MARKET WRAP

SPX briefly kissed the 6000 level on the heels of news of more US/China calls but quickly sold off mid day, driven by what was at one point a -20% intraday decline in Tesla shares. TSLA ended the day -14% as the recent unraveling of Elon Musk’s once-chummy relationship with the White House turned into a full on public brawl today. It was entertaining, but not for TSLA shareholders.

On the day SPX -0.5%, QQQ -0.8%, IWM flat. Elsewhere, the US10YY edged higher, now 4.40% while DXY was volatile but ended the day flat, now $98.73. Tomorrow morning is the “all important” Jobs Number. More on expectations and expected moves below.

After hours: AVGO is lower by about -2% on earnings, well inside its expected move so far. LULU stock is getting wrecked after hours, down about -20%. SPY and QQQ are both slightly lower from their close.

• MRKT Call: Are stocks as overbought now as they were oversold in early April? What will the Fed do over the Summer? A look at the regional and money center banks, silver, AVGO, LULU, a SPY put spread and more.

• RiskReversal Pod: Dan is joined by Deirdre Bosa, host of CNBC's Tech Check, where she previews Tesla's upcoming Robotaxi event and talks competitors like Waymo. Also, the broader AI landscape, Meta's AI shakeup and strategic moves by companies like Perplexity and Samsung, and new AI meme stocks like Core Weave.

MRKT MATRIX: TODAY’S TOP STORIES

• S&P 500 turns lower as Tesla shares slide, traders weigh Trump-Xi talk (CNBC)

• Elon Musk Urges Americans Take Action to ‘Kill’ Trump Tax Cut Bill (Bloomberg)

• European Central Bank trims interest rates after inflation dips below target 

• Global Bond Auctions Show Weaker Trend as Fiscal Angst Grows (Bloomberg)

• Financial stocks seem to be losing momentum and show signs of weakness (CNBC)

• Microsoft CEO Says OpenAI Alliance Changing But Remains Strong (Bloomberg)

• Procter & Gamble to Cut 7,000 Jobs (WSJ)

• Trump Signs Travel Ban for 12 Countries Including Afghanistan (Bloomberg)

WHAT’S NEXT?

All eyes are now squarely on tomorrow’s jobs report, which is widely seen as catalyst for treasury yields, and possibly the next leg for equities. The labor market data so far this week is already beginning to set a tone, with treasury markets whipping around, reflecting shifting expectations around rate cuts and the reasons why. The dollar has been just as jumpy, caught between softening economic signals and global policy uncertainty. 

One thing to watch for with tomorrow’s number is the reaction in rates should the number come in light. If the move in treasuries implies a more aggressive Fed on lowering rates, traders may be forced to reckon with the reasons why. In other words, be careful what you wish for, as a dovish pivot driven by economic softness might not be the bullish setup equity investors are dreaming of. What reaction we see in equities off a strong number would also be interesting as that’s likely to send yields higher. The consensus estimate for tomorrow is about 130k jobs added and a 4.2% unemployment rate.

Friday, June 5th

• 8:30am - NFP Jobs Number

Expected Moves:

• SPX: 0.8% 

• TLT: 0.9%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: How To Profit If $SPY Moves Lower

• Analysis - SPX, US10YY, TLT, KRE, BKX, WFC, NKE, AVGO, LULU, V

• Earnings Previews: AVGO, LULU, 

• Live Trade: SPY June Put Spread +590p/-570p

• SoFi Report: Hyperscaler CapEx

• Call of the Day: Visa V upgraded at Mizuho

• Your Questions Answered:

  • PAAS as a silver play? Already had a big run, $30?

Learn more about our sponsor, SoFi.

Watch RiskReversal Podcast’s newest episode: Trust, Safety & Uber’s Trojan Horse: Can Tesla Catch Up to Waymo? | $TSLA $UBER $AAPL $META

Dan Nathan and Deirdre Bosa, host of CNBC's Tech Check, delve into Tesla's upcoming Robotaxi event, comparing its approach to self-driving technology with that of competitors like Waymo. They also cover the role of trust and safety in the adoption of autonomous vehicles and the financial implications for Tesla. Additionally, the conversation shifts to the broader AI landscape, touching on Meta's AI shakeup and strategic moves by companies like Perplexity and Samsung. The episode ends with a discussion of meme stocks, particularly Core Weave, and its position in the generative AI market.

Learn more about our sponsor Betterment and RBC Capital Markets.

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