Ringside · Pre-Bell · August 31
- Brent trades at $91.13 after American forces struck launchers on Iran's Larak Island
- PG&E is down 15.7% at $13.99, below its 52-week low, after Newsom abandoned utility liability relief
- August ends today with the S&P 500 up 2.96% on the month, its first advance since May
Indexes
The weekend produced a shooting escalation in the Strait of Hormuz and a political capitulation in Sacramento, and the equity futures have priced exactly one of them. American forces hit two Iranian launchers on Larak Island on Sunday, Tehran sent missiles at bases in Jordan in reply, and oil added better than three percent. Stock index contracts marked down about a tenth of a percent and stopped there. Everything with real damage in it is happening inside single names.
| Futures | Level | % Chg | Note |
|---|---|---|---|
| ES (S&P 500) | 7,709.75 | -0.16% | |
| NQ (Nasdaq 100) | 29,462.25 | -0.10% | Chips steady after Friday |
| YM (Dow) | 53,510.00 | -0.14% | |
| RTY (Russell 2000) | 2,976.20 | -0.04% | Cash index closed at 2,972.37 |
London is shut for the summer bank holiday, which thins European volume and leaves Frankfurt as the session's main event. Asia closed the month without conviction either way.
| Global | Level | % Chg | Note |
|---|---|---|---|
| DAX | 26,372.00 | -0.75% | German inflation data at 8 a.m. ET |
| Nikkei 225 | 66,311.93 | -0.13% | |
| CSI 300 | 4,625.09 | +0.35% | Factory gauge beat forecast |
| Kospi | 6,820.02 | +0.46% | Reversed an early decline |
In the News
Rates, FX, Commodities
Friday's repricing sat at the front of the curve, where policy expectations actually live. The two-year note finished at 4.34%, some fourteen basis points above Thursday, leaving 38 basis points between it and the ten-year.
| Treasury | Yield | Note |
|---|---|---|
| 2-Year | 4.340% | Carried Friday's repricing |
| 10-Year | 4.720% | Top of its August range |
| 30-Year | 5.206% | The speech left it alone |
| 2s10s spread | 38 bp |
Energy is the only asset class treating the weekend as material. Brent is back over $90 for the first time in a week, and West Texas Intermediate has recovered everything last week's slide took out of it. Gold declined to join in, holding within a few dollars of Friday's finish and still nursing the three percent it lost when Warsh spoke, which is a strange way for the metal to greet missiles over Jordan.
| Commodity | Level | % Chg | Note |
|---|---|---|---|
| WTI Crude | $86.65 | +3.9% | Settled at $83.40 Friday |
| Brent Crude | $91.13 | +3.4% | |
| Gold | $4,459.19 | +0.1% | Spot; up about 10% across August |
| Natural Gas | $2.925 | +1.3% |
| Currency | Level | % Chg | Note |
|---|---|---|---|
| Dollar Index | 99.557 | -0.15% | Gave back part of Friday's 0.5% gain |
| EUR/USD | 1.1602 | +0.13% | |
| USD/JPY | 159.73 | -0.20% |
Technicals
Both large-cap benchmarks spent Friday returning to the middle of their own ranges rather than testing the edges. Friday's 7,711.76 finish for the S&P 500 is 148 points above a 50-day average of 7,563.79 and 1.1% under the 7,798.99 printed earlier in the year, with the 20-day at 7,712.58 running through the close almost to the point. The Nasdaq Composite at 26,402.42 sits 443 points above its own 50-day of 25,959.02. Small caps are the exception: the Russell 2000 at 2,972.37 is 0.7% under a 50-day of 2,992.10.
Yields spent August inside a range and left it intact. Ten-year notes at 4.720% sit at the upper end of it, and 4.75% is the level that would take them to ground unvisited since spring.
Breakouts
Schlumberger (SLB) is indicated at $58.11, about 1.2% under the $58.82 that has capped it for a year, with a 50-day average down at $49.74. The SPDR Oil and Gas Exploration fund (XOP) at $189.40 is one percent from $191.24, the high it set on August 20 and its best level in five years.
Breakdowns
PG&E (PCG) at $13.99 sits beneath the $14.34 that has been the floor since September of last year and 17% under a 200-day average of $16.83. The next level of any consequence below is the $13.00 the shares closed at in July 2025. Edison International (EIX) at $62.91 would open eight percent under a 200-day of $68.54 and within eleven dollars of the $52.12 it closed at last October.
