US EQUITY OPEN: Indices open contained amid conflicting Strait of Hormuz projectile reports
OPEN: US indices opened the day mixed, with NDX eking out marginal gains, while Russell 2000 (-0.4%) lags as focus resides around the Middle East. Over the weekend, Trump said the US will guide neutral ships safely out of the Strait of Hormuz, and then conflicting reports followed in pre-market trade. Numerous outlets said two missiles hit a US patrol boat, after earlier warnings were disregarded, but senior US officials and CENTCOM denied these reports, which saw two-way action across markets. Initially, risk off trade was seen, but reversing on the denials. WTI and Brent are seeing gains, but to different degrees, as the former is c. USD 0.50/bbl and the latter USD 2.50/bbl. Sectors are predominantly in the red, with only Technology and Consumer Discretionary sitting in firmer territory. Communications and Materials lag, with US data docket and Fed speak schedule light to start the week, although Williams in scheduled to speak later with a text and Q&A expected. Treasuries are lower across the curve, ahead of Treasury Financing estimates. G10 performance vs. the Buck is mixed, with NZD and JPY slightly firmer, while CAD, CHF, and AUD are the relative laggards. USD/JPY sits around 157.00, coming off an earlier low of 155.69, with traders remaining on intervention watch. Precious metals are lower, with spot silver underperforming its counterpart.
STOCK SPECIFICS:
- Amazon (AMZN) opening its global logistics network to all businesses through Amazon Supply Chain Services. Of note for FedEx (FDX) and UPS (UPS).
- AMD (AMD) downgraded at HSBC to 'Hold' from 'Buy'.
- Apple (AAPL) Mac supply reportedly constrained by TSM 3nm capacity.
- Berkshire Hathaway (BRK.B): Revenue rose and net earnings more than doubled
- GameStop (GME) made an offer to buy eBay (EBAY) for c. USD 56bln, or USD 125/shr in cash & stock; EBAY closed Fri. at 104.07. Later, GME CEO said he has not had conversations with EBAY.
- Norwegian Cruise Line (NCLH): Revenue light with dismal FY profit guidance and said it is experiencing headwinds regarding the Middle East.
- O-I Glass (OI) upgraded at Wells Fargo
- Spirit Aviation (FLYYQ) ceased operations.
The mixed opening of US indices reflects underlying geopolitical tensions in the Strait of Hormuz, where conflicting reports on missile strikes against a US patrol boat initially triggered risk-off sentiment. While both the denial of these reports and statements from Trump helped markets recover somewhat, investor caution remains as developments around this region could impact energy prices and broader risk sentiment, ultimately influencing trading behaviors today.