August 5th Pre-Market Brief

Good Morning

The S&P closed above 7,700 for the first time last night and futures want more.

SpaceX spent $18.4 billion last quarter against $7.81 billion in revenue, and the stock is getting hit for it. Oil turned back up after a Saudi tanker was struck overnight in the Red Sea.

Let's dig in...

Today's Big Picture

1. SpaceX Has To Come Back For Money
Capex ran $18.4 billion against $7.81 billion of revenue, and the CFO said the next two quarters look the same. Morgan Stanley doesn't expect positive free cash flow until 2035. That means years of selling stock or debt, starting from a price below the $135 IPO. Musk answered by moving his $1 trillion revenue target up a year to 2030.

2. The Deal Being Priced Isn't The Deal Being Negotiated
Crude dropped about 6 percent Tuesday on Bessent saying a Hormuz agreement could land within days. The talks are between Iran and Oman with Pakistan mediating and the U.S. involved only indirectly, and Iran's foreign ministry said Monday it isn't negotiating with Washington at all. Transit fees remain unsettled, and CENTCOM says the southern route through Omani waters has been open the whole time, with more than 1,000 vessels escorted through. Oil took back part of the drop this morning after a tanker was hit near Yanbu, well outside the strait.

3. Weak Jobs Data Stopped Buying Rate Cuts
Private payrolls added 44,000 in July, the slowest since January. Kashkari went on television hours later and said start moving rates up. Job switchers got 7 percent raises, the biggest since August 2025, which is the wage number the hawks point to. Soft hiring plus firm pay is the combination that keeps a hike on the table.

Market Overview

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Stock Spotlight (pre-market)

Advanced Micro Devices $AMD ( ▲ 7.0% )  
Lower on a beat. Data center revenue doubled to 58 percent of sales and Lisa Su raised her 2030 market forecast, but Musk said SpaceX buys Nvidia only from here and margin guidance came in soft. .

Eli Lilly $LLY ( ▼ 0.51% )  
Higher on $8.38 adjusted against $6.01 expected, revenue $22.97 billion against $20.73 billion. New full year guidance of $85 to $87 billion sits entirely above the old range.

Novo Nordisk $NVO ( ▼ 5.97% )  
Lower after raising guidance. The beat leaned on rebate adjustments and the Wegovy pill came in slightly light. Jefferies said the new guidance leaves little room for consensus to rise, so nobody has to lift a number today, and that is the whole problem.

Walt Disney $DIS ( ▲ 0.04% )  
Higher on $2.06 adjusted against $1.86 expected, revenue slightly light. Parks did $9.97 billion with U.S. attendance up 3 percent in the same Orlando market where Comcast reported declines, so the growth reads as share gains.

Arista Networks $ANET ( ▲ 3.04% )  
Higher on $1.02 against 88 cents expected, revenue $3.04 billion against $2.82 billion, guidance above consensus on both lines. The hyperscaler spending that sank SpaceX overnight shows up here as revenue.

Uber $UBER ( ▲ 0.53% )  
Lower on guidance. The bookings midpoint missed by $80 million on a $59 billion number, roughly a tenth of one percent, with the earnings range a few cents light.

What to Watch

Upcoming IPO’s?
MarketBeat did an excellent job on this free IPO guide on IPO’s happening this year.

Sandisk, Shopify And Western Digital Report Today
Sandisk reports after the close, with options priced for an unusually large move. The stock set a record above 2,300 dollars in late June and traded near 1,000 dollars by the end of July. Shopify and Western Digital are also on today's calendar.

SpaceX Insider Lock-Up Expires Tomorrow
Employees and early backers who have been barred from selling since the June listing can begin selling tomorrow. Roughly a fifth of shares become tradable this week. Short sellers have been building positions since the stock fell below its 135 dollar offering price.

- John

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