August 19th Pre-Market Brief

Good Morning

Woke up to the markets slightly green and a mess in Asia’s overnight session.

Treasury said it would buy back more of its own long bonds and that was this AM’s main catalyst. Yields backed off, futures picked up, gold is having a day too, which is a little odd on a risk-on morning.

Moderna doubling on the cancer vaccine is the headline everybody sees. I'd argue the Treasury move matters more as far as buying volume.

Let's dig in...

Today's Big Picture

1. Treasury Stepped Into Its Own Bond Market

Treasury will at least double its buybacks of ten to thirty year debt, raising the cap from $2 billion per operation to at least $4 billion. The thirty-year backed off Tuesday's nineteen-year high to near 5.20 and futures turned green. Two things got lost in the reaction: it does not start until September 9, and Treasury's own site says buybacks are not meant to relieve market stress.

2. Moderna Doubled On A Number Nobody Has Seen

The trial hit its main goal and its secondary goal. That is the whole disclosure. Neither company said how much longer patients went without the cancer returning, and that figure waits for a medical conference later this year.

3. Anthropic Passed OpenAI On Revenue

OpenAI booked $6.7 billion last quarter with losses widening. Anthropic's preliminary number is near $11.5 billion, up from $787 million a year ago, with a listing reportedly targeted at a $2 trillion valuation this fall. Oracle is lower because its cloud revenue depends on OpenAI funding its commitments, and this is the first outside look at whether it can.

Market Overview

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Stock Spotlight (pre-market)

Marvell Technology $MRVL ( ▼ 7.82% )  
Up sharply after granting Google a warrant to buy up to nearly 59 million shares, worth about $12.18 billion, tied to Google's tensor processing units. The market read it as a locked-in customer rather than dilution. Note this reversed from lower earlier in the premarket.

Oracle $ORCL ( ▼ 2.63% )  
Lower after the Journal reported OpenAI's second quarter revenue grew eighteen percent from the first quarter while losses widened. Oracle's cloud revenue depends on OpenAI funding its purchase commitments. This is the first outside look at whether it can.

Nvidia $NVDA ( ▲ 0.24% )  
Has started moving H200 processors into mainland China, with ByteDance and Tencent each receiving roughly 10,000 chips, per the Financial Times. Nvidia holds about 500,000 H200s with most earmarked for that market. Beijing wants the bulk kept off the mainland to protect its own chipmakers, so a foreign government decides how much of that inventory sells. Earnings August 26.

SK Hynix $SKHY ( ▼ 9.2% )  
U.S. listing reversed higher after the company pledged at least half of free cash flow through 2027 to shareholder returns, including buying back and cancelling about $28 billion of stock. Seoul closed down near ten percent before the news landed. Details come with third quarter earnings.

Lowe's $LOW ( ▼ 0.08% )  
Lower after guiding full year sales and earnings to the bottom of its prior range and missing on revenue, citing pressure in do-it-yourself spending. Same-store sales grew 0.2 percent against 0.7 expected. Home Depot posted its best comparable sales since fiscal 2022 yesterday.

Target $TGT ( ▲ 0.97% )  
Beat on revenue and raised its full year outlook, with $752 million of that from tariff refunds worth $1.65 per share. Sales rose in every merchandise department and store traffic increased. Shares slipped anyway.

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

Twenty-Year Auction (1:00 PM ET)
The Treasury sells twenty-year paper the same week Alphabet prices twenty-year money in Australia near seven percent. Investment grade issuance has already cleared $1.5 trillion this year, so government and corporate supply are pulling from the same pool of buyers. A soft auction takes the overnight calm in yields with it.

Fed Minutes (2:00 PM ET)
Three officials voted to raise rates in July and the useful detail is how many more were close to joining them. The minutes were written before oil went back over $91 and before the long end broke to nineteen-year highs, so the outlook inside them is already stale. They land an hour after the auction, which is where today's range gets set.

Today’s Sponsor

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