After a strong finish to last week, stocks are relatively flat in early trading today. Crude oil is rebounding from earlier losses, while gold and silver are slightly lower. The US bond market is closed for the holiday.
The weekend brought plenty of news on the geopolitical front – from deadly attacks on Saudi Arabia’s main airport to a US-Russia diesel deal from President Trump. Houthis struck the international airport in Riyadh on Saturday and Sunday, killing at least 14 and injuring hundreds more. Trump, for his part, said he reached a deal with Russian President Vladimir Putin on diesel supplies. It would reportedly allow Russia to sell hundreds of thousands of tons of diesel into world markets over the coming weeks.
WTI Crude (Black), Diesel (Blue), Gasoline (Red) – 5-Day % Change
Source: TradingView
Crude oil prices initially dipped when commodities trading resumed. But the respite was short-lived, with Brent crude recently trading back around $106 per barrel and US WTI changing hands near $93. On a five-day basis, WTI is up about 4.4% while US diesel futures are up 4% and US gasoline futures are up 2.3%.
Earnings season is about to get underway, with big banks like JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS) set to report third-quarter results tomorrow. Bloomberg Intelligence estimates that S&P 500 Index (^SPX) companies will report a 25% rise in Q3 profits overall. Leading the way? AI and tech stocks, where earnings could jump 47% year-over-year.
Finally, one of the oddest bits of recent market news was a possible Starbucks Corp. (SBUX) merger with Chipotle Mexican Grill Inc. (CMG). The Financial Times reported that the companies had explored a link up, which would be the largest-ever deal in the restaurant space.
Starbucks CEO Brian Niccol used to lead Chipotle. But from a strategic and financial standpoint, blending the coffee company and burrito chain doesn’t seem to make much sense, according to analysts. Starbucks stock is up 8% year-to-date, while Chipotle stock is down 15.7%.