June 10th Market Overview

Happy Tuesday.

Trade talks still at center stage today as Commerce Secretary Lutnick called U.S.-China negotiations "fruitful"—>The kind of BS diplomatic speak that keeps the markets nodding politely higher. Institutional money keeps flowing with Bank of America’s private clients buying stocks for 25 of the past 26 weeks, a record streak that's quietly driving this recovery.

Apple's WWDC event has been…. pretty, pretty, pretty…lame. Reception from analysts calling it "evolutionary not revolutionary,".

$TSM ( ▲ 0.66% ) strong revenue numbers reminded everyone the chip cycle isn't dead yet.

Let's dig in...

Executive Summary

1. Trade Talks Gain Some Traction: U.S.-China negotiations entered day two with Commerce Secretary Lutnick calling discussions "fruitful." Beijing's weekend approval of rare-earth export licenses signals both sides want a deal.
   

2. Money Keeps Flooding In: Bank of America clients bought stocks for 25 of the past 26 weeks—a firm record. This relentless accumulation def helped push the S&P 500 back to positive territory for the year.
   

3. Inflation Spike Incoming: Goldman expects tomorrow's CPI to jump to 2.9%, with tariffs driving goods prices higher. Monthly core gains could hit 0.35%, over 4% annualized if sustained.
   

4. Main Street Optimism Returns: Small business confidence hit a four-month high as tariff fears fade and Trump's spending package builds momentum. NFIB(Small Business Optimism Index) index rose to 98.8, beating expectations.

Market Overview

Key Market Drivers

1. Labor Market Goldilocks: May jobs came in at 139,000 versus 125,000 expected, down from April’s revised 147,000. Health care led with 62,000 new jobs, leisure and hospitality added 48,000. Unemployment held at 4.2%, exactly where Fed officials want it for a non-inflationary economy.
   

2. China Diplomacy: First concrete trade engagement since tariff escalations began. Monday’s London talks follow Trump-Xi call that reportedly resolved rare earth export license disputes, removing a key escalation point.
   

3. Tech Recovery: Microsoft reclaimed largest U.S. company status from Nvidia while Tesla bounced back from its worst single-day loss in company history.
   

Stock Spotlight

Taiwan Semiconductor Manufacturing $TSM ( ▲ 0.66% ) reported May revenue growth to $9.86 billion, demonstrating continued semiconductor demand despite geopolitical tensions. Year-to-date revenue reached $46.4 billion, showing resilience in the chip cycle.

Duolingo $DUOL ( ▲ 2.29% ) attracted Morgan Stanley attention with analyst outlining “Triple-Double” bull case involving doubling users, revenue per user, and margins. The firm believes markets underestimate execution probability.

CoreWeave $CRWV ( ▼ 5.38% ) received continued criticism from D.A. Davidson, which maintained underperform rating citing concerns over disclosed financing structure providing limited equity holder returns.

Big Name Updates

Tesla $TSLA ( ▼ 0.67% ) continued recovering from political headwinds as President Trump indicated willingness to speak with Elon Musk. Wells Fargo maintained underweight rating, citing May global deliveries down 23% year-over-year and promotional pricing pressure.

Apple $AAPL ( ▼ 1.05% ) received mixed analyst feedback following WWDC kickoff. Bank of America found event “not as exciting as prior years,” while UBS called announcements “more evolutionary than revolutionary.” Citi suggested event positions Apple well for 2026.

Microsoft $MSFT ( ▲ 0.13% ) entered handheld gaming market with ROG Xbox Ally announcement targeting holiday launch to compete with Nintendo Switch 2. Portfolio company Mistral AI also launched its first reasoning AI model.

Meta Platforms $META ( ▼ 0.68% ) saw CEO Mark Zuckerberg personally recruiting 50 engineers for new “superintelligence” AI team following reported Llama 4 development frustrations.

Alphabet $GOOGL ( ▲ 0.4% ) expanded AI infrastructure relationship as OpenAI finalized deal to add Google Cloud services for additional computing capacity, diversifying beyond Microsoft partnership.

Other Notable Company News

Novo Nordisk $NVO ( ▼ 7.25% ) gained on Financial Times reports that activist fund Parvus took stake and may influence CEO succession planning.

FedEx $FDX ( ▼ 4.55% ) announced board approval of annual dividend increase.

Paramount Global $PARA ( ▲ 0.38% ) implemented second workforce reduction affecting U.S.-based employees as traditional media headwinds persist.

DraftKings $DKNG ( ▲ 4.93% ) positioned for Missouri sports betting launch December 1 with day-one operational status.

IBM $IBM ( ▼ 0.82% ) reaffirmed quantum computing timeline targeting practical systems by 2029.

McDonald’s $MCD ( ▲ 0.31% ) received Redburn Atlantic downgrade citing traffic softness and pricing fatigue, while Yum! Brands $YUM ( ▲ 1.25% ) earned upgrade based on international expansion and Taco Bell innovation.

Uber Technologies $UBER ( ▲ 0.61% ) partnered with UK-based Wayve for London robotaxi pilot program.

Sector Watch

Bond Market

Treasury yields held steady after Tuesday's $58 billion 3-year auction cleared at higher yields than expected. Primary dealers took their usual allocation.

This week's supply:

• Wednesday: $39 billion 10-year auction

• Thursday: $22 billion 30-year sale

The 10-year yield stayed pinned at 4.478% as traders positioned for Wednesday's CPI data.

Policy Watch

Growth Warnings Pile Up: The World Bank slashed U.S. growth forecasts to 1.4% for 2025—half last year's pace—blaming tariff policies. The OECD made similar cuts last week.

• Tax Fight Brewing: Fund managers lobby Congress over Section 899, warning it could trigger foreign investment outflows from U.S. markets
  

• Trade Calendar: Japan's Economic Minister visits U.S.-Canada June 13-18 for tariff talks while EU preps new Russian sanctions targeting Nord Stream and cutting oil price caps to $45
  

• Vaccine Shakeup: HHS Secretary Kennedy retired all vaccine advisory panel members, hitting $AZN, $MRNA, $PFE, $MRK in after-hours trading yesterday
  

What to Watch

1. Wednesday’s CPI Data: Core inflation expected to accelerate, potentially validating Fed caution. Higher readings could pressure growth stocks and reignite dormant inflation concerns.
   

2. Trade Talk Conclusions: Final statements from London negotiations determine market direction. Concrete agreements on rare earth exports and semiconductor access would ease supply chain concerns.
   

3. Treasury Auction Demand: Wednesday’s 10-year and Thursday’s 30-year auctions test fixed-income appetite. Weak demand could pressure yields higher, affecting mortgage rates and growth valuations.
   

4. Oracle Earnings: Enterprise software giant reports amid AI infrastructure spending surge, signaling broader technology spending trends.
   
   
   Thanks for reading 🙂
   
   - John
   

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