MARKET WRAP

The new month (and new quarter) kicked off with what appeared to be a relatively calm day on the surface, as the S&P 500 traded in a tight range and closed essentially flat. But beneath that quiet tape, there were signs of rotation as investors appeared to reposition portfolios to start Q3, with the Nasdaq lower but the Dow and Russell 2K higher. On the day: SPX -0.1%, QQQ -0.9% and IWM +0.9%.

Elsewhere, Oil, Gold and the US10YY all ticked higher, while DXY was lower again, now $96.73. The VIX is holding in there, closing 16.83 and is worth keeping an eye on whether its found a bottom or will collapse following Thursday’s Jobs number.

After hours: Both the SPY and QQQ are a tick lower after hours. STZ is lower by about -1.5% on earnings.

• MRKT Call: Dan kicks off the first trading day of July (and new qtr) with a look at the state of the rally, and names like Nvidia, Apple, and Tesla. He’s joined by Michael Obucino of Robinhood to discuss options, event contracts, and more.

MRKT MATRIX: TODAY’S TOP STORIES

• Dow rallies, S&P 500 is flat as investors rotate out of tech to start new quarter (CNBC)

• Amazon Is on the Cusp of Using More Robots Than Humans in Its Warehouses (WSJ)

• Car Sales Hit a Wall as Tariff-Induced Shopping Spree Subsides (Bloomberg)

• Homes Are Taking Longer to Sell in US Market That Once Flourished (Bloomberg)

• Analyst Dan Ives says it will be the summer of $4 trillion market caps for surging tech giants (CNBC)

• Elon Musk’s xAI raises $10 billion in debt and equity as it steps up challenge to OpenAI (CNBC)

WHAT’S NEXT?

Some signs of rotation today into some stocks not yet at all time highs as the DJIA ended the day nearly +1% higher, as did the Russell 2000, while the tech-heavy Nasdaq 100 closed in the red by nearly -1% amidst some profit-taking in recent high flyers. That (at least for one day) rotation/divergence left the SPX stuck in the middle. As flagged in Sunday’s weekly preview, one theme to watch this week was whether investors might rotate into names that have lagged and remain well below their highs, and how that might impact stocks already above 52-week or record levels. From this weekend:

At least for today, we may have seen early signs of that dynamic: a bit of profit-taking in the tech leaders that led the charge off the April lows, and some renewed interest in areas of the market that still have room to play catch-up. While it’s too early to call it a full-blown rotation, the action suggests investors may be selectively rebalancing as Q3 begins:.

• Some sectors that saw buying today: XLF, XLE, XRT

• Some recently high flying names that saw profit taking: PLTR, HOOD, NVDA, AMD and META.

It’s possible that could be a one day event to start the new quarter but it’s worth keeping an eye on whether it becomes a trend over the next few days. For tomorrow, Tesla Delivery numbers as well as the ADP employment data:

• Wednesday July 2nd

  • Tesla Delivery Numbers (FactSet’s consensus 387,000, -13%).

  • 8:15am - ADP Employment

  • 10:15am - ECB Lagarde Speech

TODAY’S EPISODES

Watch MRKT Call’s newest episode:

• Analysis: NVDA, TSLA, AAPL, IWM, COST, TGT, NKE, GOOGL, MSFT, UBER, SPY, STZ

• Trade Update - SPY Put Spread Roll

• Your Questions Answered:

  • Why is the IWM lagging behind the S&P and Nasdaq?

  • What’s up with TGT today?

  • What do you think about NKE?

  • GOOGL? Fills in the Feb gap?

  • Is UBER a buy?

Learn more about our sponsor, Robinhood.

A MESSAGE FROM OUR PARTNER

Subscribe to the RiskReversal YouTube Channel and drop a comment/like to show your support

Want to check out past podcast episodes? Go to wherever you get your podcasts and type in “RiskReversal Media”

We want to hear your feedback! Reply to this email with any comments or questions