The Morning Call
6/4/26
The
Market
Technical
Wednesday in the charts.
https://www.zerohedge.com/markets/stocks-go-down-historic-win-streak-ends-us-macro-soars
Summary:
Stocks and bonds ended the day in the red as oil rallied amid re-escalating
MidEast tensions, renewed
tariff uncertainty, crude
inventory drawdowns, and strong
US macro. The dollar extended gains, pushing gold and bitcoin lower as MegaCap
tech stumbled again. The (9-day) win-streak is over for the S&P 500
(just shy of its 1985 record) with all the majors closing in the red today.
Small Caps were the biggest losers, Nasdaq was the prettiest horse in the glue
factory.. Treasuries
suffered their biggest drop (yield spike) in more than two weeks after a gauge of
private-sector employment growth was in line with estimates, leaving intact
expectations that the Federal Reserve will raise interest rates this year. The
dollar rallied back to last week's highs as rates shifted hawkishly... ...and that weighed on
precious metals with gold back below $4500...
Wednesday in the
technical stats.
https://www.barchart.com/stocks/momentum
https://www.barchart.com/stocks/market-performance
https://www.barchart.com/stocks/sectors/rankings
https://www.barchart.com/stocks/signals/new-recommendations
The first cracks.
https://www.zerohedge.com/the-market-ear/first-cracks
Summary:
The AI melt-up remains firmly intact, but some of the first meaningful warning
signs are starting to appear. Trend support is being tested, semis are showing
signs of exhaustion, and volatility traders are becoming increasingly cautious.
Nothing has broken yet, but the market is no longer as one-sided as it was a
few weeks ago. The AI melt-up remains firmly intact, but some of
the first meaningful warning signs are starting to appear. Trend support is
being tested, semis are showing signs of exhaustion, and volatility traders are
becoming increasingly cautious. Nothing has broken yet, but the market is no
longer as one-sided as it was a few weeks ago.
Update on breadth.
A technical take
on this record high rally.
https://www.lpl.com/research/blog/technical-take-on-the-record-high-rally.html
‘Historical extremes’
haven’t ended well.
Summary:
Despite the S&P 500 index looking set to end its historic daily win-streak
today, if the week ended right now, BTIG Chief Technical Strategist, Jonathan
Krinsky, notes that it would be the best 10-week gain (+44.6%) in the
history of the S&P 500 Tech Sector which dates back to 1990. Krinsky
notes that has only occurred on ten unique periods since 1990.Most recently
June 2024, before that August 2020, and before that late December 1999. There
were some positive outcomes (May '95 and July '97), but most of the
other occurrences saw meaningful consolidations or drawdowns over the next 40
trading days. The only fear left is FOMO.
Dispersion and correlation
are screaming ‘overbought’.
The Market has
forgotten how to go down.
https://www.zerohedge.com/the-market-ear/market-has-forgotten-how-go-down
Summary: The
rally continues to defy gravity. Momentum remains powerful, investors continue
to abandon protection, and the market keeps squeezing higher. The trend remains
firmly intact, but signs of stretching are becoming increasingly difficult to
ignore. Vol refuses to collapse. VXN has remained remarkably well bid despite
the strong move higher in the Nasdaq. The problem with spot-up, vol-up regimes
is that investors often become frustrated paying for protection and eventually
abandon it. Ironically, that's usually when protection is needed most. Protection
remains unwanted. Skew has spent months resetting as investors have grown
increasingly comfortable selling or abandoning downside hedges. Today's uptick
is modest, but it serves as a reminder: when everyone is naked the downside,
small declines have a tendency to become larger ones. Momentum remains
extraordinary, but the crowd is increasingly positioned for a world where every
dip gets bought. That's rarely when risk is lowest.
