August 24th Pre-Market Brief

Good Morning

Bessent goes to the podium at 1 p.m. with sanctions he keeps calling the largest ever, and oil is starting to sell off a little into it.

Steel is the best thing on the board this morning and chips are the worst. Nvidia reports Wednesday, and that one sets the tempo for the rest of the week once we clear the sanctions headline.

Let's dig in...

Today's Big Picture

1. The Sanctions List Is Aimed At Beijing

Bessent details the package at 1 p.m. Eastern, and Iran is not really the target. He has said any country acting as a financial artery for Tehran should expect to share its isolation, and China buys roughly 90 percent of Iran's oil exports. Ben Emons at Highline Asset Management says sanctions on Chinese banks are a plausible next step, with Xi Jinping due at the White House next month.

2. Yields Fell On A Funding Detail, Not The Buyback

Last week's buyback announcement pulled yields down for a day and then the whole move reversed. This morning CNBC reported Treasury may pay for the purchases out of its cash account at the Fed, which holds close to $950 billion, and yields eased at both ends with the 10-year back near 4.70. Size was never the argument. The argument is whether Treasury funds this by selling short-term bills instead, which Peter Boockvar says would chain the government's own interest bill to whatever the Fed does with rates.

3. Asia Repriced The Cost Of AI Money

Alibaba sold $10.2 billion of stock below Friday's close and the shares fell straight to the placement price. SoftBank is offering seven-year bonds to Japanese retail savers at a preliminary rate of 4.30 to 4.90 percent to fund its AI bets, which is what capital now costs the most aggressive buyer in the space. Samsung got marked down for a shareholder return plan near $79 billion because holders wanted more of the AI cash flow.

Market Overview

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Stock Spotlight (pre-market)

Sandisk $SNDK ( ▼ 0.28% )  

Is among the widest decliners before the bell, with Seagate and Corning also lower. Samsung dropped hard in Seoul overnight when its shareholder return plan came in short, and US memory and storage names are trading off that read-across.

Coherent $COHR ( ▼ 0.18% ) and Lumentum $LITE ( ▼ 1.43% )  

Leading losses in the technology sector premarket. Neither has company news this morning. Both sell optical components into data centers, which is the first thing sold when the market questions AI spending.

Alibaba $BABA ( ▼ 8.57% )  

Lower in US trade after pricing 710 million new shares at HK$112.70, under Friday's Hong Kong close of HK$123. The $10.2 billion raise funds AI infrastructure and settles Wednesday.

Coinbase $COIN ( ▲ 8.2% )  

Slipping with Robinhood and Strategy after bitcoin stalled near $77,000. Last week was bitcoin's best in more than three years, so this is the first pause in that run.

Trump Media $DJT ( ▲ 6.93% )  

Flat before the open after interim CEO Kevin McGurn told CNBC that Truth API is now in the mid-teens for customers, up from more than ten two weeks ago. The service sells faster access to the president's posts for up to $100,000 a month and went live Aug. 1.

United Parcel Service $UPS ( ▼ 0.56% )  

Told CNBC Monday it is spending more than $2 billion across its international, healthcare and supply chain units through 2028, a figure it had not disclosed before. The build includes a Philippines hub this year, an Ontario facility next year and a Hong Kong air hub in 2028.

What to Watch

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Wednesday Stacks Both Events Eight Hours Apart
The Fed's preferred inflation reading lands at 8:30 a.m. and Nvidia reports after the close. Traders price roughly a forty percent chance of a hike in September and are fully priced for one by December, so a firm inflation number pulls that forward before Nvidia says a word. Durable goods and the second read on second-quarter growth come the same morning.

Where The Money Goes If Nvidia Disappoints
Rick Bensignor counts ten of the last thirteen S&P sessions closing below their open as institutional selling since the Aug. 4 breakout, says tech has peaked in relative terms, and prefers healthcare and financials. Morgan Stanley says chip stocks trail silver stocks by about four months and are unlikely to lead again soon, and is overweight financials, industrials and consumer discretionary.

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