August 14th Pre-Market Brief

Good Morning

27 record closes on the S&P this year, yesterday added one more.

Futures are calm and a Quiet macro calendar this morning. The big thing I've got my eye on is oil, which hasn’t really let up all week.

Let's dig in...

Today's Big Picture

Households Cut Back In July While Stocks Set A Record
Retail sales fell 0.6 percent against expectations for a small gain, the largest drop since May 2025. Cheaper gasoline explains part of it since the figures are not adjusted for prices, but the categories the government uses to measure economic growth also fell, down about 0.4 percent for the first monthly decline this year. Consumer discretionary has been the weakest sector this week.

August's Rally Is Running Without The Crowd
Nine trading days into August, an equal-weight basket of ARK Innovation, IPOs, chips and software is beating the S&P by about eight percentage points, the widest early-month lead since 2015. Individual investors are sitting it out. The American Association of Individual Investors survey has bulls at 34.7 percent against a long-run average of 37.5, and bears at 37.9 against an average of 31.5. That survey is read as a contrarian signal because heavy bullishness usually means buyers have already committed their cash, and by that measure this rally still has money behind it.

Fuel Margins Are Making Energy The Week's Best Sector
Energy is up 5.9 percent on the week, with refiners Marathon Petroleum and Valero up 20 and 15 percent through Thursday. Brent gave back its early gain and sits near $87, so crude is not what is paying them. Refiners earn the gap between what crude costs and what the finished fuel sells for, and that gap topped $70 a barrel last month against a normal reading in the teens, with Russian output at a two-decade low and China capping fuel exports.

Market Overview

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Stock Spotlight (pre-market)

Applied Materials $AMAT ( ▼ 2.48% )  
Lower after adjusted earnings of $3.50 a share on $9.12 billion in revenue, with the semiconductor systems division at $7.04 billion against a $6.96 billion estimate. The stock has more than doubled in 2026.

Reddit $RDDT ( ▲ 3.04% )  
Higher after S&P Dow Jones Indices selected it to replace AvalonBay Communities in the S&P 500, effective before the open on Monday, August 18. AvalonBay is being bought by fellow index member Equity Residential, which opened the seat. Every index fund tracking the S&P has to own Reddit by Monday.

Sandisk $SNDK ( ▲ 13.67% )
Higher after JPMorgan raised the memory maker to overweight from neutral. The analyst points to long dated contracts where customers pay for volume whether they take it or not, which lifts margins and removes much of the swing from a business that has always moved with the memory cycle.

Workday $WDAY ( ▲ 17.78% )  
Adding to Thursday's move, its best session in ten years, after Reuters reported that Silver Lake is in talks to buy the company. Software has been sold for months on the argument that AI erodes seat-based licensing.

AeroVironment $AVAV ( ▼ 2.26% )  
Higher with Red Cat and Unusual Machines after President Trump said Thursday he would put tariffs on imported drones and components. No rate, product scope, or start date has been given.

Innventure $INV ( ▲ 2.27% )  
Sharply lower after withdrawing guidance for Accelsius, its data center liquid cooling unit, citing conditions in the AI infrastructure market. Withdrawing a forecast leaves analysts with no number to model until the company issues a new one.

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

Reddit Joins The Index Monday Morning
Index funds have to own it at the open on August 18, and the premarket move is traders positioning ahead of that forced buying. Once the funds are done, the mechanical bid is gone and the stock trades on the AI traffic question again.

Retail Earnings Next Week
Walmart, Target, Home Depot and Lowe's all report and give the second read on the consumer, this one from the register rather than a government survey. July's spending number is already priced.

New Iran Financial Measures Next Week
Treasury Secretary Scott Bessent says fresh measures arrive next week. One analyst at Global Risk Management makes the harder point: it is getting difficult to name a sanction that would still bite and is not already in place. .

- John

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