 2%, while the value trade outperformed growth. Gold and silver show technical rebounds after a sharp sell‑off, and Bitcoin, Ethereum and Solana are described as near‑bottom levels. The centerpiece corporate story is SpaceX’s $1.25 trillion acquisition of XAI, with a share‑exchange ratio of 0.1433 SpaceX shares per XAI share and an optional cash payout of $75.46 per share; Polcari explains the strategic rationale of merging AI capabilities with SpaceX’s data‑rich aerospace platform. Palantir’s earnings beat is summarized (sales +70% YoY, EPS $0.25 vs $0.23 estimate, revenue guidance up to $7.2 B). Oil slipped 4.4% on easing U.S.–Iran tensions, while bond yields rose modestly (10‑yr 4.28%, 30‑yr 4.91%). Upcoming economic releases (ADP jobs, ISM Services, Michigan sentiment) and a list of earnings are previewed. The segment closes with a detailed swordfish Palermo‑style dinner recipe. The tone is conversational yet data‑driven, with overall optimism about the economy and caution on bond yields.
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Well, good morning. Yes, it's me, and I am back after spending a week in New York City.
It's great to be back in South Florida, but it is still a little bit cold outside. It's about 50 degrees this morning, but we're going up to 70 before the day is out. Anyway, today is Tuesday, February 3rd, 2026, and here are the things that you need to know to get your day started.
Well, the Ego data yesterday crushed it, right?
They crushed any doubt of a slowdown.
Early weakness in the morning in the, in the indexes turned to what?
New closing highs. Palantir crushes it after the bell last night. And SpaceX, guess what? They're buying XAI. Oil is down, gold is stabilizing, bonds are down, and yields are just a bit higher in the 30 years approaching that 5% level. And what do we have at dinner time? We're gonna have the swordfish Palermo style.
Okay.
From Fed fear to economic firepower, the US economy just silenced all of the doubters. So I guess we're no longer losing sleep over Kevin Walsh, right? The Fed, the rates, timing, because the focus now is shifted right back to the hard data, and the data is screaming strength. The ISM Manufacturing PMI surged to 52.6, firmly in expansionary territory and miles above the 48.5 expectation which implies contraction. Even more impressive, new orders jumped by 19%, rising to 57.1, up from 47.7, a clear signal that demand is accelerating, not slowing. Meanwhile, prices paid actually eased to 59, down from 59.3, suggesting that inflationary pressures are not reaccelerating alongside the growth. Add to that an already robust services sector, and it becomes very difficult to argue that the US economy is in any kind of trouble. This is a true Goldilocks economy. It's just right. Growth is strong enough to support hiring, investment, rising corporate earnings, but not so strong that it's sparking runaway inflation. In fact, inflation pressures remain contained, as evidenced by, uh, last week's PCE report and yesterday's prices paid data, which means the Fed doesn't need to raise rates, nor does it mean that it needs to rush to cut them to rescue a weakening economy. In this environment, businesses can plan with confidence, consumers obviously keep spending, and investors are putting money to work without the overhang of policy panic or a recession risk. As the bell rang last night, it was very clear stocks ended higher, the mood was great. The Dow gained 515 points or 1%, the S&P up 37 points or half a percent, the NASDAQ added 130 points or 6/10, the Russell took back 26 points or 1%, The transports surged by 576 points, or 3.1%, and that speaks volumes about expectations. The equal weight was up 41 points, or half a percent, and the Mag 7 bucked the trend, losing 32 points, or a tenth of a percent. Here you can play Nvidia down 3%, and Meta down 1.4%, Tesla down 2%, Microsoft down 1.6%. Here's how the 11 broad sectors performed: Industrials up 1.25%, Consumer Staples up 1.2%, Financials up 1.1%, Tech up 1%. Basic materials up 0.8, consumer discretionary up 0.7, healthcare up 0.6, energy though lost 2%, utilities down 1.5, and real estate lost 1%, communications down 0.4. Down the list, homebuilders up 0.7, retail is up 2%, airlines up 3%, disruptive tech down 0.7. The value trade was up nearly 1%, the growth trade was up 0.4, metals and miners gave back 1%. Cybersecurity was up 0.8%. Semis up 2%. Aerospace and defense lost 1%.
