STRAIGHT FROM THE TRADING FLOOR
by Michael P. Reinking, CFA - Sr. Market Strategist
Published on 8/12/26 (a/o 9:00 am)
Happy CPI Day,
Yesterday, US markets continued to consolidate the recent rally ahead of today’s inflation report. Major US indices were mixed with the S&P 500 falling modestly while the equal weight and small/midcap indices recouped some of the previous day’s losses as yields pulled back. The Nvidia/Wall Street $500B “compute financing platform” was the big story of the day. The asset management partners were some of the best performing stocks in the market and the news broadly helped the AI infrastructure complex. However, the hyperscalers (ex-Meta) were all under pressure as this signaled more spending and competition going forward. There continued to be a steady flow of conflicting Iran headlines keeping a bid under oil markets.
US futures were on the move higher ahead of this morning’s data after a strong round of tech earnings since yesterday’s close. Neocloud companies CoreWeave and Nebius are both up >15% with strong sales and growing backlogs but the pushback is the ever-growing amount of Capex spending. Hardware companies Lumentum and Super Micro are both up >5% after beat and raise quarters. Headline and Core-CPI were both on the screws up 0.1%/0.2% m/m respectively. Energy prices continued to decline though this will likely reverse in August. Within core the components that fell in June did bounce back modestly (apparel/used cars/transportation services). Shelter was muted again at 0.1%. After a little volatility rates are around where they were before the data down 3-4bps across the curve with the odds of a hold in September ticking up slightly to ~58% from 52% yesterday. Equity futures have extended the gains modestly with S&P 500 and R2k futures both up ~0.5%.
Ahead of this morning’s inventory data oil prices are hovering around unchanged. Natural gas in both the US and Europe is moving higher adding to the week’s gains. Metals were rallying ahead of the data and have extended to the upside as the USD has weakened. Gold is up nearly 1% retesting yesterday’s high just under its 200d ma. Other precious metals are up >2%. Ag is moving higher ahead of the WASDE report at noon. Wheat is up >3% with supplies expected to decline given weather conditions and escalating tensions in the Black Sea. Crypto is bouncing modestly after a couple of days of weakness but already coming off the highs.
Earnings:
After-Market: CAVA, CRWV, FLY, HRB, LITE, QNT, SMCI
Pre-Market: AMCR, EAT, EYE, KTB, NBIS, PFGC, SLAB, TORO, WRD
After-Market: AOSL, BTGO, CAE, CBRS, COHR, CSCO, DOX, ENS, EQPT, GO, HLIT, INFQ, JACK, NNE, PAR, REZI, SECZ, SPCE, STAA
Economic Data:
US:
Yesterday, US markets continued to consolidate the recent rally ahead of today’s inflation report. Major US indices were mixed with the S&P 500 falling modestly while the equal weight and small/midcap indices recouped some of the previous day’s losses as yields pulled back. The Nvidia/Wall Street $500B “compute financing platform” was the big story of the day. The asset management partners were some of the best performing stocks in the market and the news broadly helped the AI infrastructure complex. However, the hyperscalers (ex-Meta) were all under pressure as this signaled more spending and competition going forward. There continued to be a steady flow of conflicting Iran headlines keeping a bid under oil markets.
US futures were on the move higher ahead of this morning’s data after a strong round of tech earnings since yesterday’s close. Neocloud companies CoreWeave and Nebius are both up >15% with strong sales and growing backlogs but the pushback is the ever-growing amount of Capex spending. Hardware companies Lumentum and Super Micro are both up >5% after beat and raise quarters. Headline and Core-CPI were both on the screws up 0.1%/0.2% m/m respectively. Energy prices continued to decline though this will likely reverse in August. Within core the components that fell in June did bounce back modestly (apparel/used cars/transportation services). Shelter was muted again at 0.1%. After a little volatility rates are around where they were before the data down 3-4bps across the curve with the odds of a hold in September ticking up slightly to ~58% from 52% yesterday. Equity futures have extended the gains modestly with S&P 500 and R2k futures both up ~0.5%.
