Diesel Surge Helps Put Fed's Dilemma In Context — Market Talk

1250 ET - The former head of fixed-income powerhouse Pimco says the first thing he looks at in the morning is diesel. Mohamed El-Erian made the comments on CNBC as the price of diesel, the lifeblood of so many economic sectors, hits records daily. El-Erian, now chief economic adviser at Allianz, says the main problem for the U.S. economy is supply side, particularly energy, and investors need to stop pushing central banks saying "you're the only game in town." He thinks effective remedies lie with other policymakers that address the supply side, such as reducing sensitivity to choke-point areas like the Strait of Hormuz. On the demand side he says reducing debt burdens and budget deficits is a must. Without these things, the Fed could sacrifice the real economy just to quell Wall Street's expectations. ([email protected])1209 ET - Bitcoin ETFs started the week with a bang, with CoinGlass reporting net inflows of $999M to bitcoin ETFs on Monday. It was the third trading session in a row that bitcoin ETFs have reported net inflows, with a net $1.59B inflow seen in that timeframe. Bitcoin has inched back from its highest point since January, trading down 0.7% to $86,407. Analysts say that resistance for bitcoin is now around $90k. Ethereum is down 1.3% to $2,747, XRP is up 2.9% to $1.57, and solana falls 1.3% to $117.46. ([email protected])1043 ET - BlackBerry just won its first customer design for Alloy Kore, its co-developed automotive operating system platform with Vector. TD Bank's John Shao notes in a report that the win is with Coretura, the JV between Daimler Truck and Volvo Group, which selects the platform as a key software foundation for its software-defined vehicle architecture. "This win is a strong starting point," says Shao, who believes that investors have been waiting for the first Alloy Kore design win since the beginning of the summer. He estimates that this agreement alone could contribute more than $10 million of annual revenue over multiple years, but the benefits of the win won't be immediate, given "development cycles associated with commercial vehicles, combined with the nature of a first-generation platform." ([email protected])1034 ET - U.S. home prices increased 0.25% month over month in August, Redfin says. That's down slightly from 0.26% in July and 0.27% in June. Prices rose 3.7% from a year earlier in August, the fastest annual growth rate in a year. Price growth slowed slightly because buyers continue to gain bargaining power. August was the strongest buyer's market on record. Home prices continue to rise, partly because many homeowners have substantial equity and little incentive to accept a steep discount. The luxury housing market is another factor keeping prices afloat. Slowing price growth is good news for buyers, Redfin says, because it means waiting for the right home is less likely to come with a rapidly rising price tag. Buyers can afford to be choosy and negotiate. ([email protected])1018 ET - On Holding is planning to expand into even more new sport categories, Co-CEOs David Allemann and Caspar Coppetti say on CNBC. The company, which last week said it would launch a new soccer category with the help of French superstar Kylian Mbappé, is currently eyeing an expansion into golf. "We know that a lot of golfers are already playing in On shoes and On apparel, just because it's comfortable," Allemann and Coppetti say. "There's been very little innovation in golf footwear over the past 10 years, so we have an opportunity." The co-CEOs decline to say what other sports they're looking into, but they tease more expansions are coming. ([email protected])1011 ET - On Holding is defying the current highly promotional retail environment, Co-CEOs David Allemann and Caspar Coppetti say on CNBC. "We are the brand with the highest average selling price and the lowest discount rate," they say. "In fact, since our last investor day three years ago, we have taken the average price point for On from $145 to $170." Allemann and Coppetti say the company can charge higher prices due to the brand's premium positioning. Those higher prices, in turn, will allow On to grow its bottom line faster than its top line over the coming years, they add. On climbs 13% after issuing its 2029 financial outlook. ([email protected])1006 ET - Bitcoin is retreating slightly after climbing as high as $87,000, which is the highest since January. The push toward $90k has analysts calling for the start of a new "bull cycle" in bitcoin. "Bitcoin has crossed above its 365-day moving average - now at $80.5K - and trades at $86K," says analysts with CryptoQuant in a note. "This crossover is the definitive technical signal that has marked the start of Bitcoin's bull markets in past cycles." The firm adds that $90k is the new resistance level for bitcoin. Bitcoin is down 1.4% to $85,729, while ethereum falls 1.4% to $2,746, XRP rises 1.4% to $1.55, and solana slides 1.7% to $117. ([email protected])1005 ET - Higher energy and food prices are likely to keep inflation measures above the Fed's 2% target until March, Goldman Sachs' David Mericle writes. Crude prices are easing this week, but remain elevated. Mericle notes that refined products "have risen disproportionately," adding pressure on consumer prices. He expects the upward pressure on energy and food price to "keep headline PCE inflation near 3.5% through year-end before a drop-off to 2.5% in March 2027 and 2.0% in May as base effects kick in," he says. ([email protected]; @ptrevisani)0946 ET - Bank of America raises its Brent price estimates citing the "exceptionally large supply disruption," that has reduced crude and refined-product availability. "Continued skirmishes into year-end are now our most likely scenario," Francisco Blanch of BofA Global Research says in a note. "Although alternative routes and escorted Hormuz shipments have mitigated some of the shortfall, damaged infrastructure and rising geopolitical tensions make rapid normalization unlikely." BofA expects Brent to average $95 a barrel in 2H26, up from the previous estimate of $83 a barrel, and raises its estimate for 2027 to $80 from $75 a barrel.([email protected])0939 ET - On Holding Co-CEOs David Allemann and Caspar Coppetti say the company's collaboration with soccer star Kylian Mbappé will bring something new to the game. "We've been innovating with Kylian over the last months," they say on CNBC. "Because we don't have an archive, we do things new." On's expansion into the soccer market--which Allemann and Coppetti call "the biggest sport in the world," will include cleats and apparel, while also going beyond the pitch to include streetwear as well. These new product lines are projected to help fuel the company's growth over the coming years, they add. On surges 12% in early trading, after announcing its 2029 financial targets. ([email protected])0937 ET - The easing of energy prices is having little impact on the dollar as expectations for further Federal Reserve interest-rate rises support the currency, ActivTrades analyst Ricardo Evangelista says in a note. The Fed's rate rise last week, along with signals of further tightening from Fed officials, has strengthened expectations that borrowing costs could rise again before year-end, he says. Currency traders will closely follow upcoming U.S. economic data and comments from Fed officials for further clues on the path of monetary policy, he says. The DXY dollar index trades flat at 100.472, having reached a seven-week high of 100.667 earlier. ([email protected])0916 ET - Reports of a conditional Iranian offer to reopen the Strait of Hormuz has oil falling for a fifth consecutive session, with Brent trading under $100 a barrel. The decline reflects optimism for a return to U.S.-Iran talks, although "we remain stuck in the gray state represented by a formula of neither peace nor war," says Samer Hasn of XS.com in a note. "Unless we see a serious return to negotiations between Iran and the United States involving mutual concessions, escalation prospects may remain extremely high, potentially keeping crude prices elevated for an extended period." Most active WTI is down 2% at $90.50 a barrel and Brent falls 1.4% to $98.95 a barrel. ([email protected])