China’s 4F² Threat to Micron—Houthis' Deadly Attack On Saudi Arabia Eclipses Trump’s Russian Diesel Deal

Advance In Memory Chips Please click here for an enlarged chart of United States Oil ETF (NYSE:USO). Note the following: The chart shows oil ETF USO moving up on two crosscurrents. President Trump’s Russia diesel deal is negative for oil, but the Houthi attack on Saudi Arabia is positive for oil. The chart shows oil ETF USO has moved into zone 1 (resistance). RSI on the chart shows USO has room to run in either direction. President Trump has announced a landmark diesel deal with Russia aimed at bringing down energy prices. Under the deal, Russia will immediately supply more than 300,000 tons of diesel to the U.S. and global markets, followed by another 500,000 tons in November and another 1 million tons thereafter. In our analysis, these diesel quantities are relatively small compared to global diesel consumption and are unlikely to make a significant difference in prices on their own. Ukraine has been targeting Russian oil refineries. This has disrupted Russian fuel production, putting additional pressure on diesel supplies. To change the landscape, President Trump has also announced an energy ceasefire between Russia and Ukraine, under which both countries would stop attacking each other’s energy infrastructure. However, Ukrainian President Zelenskyy said he was surprised by the announcement, and Ukraine was willing to comply if Russia did the same. Ukraine is already accusing Russia of violating the ceasefire by attacking its power plants, including one in Kharkiv. To allow the deal, the Trump administration has temporarily eased U.S. sanctions on Russian diesel. In our analysis, reversing part of the pressure Washington has been putting on Russia over the Ukraine war could provide Russia with additional revenue to finance the war. For investors, the important point is that the additional diesel supply could help at the margin, but meaningful relief in energy prices will depend much more on whether attacks on energy infrastructure stop and whether the broader geopolitical risks ease. Iran backed Houthi rebels in Yemen launched missile and drone attacks on Saudi Arabia, including a devastating strike on Riyadh’s international airport that killed at least 13 people and injured more than 300. On an ongoing basis, we have been sharing with you how the conflict in Yemen spills over to Saudi Arabia. In our analysis, the risk to oil supplies is significant. Saudi Arabia is the world’s largest oil exporter, and the Houthis have demonstrated their ability to strike targets deep inside the country, including oil infrastructure. Houthis have also threatened shipping through the strategically important Bab el-Mandeb Strait, a major route for oil shipments. A successful attack on Saudi oil production or export facilities could disrupt millions of barrels of daily supply. The danger of a wider war disrupting Saudi oil supplies could easily outweigh the benefit of additional Russian diesel. The semiconductor industry has been working on a new memory technology called 4F², which allows more memory to be packed into the same space on a chip. Today’s mainstream DRAM technology uses a 6F² design. Moving from 6F² to 4F² reduces the area required for each memory cell by one third, potentially increasing memory density by as much as 50% and reducing manufacturing costs. China’s ChangXin Memory Technologies says it has made significant progress with 4F² technology and plans to introduce a product before year end. The three largest manufacturers Samsung Electronics Co Ltd (OTC:SSNLF), SK Hynix Inc – ADR (NASDAQ:SKHY), and Micron Technology Inc (NASDAQ:MU) are also working on 4F². In our analysis, the concern for Micron investors is that China’s ChangXin could become a more formidable competitor, leading to increased memory supply and pressure on prices and profit margins. However, the big question is whether ChangXin can manufacture the 4F² chips in large volumes with acceptable yields, reliability and competitive costs. As full disclosure, we are long MU from an average of $21.77. Tomorrow morning will bring earnings from major banks JPMorgan Chase & Co (JPM), Citigroup Inc. (C), The Goldman Sachs Group, Inc. (GS), and Wells Fargo & Company (WFC). As full disclosure, JPM Is in our portfolio, long from an average of $34.14. C is also in our portfolio. Consumer Price Index (CPI) will be released on Wednesday at 8:30am ET, and Producer Price Index (PPI) will be released on Thursday at 8:30am ET. Magnificent Seven Money Flows Most portfolios are now heavily concentrated in the Mag 7 stocks. For this reason, to get ahead and get an edge, investors need to dig below the surface of the Mag 7 stocks. It is equally important to rise above the noise of daily news on the Mag 7 stocks. The best way to get an edge, dig below the surface, and rise above the noise of the daily news is to pay attention to early money flows in the Mag 7 stocks on a daily basis. When there is significant news in the Mag 7 stocks that rises above the threshold of noise and impacts your entire portfolio, it is covered in the main section above. In the early trade, money flows are positive in Apple Inc (NASDAQ:AAPL), Meta Platforms Inc (NASDAQ:META), and Microsoft Corp (NASDAQ:MSFT). In the early trade, money flows are neutral in Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc Class C (NASDAQ:GOOG), and Tesla Inc (NASDAQ:TSLA). In the early trade, money flows are negative in NVIDIA Corp (NASDAQ:NVDA). In the early trade, money flows are mixed in SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust Series 1 (NASDAQ:QQQ). Momo Crowd And Smart Money In Stocks Investors can gain an edge by knowing money flows in SPY and QQQ. Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil. The most popular ETF for gold is SPDR Gold Trust (GLD). The most popular ETF for silver is iShares Silver Trust (SLV). The most popular ETF for oil is United States Oil ETF (USO). Bitcoin Bitcoin (CRYPTO: BTC) is range bound. What To Do Now Consider continuing to hold good, very long term, existing positions and add tactical positions based on signals. The Arora Report is known for its accurate calls. Most recently, we correctly called the rally from recent stock market lows and the 2026 semiconductor decline before a 25% drop in the Semiconductor ETF (SMH). In gold, we bought at an average price near $1,105, close to cycle lows, and took partial profits near $5,400, close to cycle highs. Please click here to get our free forever Generate Wealth Newsletter. Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.