Twenty-Nine Billion, Handed Back

SK Hynix is buying back $29 billion of its own stock. Forty trillion won, 24 million shares between tomorrow and November 19, then cancelled, and shareholder returns raised above half of cumulative free cash flow from 2025 through 2027. The stock had fallen more than 50% in two months. US shares rose as much as 7.1% premarket. SPX closed 7,691.76 yesterday, off 0.69% and a third straight down session. Premarket 7,725, up 33.

The overnight tape and the morning tape are opposites. Korea fell 5.4% and the Nikkei 3% while that filing was going in, with SoftBank down more than 10% and Kioxia near 13%. Now the same complex is bid.

What matters is the form of the defense. All season companies beat and got sold on what they spend, the one exception being Microsoft guiding capex below estimates. Nobody answered by handing money back. SanDisk added $14 billion to its authorization this month, Hynix just committed $29 billion, and memory is competing on returns instead of capacity. Yields helped at the margin, though they helped yesterday too and nothing came of it. The 30-year touched 5.336% Tuesday, its highest since 2007, then reversed under 5.27%, and the 10-year peaked near 4.75% before finishing below 4.69%.

The retailers were the other read this morning. Target printed comps up 3.8% on 3.6% traffic growth and raised the full year, though $1.65 of its $4.11 EPS came from tariff refunds. Lowe's is the offset, comps up 0.2% with full-year sales cut to the low end at $92 billion and comps flat. July retail sales cracked ten days ago and the retailers still have not confirmed it.

Price is on the call wall. 7,725 is the largest positive in the book, the 8 EMA at 7,726, and prior resistance at 7,725, three levels landing on one number and we open sitting on it. That puts us 20 points over the flip and back in positive gamma for the first time in three sessions.

Five points under is the 7,720 block, still the largest negative in the profile at -3,909. Above price yesterday it read as overhead resistance. At price it becomes the most reactive level of the day: sharp off it, decisive through it. It expires tonight either way. Overhead is choppy, +945 at 7,730 against -757 at 7,735, but clear 7,740 and the positives run 7,750 through 7,780 and pull toward 7,775. Under the flip nothing changed from yesterday. No wall, an even slope down to 7,600, first real support 7,650 where the 21 EMA sits at 7,648.

I lean long while 7,720 holds and want 7,740 to open the upper shelf. Lose 7,704 and yesterday's map comes straight back. FOMC minutes at 2:00 PM, from the 9-3 July meeting with three dissents for a hike.