Market Overview - The market is experiencing continued sector rotation, with the S&P 500 advanced decline line showing a balanced 50/50 performance, indicating potential volatility ahead [2][3] - The S&P 500 is down over 0.5%, primarily affected by the technology sector, suggesting a shift of investments between sectors like financials and energy [3] Broadcom (AVGO) - Broadcom shares are under slight pressure, down about 0.25%, despite reporting record revenue for Q3 [4] - A bearish outlook is presented due to concerns over AI spending and profitability, with significant investments in AI and server farms raising questions about future upside potential [5][7] - A bearish trade strategy involves buying 310 puts and selling 300 puts, creating a $10 wide put spread for a $263 debit [7] Eli Lilly (LLY) - Eli Lilly is constructing a $6.5 billion plant for a new obesity weight loss pill, but the stock is down nearly 20% year-to-date and flat over the last year [15] - A bearish position is taken based on technical analysis, with expectations for the stock to drop back to the $700 range [19] - The trade involves buying a 242.5 put and selling a 240 put, creating a $2.50 wide put spread for a $90 debit [19] Goldman Sachs (GS) - Goldman Sachs has seen a 40% increase year-to-date, with a 10% rise in the last 12 trading sessions, attributed to a slowing economic backdrop [27][28] - A bearish sentiment is expressed, with concerns that the stock's performance does not reflect a genuine improvement in business fundamentals [30] - A bearish trade strategy includes buying 765 puts and selling 755 puts, creating a $10 wide put spread for a $2.70 debit [30]

Market Trends & Guidance - Novo Nordisk's stock experiences a significant drop, potentially the worst since 1987, due to lowered full-year guidance, anticipating weaker growth in the second half for GLP-1 drugs like Wegovy [1] - Analysts are beginning to question the previously inflated near-term and long-term expectations for the obesity market [2] - Market size predictions for obesity drugs have rapidly increased from $50 billion to over $150 billion, which may be unsustainable in the short term [3] Competitive Landscape & Pricing - Factors contributing to the revised outlook include compounding pharmacies and cheaper alternative ways to access these drugs [4] - Both Novo Nordisk and Eli Lilly have reduced prices over time, despite being only in the second year of full availability for both drugs [4] Product Usage & Consumer Behavior - The nature of GLP-1 drugs is being re-evaluated as more of a consumer product with patients cycling on and off, rather than a chronic therapeutic [5][6] - Modeling the market for these drugs is more complex if they are primarily used as consumer products [6] Investment Strategy & Management - Despite the stock decline, the long-term outlook for Novo Nordisk is considered potentially positive, but today is not the day to buy the dip [6][7] - Waiting to assess Eli Lilly's performance next week is advised before making investment decisions [7] - The new management team should have been more proactive in addressing risks when the company was performing well [8]