June 16th Pre-Market Brief

Good Morning

Markets are at record highs and SpaceX, doing has been doing most of the work since Friday. Feels good, but I'm watching it sideways.

Oil dropped further under $80 this morning. The headlines say the Strait reopens Friday. One thing I do care about is tomorrow. Warsh runs his first Fed meeting, and I want to see if he sounds as easygoing on rates as everyone says he is.

Let's dig in...

Today's Big Picture

1. SpaceX Passes Amazon. It Still Loses Money.
SpaceX is up again before the bell, third straight day, on track to pass Amazon as the fifth most valuable US company. It's doing that while losing billions a year, the only company worth over a trillion that doesn't turn a profit. Today it agreed to buy Cursor for $60 billion in its own stock.

2. The Hold Isn't The Story. The Dots Are.
Kevin Warsh chairs his first Fed meeting today, decision out Wednesday, and nobody expects a rate move. What matters is the dot plot, the chart where each Fed official marks where they think rates are headed. Since the last meeting, the market has flipped from expecting rate cuts to bracing for a hike. Warsh is seen as someone who favors lower rates, but he's walked into a committee that's leaning the other way.

3. Oil Slips Under $80. The Tanker Bosses Aren't Buying It.
Brent dropped under $80 this morning for the first time since March, pricing in a clean reopening of the Strait on Friday. The people who actually move the oil disagree. The CEO of the world's largest tanker operator says many won't send ships back through Hormuz for weeks, and Hapag-Lloyd is only hoping its four stranded ships clear this weekend.

Market Overview

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Stock Spotlight (pre-market)

Dave & Buster's $PLAY ( ▼ 4.72% )  

Down hard premarket after a weak quarter, profit and sales both well short. Same-store sales fell again.

Robinhood $HOOD ( ▲ 5.29% )  

Higher after cutting about a tenth of its staff. The market reads it as discipline, not distress. Bears who shorted the bloated cost base have less to lean on now.

Qualcomm $QCOM ( ▲ 4.29% )  

Up on a report it's in talks to buy AI chip startup Tenstorrent for $8 to $10 billion. The deal pushes it deeper into AI silicon just as its CEO argues agents will replace the apps on your phone.

Huntsman $HUN ( ▲ 1.52% )  

Lower after agreeing to an all stock merger of equals with Olin to form OlinHuntsman. The gap between the two stocks is the spread merger-arb desks will trade until the 2027 close.

Micron $MU ( ▲ 10.84% )  

Leading a strong morning for memory chips, with Western Digital and Seagate moving up beside it. Memory is where the AI buildout shows up first. Funds chasing the semi bounce have to own this group, not just the GPU names

Yum Brands $YUM ( ▲ 0.23% )  

Selling Pizza Hut to LongRange Capital for $2.7 billion, cutting loose a brand that's dragged on results for years. It keeps KFC and Taco

What to Watch

IPO’s

MarketBeat did an excellent job on this free IPO guide.

A Hot Inflation Print Just Landed Before The Fed (Out This Morning)
May import prices came in well above forecast, the largest annual jump since 2022, driven by the wartime fuel spike. It's the rearview mirror while cheaper oil is the windshield, but it hands the hawks fresh ammo a day before Warsh speaks.

Nvidia's First Debt Sale
The cash king is borrowing at least $20 billion, its first bond sale of the AI boom, which tells you how big the buildout bills are getting.

The Signing Lands On A Closed Market (Friday)
The deal signs and Hormuz is set to reopen Friday, but US markets are shut for Juneteenth. The reaction to the actual news compresses into Thursday's positioning and the following Monday.

- John

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