As you would expect, all of the contra trades yesterday lost ground.
Gold, silver, and the broader pressure— precious metals complex, which suffered a swift and violent repricing on Friday and yesterday, are now attempting to stabilize as investors have had this time to digest the Kevin Walsh news and the policy implications. This morning, gold is up 5.4% at $4,910, while silver is higher by 12.5% at $86.20. Recall that both metals sold off hard and tested short-term support levels. They briefly failed but quickly recovered, and now they're trying to stabilize above their respective trend lines.
That said, it really looks more like a technical bounce to me following that vicious sell-off rather than a start of another sustained rally.
Now, I don't expect either, either metal to snap right back to the recent highs in near term, but that's me.
You do you. Now, this morning we woke up to the news that Lonnie has officially confirmed the takeover of XAI by SpaceX. How great is that? One of Elon Musk's companies just taking over another one.
It's very on brand for Musk.
Now, the price tag $1.25 trillion. And here's how it shakes out. XAI shareholders are going to receive 0.1433 shares of SpaceX for every share that they own. And if you're one of the lucky executives who opts for cash instead, you're going to walk away with $75.46 per share. What makes this deal so fascinating isn't just the eye-popping $1.25 trillion headline. It's what it represents. By having Elon Musk fold his XAI business into SpaceX, he's essentially collapsing the distance between AI, data, compute, and real-world deployment into a single corporate ecosystem. This isn't financial engineering for the sake of optics. It's really strategic consolidation in Musk's eyes. SpaceX generates enormous amounts of proprietary data from its launches and satellites and telemetry, Starlink traffic, and real-time global communications. xAI brings the intelligence layer, the models, the learning systems, and the decision engines that can digest, interpret, and optimize that data at scale. Put them together and you're no longer talking about, uh, AI as a software tool. You're talking about AI embedded directly into physical infrastructure operating in space communications, defense, and global networks. The structure of the deal reinforces the point. XAI shareholders are rolling into SpaceX equity tells you that this is about long-term value creation, not a quick liquidity event. Musk is effectively saying the future isn't siloed companies, it's vertically integrated systems. Now, if you zoom out a little bit, you'll see a bigger takeaway here. Private market valuations are no longer being driven by revenue multiples alone. They're being driven by strategic control of the platforms, of the data, and of the intelligence. The deal blurs the lines between aerospace, AI, communications, and national infrastructure, and it sends a clear message that the next phase of technological dominance won't come from standalone apps or models. It's gonna come from who controls the stack. And we're seeing who that is right now with Lizzie and Bernie. Their heads must be exploding. Tesla this morning is quoted up $6 or 1.2%. Oh, and Palantir, yes ma'am, they reported last night after the bell. They blew it up. Sales jumped by 70% year over year. He just cannot keep up with demand. Earnings per share of $0.25 versus $0.23 estimate. Revenues of $1.4 billion versus the $1.33 billion estimate. Alex Karp is suggesting that 2026 revenues are going to hit $7.18 to $7.2 billion versus the prior estimate of $6.27 billion. First quarter 2026 revenue is expected to be $1.53 billion versus the consensus estimate of $1.35 billion. The stock is quoted up $16 or 11% at $164.41. Do I need to keep going on? Bonds ended lower. The TLT and TLH down 7/10 and 6/10 respectively. The 10-year is now yielding 4.28%, while the 30-year is yielding 4.91%. The 30-year is creeping closer to the red line of 5%, so just proceed with caution. Oil lost $2.90 or 4.4% yesterday on the back of those reduced tensions between US and Iran. It traded in a range of $64.72 to a low of $61.39 before settling at $62.14. This morning it's up small, trading at $62.24. The latest news says that OPEC+ expects a pickup in demand in the spring. Uh, Kuwait is opening up its oil fields to foreign firms and they're leasing part of their pipeline network. That's more supply. And US crude inventories are expected to increase by 1.9 million barrels for the week ended January 30th. The dollar's holding steady at 97.62.
