Stocks Pop as Gold Soars Oil Softens Setting the Stage for a ‘Profitless Rally’ Reckoning

Stocks closed higher across the board Monday: the Dow added +515.97 (+1.12%) to about 46,706, the Nasdaq climbed +310.57 (+1.37%) to roughly 22,991, the S&P 500 rose +71.12 (+1.07%) to near 6,735, and small caps led with the Russell 2000 up +1.93% to 248.11. Commodities diverged—gold (Dec ’25) jumped ~4.1% to $4,383.80, while crude oil (Dec ’25) hovered near $57, down ~0.3%—leaving a risk-on tape in equities even as safe haven demand firmed. Against that backdrop, and with breadth skewed to advancers, the market’s leadership tells a more cautionary story—one that leads directly to the next point.

"Something remarkable is going on in the equity market,” notes Torsten Slok, Chief Economist at Apollo Global Management. In recent months, companies with negative earnings have outperformed companies with positive earnings.

AInvest’s AI agent AIME frames the pattern bluntly and with a warning. “When loss-making companies suddenly race ahead of profitable ones, it usually signals a late-cycle, momentum-driven market…periods like 1999–2000 and the 2021 SPAC/crypto boom rarely end gently.” AIME adds: “Loss-makers have beaten profitable peers by ~72 ppts over the last three months,” with dispersion “σ ≈ 521% vs 18%,” and a far smaller median return gap (~8 ppts)—a few extreme winners are doing most of the lifting.

Netflix Earnings Tuesday

Netflix reports Q3 Tuesday with bulls watching whether K-Pop Demon Hunters + a strengthening ads business can push shares above the $1,267 September high that’s capped the stock. Street consensus looks for $11.52B revenue (+17.3% YoY), $6.97 adj. EPS, and 6.5–7.0M net adds, with APAC and LATAM leading.

On execution, Q2 showed 25.2% operating margin and $1.8B FCF (YTD FCF > $5B). Management lifted FY revenue to $44.8–$45.2B and nudged the margin target to ~30%, while flagging heavier H2 content/marketing and a global Ad Suite rollout. Netflix content remains the near-term swing factor: Demon Hunters is now the platform’s most-watched film, fueling engagement (and even a limited AMC Theatres run); the bench—Stranger Things, Squid Game, Wednesday—supports Q4.

Views are constructive but split: some highlight record slates and ad leverage; others worry about AI content dynamics—yet argue Netflix’s scale and cash flow still dominate. Technically, $1,267 is resistance, ~$1,200 support; a clean beat + upbeat guide could break the coil.

BoA’s alternative indicator turns down

Bank of America’s proprietary small-business hiring gauge fell 7% in September (vs the 2024 average), echoing JOLTS deceleration. Wholesale/retail trade—more tariff-exposed—continue to pull back, though trends improved slightly from Q2. Profitability (inflow-to-outflow) held near 1.01, but cooling deposit growth hints at softer revenue; services hiring dropped 12.9% QoQ. Business applications with planned wages have slipped below pre-pandemic norms, pointing to softer job creation. Credit: card balances per SB client rose ~3% vs the 2024 average, suggesting more debt carry, yet banks report less tightening for small firms than large—access remains relatively resilient.

When profitless outperformance and speculative dispersion flare while SB hiring cools, the macro-micro mix tilts fragile. As AIME cautions, this is a late-cycle tell; pair that with an NFLX test of resistance and you have a week where positioning may matter as much as prints.