June 3rd Market Overview

Happy Wednesday

Our record streak took a little nap today. Five straight days of highs is a heck of a run, I'm not going to sweat one red afternoon.

Oil ticked up again on the latest back and forth with Iran, and a strong jobs report had bond traders backing off their bets that the Fed will cut rates soon. More people got hired than expected, so the Fed has less reason to step in and help.

Let’s dig in...

Today's Big Picture

Oil Wakes Up on Middle East Strikes 
The ceasefire is cracking. Iran fired its biggest barrage in weeks, hitting US bases in Kuwait and the Navy's 5th Fleet base in Bahrain, and the US hit back at Qeshm Island. Crude climbed and stocks gave back a chunk of their record run. Markets spent weeks treating this war like background noise. Today they stopped.

Strong Jobs Flip the Rate Story 
Companies added 122,000 jobs in May, the best month in over a year and well past the 110,000 economists penciled in. Yields climbed and the rate cut bets faded fast. Wall Street came into this year sure the Fed would cut. Now it's bracing for a hike. Hard to cut when the economy keeps picking up speed.

Private Markets Tighten the Exits
Two funds slammed the door on investors this week. Partners Group in Switzerland capped withdrawals from one of its funds, a day after Cliffwater did the same with its private credit fund. KKR, Blackstone, and Apollo all fell on the fear it spreads. When investors can't pull their cash out, the question becomes who freezes up next.

Market Overview

Index Performance (Today is Oil futures past week)

Stock Spotlight

SpaceX $SPCX ( ▼ 0.18% )  
set a fixed IPO price of $135 a share on June 12th, valuing Elon Musk's company near $1.75 trillion before the roadshow even starts. At $75 billion raised, it would be the biggest IPO ever.

GameStop $GME ( ▲ 6.31% )  
approved a new $2 billion buyback and posted first quarter revenue growth on strong collectibles demand. Profit rose to $389.6 million from $44.8 million a year ago.

Marvell $MRVL ( ▲ 3.48% )  
kept climbing after Nvidia's Jensen Huang called it the next trillion dollar company at a conference in Taiwan.

Big Name Updates

Palo Alto Networks $PANW ( ▼ 5.76% )  
beat earnings and raised its revenue outlook, but the stock fell anyway. After nearly doubling since April, that is a textbook sell the news move.

Meta $META ( ▲ 3.87% )  
started charging businesses to use its AI agent for customer chats on WhatsApp and Instagram, a fresh revenue line off all that AI spending.

Macy's $M ( ▼ 0.85% )  
posted its best comparable sales in four years and raised its full year outlook as the turnaround takes hold.

Other Notable Company News

Strategy $MSTR ( ▼ 5.69% )  
sold bitcoin for the first time since 2022, a tiny amount, but enough to spook crypto.

Broadcom $AVGO ( ▲ 1.2% )  
hit a fresh record high ahead of its earnings this afternoon.

GitLab $GTLB ( ▼ 4.12% )  
is cutting staff and pulling out of 22 countries as it pivots toward AI.

Universal Music $UNVGY ( ▼ 8.22% )  
fell after reports that Bill Ackman wants to sell his stake.

Navitas $NVTS ( ▲ 20.84% )  
caught a bid after touting its tie in with Nvidia's data center chips.

Walmart $WMT ( ▲ 3.22% )  
flagged that high fuel prices are squeezing lower income shoppers.

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Sector Watch

Bond Market

Treasury yields pushed higher across the curve after the strong jobs print.

• The 10 year is approaching 4.5.

• The 30 year is closing in on 5.

• Service sector growth slowed a touch in May, the one soft spot in an otherwise firm read.

Policy Watch

Trade and Tariffs 
The US floated new tariffs on about 60 trading partners over forced labor concerns. Canada, Mexico, the EU, and the UK face the lower tier, while China, India, and Japan get a steeper rate.

• Trade experts expect them to take effect in July.

• This batch sits on firmer legal ground than the tariffs the Supreme Court tossed out earlier.

Energy 
The Strategic Petroleum Reserve keeps draining fast, with another 8 million barrels pulled last week.

• The reserve is on pace to hit its lowest level since the early 1980s this month.

• That leaves a thin buffer if the Strait of Hormuz stays shut.

Overseas 
India is moving to pull in more foreign cash, with plans to cut or scrap the tax on interest global funds earn on its bonds. Japan's central bank also signaled it plans to keep raising rates.

What to Watch

The AI company quietly automating every Walmart distribution center. 
23 billion in orders on the book.

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Broadcom and CrowdStrike Earnings
Both report after the bell. Broadcom is the last big chip name of the season and a clean read on hyperscaler AI spending. CrowdStrike will show whether cloud security demand is holding up.

Friday's Jobs Report 
The government's official May payrolls land Friday morning, with economists looking for around 80,000. A strong number on top of today's private read would keep yields firm.

The Strait of Hormuz 
JPMorgan thinks the waterway could reopen this month as oil inventories drain. It carries a big chunk of the world's oil, so any reopening would cool prices fast.

Thanks for reading - you are now the more informed 🙂

- John

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