August 17th Pre-Market Brief

Good Morning

Two headlines out of the Middle East this morning, pointing opposite ways. One says the ceasefire got extended. The other has an Iranian official telling Reuters they may go on the offensive.

Third straight weekly gain for the S&P, and the VIX at its lowest level of the year.

Let's dig in...

Today's Big Picture

1. The Iran Deadline: Two Directions at Once

Al Arabiya reports the 60-day period with Iran has been approved for an extension. That is one outlet, unconfirmed. An hour later a senior Iranian official told Reuters that Iran may go on the offensive and escalate in Hormuz if talks fail, and oil rose about 1 percent on that headline instead of falling on the first one. The reserve that would normally absorb a bad outcome is below 300 million barrels for the first time since the early 1980s.

2. Anthropic Put a Real Number on AI Demand

Bloomberg reports second quarter revenue topped $11.5 billion, up from $787 million a year ago and $4.73 billion in the first quarter, and the company turned a profit on an adjusted basis. That single report is why Micron $MU is up more than 3 percent premarket, with Broadcom $AVGO and Nvidia $NVDA higher. The demand question on the AI trade got a real answer this morning. The financing question did not, and nine tech companies still carry about $3 trillion of commitments that never touch a balance sheet.

3. The Best Revenue Quarter in Five Years Has Footnotes

Goldman says second quarter revenue for S&P 500 companies grew 6.4 percent excluding energy, the fastest in five years. Strip out tech and the median company grew 3 percent. Earnings grew almost 50 percent, and most of that came from big tech writing up the value of stakes it holds in private companies. Companies also collected more than $100 billion in tariff refunds and spent it on marketing and lower prices, which is real cash that arrives once.

Market Overview

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Stock Spotlight (pre-market)

Reddit $RDDT ( ▼ 2.5% )  
Joins the S&P 500 before Tuesday's open. JPMorgan says index funds have to buy about 16.7 million shares, three times average daily volume. Forced buying with a deadline, on a stock down 31 percent this year and 42 percent below its high. The flow happens once.

Micron $MU ( ▲ 2.3% )  
Crossed $1,000 premarket on Anthropic's revenue report, first time since July 6. Up 240 percent this year. BofA keeps it a top pick at a $1,550 target.

Sandisk $SNDK ( ▲ 7.4% )  
Lutnick said the administration opposes Apple $AAPL buying Chinese memory. Sandisk added nearly 5 percent premarket, Western Digital 3, Seagate 2.5. Apple is the forced buyer now, at domestic prices.

Vista Energy $VIST ( ▲ 3.2% )  
Up about 5 percent on a stale 13F showing Thiel Macro holds roughly $76 million. No flow behind it, so this is sentiment. Six of the fund's seven new positions are energy or utilities.

Intel $INTC ( ▼ 1.97% )  
CEO Lip-Bu Tan bought 105,000 shares at $95, about $10 million of his own money. No forced flow. It sets a reference price everyone will argue from.

Diana Shipping $DSX ( ▲ 0.41% )  
Up about 7 percent after dropping its year-long bid for Genco $GNK. Merger arbs unwind now, covering Diana and selling Genco, which just lost its premium.

L3Harris $LHX ( ▼ 2.77% )  
Chairman and CEO Christopher Kubasik out over his conduct. The 2026 revenue outlook was reaffirmed, so this is governance, not numbers.

Alphabet $GOOGL ( ▼ 0.49% )  
Berkshire added to the stake. Worth holding against the $811 billion in commitments from item three.

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 year

Meta's California trial opens tomorrow. 

Twenty-nine state attorneys general are behind it. Meta's own lawyers put potential damages as high as $1.4 trillion, while the states told the judge $200 billion is the realistic number. The remedy is the bigger exposure: nationwide injunctive relief, deletion of under-13 user data and the algorithms trained on it, and removal of infinite scroll and autoplay. Meta draws 98 percent of its revenue from ads and is funding up to $145 billion of AI spending out of that cash flow.

Walmart $WMT ( ▼ 0.39% )  reports Thursday. 

The Street wants 74 cents on about $187 billion, with comps at 3.8 percent against 4.6 percent a year ago. Gas is $4.06 now versus above $4.50 in May, when the CFO said the average fill-up had fallen below 10 gallons. The number to find is whether cheaper gas turned into traffic. If it did not, Friday's retail sales drop stops looking like one bad month.

- John

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