AI Rally Meets Oil Pressure

Grant Calloway

Eleven point five billion dollars. That, uh, that is the second quarter revenue figure Anthropic just dropped onto the tape, and, uh, let me tell you, it completely re-ignited the entire AI capex trade before the opening bell even rang. Now, looking at the board this morning, S&P 500 futures were relatively unchanged on Monday, coming off the back of a third consecutive week of gains, but Nasdaq 100 futures, they, uh, they pushed up zero point five percent on that Anthropic news.

Grant Calloway

And you can see the ripple effect right down the line. Micron is up over three percent in premarket trading. Intel gained one point five percent, and, uh, look, part of that Intel move is tied to their Chief Executive, Lip Bu Tan. He went out and made a massive insider purchase, buying 105,000 shares at ninety five dollars a share. That is nearly ten million dollars of his own capital put right on the line. Back when I was walking the floor on the Big Board, back when the equity posts still roared and you could smell the grease on the telegraph printers, you learned real fast to distinguish between algorithmic sentiment swings and, uh, and real conviction. A C-suite executive writing a ten million dollar check at ninety five a share, that is conviction, plain and simple.

Grant Calloway

Now, over in the fixed income market, Treasury yields are easing just a bit. The ten year note yield slipped down to four point six seven four percent, while the two year yield settled around four point one five four percent. That helped push the Dollar Index down zero point one eight percent. But, uh, but do not close your eyes on commodities. Geopolitical friction is keeping a floor under energy. Brent crude ticked up zero point seven six percent to eighty nine dollars and nineteen cents per barrel, and WTI crude is sitting right around eighty two dollars and eighty five cents per barrel. That crude price is hanging over this market like a dark cloud, no matter how bright the tech headlines look.

Grant Calloway

Across the broader premarket, we are seeing some fascinating stock specific stories. Argentine producer Vista Energy jumped five percent after SEC filings showed Peter Thiel took a seventy six million dollar stake in the company. Over in Europe, Danish shipping giant Maersk surged four point three percent, hitting a four year high as elevated container freight rates keep boosting their bottom line. And consumer finance platform SoFi gained two percent following a fresh overweight initiation over at Piper Sandler.

Grant Calloway

So, on one hand, you have massive tech revenue numbers and big insider buys pushing growth forward, but on the other hand, eighty nine dollar crude oil is whispering that inflation might not be finished with us just yet. That tape is tighter than a drum, folks.

Grant Calloway

So where does that leave the macro narrative as we open the week? Well, if you ask the bulls, they will tell you rate cut salvation is right around the corner. Traders have knocked the probability of a September Federal Reserve rate hike down to thirty percent, down from fifty percent just last week. Recent mild Consumer Price Index data combined with softer retail sales figures have fueled a strong relief rally across rate sensitive growth stocks. The argument there is simple: cooling inflation gives the Fed room to breathe, and easing yields will cushion economic activity.

Grant Calloway

But, uh, let us hold on a second and look at the bear case, because the bears have some pretty heavy artillery of their own this week. If crude oil stays pinned near eighty nine dollars a barrel, energy costs act as a direct tax on the consumer. And we are about to get a direct look at the health of that consumer. Earnings reports are rolling in this week from retail heavyweights Home Depot, Lowe's, and Walmart. If those reports reveal squeezed household margins and weakening core demand, all this rate cut optimism could turn upside down fast, especially with the release of the FOMC meeting minutes coming up on Wednesday.

Grant Calloway

On deck for today, keep your eyes on the August Empire State Manufacturing survey along with the NAHB Housing Market Index for a fresh check on regional industrial activity and homebuilder sentiment. It is going to be an information dense session, no question about it.

Grant Calloway

Quick shoutout to our friends at Jellypod.com for powering the tech behind these daily deep dives. If you want smart audio summaries customized to your portfolio, check out Jellypod.com. And remember, as always, everything discussed on this show is strictly for educational and informational purposes and should never be construed as personal investment advice. Always do your own research or consult a licensed professional before placing a trade. Alright, bell is about to ring, so let us go see what the market gives us today.