September 16th Pre-Market Brief

Good Morning

Oil and yields are easing off a bit, giving stocks a better start today after last two days of selling.

A hike is widely expected today, so I’m more interested in what Warsh says would make another one necessary.

Let's dig in...

Today's Big Picture

The Hike Is Expected. What Follows Matters.

Markets expect the Fed’s first rate increase since 2023 at 2:00 PM ET. Investors are already pricing further increases, so Warsh’s explanation matters more than simply getting the hike everyone expects. If he gives them little reason to reconsider, pressure on borrowing costs could stick around.

Oil Is Getting Some Help From Supply

Brent is near $107 after reports that Saudi Arabia is offering additional crude through Oman. Getting more barrels to buyers could ease fuel costs without needing consumers and businesses to spend less. That would be useful relief, although disrupted shipping routes still stand in the way.

Plenty Of Funds Have Already Bet Against The Consumer

Nine consumer names made Hazeltree’s August list of the 20 most-shorted North American stocks, versus four in July. That tells us funds were already preparing for weaker spending. If consumers hold up better than expected, short sellers buying shares back could help those stocks recover.

Market Overview

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Stock Spotlight (pre-market)

J.B. Hunt Transport Services $JBHT ( ▼ 11.71% )  

is sharply lower after warning that third-quarter earnings could decline from the second quarter. The company cited adjustments tied to higher costs for transportation purchased from other providers.

Intel $INTC ( ▼ 0.05% )  

higher on reported talks with SK Hynix about producing memory chips in the U.S. Leasing part of Intel’s Ohio facility is one option; no agreement is confirmed.

Expedia $EXPE ( ▲ 1.81% )  

is lower after Morgan Stanley downgraded the stock to underweight. The bank cited an unfavorable balance of risk and reward, particularly if consumer spending weakens.

Union Pacific $UNP ( ▲ 1.57% )  

is higher after UBS upgraded the railroad to buy. The bank expects stronger freight volumes to support better-than-expected earnings through 2028.

Paychex $PAYX ( ▼ 0.18% )  

is higher after Wolfe Research upgraded the stock to peer perform. Analysts cited a supportive revenue outlook and blue-collar exposure that could limit vulnerability to AI-related job losses.

Diamondback Energy $FANG ( ▲ 2.82% )  

is lower alongside energy peers following a report of higher energy inventories last week. The inventory build adds pressure to crude prices.

What to Watch

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Fed Decision And Bond Reaction (2:00 PM ET)

A hold could raise doubts about the Fed’s willingness to confront inflation, according to analysts cited in today’s reporting. A hike leaves another test: whether longer-term yields settle or keep pushing financing costs higher.

Confirmation Of Saudi Shipments

The next useful development would be confirmation that the offered cargoes can reach buyers. Completed deliveries would strengthen the case for supply relief; further transport disruptions would weaken it.

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