- US 2yr -4bps to 4.18%, 5yr -4bps to 4.35%, 10yr -3bps to 4.66%, 30yr -2bps to 5.23%
- USD index: -$0.16 to $99.56
Ahead of this morning’s inventory data oil prices are hovering around unchanged. Natural gas in both the US and Europe is moving higher adding to the week’s gains. Metals were rallying ahead of the data and have extended to the upside as the USD has weakened. Gold is up nearly 1% retesting yesterday’s high just under its 200d ma. Other precious metals are up >2%. Ag is moving higher ahead of the WASDE report at noon. Wheat is up >3% with supplies expected to decline given weather conditions and escalating tensions in the Black Sea. Crypto is bouncing modestly after a couple of days of weakness but already coming off the highs.
Earnings:
After-Market: CAVA, CRWV, FLY, HRB, LITE, QNT, SMCI
Pre-Market: AMCR, EAT, EYE, KTB, NBIS, PFGC, SLAB, TORO, WRD
After-Market: AOSL, BTGO, CAE, CBRS, COHR, CSCO, DOX, ENS, EQPT, GO, HLIT, INFQ, JACK, NNE, PAR, REZI, SECZ, SPCE, STAA
Economic Data:
US:
- Mortgage Apps: 3.6% w/w prior -2.9%; 30yr Rate 6.77% prior 6.81%
- CPI: 0.1%/3.4% m.m/y.y vs. 0.1%/3.4% cons., prior -0.4%/3.5%
- Core CPI: 0.2%/2.5% vs. 0.2%/2.5% cons., prior 0%/2.6%
- 10:30 Oil Inventories
- 12:00 WASDE Report
- 1:00 10yr Auction
- 2:00 Monthly Budget
- India Inflation: 4.45% vs. 4.5% cons., prior 4.38%
Ahead of Friday’s retail sales Bank of America Institute noted that consumer spending growth moderated to 5% y/y from 6.3% in June but suggested that this was related to one-time items like the pull forward of Prime Day and unwinding World Cup spending.
Oil prices are up ~1% but off the overnight high. Natural gas prices are pulling back modestly giving back some of yesterday’s gains. Metals are mixed. Gold nearly tagged its 200d overnight trading just under 4,500 before giving up about half its gains. Ag is lower. Crypto has given up overnight gains trading slightly lower. The SEC announced that it would be holding an open meeting on Friday to “consider whether to issue a release proposing new rules to create a tailored offering regime for certain investment contracts involving crypto assets.” This is a procedural step in the rulemaking process which typically takes 12 - 18 months.
Withing the S&P 500 only 4 of 11 sectors are trading higher though breadth is slightly better than 1:1 adv:dec. Energy is leading to the upside. Industrials are being helped by AI infrastructure, airlines and building products companies. Utilities are broadly trading higher with the pullback in yields though IPPs are some of the best performing. Asset managers are the best performing stocks with financials. Hyperscaler weakness is dragging down comm services, consumer discretionary and info tech. Within consumer discretionary housing, autos and travel related stocks are trading higher. Apparel and footwear after disappointing On Holding results. Within tech Nvidia has turned slightly lower while the other direct chip competitors (AMD/AVGO) are under a bit of pressure as this strengthens their ecosystem. Software is underperforming giving back some of the recent gains.
Looking ahead to tomorrow CPI is the main event. On the earnings front there are a couple of tech reports that will get some attention. As well as a couple of restaurants including CAVA which is on the menu for the MAC Desk lunch today.
Earnings:
After-Market: CAVA, CRWV, FLY, HRB, LITE, QNT, SMCI
Pre-Market: AMCR, EAT, EYE, KTB, NBIS, PFGC, SLAB, TORO, WRD
After-Market: AOSL, BTGO, CAE, CBRS, COHR, CSCO, DOX, ENS, EQPT, GO, HLIT, INFQ, JACK, NNE, PAR, REZI, SECZ, SPCE, STAA
Economic Data:
US:
- NFIB business sentiment: 99.8 vs 97.5 cons, prior 97.4
- ADP weekly payrolls: 8.25K vs prior 15.0K
- Existing Home Sales: 4.06 vs. 4.07ml cons., prior revised to 4.13ml from 4.09ml
Global:
- RBA rate decision: Unchanged as expected (4.35%)
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