It's up off its lows of 95.50, but below the trend line at 98.50.
Is a continued push up should see precious metals retreat a bit. Bitcoin's trading at 78,500, Ethereum's at 2,880, and Solana is 103. All levels that analysts are calling a bottom. European markets are mixed. The UK is down 4/10, in Italy it's up 8/10. Everything else is in between. Futures in the US are mixed as well. Dow is down 44 points, S&P's up 10, NASDAQ's up 110, and the Russell is plus 2. ECO data today includes nothing Tomorrow brings us the ADP employment for January, expected to show 45,000 new jobs. We're also going to get January ISM Services, uh, PMI, and that's expected to remain in the expansion zone at 53.5. Thursday brings us Challenger job cuts, and Friday is going to give us the U of Michigan sentiment surveys. We're going to hear from PayPal, Merck, uh, ADM, Pepsi, MPC, and so many more today. 7 companies have already reported and they beat the estimates. Only two have disappointed: GPK and PayPal. Not names that are going to create any drama for the broader market. GPK though is quoted down 6%, PayPal's quoted down 12%. The S&P closed at 6,976, up 37 points. Investors, traders, and algos did push it as high as 6,991 yesterday before exhausting itself. The XAI news and the Paladin news along with strong ECO data should continue to push us up and through 7,000. We've tried it 3 times already, so get ready because it's coming. Trendline support though remains down at 6860. You can call me at 561-931-0190 for no obligation portfolio review. Let me assess whether the risk in your portfolio actually matches your risk tolerance, because it works both ways, right? You could be taking on too much risk, or maybe you're not taking on enough to meet your goals. Okay, so what are we having dinner tonight? We're gonna have the swordfish Palermo style. It's raisins, it's green olives, it's capers, pignoli nuts, it's tomatoes, garlic, onion, salt, pepper, olive oil, and the swordfish. The dish is easy to make, it teases your senses, it'll tickle your palate, and it only takes 15 or 20 minutes to prepare and another 10 minutes to cook or so. 10-15 minutes to cook depending on the thickness. Now you wanna— it's gonna give you enough time to set your table, pour the wine, light the candles, put on the music, and dim the lights. You want to preheat your oven to 400 degrees. You're going to season the swordfish with salt and pepper and a little bit of lemon juice. Next, you're going to soak the raisins in warm water for about half an hour, drain them, and then set them aside. You're going to heat the olive oil in a sauté pan on medium-high heat. You're going to sauté the diced onions, the crushed garlic until soft.
Do not burn it.
Maybe 5 to 8 minutes. You're going to add your raisins, your diced tomatoes, your chopped olives, right? No pits. You're going to add the capers, like 1 tablespoon. Now, if you like capers, you can feel free to add more, but not too much because the taste will overpower the dish. You're going to reduce the heat to simmer. You're going to cover it, stir it occasionally for about 15 minutes. Now place the swordfish in a baking dish and then cover the fish with the raisin, olive, caper, tomato mixture. Put it in the oven and bake it for 15 minutes or until the steaks are firm. Again, depending on the thickness. Present the fish on a warm plate with steamed green beans and maybe a large a mixed green salad with red onions, cucumbers, grape tomatoes, maybe even some fresh muts. You're going to dress it with salt and pepper, oregano, a splash of fresh lemon juice, and olive oil. Keep it simple. There's no need to, you know, put all kinds of creamy dressings on it. Keep it simple because simple is better. In any event, while it's cold outside at the moment, it is going to warm up. Until tomorrow, take good care.
