Dear Trader,
Mark Sebastian and Voz go live at 10 AM Eastern, and they picked a busy morning for it.
Core PCE printed before the open, Nvidia reports after the close, and Iran and Oman have agreed on a shipping corridor through Hormuz that Iran insists is not the same thing as reopening the strait. Mark takes the Nvidia preview first. Voz joins at 10:16 with charts on SPX, QQQ, Nvidia, IBIT and energy.
They'll also get to the stories nobody scheduled. The White House sent a civil nuclear agreement with Saudi Arabia to Congress on Monday, contingent on Riyadh joining the Abraham Accords. SpaceX is dropping $100 billion on a spaceport across 125,000 acres of former Exxon land in Vermilion Parish, Louisiana, which is a sentence I did not expect to type this week.
This link adds State of the Market to your calendar.
The Daily News Breakdown
SIREN: Core PCE rose 3.3 percent year over year in July, in line with expectations and unchanged from June, which is the kind of print that settles nothing. Month over month it was 0.2 percent, up from 0.1. New York Fed president John Williams has said 0.2 percent or lower means inflation gets back to target without a hike. Boston Fed president Susan Collins wants proof inflation is falling before she votes to hold again, and she used the word soon about raising rates. Kevin Warsh delivers his first speech as Fed chairman Friday at Jackson Hole, and analysts expect him to say nothing useful about September. Energy is still elevated and fresh Canada tariffs hit next month, so the hawks have material to work with.
SNEAKER: Iran and Oman have agreed on a temporary shipping corridor through the Strait of Hormuz, about seven miles wide, with the entry and part of the exit running through Iranian waters. Iran's deputy foreign minister made a point of saying the strait stays closed until Washington honors the June memorandum it signed and then let lapse. Ships will need Iranian permission and will sail under Iranian surveillance. Coordinates, start dates and who collects the fees are all still unannounced. Brent has printed above $100 several times since the war started in February, against $66 before it. Crude sold off on the news anyway, which tells you how much war premium traders still have priced in.
SIGN: Nvidia reports Wednesday night, and the fastest-growing piece of the business is the networking gear sitting next to the chips. NVIDIA Corp. (NVDA) put up nearly $15 billion in networking revenue last quarter, up from roughly $3 billion a quarter two years ago, and the street is looking for something near $17 billion. That line grew close to 200 percent year over year while compute grew 77 percent. Every hyperscaler is building its own silicon now, and all those custom chips still have to talk to each other. Nvidia sells the plumbing that makes that happen, through Spectrum-X, InfiniBand and NVLink. Since semiconductors peaked in late June, iShares Semiconductor ETF (SOXX) has dropped about 20 percent while Nvidia has gone sideways.