Good morning,
 
Enjoy the last day of Summer. Autumn arrives around 8:00pm ET tonight with the arrival of the equinox in the Northern Hemisphere. Speaking of arrival, President Trump is in NYC and will make a speech at the UN around 10am, followed by meetings with the leaders of UK, Japan and Ukraine, as well as Gulf Cooperation Council.

Yesterday saw sharp gains as mega cap tech and AI ripped. The S&P rose 1.5% while the equal-weight and Russell 2000 added ~0.5% each. META led the rally (+11%) as its Muse AI agent saw a surge of demand, which filtered down the tech stack and especially chip names (ICE Semis +5%). On top of that was oil declining for the 4^th straight day, taking Brent crude below $100. The treasury curve bull-flattened as 10/30y fell ~5bp. Outside of equities, crypto shot higher with Bitcoin taking out $85K as a short squeeze sent a wave of liquidations through the system.

Oil was higher and equity futures lower overnight before reports that Iran offered to reopen the Strait of Hormuz within 7 days and restart negotiations, contingent on the US easing military pressure. Other reports that the Saudis restarted the East-West pipeline and will resume Red Sea exports from Yanbu also pushed the reversal in oil and supported equities. AZO, MLKN and THO are trading modestly higher after reporting earnings. Qualcomm’s CEO will deliver a keynote speech at the company’s Snapdragon conference around 3:15pm today (from Hawaii- no live reporting from the MAC Desk).


Treasury yields are flat to slightly lower as oil continues to pull back. The US Dollar Index is flat as well. ADP weekly employment rose and the Philly Fed manufacturing index will come out after the open. We’ll also hear from several Fed speakers as well in addition to all the Trump/geopolitical talks today.  

• US 2yr -1bps to 4.75%, 5yr -0bps to 4.82%, 10yr -0bps to 4.95%, 30yr -1bps to 5.28%
• USD index: -$0.01 to $100.15

As of now its lining up to the be the fifth straight decline for brent. Dutch natural gas is lower as well, continuing to pull back from its recent highs ~€85. Precious metals are on either side of unchanged while copper continues to head back toward ATH on tight supply and Chinese buying. Crypto is taking a pause after a sharp rally yesterday. Bitcoin surged past $85K and is trading a little under its highs ~$87.5K, while ETH is slightly lower than its $2800 high. CME announced Bitcoin Cash and Uniswap futures coming in October, pending regulatory review, and SoFi and Mastercard stablecoin settlement of its debit credit cards is available through SoFi’s stablecoin, SoFiUSD.  


Asian indicies were modestly higher overnight but off their best levels, closing before oil weakened. Japan was closed for another holiday. In an interview yesterday USTR Jamieson Greer said the US and China continue to discuss an extension to the trade truce (expires Nov 10) but an agreement likely won’t be reached during Thursday’s Trump-Xi meeting. Alibaba showed off its latest AI chip and is targeting 20GW of data center capacity by 2032. European markets are modestly higher, turning positive as oil fell on the Hormuz headlines. Retail, travel and tech are outperforming while Energy and Telecom lag. The UK’s CBI Industrial Trends Survey showed signs of improvement in the UK’s industrial sector.



Earnings:
Pre-Market: AZO, MLKN, THO
After-Market: KBH, WOR
 
Economic Data:
US:

• ADP weekly employment: 20.0K vs prior 16.75K
• 10:00am Richmond Fed Manufacturing
• Fed speakers: Williams (10am), Jefferson (10:20am), Barkin (1:00pm)
• 1:00pm 2y auction
• 1:00pm Money Supply
• 4:30pm API crude inventories

Global:

• Taiwan Exports y.y: 71.4% vs prior 61.9%
• UK CBI Industrial Trend Orders survey: -9 vs -34 cons, prior -25
• Europe Consumer Confidence: -15.5 vs prior -16