September 8th Pre-Market Brief

Good Morning

We came back from the long weekend to crude near $100 and the Dow down a few hundred points, which sounds worse than it is. Most of that is Amgen on a failed drug trial, and the Dow counts by share price, so one healthcare headline goes a long way.

Most chips are green, small caps are green. This looks like money moving around, not money leaving.

Let's dig in...

Today's Big Picture

1. The War Moved From Shipping Lanes To Oil Fields
Houthi militants hit Saudi Aramco facilities with drones and ballistic missiles, wounding more than 70, and the energy ministry halted operations at certain sites. For six months this conflict has been about traffic through the Strait of Hormuz, and traffic resumes the day a deal is signed. Damaged production capacity does not. Goldman raised its December Brent forecast to $85, which sits below where crude trades right now, so the bank's own base case reads today's price as fear rather than a real shortage of barrels.

2. The Dow's Drop Is Mostly One Drug Headline
Amgen fell hard on a failed Novartis trial in Switzerland, and the Dow weights companies by share price instead of size, so that single result is doing an outsized share of the damage. The Nasdaq is green. Chip stocks are higher across the group, with Intel, Broadcom and Nvidia all gaining after Qualcomm announced an AI infrastructure deal with Amazon. Small caps are positive too, which means money is moving between sectors this morning rather than leaving stocks.

3. Friday's Inflation Number Already Missed The Oil Move
Traders put the odds of a Fed increase on September 16 near 60 percent, and Friday's consumer price report is the last major reading before that vote. But it measures August. The strikes on Saudi facilities, crude near $100 and record gas and diesel prices all landed after that window closed. September's data does not arrive until October, so a cool number Friday would describe a month that ended before the energy move started.

Market Overview

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Stock Spotlight (pre-market)

Qualcomm $QCOM ( ▲ 0.1% )  
Up on a partnership with Amazon Web Services to build out AI infrastructure, pairing Qualcomm's power-efficient chip design with Amazon's cloud capacity. The move pulled the broader chip group higher and is the main reason the Nasdaq is holding green.

Novartis $NVS ( ▼ 12.5% )  
Down on a failed late-stage trial. Del-desiran missed its primary objective in myotonic dystrophy type 1, a genetic muscle-wasting disease, and it was the lead drug from the $12 billion Avidity Biosciences deal that closed in February. Third setback in a week and the shares are tracking their worst session on record.

Amgen $AMGN ( ▼ 8.02% )  
Down on someone else's data. The Novartis drug that failed days ago, pelacarsen, targeted cardiovascular risk, and Amgen and Eli Lilly $LLY are both developing treatments in the same category.

Roivant Sciences $ROIV ( ▲ 11.87% )  
Up sharply on mid-stage results. Its Pulmovant unit said mosliciguat produced a statistically significant reduction in blood pressure through the arteries of the lungs versus placebo, in patients whose pulmonary hypertension stems from scarred lung tissue.

Bloom Energy $BE ( ▲ 7.35% )  
Up on index inclusion. S&P Dow Jones Indices confirmed the fuel cell maker joins the S&P 500 on September 21, which obligates index funds to buy. The stock has roughly tripled this year on data center power demand.

D-Wave Quantum $QBTS ( ▲ 10.62% )  
Rigetti Computing $RGTI
Up after the federal government took minority stakes in both companies, along with Quantinuum, through a combined $300 million CHIPS Act deal. This follows the administration's ten percent Intel stake taken last August.

What to Watch

Want to Know about this years upcoming IPO’s?
MarketBeat did an excellent job on this free IPO guide on IPO’s happening this year

Canada's January Deadline
Today's Canadian duties run from fifteen to fifty percent on steel, appliances, dairy and electronics. The part nobody is reading: Washington's answer, fifty percent on Canadian metals and vehicles, is not scheduled until January 1. Both sides built themselves four months of runway, so the escalation headline and the negotiating calendar say different things.

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