Ringside · Pre-Bell · August 17
- Micron changes hands near $1,003 before the bell, up 3.2%, after Washington leaned on Apple over Chinese memory.
- July retail sales fell 0.6%, the first monthly drop in nine months, three days before Walmart reports.
- The Russell 2000 finished Friday at 3,068.42, its highest close in a year.
Indexes
Seoul, the market that has done most of the running in this rally, is shut today for a substitute Liberation Day holiday, so the memory trade arrives in New York without its usual overnight sponsor. Tokyo picked up the slack anyway. US futures are doing very little in aggregate, but the split beneath the surface is wide: the Nasdaq contract carries a bid while the Dow contract leaks, which is how a session led by four or five chip stocks tends to look before nine-thirty.
| Future | Level | % Chg | Note |
|---|---|---|---|
| ES (S&P 500) | 7,815.50 | +0.04% | |
| NQ (Nasdaq 100) | 30,297.00 | +0.17% | Only contract with real lift |
| YM (Dow) | 53,718.00 | -0.05% | |
| RTY (Russell 2000) | 3,071.40 | -0.10% | Pausing after Friday's high |
Overseas, the Nikkei 225 closed at 69,220, up 0.7%, even after preliminary data showed Japan's economy grew an annualised 1.1% in the second quarter, short of forecasts, with weak household demand offsetting exports. Kioxia, Advantest and Tokyo Electron led the advance, which is the same trade New York is about to open on. Hong Kong rebounded 1.3%. Europe is barely moving: London and Frankfurt are a fraction firmer, Paris is a fraction softer, and the Euro Stoxx 50 sits 0.3% higher.
| Index | Level | % Chg | Note |
|---|---|---|---|
| Nikkei 225 (Japan) | 69,220.25 | +0.73% | Chip names carried it |
| Hang Seng (Hong Kong) | 25,453.23 | +1.34% | Best of the majors |
| FTSE 100 (UK) | 10,771.29 | +0.17% | |
| DAX (Germany) | 26,451.42 | +0.07% |
In the News
Rates, FX, Commodities
Bond yields went up last week while the data went down, which is an uncomfortable combination for anyone hoping the consumer slowdown buys relief on financing costs. Energy is the reason: Brent has run more than a third higher this year with traffic through the Strait of Hormuz still severely restricted, and that keeps a floor under inflation expectations no matter what a single month of retail sales says.
| Rate / FX | Level | Chg | Note |
|---|---|---|---|
| 2Y Treasury | 4.15% | — | Aug 13 constant maturity |
| 5Y Treasury | 4.362% | — | Added 4.9 bp Friday |
| 10Y Treasury | 4.696% | — | Up 5.5 bp, near a three-month high |
| 30Y Treasury | 5.265% | — | Added 5.2 bp Friday |
| Dollar Index | 99.476 | -0.04% | |
| VIX | 14.91 | +4.63% | Still under 15 |
| Commodity | Level | % Chg | Note |
|---|---|---|---|
| WTI crude | $82.52 | +0.15% | |
| Brent crude | $88.92 | +0.45% | Hormuz traffic still thin |
| Gold (Dec) | $4,459.50 | +0.50% | Contract rolled from August |
| Natural gas | $2.644 | -3.26% | Weekend forecasts turned mild |
The two-year to ten-year spread stood at 48 basis points at Thursday's Treasury close. Gold's December contract took over as the active month today, so Friday's quoted change is not comparable; against December's own settlement of $4,437.30 the metal is half a percent firmer, still well below its January peak.
Technicals
A close of 7,785.76 leaves the broad index roughly 2.6% above its 20-day average of 7,588 and 13 points under Thursday's record of 7,798.99. There is very little between the index and that mark, and nothing much below it until the 20-day. The Nasdaq 100 at 30,046 has further to travel: it sits about 2% under its June high of 30,660, with its 20-day at 28,976 now above the 50-day, a configuration that usually accompanies a market rotating rather than one topping.
Rates are the tighter situation. The ten-year at 4.696% is a single basis point from 4.703%, the highest close of the past three months, and the three-month floor is 4.604%. The entire range is ten basis points wide, so the yield has gone nowhere with conviction while the equity market added 3% since late July.
