August 25th Pre-Market Brief

Good Morning

Green open, chips leading, yields down a second day.

The Russell is red , and that tells me this is a chip earnings bounce and not a broad move. Gold and bitcoin both faded off their overnight highs after having a monster run these past 2 weeks.

Let's dig in...

Today's Big Picture

1. Nvidia's Second Customer Group Is The Number That Matters

Nvidia trades near 24 times expected earnings. The S&P trades at 21. JPMorgan's Harlan Sur notes the company has beaten its own revenue forecast four quarters running and the stock still drifted lower after each one. Tomorrow night the number to find is sales to customers outside Amazon, Google and Microsoft, which analysts expect to nearly match what those three spend.

2. Druckenmiller Just Undercut Both Men Speaking This Week

Yields fell again, so Treasury's bond buybacks look like they're working. Stanley Druckenmiller called the plan a mistake in the Journal, saying it does nothing about a national debt past $40 trillion. He mentored Scott Bessent and was Kevin Warsh's boss for over a decade. Warsh speaks Friday and now has to defend a bond market his old boss says is being managed, not fixed.

3. Crude Is The Only Energy Price Falling

Oil dropped again on word the State Department is sending diplomats back to the region. Everything else in energy went the other way. European natural gas settled at its highest since January 2023,and insuring a ship through the Persian Gulf now runs three to six percent of its value against a quarter point in peacetime. Crude is trading the diplomacy while gas and shipping still price the blockade.

Market Overview

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Stock Spotlight (pre-market)

Dick's Sporting Goods $DKS ( ▼ 2.13% )  

Down hard premarket after missing on both lines and cutting full-year guidance. Second quarter adjusted earnings came in at $3.53 against $3.76 expected, on revenue of $5.59 billion against $5.65 billion. The cut traces to Foot Locker, where same-store sales fell, while the core Dick's stores grew close to five percent.

Advanced Micro Devices $AMD ( ▼ 3.49% )  

Higher after Raymond James raised it to strong buy from outperform with a $641 price target, about forty percent above Monday's close. The analyst expects AMD to take the lead from Intel in central processors.

Marvell Technology $MRVL ( ▲ 6.18% )  

Up with the chip group two days ahead of its own earnings. It gained over the same seven sessions Nvidia fell, and last week signed a $120 billion custom chip agreement with Google.

Strategy $MSTR ( ▼ 2.01% )  

Slipped premarket after bitcoin gave back its overnight move above $80,000. The company has not bought bitcoin in two weeks, and last week's rally ran on fund inflows of $1.92 billion, the largest weekly total since October.

XPeng $XPEV ( ▼ 8.53% )  

Lower after reporting a wider quarterly loss. The spending is going into humanoid robots and self-driving systems.

United Airlines $UAL ( ▲ 0.35% )  

Higher after announcing ten new international destinations for 2027, eight of which no other U.S. carrier flies. Most run on the Airbus A321XLR, a single aisle jet built for long haul routes, and United calls it the largest international expansion in its history.

What to Watch

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Canada Answers At 11:00 AM ET
Mark Carney has already said the response will be dollar for dollar and start September 8, so the news today is the list, not the decision. Washington deliberately left crude off its tariffs because the U.S. takes about 90 percent of Canada's crude exports. Whether Ottawa returns the favor is the tell, and European auto stocks are already trading the January threat on cars and parts.

The Bank Bessent Will Not Name
Bessent said a major foreign financial institution gets sanctioned this week and declined to name it. Treasury has sanctioned Chinese refiners this year while leaving Chinese banks untouched, and Eurasia Group's Dan Wang says the banks are where Beijing draws its line. If the name is Chinese, the thing that moves is the trade truce ahead of Xi Jinping's Washington visit next month.

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