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Briefing.com Summary:
*Oil pices have dropped on an uplifting oil export report.
*OpenAI is holdiong back on the release of a new model due to safety concerns.
*There will be a lot of Fedspeak throughout today's trading session.
WTI crude futures are down 2.3% to $90.47/bbl, reacting favorably to a report that oil expots out of the Middle East hit a post-war high. The surprising part in all this is that there hasn't been a stronger response from either the bond market or the equity futures market to this development.
The 10-yr note yield is down just two basis points to 5.23% and the futures for the equity indices are signalling only modest gains.
Currently, the S&P 500 futures are up eight points and are trading 0.1% above fair value, the Nasdaq 100 futures are up 71 points and are trading 0.3% above fair value, and the Dow Jones Industrial Average futures are up 30 points and are trading in line with fair value.
Those indications are setting the stage for a mildly higher start, but that isn't the response we would have expected to see with a paired trade of falling oil prices and falling Treasury yields. Perhaps the cash session will be accented with more bullishness, yet there are other issues out there causing some distraction.
One issue revolves around AI safety. OpenAI said it is not going to release its GPT-6.1 Astra model because of safety concerns. Competitor Anthropic, meanwhile, put out an IPO prospectus that reportedly indicates its models could pose a "catastrophic or existential risk to humanity."
This is a known unknown, yet it is a stark warning nonetheless to see as a risk factor in an IPO prospectus.
President Trump is holding a meeting with AI executives at the White House today that will focus on finding balance between AI safety and innovation.
Another issue is that smart ring maker Oura is postponing its IPO, citing market "uncertainty." It is a surprising revelation with the major equity indices within striking distance of record highs.
We'll see how the stock market ultimately responds today, but in that regard, Treasury yields just may be the dictating factor more so than oil prices.
Fittingly, five Fed officials--Bowman (FOMC voter), Barr (FOMC voter), Goolsbee (non-FOMC voter), Williams (FOMC voter), and Waller (FOMC voter)--will be speaking throughout the day. They may not delve into policy settings in their remarks, but it is a risk factor if they do and sound hawkish.
