June 9th Market Overview

Happy Monday.

Trade talks with China in London delivered exactly what the market wanted to hear. Kevin Hassett's "big strong handshake" comment had semiconductors up- Qualcomm up big on its $2.4B AlphaWave deal while Apple couldn't catch a break because they wont stop trying to redesign iOS.

Decent start to the week, love seeing some trade progress.

Let's dig in...

Executive Summary

1. U.S.-China trade: London negotiations between Treasury Secretary Bessent and Chinese Vice Premier He Lifeng signal rare-earth exports resuming and semiconductor restrictions easing
   

2. Individual stock stories dominate: Qualcomm’s M&A success and Apple’s AI struggles show execution matters more than sector trends in current market
   

3. Policy uncertainty: Steel tariffs hit consumer goods while Medicaid changes target healthcare margins - inflation data this week determines Fed response
   

4. Market structure holds: Indices finishing higher despite mixed internals, suggesting underlying resilience as traders position for summer trading patterns

Market Overview

Key Market Drivers

1. Hassett Trade Framework: National Economic Council Director's "big strong handshake" comment triggers immediate semiconductor buying as export control relief appears imminent
   

2. M&A Catalyst: Qualcomm's $2.4 billion AlphaWave acquisition at 183p validates AI infrastructure investment thesis amid broader chip optimism
   

3. Healthcare Regulatory Risk: Friday's Trump Medicaid directive creates
   immediate reimbursement uncertainty, with Universal Health Services down as sector leader
   

4. Inflation Week Setup: Wednesday CPI and Thursday PPI reports will determine whether tariff costs are flowing through to consumers, setting Fed policy expectations

Stock Spotlight

Apple $AAPL ( ▼ 1.38% ) closes right above $200 as WWDC disappoints despite first iOS redesign since 2013. AI features fail to impress compared to Big Tech peers.

Warner Bros Discovery $WBD ( ▼ 1.28% ) reverses early gains after split announcement. Streaming assets separate from cable networks by mid-2026.

Qualcomm $QCOM ( ▼ 2.51% ) leads semiconductor rally on $2.4 billion AlphaWave IP acquisition.

Alibaba $BABA ( ▼ 3.22% ) benefits from U.S.-China trade progress as export control easing appears likely.

Universal Health Services $UHS ( ▼ 1.49% ) falls nearly flat after CFO warns procedural volumes “slower to recover than imagined.”

Big Name Updates

Tesla $TSLA ( ▲ 1.94% ) faces pressure after Trump suggests relationship with Musk “is over.” Analyst downgrades on robotaxi timeline add to headwinds.

Meta Platforms $META ( ▼ 1.51% ) explores $10+ billion Scale AI investment as JPMorgan warns rising yields could “arrest” equity rebound.

Other Notable Company News

IonQ $IONQ ( ▼ 2.25% ) acquires Oxford Ionics for $1.08 billion, targeting 2 million qubits by 2030.

Robinhood $HOOD ( ▼ 1.68% ) excluded from S&P 500 quarterly rebalancing despite Bank of America recommendation.

ARK Fintech ETF $ARKF ( ▼ 0.27% ) hits December 2024 highs on Circle $CRCL ( ▲ 25.36% ) strength since $31 IPO.

Netflix $NFLX ( ▼ 0.24% ) acquires Daily Beast pilot for current events programming as China increases international film imports.

Sector Watch

Bond Market

The 10-year Treasury yield slips below 4.5% as U.S.-China trade progress reduces safe-haven demand. This week's government auctions of 3-year, 10-year, and 30-year bonds will test whether investors stay committed to risk assets.

• Friday's stronger jobs report (139,000 vs 125,000 expected) initially pushed yields higher but trade optimism reversed the move

• Dollar weakness accompanies yield decline as export restriction relief appears likely

• Bond vigilantes watching Wednesday's CPI closely for tariff inflation impact

Policy Watch

U.S.-China trade talks in London show promise as National Economic Council Director Kevin Hassett signals immediate export control relief and rare-earth access restoration. His confidence suggests substantive progress beyond typical diplomatic rhetoric.

Trump's Friday Medicaid directive orders closer scrutiny of government healthcare payments, creating immediate reimbursement uncertainty. Hospital operators like Universal Health Services and Tenet face potential margin compression as the administration targets healthcare cost controls.

• Steel import tariffs jump to 50%, forcing Campbell's, Hormel, and Del Monte to absorb higher can costs or raise prices 9-15%

• Retailers accelerate Chinese imports during temporary tariff reduction window - National Retail Federation forecasts 2.01 million containers in June versus May's pause

• Imports up reflects supply chain managers front-loading inventory before potential tariff restoration
  

What to Watch Out For

1. Bond Yield Risk: JPMorgan warns rising yields could “arrest” equity rebound through summer as activity-inflation tradeoff deteriorates. Current 10-year Treasury below 4.5% but vulnerable to reversal.
   

2. Seasonal Headwinds: Raymond James notes equity strength from March-June typically fades into “summer doldrums” starting now. Historical pattern suggests momentum could wane amid earnings optimism concerns.
   

3. Consumer Price Index Wednesday: May inflation data critical for Fed policy direction and tariff impact assessment. Market expects continued disinflation trend supporting current trade negotiations.
   

4. Producer Price Index Thursday: Wholesale inflation data complements Wednesday CPI release. Focus on tariff costs flowing through supply chains and manufacturing input prices.
   

5. Trade Talk Outcomes: London negotiations delivered positive signals but concrete rare-earth and semiconductor agreements still needed. Success would reduce tech sector uncertainty and support continued gains.
   
   
   Thanks for reading 🙂
   
   - John
   

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