Oil Prices Fall but Diesel Shortage Won’t Ease Anytime Soon: 8 Key Items Shaping the Stock Market Monday
Anthropic now targets November IPO, Novo Nordisk sinks and other headlines moving the market this morning.
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These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to a positive start for the trading week.
1. Wall Street futures advanced on Monday, led by AI stocks, as a 2% slide in oil prices pulled Treasury yields lower on signs the warring parties in the Middle East were open to a resolution… Commentary from at least 10 policymakers is lined up this week, starting with Chicago Fed President Austan Goolsbee on Monday, that could offer traders more clarity on the outlook for rates… Diplomacy will be in focus on Thursday at a China-US summit that could likely touch topics including an extension of the trade truce between the two superpowers, the Iran war and regulation on AI advancement. (Reuters)
US and Chinese officials offered upbeat assessments of their talks on artificial intelligence, trade and investment, signaling a mutual desire to steady ties ahead of this week’s summit between leaders Donald Trump and Xi Jinping. (Bloomberg)
As we near the end of September, things are heating up on several fronts that have the potential to shape the market as we barrel head long into what is considered by many to be one of the most seasonally challenging times of the year. While we are cautiously optimistic on a few of these fronts, we’ve been here several times before in the last six months only to see things not play out as the market expected. Following last week’s string of negative earnings pre-announcements, the risk of other companies joining that group isn’t low.
While the market may be laced with renewed hopium, we’re wary of getting head faked, especially given the recent analysis from Citadel Securities that during a mid-term election year the market tends to trough near September 30.
2. A total of 17 commodity vessels transited the Strait of Hormuz on the weekend, down from 37 a week earlier, shipping data showed on Monday, as tension in the Gulf persisted with the US and Iran in stalemate. Visible traffic through the strait, the conduit for a fifth of the world’s oil and liquefied natural gas before the war, has dwindled to a trickle. However, Middle Eastern producers continue to export oil on tankers travelling with their transponders off. (Reuters)
Iran and the United States exchanged new threats on Sunday, with President Donald Trump warning Iran would fail economically or face its leadership being wiped out if it didn’t make a deal, and the Iranian military saying it would retaliate harshly to any fresh attack. (Reuters)
Our first item above flagged diplomacy as an item that has the potential to influence the market this week. While many if not most are focused on the meeting between Trump and Xi, Iran’s President Masoud Pezeshkian is expected in New York this week for the United Nations General Assembly. Reports indicate Trump would be open to meeting him, and while that is adding to this week’s market hopium, we’ll first want to see if the two gather, then look to see not only the outcome but how it is received in Iran.
3. US retail diesel prices topped $6.50 a gallon for the first time, extending a war-driven rally that’s rippling through the largest economy. Average nationwide prices rose to $6.505 a gallon, according to figures from the American Automobile Association. (Bloomberg)
A global diesel shortage fueled by wars in Iran and Ukraine is unlikely to ease before next year, according to storage market indicators and industry participants, extending a spike in fuel costs that is weighing on economies worldwide… The rapid draw of diesel from US storage indicates how tightly supplied the market has been in recent months, and the rising availability of tanks for lease underscores how long the tightness is expected to persist… The combination of falling inventories and rising storage availability suggests market participants expect supplies to remain tight into at least the first quarter of next year… (Reuters)
The Iran war has created a new shortage on the oil market. This time the scarce commodity isn’t just crude—it is the ships that carry it. (WSJ)
4. A worldwide shortage of motor oil is becoming more acute, with prices of the car engine lubricant reaching new highs, oil-change shops running dry and a US retail group rationing sales to do-it-yourself customers. The surge in the cost of base oil used for the full synthetic motor oil required for many newer cars far outpaces steep price rises for crude oil, petrol and diesel. The US price of so-called Group III base oil has almost quadrupled since February to a record $12.45 a gallon on Friday, according to Argus Media. (FT)
Europe faces a fourth-quarter jet fuel deficit, even as it turns to far-flung suppliers including South Korea, which is set to boost its jet exports to Europe to a four-year high in September, according to analysts and shipping data. (Reuters)
While oil prices are moving lower on Monday, hitting their lowest level is 11 days, the above is a sharp reminder that any rebound in oil flows are not likely to be enough to address the overall market deficit. As such, we’re seeing increasing forecasts like the one from Eurasia Group that sees Brent prices trading in the $90 to $110 per barrel through the rest of this year. That gives reason to think more companies will face higher input costs than they expected back in July and consumer wallets will feel the impact of those higher energy prices.
5. Anthropic plans to stage its blockbuster initial public offering in November, later than many investors expected, as leaders of the biggest companies in the artificial-intelligence race call for a slowdown in the development of the technology. The AI giant had been expected to stage a record-breaking offering in October, according to people familiar with the matter. (WSJ)
Anthropic is considering rolling out a new AI model to counter OpenAI’s momentum since its launch of GPT-6 Astra, according to three sources, ahead of an expected IPO and after its CEO called for an industrywide slowdown. (Reuters)
The slip for Anthropic’s IPO into November from October is likely to raise some concerns but if we think about the November timing would allow the company to include its Q3 2026 results and discuss the vector and velocity for how its business is shaping up in the final quarter of the year. With a reported target valuation of over $2 trillion, and given the recent post IPO performance of several new listings, waiting may not be a bad thing, especially if the results showcase strong performance even in the face of OpenAI’s newest model, Astra, that was launched this month. We look forward to reading the eventual and updated S-1 filing.
6. Novo Nordisk stock tumbled on Monday as the weight-loss drug manufacturer failed to excite investors hoping for a turnaround. At an investor event on Monday, Novo Nordisk set out its ambitions by 2030 to launch at least five multi-blockbusters, deliver compound annual revenue growth in line with industry peers, scale capacity to serve 10 times more people with obesity on oral GLP-1 drugs and serve 60 million patients globally. (MarketWatch)
The company came up short by not sharing more specifics around near-term growth targets amid fierce competition in the weight loss drug market. (Yahoo! Finance)
Here’s the thing, semaglutide, the active ingredient in weight-loss and diabetes medicines Wegovy and Ozempic loses key patent exclusivity in the U.S. in 2032. The U.S. market accounted for more than half of Novo Nordisk’s (NOVO) overall sales last year. While Novo discussed big plans, the reality is that, at least for now, the company will be what we refer to as a a “show me” story.
7. Economic data today per TipRanks: Chicago Fed National Activity Index (August).
8. Companies reporting today per TipRanks: There are no market moving earnings reports expected, but we will be on watch for negative preannouncements.
