August 10th Pre-Market Brief

Good Morning

Futures are barely red, oil is grinding higher, and there is nothing on the calendar until Wednesday.

We closed Friday at a record on a report that showed the economy losing jobs, which I am still turning over. Quiet tape this morning. VIX is just over 15, the lowest since January, and it is up this morning even with futures flat. That combo usually does not last.

Let's dig in...

Today's Big Picture

1. Washington Quietly Lowered Its Ask On Iran

Trump has told aides privately he would end the war without a nuclear deal if Iran fully reopens the strait, per the Journal. Publicly he says he is only semi-negotiating, and that is the version oil is trading on with Brent near $85. Iran's stated conditions still include reparations and sanctions relief, so the two sides are not close. The part worth holding onto: the US ask got smaller, not bigger, and crude has not priced that yet.

2. Hedge Funds Are Back In After Sitting Out July

Goldman's prime desk has hedge funds buying global equities a second straight week, with gross activity the fastest in seven weeks and long buys beating short sales 1.4 to one. Same funds cut risk in late July and finished the month down 0.8 percent. Options tell the same story: call skew hit a two-year high last week and the call-to-put ratio is the most bullish in four years. This leg is being bought by people who missed the last one, which is a different kind of buyer than the one that started it.

3. The AI Buildout Is Now Funded By Shareholders

Intel is selling $15 billion of common stock, citing demand from AI compute, and shares are down about four percent on it. Cloudflare is raising $2.175 billion in convertible notes the same morning. Demand is not the question: TSMC's July revenue rose 44.7 percent and it just announced a $6.3 billion sensor plant with Sony. What changed is where the money comes from, and CoreWeave, Super Micro, Nebius and Cerebras all report into that this week.

Market Overview

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Stock Spotlight (pre-market)

Apple $AAPL ( ▲ 0.29% )  

Lower after Jefferies moved the stock to underperform from hold. The bank's supply chain checks indicate the all glass iPhone is canceled, a device Apple never announced publicly. Anyone carrying a device price uplift in their model, since that premium hardware was the offset to rising memory costs.

Berkshire Hathaway $BRK.B ( ▼ 0.54% )  

Higher after Saturday's report. Cash fell to $364.7 billion, the first sequential decline in four years, with $23.5 billion of stock bought against $3.7 billion sold, a $6.8 billion homebuilder purchase and roughly $4.5 billion of buybacks. Berkshire followers waiting on the position level filing due next week, since the $10 billion Alphabet stake is the only name disclosed so far.

Verisk Analytics $VRSK ( ▲ 1.09% )  

Lower after a Delaware judge ordered it to complete the $2.35 billion AccuLynx acquisition it terminated in December, when the antitrust review ran past the deal's end date. It has to fund a purchase it walked away from eight months ago at the price it agreed to before walking.

Barrick Mining $B ( ▲ 5.58% )  

Down about five percent premarket on a second-quarter profit miss. Gold futures sit near $4,400 after a seven week high Friday. Those who own the miner as leverage on the metal, because the miss landed during gold's best week since February.

Hewlett Packard Enterprise $HPE ( ▲ 1.51% )  

Higher after Morgan Stanley moved it to overweight from equal weight, calling the gap between earnings power and valuation underappreciated. No company news attached. This is a re-rating on the same numbers, not a revision to them.

Rocket Lab $RKLB ( ▲ 9.46% )  

Higher into second quarter results after Monday's close. Shares are more than forty percent below their late May high.

What to Watch

Upcoming IPO’s?
MarketBeat did an excellent job on this free IPO guide on IPO’s happening this year.

Hammack Speaks (Today, 3:00 PM ET)
She dissented last month in favor of higher rates and is the first Fed voice since Friday's payrolls miss. The question is narrow: did a negative jobs print move a hawk. If it did not, September firms up before CPI even lands.

CPI (Wednesday, 8:30 AM ET)
Headline and core are both expected up 0.2 for July, with the annual rate easing to 3.4 from 3.5. Bank of America's read is the part that gets skipped: an in-line print strengthens the case for a September hike rather than weakening it. Cool is the only outcome that helps.

AI Infrastructure Earnings (Tuesday And Wednesday)
CoreWeave and Super Micro report Tuesday, Nebius and Cerebras Wednesday. These four rent out compute instead of buying it, and the dispersion is the tell: Nebius up 122 percent this year against Cerebras down 35 since its May IPO. The hyperscalers already confirmed the demand. These names show who is actually capturing it.

- John

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