Ringside · Pre-Bell · August 18
- A Hormuz strike lifts Brent to $91.04; thirty-year Treasuries yield 5.32%, most since 2007.
- Memory gives back Monday's rally — Micron off 5.0%, Western Digital off 6.0%, SanDisk off 5.6% pre-open.
- Home Depot earned an adjusted $4.92 against $4.73 expected and left full-year guidance alone.
Indexes
Two sessions of crude buying have turned into a worldwide repricing of long-dated government debt, and equity futures are wearing it unevenly. Nasdaq 100 futures are down 1.24% at 29,723.50 while Dow futures sit fractionally higher at 53,559, a gap of more than a percentage point that marks this as a duration problem rather than a growth scare. S&P 500 futures are off 0.49% at 7,730.50. The split traces to a single group: storage and memory names that led Monday's advance are being sold hard before the open, and they carry far more weight in the Nasdaq than in the Dow.
| Futures | Level | % Chg | Note |
|---|---|---|---|
| ES (S&P 500) | 7,730.50 | -0.49% | |
| NQ (Nasdaq 100) | 29,723.50 | -1.24% | Memory complex heavy |
| YM (Dow) | 53,559 | +0.03% | Energy and staples offset |
| RTY (Russell 2000) | 3,054.80 | -0.33% |
Asia took the brunt of it. Tokyo fell the most of any major market as Japanese government bond yields climbed alongside the American long end, and Seoul followed its chipmakers lower. Europe has been comparatively still, with the DAX off about 0.4%, the CAC 40 about 0.3%, and the FTSE 100 marginally higher on its energy weighting.
| Asia | Close | % Chg | Note |
|---|---|---|---|
| Nikkei 225 | 67,460.73 | -2.47% | JGB yields at a 30-year high |
| Kospi | 6,869.83 | -1.55% | Samsung, SK Hynix lower |
| Hang Seng | 25,471.15 | +0.07% |
In the News
Rates, FX, Commodities
The long end is selling off on supply, oil and the absence of forward guidance, and Treasuries are only part of a synchronized move. The 30-year reached 5.327% overnight before settling near 5.32%, per CNBC, which is the highest that maturity has yielded since 2007. Two-year yields have not moved in a week, so the curve is steepening entirely from the far end.
| Treasury | Yield | Chg | Note |
|---|---|---|---|
| 2Y | 4.17% | — | Aug 14 constant maturity |
| 5Y | 4.376% | — | |
| 10Y | 4.74% | — | Up about 2 bp from Monday |
| 30Y | 5.32% | — | Highest since 2007 |
Crude is the engine. Trading Economics has Brent extending a third consecutive session of gains, with Iran and Oman still negotiating a Hormuz traffic arrangement that Washington is not party to and will not accept without guaranteed passage.
| Commodity / FX | Level | % Chg | Note |
|---|---|---|---|
| WTI crude | $85.05 | +0.65% | |
| Brent crude | $91.04 | +0.19% | Third session above $90 |
| Gold (Dec) | $4,454.70 | -0.43% | Sold with bonds, not bought |
| Natural gas | $2.71 | +0.61% | |
| Dollar Index | 99.65 | +0.01% | |
| VIX | 15.86 | +4.41% | Early reading; 15.19 Monday |
Technicals
Nothing in the index charts has broken. The index finished Monday on 7,745.06, some 53.93 points beneath the record close of 7,798.99 struck on August 13, a peak verified before publication in the S&P's daily history, and 156 points clear of its 20-day average at 7,589. Its 50-day sits at 7,516 and the 200-day at 7,066. The Nasdaq 100 finished at 29,995.38; futures point to an open near 29,700, which would leave it above the 50-day average at 29,387 with room to spare. On rates, the 10-year at 4.74% has cleared the 4.60-4.72% band it held through late July, and the 30-year is trading in territory with no modern chart reference. The nearest historical marker is the 2007 peak of 5.44%.
Micron is the name to follow at the open. Its pre-open price of $961.08 sits within a dollar of the 50-day average at $960, a line the stock has not closed under since the middle of June.
Breakouts
Valero Energy (VLO) closed Monday at $347.19, a fresh 52-week closing high that took out the $342.92 mark set only three sessions earlier, and it sits 11% above its 20-day average at $312.47. ConocoPhillips (COP) is the second name working, holding $127.56 with its 20-day at $119.90 and the March high of $133.80 the next reference above.
