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Briefing.com Summary:
*Sk Hynix (SKHY) is set to debut its ADRs after a robust pricing last night at $149.00 per share.
*Other semiconductor stocks are exhibiting weakness amid some supply concerns tied to the SKHY offering.
*There are some ongoing rotational dynamics in play on the tape ahead of the open.
Yesterday was a day for the semiconductor stocks and the tech stocks in general, so the trading playbook suggests today should be a day to spread the wealth (i.e., a rotation day). The equity futures market at the moment appears to be adhering to that approach.
The S&P 500 futures are flat and are trading fractionally below fair value, the Nasdaq 100 futures are down 105 points and are trading 0.3% below fair value, and the Dow Jones Industrial Average futures are up 132 points and are trading 0.3% above fair value.
The irony is that the Nasdaq 100 futures are on the defensive in part because a semiconductor stock is on the offensive. That would be Sk Hynix (SKHY), the South Korean high-bandwidth memory maker, which is making memories with a robust $26 billion IPO for its ADRs, priced last night at $149.00 per share.
The reported issue is that the increased equity supply from the SKHY offering is grounding other semiconductor stocks for the time being. That could potentially lead to another buy-the-dip opportunity, but for now, buyers are keeping mostly to the sidelines. The VanEck Semiconductor ETF (SMH) is down 1.3%.
That hesitation could be an undercurrent for today's tape, as traders look ahead to a very big week of news next week that features earnings reports from the leading investment banks, CPI and PPI data for June, more geopolitical wrangling, and Fed Chair Warsh's semi-annual monetary policy report to Congress.
This understanding is likely contributing to some of the interest this morning in lower-beta, blue-chip stocks that have the Dow Jones Industrial Average futures in a lead position.
Delta Air Lines (DAL) was the high-profile earnings reporter today. It exceeded the Q2 consensus EPS estimate, provided in-line guidance for Q3, and reaffirmed its full-year outlook, with an expectation that demand will remain strong through the back half of the year. DAL, up 31% since the middle of May, is down 0.6% in pre-market trading.
Circle Internet Group (CRCL), on the other hand, is up nearly 13% after getting clearance from the Office of the Comptroller of the Currency to establish Circle National Trust, a national trust bank.
The energy of the tape right now, then, is concentrated mostly in story stocks, as opposed to macro factors. That shows up in the fact that oil prices are subdued ($71.93, -0.15, -0.2%); the 10-yr note yield is unchanged at 4.54%; and the U.S. Dollar Index is flat at 100.87.
Fittingly, there is no U.S. economic data of note today.