Breakouts & Breakdowns
Breakouts
Seagate (STX) has the strongest chart of the storage names, closing at $973.44 against a 50-day average of $889.06, with the January high near $1,145 the next reference above. The Russell 2000's 3,068.42 finish is the broader signal: small caps at a one-year high while the S&P eases from a record is not what a narrow market produces.
Breakdowns
Home Depot (HD) goes into Tuesday morning's report at $338.86, below its 200-day average of $347.10 and about 12% lower than a year ago. Lowe's (LOW) is in worse shape at $218.47 against a 200-day of $238.07. Western Digital (WDC), despite Friday's 4.4% gain, sits $44 under its own 50-day of $552.41, so last week's advance left the group's charts in very different condition.
Top Movers
Gainers
SanDisk (SNDK) is indicated 4.6% higher near $1,716 after closing Friday at $1,641.11, a 7.4% session of its own. The company's investor day last Thursday laid out mid-to-high double-digit revenue growth through fiscal 2030, gross margins near 80% and tens of billions of dollars in long-term contract backlog. Three sessions later, buyers appear to have accepted those targets. Its 50-day average at $1,655.63 has capped the stock since the July drawdown.
Micron (MU) adds 3.2% to about $1,003 pre-market, reclaiming a round number it has failed to hold three times this month. Lutnick's comment about Apple hands share directly to the two American suppliers, and the company has lobbied the administration on precisely this point, so the move reflects policy rather than a new product cycle. It has gained 13% across five sessions and closed Friday at $971.66, just above a 50-day average of $960.72.
Seagate (STX) is up 2.4% near $996.85 and Western Digital (WDC) 3.7% near $527.42, both riding the same storage demand argument.
Nvidia (NVDA) adds 0.7% to $226.81, within $10 of its 52-week high at $236.54, as the SB Energy report gives the market a fresh number to attach to the Ohio project.
Losers
The retailers reporting this week are all a touch softer, and none of the moves is large: Walmart (WMT) is off 0.5% at $114.74, Home Depot (HD) down 0.2% at $338.00, Lowe's (LOW) down 0.2% at $218.02, Target (TGT) down 0.2% at $154.23. Friday's retail sales figure is doing the work; four days of results will settle whether it was a July distortion or a trend.
Macro Calendar
| Time (ET) | Release | Consensus | Prior |
|---|---|---|---|
| 8:30 | Empire State Manufacturing (Aug) | 10.2 | 15.6 |
| 10:00 | NAHB Housing Market Index (Aug) | 35.0 | 34.0 |
| 16:00 | TIC Net Long-Term Flows (Jun) | $150.0B | $232.7B |
The homebuilder survey is the one to read alongside Home Depot tomorrow. At 34 it has been below the neutral 50 line for a long stretch, and a builder sector that cannot generate confidence is not one that generates renovation demand either. Empire State is a regional survey with a deserved reputation for noise, so a miss against 10.2 will not move much on its own.
Earnings Today
Nothing of consequence before the open, and the after-close list is small caps only. The week's substance starts tomorrow with Home Depot, followed by Target on Wednesday and Walmart on Thursday at 7:00 ET. Home Depot rose 3.6% on the day it reported in May, when first-quarter earnings of $3.43 a share edged past the $3.41 consensus and management left full-year guidance unchanged.
Drivers
- Whether the memory bid holds once Seoul is absent. Samsung and SK Hynix have supplied the overnight momentum for this trade every day for a week, and today they are shut. That leaves Micron, SanDisk, Seagate and Western Digital to price the Lutnick headline on their own, into a US session with no data before 8:30 and no earnings worth the name. Micron above $1,000 at the close would be the first time it has managed that since late July.
- The Russell 2000 at 3,068.42. Small caps have quietly outrun the S&P for three weeks, and Friday's 0.5% gain against the large-cap index's 0.2% decline extended that. Broad participation while the leadership names rest is the healthier version of this market; the futures contract is indicated a shade lower this morning.
- Whether the ten-year can stay under 4.70%. Last week produced softer producer prices, a 0.6% drop in retail sales and a yield that rose five and a half basis points anyway. Traders have cut September hike odds to about 35%, so the bond market is not pricing tightening; it is pricing the oil that comes through Hormuz, and Brent at $88.92 is the number doing that work. The next scheduled test is the release of the July Federal Reserve minutes on Wednesday afternoon.