Good morning. US equities ended yesterday with modest losses despite crude falling. 2y yields fell but the long-end continued to march higher. Utilities led and Comm Services, Industrials and Consumer Discretionary were the other sectors in the green. The fall in oil pushed Energy to back of the pack. Large caps were mixed, with the tech mega caps mostly lower AAPL (-3%). Semi/memory stocks were among the leaders, especially the capital-equipment stocks. Anthopic’s IPO/S-1 details leaked, with lots of huge numbers in it for both revenue and spending. Also, a “destruction of humanity” note in the risk factors. Consumer Confidence was weaker than expected as were the JOLTS job openings, though CCL and KMX earnings showed consumer resiliency. NY Fed Williams dovish comments in the middle of the day helped the short-end rally and eased pressure on equities.

In a throwback to my college years, Rice and Schlitts was on the dinner menu last night as the Yanks blasted and silenced the Red Sox in Game 1 of their post-season match. S&P futures were trading around flat before today’s end of month and quarter, and this morning’s economic data hitting the tape. PCE, the main focus, came in a little cooler than expected. GDP was revised higher. 2y yields moved lower but 10 and 30y are flat to higher. Pricing for another rate hike next month is falling, to ~40% versus 50% yesterday, as futures moved to their highs. The S&P 500 is looking at a flatish September- a solid gain could push it into the green. For Q3 the index is up ~2%, despite rates ripping higher. Tonight Micron will report results in another piece of news flow for the industry formerly known as AI (now SI, Super Intelligence), adding to yesterday’s Anthropic news, OpenAI’s Dev day, which included their “Dots” personal AI response to Meta’s Muse, and the tech summit at the White House.

After declining yesterday oil is higher this morning. There are a lot of puts and takes across the oil complex. Goldman Sachs and JPM estimate Gulf exports are near or back to 2025 levels while multiple efforts to bypass the SOH ramp up, including the Saudi East-West pipeline. However diplomatic progress has stalled and a return to hostilities is becoming more likely, according to several reports.