Dear Trader,
Mark and Tim
Mark's live today at 10 AM ET, and he's taking three stories head-on and running eight loves and leaves from the desk.
Here’s some of the highlights:
- Somebody's buying the most polarizing car company on the board, and somebody else is walking away from a monthly dividend name a lot of retirees treat like a savings account.
- One editor loves a mega-cap that quietly runs a big chunk of the internet's plumbing. Another is leaving the whole energy sector on a morning when crude's up 4%, which should make for a lively few minutes.
- There's a pet-health name in the love column, a bitcoin fund in the leave column, and a satellite story retail money has been piling into that's getting shown the door.
Mark names every one of them live.
This link adds State of the Market to your calendar.
The Daily News Breakdown
SIREN: Investors walked into Jackson Hole hoping the new Fed chair would hint at a cut, and Kevin Warsh spent his debut keynote talking about inflation instead. He called the recent numbers concerning, said prices deserve the Fed's main focus, and suggested financial conditions still aren't restrictive enough. Yields jumped and all three major indexes closed lower.
Futures now put the odds of a September hike near 61%, which is a big repricing for anyone who spent the summer waiting on cuts. Citi's Scott Chronert still likes the fundamentals but calls the higher-rate assumption a sentiment headwind, which is a polite way of saying multiples get harder to justify. Earnings can stay strong and stocks can still get cheaper.
SNEAKER: US forces struck two Iranian launchers on Larak Island in the Strait of Hormuz Sunday, Iran answered with drones aimed at Jordan and the UAE, and crude gapped higher on the open. Brent gained roughly 3% to clear $90 for the first time in about a week, and WTI tacked on 4% to trade above $86.
Six months into this war, Persian Gulf flows are running around two-thirds of pre-war levels, and Goldman says strikes on refineries in the Middle East and Russia have pushed refined product margins to new highs. Gasoline is averaging $4.08 with midterms two months out. Bessent is threatening sanctions on anybody doing business with Tehran, which sounds tough until you remember China takes about 90% of Iran's crude.
SIGN: The VIX printed 14.13 on Friday, its lowest level of 2026, right before the stretch of the calendar where it has historically run higher. Median VIX since 1990 sits near 16.5 in late August, climbs toward 18 by mid-September, and hits about 19 in early October. September has been the S&P 500's worst month since 1950 at an average -0.6%, and -0.8% in midterm years like this one.
October and November have been the payback, averaging +3.0% and +2.8% in midterms. Keep in mind that implied volatility prices the size of the expected move and says nothing about direction. A VIX in the high teens this fall would be perfectly ordinary, and anyone who's only traded a 14-handle should plan for it.