South Korean Tech Weakness Hits U.S., Cooling Crude & Yields Add Macro Muscle

Nicole (0:01)

Kevin Hincks is live at the CBOE, our pre-bill playbook time. And the markets seem a bit mixed, somewhat like yesterday. We'll go through all these banks and such, but the chip story, it sort of continued some of these names. We're falling last week. Let's talk about the chips that are falling overnight after what we saw in Korea.

Kevin Hincks (0:20)

Yeah, good morning, Nicole. There is watch information technology this morning, as that seems to be weighing on. That's why you see the NASDAQ lower to start. Today, you've got to take your pick. If it's NVIDIA, if it's AMD, if it's Meta, if it's Google, all these tech stocks connected to AI are trading lower to start the day. So certainly watch information technology as the day starts, Nicole. That's going to be weighing despite what you mentioned to start your show, a pretty favorable macro outlook. You've got the dollar lower, you've got crude oil down 1.2%.

You've got the 10-year now at 5.18. It hit below 5.17% so far this morning. But yes, watching the NASDAQ down almost 8 tenths of a percent tells me that tech stock semiconductors are going to be on the downside, at least to start the day, Nicole. Remember, when the foreign markets sell off, many times, what happens is traders look to buy that dip unless the US markets follow significantly. And a lot of times, once our markets open, we drive the world economy. So once our markets open, let's see what tech stocks do. But definitely, pre-market, they're all on the downside, Nicole.

Nicole (1:46)

And some of them are down 7%. And I'm pulling up, for example, Seagate, right? Because I think about Seagate and Western Ditch, and those names were down last week on the news from Toshiba. And then they were down yesterday with CXMT, and to your point, down last night. For example, Seagate's down, just this month, 18%.

That's a huge, it is October 13th. And Western Ditch, just this month, is down 15%.

So those, as you're pointing out, Kevin, big move there. Let's get to crude. Not too much in the developments from yesterday. I mean, just more attacks in Saudi Arabia. Let's talk about crude.

Kevin Hincks (2:28)

Yeah, I think crude oil being down, just 1.1% being down right about a dollar, is no, I would call the news reports coming out of Riyadh and Saudi Arabia and all these other areas stable. There's no new headlines to start the day. So a little bit of backing up here in terms of crude oil. Now, we're watching, there's still discussions going on. You know, 12 people dead, 309 injured.

When the Riyadh internet, the airport got bombed over the weekend. So that's still fresh on people's minds. But a little bit of back off from the overall crude oil markets to start the day, like I said. And yields are down pretty substantially so far this morning. So the macro set up along with the US dollar is a pretty favorable set up. But we're certainly watching that is such a headline driven market, Nicole, that you've got to keep refreshing your feed and make sure there's no new headlines hitting.

Nicole (3:37)

Yeah, I think that's good advice. I think that's well said. Let's say we have a lot of earnings that came in when it came to the banks this morning. So let's touch on JPMorgan because that had a rare earnings miss. So let's start with that.

Kevin Hincks (3:50)

Yeah, JPMorgan is actually higher so far this morning. Remember, these bank stocks have sold off significantly into this number. So earnings per share, 557, missed the 590 to 593 range. So it missed on earnings per share, also missed on revenue, 50.17 billion. They were looking for something around 51.2 billion. Net interest income, 27 billion, up 12.8% year over year. The balance sheet total assets reached 5.1 trillion. Now, some of the good news from JPMorgan is that these numbers were missed, but they were not a significant miss. And here's the thing that really caught people's eye.

Equity markets grew 49% to $5 billion in terms of revenue. That's a big number. The net interest income guidance for next quarter was pretty strong. I think the markets saw a bit of a relief rally in terms of JPMorgan. Goldman had great numbers there. Their stock is significantly higher. I would call Citi and Wells Fargo closer to unchanged to start the day, but a little bit, even though a miss on earnings per share, miss on revenue for JPMorgan, the stock is, I think last time I looked about $4 higher pre-market. Remember, it had sold off into this. So a bit of a relief rally there in JPMorgan as the gold standard for banking in this country put up mixed results, but actually guided for some pretty strong numbers.