March 5th Pre-Market

Good morning.

The Iran war is in day six with Hormuz still closed and Brent back up today.

Weekly jobless claims came in at 213K this morning, right where expectations were. Employers are still holding onto workers. Good for paychecks, bad for rate cuts. The Fed has no new reason to move. Trump's 15% global tariff is expected this week.

A lot of inflation pressure building in a short window. June cut odds already sit at 30%.

Let's dig in…

Today's Big Picture

1. The Hormuz Bottleneck Is Now A Global Inflation Event 

A fifth of the world's oil and LNG supply is stuck behind a closed strait with Gulf producers already cutting output. This is no longer just an oil story. Rate cut expectations have been slashed across the Fed, the BOE, and the ECB in the past week alone. June cut odds have been cut nearly in half. If U.S. escorts don't get tankers moving soon, that number goes to zero.

2. Broadcom Just Made The Case That AI Demand Is Accelerating 

AI revenue hit $8.4 billion, more than double last year, and management guided Q2 to $22 billion versus the Street's $20.5 billion. The new $10 billion buyback says they believe it. What matters today is whether this lifts the broader AI chain or stays a Broadcom-only story.

3. Berkshire Is Buying While Everyone Else Is Hiding 

Repurchases resumed yesterday for the first time since mid-2024. Greg Abel put $15 million of his own money in and committed to doing it every year. While the rest of the market piles into gold and treasuries, the new guy running a $1 trillion conglomerate is telling you he thinks equities are cheap.

Market Overview

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Stock Spotlight (pre-market)

Broadcom $AVGO ( ▲ 1.18% )  

Revenue at $8.4 billion, double last year. Q2 guide at $22 billion, Street was at $20.5 billion. New $10 billion buyback approved. Watch whether this lifts the broader AI chain or stays isolated.

Trade Desk $TTD ( ▲ 0.68% )  

The Information reports early talks with OpenAI to sell ads inside ChatGPT. Nothing signed yet. If it happens, Trade Desk becomes the ad layer for the most used AI product in the world.

StubHub $STUB ( 0.0% )  

Missed revenue by $35 million. Swung to a loss. Still early as a public company and already stumbling. Watch for any analyst downgrades to pile on.

Veeva Systems $VEEV ( ▲ 1.38% )  

Earnings beat at $2.06 versus $1.93 estimate. Revenue topped by $25 million. One of the few cloud software names delivering right now while the rest of the sector gets crushed.

Berkshire Hathaway $BRK.B ( ▲ 1.27% )  

Buybacks resumed for the first time since Q2 2024. Abel bought $15 million in stock personally. Covered in the Summary. The signal here is conviction from new leadership at a discount from highs.

Nvidia $NVDA ( ▲ 1.66% )  

Shifting production toward the Vera Rubin platform after export controls left 250,000 H200 chips without Chinese buyers. Not a demand problem. A routing problem. The company is reallocating capacity to where orders are firm.

What to Watch

Trump's 15% Global Tariff 

Bessent said it drops this week. EU expects an exemption. Everyone else gets hit. A tariff hike landing the same week as an energy shock puts two inflation catalysts on the tape at once.

Strait Of Hormuz 

The escort plan sounds good on paper. Analysts say Iran can harass that waterway with drones for months. If Brent breaks $85, the rate cut conversation is over until at least September.

Nonfarm Payrolls (Tomorrow) 

A strong number Friday makes it nearly impossible for the Fed to justify a June cut.

Thanks for reading 🙂

- John

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