October 12th Pre-Market Brief

Good Morning

The bull market turns four today, and the S&P has more than doubled since the October 2022 low. Stocks are quiet and the bond market is off for Columbus Day.

Oil is the exception, up after Russia hit Ukraine’s gas sites overnight.

Let's dig in...

Today's Big Picture

1. Trump’s Diesel Deal Is Smaller Than It Sounds

Oil turned higher after Russian drones hit Ukrainian gas facilities, hours after Trump’s “energy ceasefire.” His Russian diesel deal from Friday starts with less than one day’s worth of U.S. demand. Even the full 4.8 million tons covers about nine days, so pump prices get little help before the midterms.

2. Trump’s No-Iran Pledge Faces Its First Test

Houthi strikes killed 12 at Riyadh’s main airport Saturday, and Trump says the U.S. “may” join Saudi Arabia’s response. Friday’s oil dip came from his promise of no Iran strikes before the Nov. 3 midterms. Hitting Iran-backed Houthis would open a second front in that war, next to a tanker route they want closed.

3. Micron Faces New Chinese Supply and a Fading Shortage

Micron is lower premarket after China’s CXMT said it will deliver next generation memory chips that compete with Micron’s.

Broadcom CEO Hock Tan said Monday that today’s memory shortage may be gone a year from now. That shortage is what lifted memory prices this year, and it’s fading just as a new rival arrives.

Market Overview

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Stock Spotlight (pre-market)

Salesforce $CRM ( ▲ 0.58% )  

higher premarket after Bank of America upgraded it from underperform to buy, with a $285 price target. BofA says big companies won’t swap out core systems, answering the AI fears that pushed shares lower this year.

Chipotle $CMG ( ▼ 3.34% )  

lower premarket after Starbucks $SBUX told CNBC it is “not buying Chipotle,” ending takeover speculation. Starbucks is higher on the denial.

IREN $IREN ( ▼ 1.46% )  

higher premarket after The Information reported Anthropic is the unnamed customer in its August cloud contract. IREN rents out AI computing power from its own data centers, and neither company has confirmed the report.

First Solar $FSLR ( ▼ 0.58% )  

higher premarket after Truist upgraded the solar panel maker to buy from hold. Truist expects strong solar demand for years and says First Solar can hold firm on prices.

Biogen $BIIB ( ▲ 3.33% )  

higher premarket after JPMorgan upgraded the biotech to overweight, its version of a buy. JPMorgan points to a string of drug trial results due in 2027.

Mattel $MAT ( ▲ 0.66% )  

higher premarket after Seaport upgraded the toymaker to buy amid reports of takeover interest. Seaport thinks the attention will make investors pay more for toy stocks across the board.

What to Watch

Bank Earnings (Tuesday, Before the Open)
JPMorgan $JPM ( ▲ 0.47% ) , Goldman Sachs $GS ( ▲ 1.44% ) , Wells Fargo $WFC ( ▲ 1.85% ) and Citigroup $C ( ▲ 1.22% ) report after financials posted the S&P’s second worst month. About a third of big investors expect banks to beat the market, down from four in five in December. Goldman and Morgan Stanley already warned that trading slowed, so a soft quarter won’t surprise anyone. If CEOs say borrowers are handling higher rates, that alone could beat the mood.

Ukraine’s Next Move on Russian Refineries
Zelenskyy says Ukraine will respond if Russia keeps hitting its energy sites. Ukraine’s past strikes on Russian refineries are why Moscow banned diesel exports in July. Trump’s deal ties most of the promised diesel to the condition of those refineries. If Kyiv hits them again, the diesel deal stalls before the big shipments start.

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