July 15th Pre-Market Brief

Good Morning

The data keeps handing the bulls gifts. Wholesale prices fell in June, and the New York Fed president just said inflation has peaked. Add ASML raising guidance again and chips are carrying futures on their back this morning.

U.S. bombed Iran a fourth straight night and gold went down, the “safety” trade keeps sitting this leg of the war out, odd enough that I've got one eye glued to gold and silver here.

Let's dig in...

Today's Big Picture

1. The AI Trade Is Running Hot Enough To Trip Circuit Breakers
ASML raised its full-year guidance for the second time this year, with orders for its most advanced machines booked into 2028. Korea took that news and melted up so fast the exchange triggered a circuit breaker on the way up, a mechanism built for crashes. Meanwhile the money funding all this chip spending is coming out of software budgets, which is what broke IBM on Tuesday. Chips and software now trade almost independently of each other, so a broad tech fund is quietly holding both the winner and the bill.

2. Stripe Offered $53 Billion For A Company Once Worth $300 Billion
Stripe and private equity firm Advent bid roughly $60.50 a share for PayPal, with about $50 billion in bank financing already committed. The stock is having its best premarket since it went public, but zoom out: PayPal closed yesterday worth $42 billion, down 85 percent from its 2021 peak. A serious buyer showing up at this price says the standalone turnaround story is over.

3. Fourth Night Of Strikes, And Gold Fell
US forces hit Iran for a fourth straight night, the naval blockade of Iranian ports is back on, and Brent is pressing toward $86. Yet gold and Treasurys both fell overnight, meaning traders see an oil supply problem, not a reason to hide. Iran's Revolutionary Guard says the strait stays closed until the strikes and blockade end, while Trump says power plants and bridges come next week.

Market Overview

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Stock Spotlight (pre-market)

Morgan Stanley $MS ( ▲ 2.98% )  
Up on record revenue and profit, with the equities desk beating by nearly two billion dollars. Third straight bank to print this story, so the beat itself is stale. The forced actors are fund managers underweight the banks, who now have to chase a group that already ran.

BlackRock $BLK ( ▼ 0.59% )  
Jumping on an earnings beat and record $15.3 trillion in assets. The real driver is organic fee growth beating the firm's own target, that's the number analysts model. Anyone who owned this as a boring index fund toll collector now has to reprice it as a growth story.

Alibaba $BABA ( ▼ 0.03% )  
Up on a state media report that its Qwen AI model will power Apple Intelligence in China. That makes Alibaba a toll booth on every iPhone in a market Apple couldn't crack alone.

Conagra $CAG ( ▼ 1.26% )  
Down after cutting its dividend in half this morning. It was the highest yielder in the entire S&P 500. Every fund that owned it for the payout just lost its reason to hold, and they don't get to wait around.

Lucid $LCID ( ▼ 16.15% )  
Sliding again on a report it hired a turnaround advisor with bankruptcy among the options. Saudi backing was the entire bull case. If that wallet is hesitating, remaining holders are deciding whether there's any floor at all.

SpaceX $SPCX ( ▼ 2.2% )  
Grinding toward its $135 IPO price after closing at a post debut low, as lockup sellers and valuation nerves outweigh the hype. Underwriters are the forced actors, they typically defend that line for 30 days.

What to Watch

IPO’s

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

Warsh At Senate Banking (10 AM ET)
He testifies hours after the PPI drops, and senators will read him the number live. Watch the two-year yield during his answers. That's the market grading him in real time.

Korea's Open Tonight (8 PM ET)
The Kospi rose over 6 percent today and the exchange tripped a sidecar, a circuit breaker built for crashes, on the way up. That's after weeks of whipsaw in these names, and SK Hynix just dropped $26 billion of fresh shares into the market last week.

TSMC Reports Tomorrow
The direct test of whether ASML's monster order book turns into actual chip production. Options desks in semis position today, not tomorrow. This is the one most people won't think about until tonight.

- John

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