Breakdowns
Western Digital (WDC) has lost its 50-day average at $551.94 and, at $503.95 before the bell, is testing the 20-day at $499.57, a level that has held every pullback since late June. Seagate Technology (STX) is the milder case: down 5.5% pre-open to $939.88, it remains above both its 50-day at $888.30 and its 20-day at $851.36.
Top Movers
Gainers
Home Depot (HD) trades at $344.21, up 1.87%, after second-quarter adjusted earnings of $4.92 a share beat the $4.73 consensus on sales of $47.9 billion against $47.2 billion expected. Comparable sales rose 1.7% where the street had 0.9%, with US comps up 1.3%, and management reaffirmed full-year sales growth of 2.5% to 4.5% and operating margin of 12.4% to 12.6%. CNBC quotes the company describing "frozen housing market conditions," which makes the beat a story about smaller upkeep jobs instead of a housing cycle turning, and it puts unusual weight on the 9:00 a.m. Eastern call given Wednesday's Canadian tariff start.
Valero Energy (VLO) adds 0.62% to $349.50, extending a run that has taken the refiner to a 52-week high while crude margins widen with the shipping-lane disruption.
Exxon Mobil (XOM), Chevron (CVX) and ConocoPhillips (COP) are each up roughly 0.7%, at $162.66, $204.19 and $128.50, on the same crude strength that is doing the damage to bonds.
Losers
Western Digital (WDC) falls 5.98% to $503.95, the sharpest decline in a group that was Monday's best performer. The selling started in Seoul, where Samsung Electronics and SK Hynix dragged the Kospi down 1.55%, and US storage names now trade closely with those two. JPMorgan's Jay Kwon cut Samsung to Neutral last month on legacy DRAM pricing risk, and that argument is the one being applied this morning to every name in the group.
Micron Technology (MU) gives up 5.01% to $961.08, surrendering the $1,000 handle it reclaimed only a session ago. The reversal is a positioning event rather than a fundamental one — no company in the group has said anything since Monday — which is what a 213% year-to-date gain buys you when Seoul opens lower.
SanDisk (SNDK) drops 5.64% to $1,686.00, and Seagate Technology (STX) falls 5.52% to $939.88.
Oracle (ORCL) slips 3.23% to $141.94, a second day of software weakness that owes nothing to memory and everything to long-duration valuations meeting a 5.32% long bond.
Macro Data Today
| Release | Time (ET) | Consensus | Prior |
|---|---|---|---|
| Housing starts (July) | 8:30 a.m. | 1.390M | 1.427M |
| Building permits (July) | 8:30 a.m. | 1.380M | 1.367M |
Housing data lands into the worst possible rate backdrop. The 30-year mortgage tracks the long end of the Treasury curve, and the long end just made a 19-year high, so a starts number near consensus would already represent builders working against tighter financing than the July figures reflect. A miss below 1.35 million would give the homebuilders their second problem of the week, one day before the Canadian lumber and plywood duties take effect.
Earnings Today
Home Depot led the before-open list at 6:00 a.m. Eastern, with Viking Holdings and La-Z-Boy also reporting and Baidu out overnight. The after-close slate carries no index heavyweight. The week's remaining retail reads are Lowe's tomorrow morning and Walmart on Thursday, and the Federal Reserve releases minutes from the July 28-29 meeting on Wednesday afternoon.
Drivers
- Housing starts at 8:30 a.m. Eastern arrive with the 30-year Treasury at 5.32%, and the homebuilders sit at the point of contact. Consensus of 1.390 million would be the second monthly decline from June's 1.427 million. The Home Depot result argues the fix-it customer is intact even while transactions are frozen, so a soft starts figure alongside a firm HD tape would separate the two businesses in a way the market has mostly refused to do this year.
- Whether the memory group finds a bid matters more for the Nasdaq than any single data release today. Micron opens on its 50-day average at $960 and Western Digital on its 20-day near $500; both lines held through the July drawdown. A close under them by the pair would be the first evidence that positioning, not the supply shortage the companies keep describing, drove the six-week advance in storage.
- Crude sets the terms for everything above it. Brent's third session above $90 begins with the front-month contract at $91.04, and the Hormuz strike overnight removes the argument that shipping was quietly normalizing. The next scheduled read on supply is the Energy Information Administration's weekly inventory report at 10:30 a.m. Eastern on Wednesday.