Thursday morning
setup: US equity futures are weaker, dragged lower by Tech after a disappointing
outlook from Broadcom triggered doubts that the blistering rally
in technology shares had gone too far, a move exacerbated by euphoric
positioning. As of 8:00am ET, S&P futures dropped 0.4%, while Nasdaq
futures slumped 1.2%. Broadcom, which added around $150 billion in market value
just this week, slumped 13% in US premarket trading after
its forecast for artificial-intelligence semiconductor revenue in the
current quarter fell short of expectations. CrowdStrike shares
also drop 10% after their revenue projection failed to impress
investors. Semis are under pressure following AVGO’s earnings, while Mag7 are
bid led by AAPL (+1%). Parts of Cyclicals and Defensives are bid as portions of
the AI Theme are weaker pointing to a potential de-risking or the very early stages
a rotation. Given the sell off in APAC and EU bid, it appears to be the former
rather than the latter. Bond yields are lower as the curve bull steepens, and
USD weakens. Commodities are lower as Energy sells-off on news that Israel /
Lebanon will resume their conditional ceasefire within 24 hours (although
Hezbollah was notably not mentioned); but, precious metals are a notable
outperformer. Today’s macro data focus is on Challenge Job Cuts, Initial
Claims, and Continuing Claims, with NFP coming tomorrow.
Fundamental
Headlines
The
Economy
US
Weekly jobless claims totaled 225,000 versus
consensus of 213,000.
https://www.zerohedge.com/markets/jobless-claims-jump-us-tech-firms-announce-most-job-cuts-2-years
Q1
nonfarm productivity advanced 0.3% versus projections of +0.5%; unit labor costs were up 1.8% versus +2.5%.
April factory
orders were up 4.8% versus estimates of +4.6%; ex
transportation, they were up 1.3% versus +0.8%.
The May services PMI
was 50.7 versus expectations of 50.9; the May composite PMI was 51.5 versus 51.7.
The May
ISM services index was 57.7 versus forecasts of 55.0.
The May ADP
private payroll report showed a 122,000 increase in jobs versus predictions of
+117,000.
International
April EU retail sales fell 0.4% versus
consensus of -0.3%.
The
May EU construction PMI came in at 43.7 versus projections of 41.5; the May German construction
PMI was 42.4 versus 42.0; the May UK construction PMI
was 38.2 versus 40.3.
Other
April median household income.
In Tuesday’s blog
post, I included an article dealing with the impact of interviewees’ political
views on the consumer sentiment index survey. Here is a study that could help adjust
for that factor.
A weirdly decent jobs market.
https://wolfstreet.com/2026/06/02/and-more-data-showing-a-weirdly-decent-labor-market/
OECD says economic growth will slow even if
oil prices peak soon.
EU could lose 1.3 million jobs due to energy price
surge.
https://www.zerohedge.com/economics/eu-could-lose-13-million-jobs-due-energy-price-surge-iran-war
Update on Q2 GDP nowcast.
https://www.capitalspectator.com/energy-shock-looms-but-q2-gdp-still-looks-surprisingly-strong/
The latest Fed
Beige Book doesn’t tell us anything that we didn’t already know.
https://www.zerohedge.com/economics/latest-fed-beige-book-underscores-k-shaped-split-us-economy
Iran
Overnight news.
Investing
Is this bull
market only half over?
https://www.carsongroup.com/insights/blog/is-this-bull-market-only-halfway-over/
Update on valuations.
https://www.advisorperspectives.com/dshort/updates/2026/06/02/q-ratio-and-market-valuation-may-2026
https://www.advisorperspectives.com/dshort/updates/2026/06/02/p-e10-and-market-valuation-may-2026
Risk management
for retirees.
Andrew Left’s
conviction leaves Wall Street wondering ‘what are the rules?’.
https://giftarticle.ft.com/giftarticle/actions/redeem/d097d67f-396a-4359-bd87-d54e33be6714
Barry Ritholtz’s thoughts
on the Market.
https://ritholtz.com/2026/06/5-things-i-am-thinking-about/
Ray Dalio’s
thoughts on the Market.
News on Stocks in Our Portfolios
What
I am reading today
Congress
wants to fix college sports. What could go wrong?
Reflections on Blackstone’s
commentaries.
https://www.cato.org/blog/reflections-blackstones-commentaries-natural-liberty-mankind
Are you winning in life?
https://kindnessfp.com/win-in-life/
Visit Investing
for Survival’s website (http://investingforsurvival.com/home)
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