June 3rd Pre-Market

Good Morning

Quiet open but there's a lot going on under the hood. Jobs came in stronger than expected, oil's back near $100, and the rate-cut story is pretty much over. Today's the day the bond market and the stock market might stop agreeing with each other.

Let's dig in...

Today's Big Picture

1. Strong Jobs

ADP printed 122,000. That beats the 110,000 everyone expected, and it's the best month since January 2025. Here's why it matters: a strong labor market plus oil near $100 is the exact mix that keeps a Fed from cutting. Yields agreed fast, the 10-year is pushing 4.5%. So stocks are sitting at records still betting on a cut that the morning data just took away. Prediction markets pricing in odds of a Fed hike by December above 70%.

2. Two Funds Locked The Doors In Two Days 

A Swiss firm, Partners Group, blocked investors from pulling money out of an $8.6 billion fund this morning. A day earlier, a US firm, Cliffwater, did the same to one of its funds. Different countries, different corners of the market, one private equity and one private credit. Both sold the same promise to wealthy clients: park your money here, pull it out whenever you want. That promise only holds until everyone asks at once, and right now they're all asking. KKR and Blackstone are selling off too, even though it's not their fund, because the read is simple: who locks the doors next.

3. The Patient Money Is Buying What Everyone Hates 

Everyone's chasing chips at record highs. Buffett and Japan's biggest builders are doing the opposite. They're buying US homebuilders, the most left-for-dead group on the board. Berkshire paid $6.8 billion for Taylor Morrison at 10x earnings, half what the S&P trades at. No AI story, no momentum, no crowd. Just the two most patient buyers alive quietly backing up the truck.

Market Overview

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Stock Spotlight (pre-market)

Alphabet $GOOGL ( ▼ 3.86% )  
Down after asking the market for $80 billion to fund AI, with Berkshire taking $10 billion. Worst three-day stretch on record. Anyone holding megacaps for the fat margins now has to ask if equity-funded buildouts are still the same trade.

GameStop $GME ( ▼ 2.06% )  
Up on its best quarterly profit ever and a fresh $2 billion buyback. Shorts riding the dead-retailer thesis have to decide how long they keep paying to be wrong.

Macy's $M ( ▼ 0.6% )  
Up on its strongest first-quarter sales in four years and a raised outlook. Anyone short the consumer on recession fears just got told the low-to-mid shopper is still spending.

Palo Alto Networks $PANW ( ▼ 1.1% )  
Beat earnings, raised guidance, and fell anyway. The read across cybersecurity: a clean quarter may not matter while the market fears AI eating pricing.

GitLab $GTLB ( ▼ 5.83% )  
Down after cutting 350 jobs and exiting 22 countries in an AI pivot. Is that discipline, or a tell that the pricing model is breaking? Holders have to pick one.

Intel $INTC ( ▼ 1.28% )  
Bouncing toward snapping a five-day slide that started when Nvidia walked into its PC turf. The relief is real. The x86 story is still leaking.

What to Watch

Broadcom After the Close 
Up 14% in four sessions into the earnings. Marvell ran on a Jensen quote; Broadcom has to show real orders. A beat is mostly priced in, so the miss is what matters, it's the first real crack in the AI-spend story and takes the chip trade with it.

CrowdStrike After the Close 
Palo Alto beat, raised guidance, and still sold off this morning. CrowdStrike reports into that same setup. If good news can't lift a cyber name, the market has decided AI threatens software pricing and earnings won't change its mind. Watch whether a beat even works.

Everyone is watching SpaceX set its IPO price this afternoon.

The risk that matters is not the listing, it is the lockup expiry six to twelve months out. SpaceX, Anthropic, and OpenAI all go public this year, so trillions in insider shares could unlock at once. Not a today problem. A note-it-now problem.

- John

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