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Briefing.com Summary:
*Micron and the semiconductor stocks continue to benefit from the AI momentum trade.
*Oil prices are below $90.00/bbl on reports suggesting there might be a plan to restore transit through the Strait of Hormuz.
*The 10-yr note yield is holding below 4.50%.
A trillion dollars here and a trillion dollars there, so what is a few billion dollars between friends? Capital markets keep minting trillion-dollar market caps. The latest arrivals include Micron (MU) and SK Hynix, which have soared on high-bandwidth memory demand and what one could call "high-bandwidth trading momentum."
Micron surged 19.3% yesterday on the heels of UBS increasing its price target to $1,625 from $535. It is up another 6.6% in pre-market trading, trading at a level (954.96) that has it up approximately 235% year-to-date.
That momentum has been infectious for the stock market. The major indices have run to new record highs, with the S&P 500 working to secure a ninth straight week of gains.
Currently, the S&P 500 futures are up 17 points and are trading 0.3% above fair value; the Nasdaq 100 futures are up 209 points and are trading 0.7% above fair value; and the Dow Jones Industrial Average futures are up 56 points and are trading 0.2% above fair value.
Aside from the growth stock momentum, the market is getting a boost from the continuing hope that the U.S.-Iran war will soon reach a peaceful resolution that revives shipping activity through the Strait of Hormuz. That hope is wrapped up in sinking oil prices, and it has been aided today by an unconfirmed report from Iranian media that the U.S. and Iran have reached an agreement to restore transit through the Strait of Hormuz to pre-war levels within one month.
WTI crude futures are down 5.8% to $88.46/bbl, which itself has been a catalyst for lower bond yields as inflation worries ease. The 2-yr note yield is down two basis points to 4.03%, and the 10-yr note yield is down three basis points to 4.46% in front of the $70 billion 5-yr note auction at 1:00 p.m. ET.
The setup for a positive open is in place. The question is, how much chasing action will there be until the momentum trade needs to catch its breath and prices retreat? That is the trillion-dollar question.
