July 14th Pre-Market Brief

Good Morning

Banks just wrapped their best quarter in years, and every CEO said the same thing… the consumer is fine. CPI backed them up this morning, the coldest print we've seen in a long time, though it's June data and doesn't know about this week's oil spike yet.

I think today trades green unless Warsh spooks the market at 10.

Let's dig in...

Today's Big Picture

1. Inflation is down, But One Number Explains Why Traders Aren't Celebrating

Prices barely rose in June, and the yearly inflation rate dropped by the most since 2020. Traders had priced a one in four chance of a rate hike this month, that dropped to under one in five. But the odds of a hike in September barely moved, still above six in ten. Energy costs in this report were still up double digits from a year ago, and that's before the new oil spike even hit the data.

2. All Five Banks Beat. Only One Stock Went Up.

JPMorgan, Citi, Wells Fargo, Bank of America and Goldman all beat expectations this morning. Goldman is the only one trading higher. Citi is down the most, Wells Fargo has clawed back some of its early loss. When good numbers don't move the stock, the market is telling you something else is driving the price.

3. IBM Is Having Its Worst Morning In Almost 40 Years

IBM stock is set for its worst day since 1987. That's dragging the Dow down by roughly 425 points, all by itself. Meanwhile the Nasdaq is green, because chip stocks are rallying. The reason ties the two together: IBM said its customers are rushing to buy memory and storage before prices go up, and that same rush is what's lifting the chip stocks pulling the other index higher.

Market Overview

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Stock Spotlight (pre-market)

Apple $AAPL ( ▲ 0.63% )  

Moving on a KeyBanc downgrade to underweight with a $250 target, one day after an all time high. The forced actors are momentum buyers who chased the high, they now need a reason to hold beyond the chart.

SK Hynix $SKHY ( ▼ 9.32% )  

Options on the new U.S. shares start trading today into record retail options volume. Market makers are the ones forced to act, hedging fresh flow in a stock with three days of price history, which means chop.

Micron $MU ( ▼ 4.32% )  

Up with the chip bounce, but today its retail base gets a shinier toy in SK Hynix options. The bottleneck crowd that drove Micron's run now has to choose between the original trade and the new one. Rotation risk is the story, not the bounce.

Applied Materials $AMAT ( ▼ 4.5% )  

Leading the equipment group higher on no news, which marks Monday as positioning, not fundamentals.

Ericsson $ERIC ( ▲ 3.26% )  

Down hard after missing on revenue. Telecom carriers are not spending, and that forces a choice on anyone holding legacy network suppliers: the capex boom is AI infrastructure or nothing.

BP $BP ( ▲ 4.16% )  

Higher with crude, plus a debt update and word that Iran volatility is feeding its trading desk. The forced actors are the airlines and shippers on the other side of that trade, hedging fuel at prices they didn't budget for.

What to Watch

IPO’s

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

Blockade Enforcement (4 PM ET)

Central Command starts enforcing right at the closing bell, so any Iranian answer comes overnight. Watch crude into the close for positioning ahead of it. If Tehran targets tankers again, Wednesday opens ugly for airlines and anything that burns fuel.

Buffett On Squawk Box (Tomorrow Morning)

He just cut the Gates Foundation from his annual gift for the first time in two decades and wants all his Berkshire shares disposed of within about eight years. The pace of that disposal is a supply question every Berkshire holder should care about.

- John

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_{Energy Exploration Technologies, Inc. (“EnergyX”) has engaged Beehiiv to publish this communication in connection with EnergyX’s ongoing Regulation A offering. Beehiiv has been paid in cash and may receive additional compensation. Beehiiv and/or its affiliates do not currently hold securities of EnergyX.}

_{This compensation and any current or future ownership interest could create a conflict of interest. Please consider this disclosure alongside EnergyX’s offering materials. EnergyX’s Regulation A offering has been qualified by the SEC. Offers and sales may be made only by means of the qualified offering circular. Before investing, carefully review the offering circular, including the risk factors. The offering circular is available at invest.energyx.com/.}

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