Good morning. QQQs -70bps / SP flat / Russell +20bps. Yields down 4-6bps on the long end of the curve while Oil -2%.
Overnight Asia Mixed with Korea the big loser: TPX +0.14%, NKY -1.82%, Hang Seng +0.31%, HSCEI +0.08%, SHCOMP +0.1%, Shenzhen +0.08%, Taiwan TAIEX -1.95%, Korea KOSPI -5.46%. Samsung -8%. Hynix -10%. Kioxia -13% led the way lower.
In the U.S., Semis -2% following through on the weakness yesterday and overnight in Korea (we wrote some about what’s plaguing semis in our EOD wrap yesterday).
WDC/STX -5-6% and Memory -5% leading the way lower. Some pointing to the CXMT news from yesterday and Musk’s tweet below:
Internet flat with some AI disintermediation names up (OTAs +50bps outperforming early).
Today we get AMAT/WDAY investor meetings while OCP continues abroad. Anthropic sellside/investor day tomorrow.
Fairly quiet on the research front this morning but let’s get to it…
ADBE: HSBC downgrades to Hold/$267 on AI-clone headline risk + rising disruption concerns
HSBC flags ArtCraft’s free open-source Creative Cloud clone as another sign AI could pressure Adobe’s moat, particularly among amateur/freemium users, even if near-term operational impact is limited. It cuts revenue ~1% and EPS 1–2%, lowers its target multiple to 10.5x, and sees rising competition/AI disruption limiting rerating despite ADBE trading at ~9x CY27 EPS vs. sector ~21x. Downgrades from Buy to Hold, PT $267 from $310.
Anthropic:
ANTHROPIC: WE’VE TURNED AWAY MEANINGFUL REVENUE AND TRILLIONS OF TOKENS’ WORTH OF PAYING TRAFFIC FROM DISTILLERS
Anthropic says new safeguards reduced the data harvested from Claude in distillation campaigns by roughly 90–99%. The company restricted access to protected reasoning and banned tens of thousands of accounts. Anthropic alleges Zhipu attempted to copy Claude’s capabilities while developing GLM-5.3.
From Claude, doesn’t seem like meaningful impact on ARR: