August 13th Pre-Market Brief

Good Morning

Consumer prices came in Wednesday right where expected, and wholesale prices this morning came in even softer.

Two straight reports pointing the same way: inflation is holding steady, not climbing. It is a quiet morning with a lot of people still out on summer break, and not every day needs a big headline. Sorry for being a little late today,s scrambled morning.

Let's dig in...

Today's Big Picture

The Fed's September Call Comes Down To Oil
Wholesale prices were flat in July, the second cool inflation reading in two days, and markets now see about a two in three chance the Fed holds steady next month. Jobless claims rose and payrolls have fallen in five of the last twelve months. A soft job market usually points to rate cuts, yet a hike is still on the table, because energy is the one thing still pushing prices up.

Wall Street Is Now Financing AI, Not Just Buying It
Anthropic's investors are targeting an October listing worth more than two trillion dollars, which would be the largest IPO ever. Nvidia is separately working with BlackRock and Goldman Sachs to raise 500 billion dollars for data centers, using the chips themselves as collateral. Money is moving from buying AI stocks to lending against AI hardware.

The AI Boom Is Raising Costs For Everyone Else
South Korea entered a bull market overnight, up 22 percent in ten sessions, led by memory chipmakers Samsung and SK Hynix. AI chips need so much memory that supply once used for phones and laptops is drying up, and prices are climbing. Cisco's margins fell this quarter on pricier parts, memory among them, and AI-linked goods helped lift this week's consumer prices too. The boom lifting Korea is quietly adding costs for companies and shoppers with no AI exposure at all.

Market Overview

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Stock Spotlight (pre-market)

Cerebras $CBRS ( ▲ 11.63% )  
Lower after second quarter revenue missed, with backlog flat near 25 billion dollars. Flat backlog means the order book did not grow, and that holds even though the loss came in narrower than expected and the full year outlook went up.

Cisco $CSCO ( ▲ 2.87% )  
Lower despite beating on revenue and earnings and guiding fiscal 2027 revenue above the street. First quarter gross margin guidance of 65 to 66 percent came in under the 66.4 consensus. Management now has to decide whether rising component costs get passed to customers or absorbed.

Tapestry $TPR ( ▼ 4.24% )  
Lower after new fiscal year guidance landed below street estimates at the midpoint. Fourth quarter earnings of 1.32 a share beat the 1.28 consensus, though revenue of 1.88 billion dollars only just cleared the 1.87 billion estimate. The board raised the quarterly dividend to 46.25 cents from 40 cents.

StubHub $STUB ( ▼ 13.93% )  
Lower after failing to turn a profit in the second quarter, with costs climbing faster than revenue. World Cup ticketing drove the revenue growth, which was the strongest demand backdrop the company is going to get.

Birkenstock $BIRK ( ▼ 1.95% )  
Higher after quarterly revenue and adjusted EBITDA beat, with full year guidance moving to the high end of prior ranges. Two consumer names reported into the same tape and guided in opposite directions.

What to Watch

Want to Know about this years upcoming IPO’s?
MarketBeat did an excellent job on this free IPO guide on IPO’s happening this y

SpaceX Lockup Expires (Thursday, August 20)
A lockup period ends next week, freeing some insiders to sell. The stock is back near 150 dollars, its June opening trade, after running 40 percent off its August 3 low. How the market absorbs that supply is a useful preview of how retail handles a giant AI float, with Anthropic's listing due in the fall.

Applied Materials Earnings (After The Close)
The chip equipment maker reports with the stock up 190 percent over the past year. Order commentary matters more than the quarter given what Korea and Micron are committing to new fabs.

- John

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