Top Movers
Gainers
Science Applications International (SAIC), +8.0% to $136.00. Revenue of $1.88 billion beat the $1.76 billion analysts wanted and grew about 6%, and adjusted earnings of $3.01 a share cleared a $2.31 estimate by a distance. The government services contractor lifted its full-year revenue outlook to $7.2-$7.3 billion from $7.0-$7.2 billion and adjusted earnings to $10.65-$10.75 from $9.90-$10.10, while leaving the free cash flow target above $600 million where it was. Net bookings of $1.2 billion put the quarterly book-to-bill at 0.6, the number worth raising on the 10 a.m. call.
Schlumberger (SLB), +1.4% to $58.11. The largest oilfield services company gets the most direct read on a supply scare, because its revenue tracks drilling budgets and those follow the forward curve. Friday's 4.22% advance anticipated part of this, and the stock has added 15.6% across August.
ConocoPhillips (COP), +2.0% to $132.93. The largest independent producer carries more leverage to the crude price than the integrated majors do. Occidental Petroleum (OXY) is doing the same work at $60.27, up 2.0%.
Losers
PG&E (PCG), -15.7% to $13.99. Governor Gavin Newsom spent the summer trying to cap what California's utilities pay when their equipment starts a fire, and on Saturday he stopped trying. The narrower package he agreed with legislative leaders drops both the ceiling on wildfire fund withdrawals and the end of subrogation, the mechanism that lets insurers recover losses from the utility. What remains is a faster claims process for survivors, a ban on private equity buying wildfire claims and a bar on chief executive bonuses in years a company's equipment kills someone. PG&E said on Sunday that Senate Bill 492 improves survivor recovery without resolving the financing risk in the present framework, which is a polite way of saying the balance sheet problem survived the weekend. Mizuho cut to neutral with a $16 target from $21, Wells Fargo to equal weight at $24, and BMO Capital to market perform at $21 from $28. Friday had already removed 7.5%.
Edison International (EIX), -10.4% to $62.91. Southern California Edison's parent carries the same uncapped insurer claims plus $1.6 billion already committed to Eaton Fire settlements, and its equipment caused the January 2025 fire that killed nineteen people in Altadena. Chief Executive Pedro Pizarro spent last week warning the state's utilities could face credit downgrades without a liability framework. Argus moved the shares to hold on that risk on Wednesday.
Delta Air Lines (DAL), -0.9% to $79.34. Jet fuel follows crude with a short lag. United Airlines (UAL) is off 1.1% at $109.35 and Southwest Airlines (LUV) 0.8% at $39.32.
Key Macro Data Today
A thin calendar for the last day of the month, with the only release of substance arriving after the open.
| Release | Time (ET) | Forecast | Prior |
|---|---|---|---|
| Dallas Fed Manufacturing, August | 10:30 a.m. | 0.7 | 1.3 |
| 3-Month Bill Auction | 11:30 a.m. | — | 3.715% |
The week's real sequence starts tomorrow with the Institute for Supply Management's manufacturing index, runs through ADP's payrolls estimate on Wednesday and the services index on Thursday, and ends with the August employment report on Friday, in front of a Fed meeting where an increase is now a live possibility.
Notable Earnings This Session
Pre-Open. SAIC has already reported and appears above. Nothing else on the morning list carries weight.
Post-Close. Empty. The names that matter this week are Palo Alto Networks and Dell Technologies tomorrow evening and Broadcom on Wednesday, the last of them the first large semiconductor result since Nvidia's.
Drivers
- Index funds and balanced portfolios must own the prices this session produces, and equities gained roughly three percent in August while the short end of the Treasury curve repriced hard in a single session. The mechanical response is to sell some stock and buy some bond in the last half hour. Both legs are bigger than usual, so the final thirty minutes deserve more attention than a month-end normally earns.
- The California decision has a second act. Two utilities worth some $56 billion between them are repricing the absence of a rescue, and the rating agencies now have to judge what a liability regime nobody fixed does to companies that borrow constantly to bury power lines. Watch whether the selling stays inside the two names or reaches the wider utility complex, where the sector fund closed Friday at $42.73, under both its 50-day and 200-day averages.
- Crude has spent the summer repricing on headlines and giving it back within the week. What separates this episode is the cargo on those launchers: mines are an attempt to close the waterway, a different category of risk than a strike on a single tanker. New York opens at 9:30 a.m. Eastern.