As We Approach The Open... 8/25/26

As we approach the open in NY, US equities are modestly higher as oil prices and bond yields ease back for a second day.

Brent oil fell to the lowest level in a week. The New York Times reported the US is preparing to send diplomats back to embassies in the Middle East, suggesting Washington doesn’t anticipate a renewal of a full-scale conflict with Iran.

Tech shares were seeing some bounce with Nvidia on track to break its longest losing streak since 2022 as mentioned in last night’s update. The iShares Semiconductor ETF (SOXX) moved up more than 2%.

The gains come even as Beijing threatened to retaliate against the US and signaled it won’t back away from its cooperation with Iran after the Trump administration’s latest sanctions targeted businesses in China and Hong Kong.

Things pick up some on the economic calendar today. Earlier this morning we got the ADP weekly job growth estimate for the four weeks ending August 8th which continued their rebound but the 4-week moving average (of the 4-week total) fell for a 12th straight week to +47.5k, the least since February 14th (see post).

Later this morning we’ll get July new home sales, August Conference Board consumer confidence, and June repeat home price indices. This afternoon, we’ll have an auction of 2-year Treasury notes.

The S&P 500 is higher by 0.4% while the tech-heavy Nasdaq-100 index is +0.8%, and the small-cap Russell 2000 +0.5%.

[Note the International Update is below the US update]

9:00 a.m. S&P/Case-Shiller Home Price Index for June.

10:00 a.m. U.S. new home sales for July.

10:00 a.m. U.S. consumer confidence for August.

1:00 p.m. Treasury announces result of $69 billion auction of 2-year notes.

Link to posts: https://x.com/neilsethinew

Note on all charts the colored lines are daily moving averages (the average price over the given number of days):

20 = green
50 = purple
100 = blue
200 = brown

The middle panel is MACD = Moving average convergence/divergence line, a measure of momentum that compares longer term and shorter term momentum to gauge if a move is strengthening or weakening. This is probably my favorite individual indicator (it’s also the favorite of Katie Stockton, a very fine technician).

The bottom panel is RSI = Relative Strength Index (basically what it sounds like) = measures the strength of the move comparing gains to losses over the given lookback window (I use the standard 14 periods).

SPX futures (/ES): sitting on 20-DMA.

10yr Yield - falling back for second session but not yet even at last week’s lows.

30-yr Yield - is testing last week’s low.

DXY US dollar index - continuing to move off last week’s lows despite yields easing.

US WTI crude - falling back for second session.

Gold futures (/GC) - mildly lower.

US copper futures (/HG) - pushing higher out of the top of range from last week.

US natural gas futures (/NG) - continue trading in range over the past month.

Bitcoin futures - up slightly as its run is starting to lose some steam after a 25% run.

CNBC:

BBG:

Some pre-market company news from CNBC/MarketWatch (links to CNBC pages).

• Dick’s Sporting Goods — Shares plunged more than 12% following a revenue disappointment out of the sports equipment retailer, which cited a “challenging” market for footwear. Dick’s posted sales of $5.59 billion, lower than the $5.65 billion expected by analysts polled by LSEG.

• Advanced Micro Devices — The chip stock gained 2% after Raymond James upgraded semiconductor company to strong buy from outperform, with a new $641 price target that implied 40% upside from Monday’s close. The analyst expects AMD will overtake Intel in the central processing unit market.

• Semiconductors — Chip stocks rose as a group in the premarket, with Intel advancing more than 3%. Nvidia also rose nearly 1%. The VanEck Semiconductor ETF (SMH) climbed more than 1%.

• Kura Oncology — The biotech stock climbed 11% after CEO Troy Wilson disclosed buying up 100,000 shares of common stock in a regulatory filing.

• Navitas Semiconductor — Shares jumped about 5% after Navitas Semiconductor said it will power management solutions company Claros in a deal valued at $232.8 million in cash and shares.

• United Airlines — The airline stock gained 2.9% after United Airlines said 2027 flights will span Sardinia to Okinawa.

Europe’s benchmark STOXX 600 as of 8.10 am ET was +0.4% as it climbs back above its 20-DMA.

Major European indices also trade in the green with Germany's DAX (+0.8%) showing relative strength.

Germany's DAX: +0.8%, U.K.'s FTSE 100: +0.2%, France's CAC 40: +0.4%, Italy's FTSE MIB: +0.6%, Spain's IBEX 35: +0.3%.

The broad MSCI AC Asia Pacific Index was +0.5% Tuesday recovering from earlier losses but remaining below where it started the week.

Major equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note.

Japan's Nikkei: +0.5%, Hong Kong's Hang Seng: UNCH, China's Shanghai Composite: +0.2%, India's Sensex: +0.4%, South Korea's Kospi: +0.7%, Australia's ASX All Ordinaries: +0.6%.

