July 22nd Pre-Market Brief

Good Morning

Paid over 4 bucks a gallon this morning. Brent touched 95 overnight and futures are red, tech worst of the bunch.

Alphabet and Tesla report tonight, as well as IBM.

Hedging chip stocks costs more than it ever has, like everyone's bracing for the AI trade to die. Super Micro just took 60 billion in orders and TSMC is raising prices next year. Both of those conflict and price discovery is still happening in this market…. signalling to me that we are still early overall.

Let's dig in...

Today's Big Picture

Crude Is Pricing The Fed
Hike odds for next Wednesday went from one in ten to one in four in a week, and no inflation data printed in between. Oil did that alone, with tankers turning back from the Red Sea and Kazakh loadings stopped in the Black Sea. The tell is diesel, which now costs a record amount over crude in Europe, and diesel is what moves freight. That's how a war becomes a goods price, and markets now lean heavily toward a hike by September.

The Spend Line Is The Story Tonight
Alphabet and Tesla open megacap season after the close. Nobody is trading Alphabet's ad number tonight, they're trading the spending line, because that's the order book for Nvidia, Super Micro and every power name attached to them. Big spend reads well downstream and heavy on Alphabet's own margins, so one release can pull the tape two directions at once. Tesla is the same question with a different bill, funding Optimus and robotaxi while the stock sits near April lows.

Quiet Tape, Loud Stocks
Super Micro is the biggest premarket gainer after guiding margins to nearly double on a record order quarter, days after the chip index it sells into fell into a bear market and clawed back the key 12,000 level. The bounce hasn't convinced anyone: traders still pay a record premium to hedge single stocks over hedging the index, so the tape only looks calm because the wreckage cancels itself out. Part of that calm is manufactured, with funds positioned to profit from it reinforcing it with their own trading. That holds until it doesn't, and this kind of unwind tends to come fast.

Market Overview

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Stock Spotlight (pre-market)

AT&T $T ( ▲ 1.41% )  

Higher after adding 432,000 wireless subscribers against the 338,500 expected, with record fiber signups attached. Revenue still came in under estimates, so that growth was bought with cheap bundles. Verizon and T-Mobile now pick a side if to match the discount and take the same soft revenue line, or hold price and watch subscribers walk.

GE Vernova $GEV ( ▼ 4.97% )  

Lower after earning $2.47 per share against a $3.18 estimate. Orders reached $24.2 billion and the backlog sits at $176 billion, so demand held up and the shortfall came out of the wind business. Anyone owning this as a clean AI electricity play has to start pricing a legacy segment they weren't thinking about.

Pegasystems $PEGA ( ▼ 2.37% )  

Lower after adjusted earnings of 35 cents missed the 43 cents analysts modeled. That is the second enterprise software disappointment in a week, following IBM's warning. Investors parked in software as the defensive corner of tech have to defend that call before tonight's reports land.

Oklo $OKLO ( ▲ 2.4% )  and X-Energy $XE ( ▲ 7.22% )  

Higher on a report both are joining a White House effort to speed reactors for AI data centers. Neither company sells power yet, so what moved here is the permitting timeline, not a contract. Developers stuck in the gas turbine queue now have a second lane to price, even if it opens years out.

Rocket Lab $RKLB ( ▲ 5.14% )  

Won a $266 million Air Force contract covering twelve suborbital launches through 2028. The customer is the government and the schedule is locked, which is steadier than the commercial launch cadence analysts have been discounting. Anyone modeling this launch by launch now has a fixed revenue line to build around.

Cal-Maine Foods $CALM ( ▼ 1.32% )  

Posted a surprise loss of 76 cents per share where analysts expected a small profit, blaming egg prices at historic lows once you adjust for inflation. Food deflation is running while energy inflation climbs. Anyone holding a basket of last cycle's inflation winners has to check which commodity each name actually rides.

What to Watch

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

Saudi Nuclear Signing (Wednesday)
Energy Secretary Chris Wright signs a 30 year deal handing American firms the Saudi nuclear buildout, worth tens of billions, with Westinghouse's reactor at the center. Blocking it takes a veto proof majority in Congress, so treat the revenue as real. One reactor can power a major AI data center, which makes this and the White House reactor push the same trade in two headlines.

Friday's Tariff Reset
The temporary global tariffs expire Friday and the replacements look permanent. Brazil's new levy went live Wednesday, and imported generic drugs face a tariff designed to double their cost in 2028. Watch the replacement structure before Friday, because Indian and Chinese drug supply chains carry the most direct exposure.

- John

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