pre market thoughts 28 May 26

US yields a touch higher with 10y at 4.5% 30y at 5.03%. Overnight some scuffles in Iran, however risk did not react broadly to that. In asian trading, NKY and KOSPI closed a touch weaker down ~0.5% while China STAR mkt closed up 1.5%.
Underneath these index moves, KR had a 5% intraday move with KOSPI at the lows of 7.8k during lunch time. with weakness led by Samsung while SK Hynix performed much firmer with a stronger recovery. 285A Kioxia also performed well with a initial dip to 57k and finding support there before closing at 61k.
Overnight in memory space, both $MU and $SNDK saw initial pre market strength that was faded into the session. $MU almost touched 1000 at one point prior. However, it is worth noting that vols for both $MU and $SNDK are very elevated. The $900 and $1000 strikes for $MU as a result are extremely clustered and a huge amount of price action are coming out of gamma hedging by dealers. As theta decays for these strikes, the resultant delta profiles will become more pronounced and much less smoother - this will only increase the erratic price action for $MU in particular.
With the fade in memory in the opening US session, we saw $NVDA touching 210 - at this point this could be classified as a value growth stock. I mentioned about how $NVDA is used as a funding short by many AI/Semi bottleneck players. With the weaker reaction in risk, nuclear names also saw a sell off with SMRs trading weaker and $XE being hit almost 10% down.
Fuel cells and battery names saw a strong performance with $TE recovering almost all of the initial drop and $ENPH continuing its silent grind up.
Another notable point, $SNOW traded up almost 35% on earnings. This was on the back of stronger than expected results AND also guidance that gave it credence that it would be a beneficiary of AI. IMO - the previous sell off in software was indiscriminate with names like $CRWD hit - however right now the market is repricing these names. I would expect further strength in $IGV and a dislocation in regime for people utilising $IGV as a broad hedge against semis.
This repricing is likely to come at the same time as a repricing for $NVDA. In my mind, $NVDA is trading dislocated from the broad Semi basket.
29 May - we have a rebalancing for MSCI due.