BBG - Beijing threatened to retaliate against the US and signaled it won’t back away from its cooperation with Iran after the Trump administration’s latest sanctions targeted businesses in China and Hong Kong.

• Speaking on Tuesday at a regular press briefing in Beijing, Foreign Ministry spokesman Lin Jian gave China’s first official reaction to measures announced by Washington, saying it opposes unilateral sanctions and warning they risk worsening conflicts. The most urgent task is to de-escalate tensions and return to negotiations, he said.

• When asked about Beijing’s response to the steps taken by the US against Iran and threats made against its trading partners, Lin reiterated that China would act to protect itself.

BBG - The US is set to impose a 7.5% tariff on Chinese goods over allegations of excess manufacturing capacity before a planned summit between Xi Jinping and Donald Trump next month, according to people familiar with the matter.

• The move would restore Trump’s second-term duties on China to around 20%, a level Beijing has previously said is consistent with its trade truce with Washington. Those come on top of other levies imposed during Trump’s first term and extended during the Biden administration.

BBG - Iran is facing mounting fuel shortages as the US squeezes its access to imports, stretching supplies of a commodity that’s previously sparked bouts of unrest in the country.

• The state-run Hamshahri newspaper on Sunday reported long queues at petrol stations in Tehran because of fears of price hikes, with many drivers filling up tanks before they’re even half empty. A top official in charge of domestic energy supply said the gasoline market had a daily deficit of 14-15 million liters due to record demand, damage incurred in the war and “changes in the national budget’s priorities.”

• Gasoline prices are a highly sensitive issue in oil-rich Iran, where state subsidies mean consumers benefit from some of the cheapest petrol in the world. Currently, Iran has a tiered quota system that provides each car with a monthly allowance of discounted gasoline.

BBG - Germany’s economy grew quicker than initially thought in the second quarter, while a top gauge of the business outlook hit its highest level since before the Iran war, further evidence that a long-awaited revival is under way.

• Output rose 0.3% between April and June, up from a preliminary estimate showing 0.2% expansion, thanks to a strong performance by trade. The ifo expectations index, meanwhile reached 89.1, more than any analyst surveyed by Bloomberg anticipated, and bumper outlays on defense have helped push manufacturing activity to its highest level in more than four years.

• “The German economy is recovering,” ifo President Clemens Fuest said in a statement. “Companies were more satisfied with their current situation, and they revised their expectations significantly upward.” Ruth Brand, president of the Federal Statistical Office, attributed Germany’s second-quarter surprise to net exports, which added 0.2 percentage points. “The growth momentum of the German economy from the beginning of the year is continuing,” she said in a statement.

• Analysts surveyed recently by Bloomberg raised their growth forecasts for this year to 0.8% from 0.6%, a pace they see accelerating to 1.2% by 2028.

• Separately, German Chancellor Merz said that his cabinet will consider ways to protect domestic industry.

• “A further rise in the Ifo business climate adds to a run of good news for the German economy, following a jump in the manufacturing PMI and an upward revision to export-driven GDP growth in the second quarter. The data suggest Germany’s economy, particularly its struggling industrial sector, will continue to recover in the coming quarters. Still, very weak investment and downside risks from shipping disruptions on the Rhine river temper the positive signals.” —Martin Ademmer, BBG

• Bank of Montreal topped estimates on better-than-forecast results at its US banking and capital-markets divisions, and across the company, as it pushes to improve profitability after streamlining operations and reworking the balance sheet.

• Bank of Nova Scotia topped estimates on better-than-expected results at its capital-markets unit as it continues to benefit from elevated market volatility, while also outperforming in its international division and across the rest of its businesses.

• Volkswagen AG Chief Executive Officer Oliver Blume told workers that roughly half of the carmaker’s additional job cuts will need to happen in Germany.

• Oura Healh Oy, a maker of smart rings that track health, fitness and sleep, and some of its backers are seeking to raise as much as $3 billion in a US IPO, according to people familiar with the matter.

• Germany’s Q2 GDP 0.3% qtr/qtr (expected 0.2%; last 0.4%); 1.0% yr/yr (expected 0.9%; last 0.7%). August ifo Business Climate Index 88.8 (expected 87.2; last 86.7). August Current Assessment 88.5 (expected 87.0; last 86.5) and Business Expectations 89.1 (expected 87.5; last 86.8)

• France’s August Consumer Confidence 86 (expected 87; last 86)Spain’s July PPI 9.2% yr/yr (last 7.0%)

• Japan's June BoJ Core CPI 2.3% yr/yr (last 2.6%). June Leading Index 116.5 (expected 116.4; last 116.5) and Coincident Indicator 0.6% m/m (expected 0.3%; last -0.2%)

• Hong Kong's July trade deficit HKD4.9 bln (last deficit of HKD52.0 bln). July Imports 41.0% m/m (last 45.4) and Exports 50.7% m/m (last 53.4%)

• South Korea's August Consumer Confidence 104.5 (last 106.8)

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