Is the Bromance Over?

The Markets at a Glance

Coming off the S&Ps best monthly advance since November 2023, twenty stocks reached new 52-week highs on Friday, and several among them secured fresh all-time highs. Here are some notables from that list:

• Mastercard, MA, trading at all-time high levels since its IPO in May 2006
• Nasdaq, NDAQ, trading at all-time high levels back to April 2003
• Johnson Controls, JCI, trading at all-time high levels back to when it began trading in 1940
• Raytheon, RTX, trading at all-time highs back to when the United Technologies name was adopted in 1975
• International Business Machines, IBM, trading at all-time highs back to when it began publicly trading on the NYSE in January 1962
• Microsoft, MSFT, trading at all-time high levels back to its IPO in March 1986
• Seagate Technologies, STX, trading at all-time highs back to its IPO in December 2002

With June on the horizon, there were several important developments to consider.

• China has reportedly granted temporary licenses for rare earth minerals to US automakers to alleviate disruptions in production
• UBS is affected by the Swiss government's proposal to tighten capital requirements in the aftermath of its 2023 rescue of Credit Suisse
• Bank of America strategist warned that global stocks were nearing a technical “sell” signal after 20% gains in two months
• Russia cut interest rates for the first time in 2022 as inflation eased while the ruble is among the world's best-performing currencies this year
• As it stands, traders are pricing in essentially no chance of any US rate cuts in June following the Fed's next meeting later in the month
• Zero-Day options trading accounted for 60% of the options market activity in May

Indices for the week

U.S. Indices

Dow +1.2% to 42,763. S&P 500 +1.5% to 6,000. Nasdaq +2.2% to 19,530. Russell 2000 +3.1% to 2,131. CBOE Volatility Index -9.7% to 16.77.

S&P 500 Sectors

Consumer Staples -1.6%. Utilities -1.1%. Financials +0.6%. Telecom +3.2%. Healthcare +1.3%. Industrials +1.4%. Information Technology +3%. Materials +1.4%. Energy +2.2%. Consumer Discretionary -0.6%. Real Estate +0.3%.

World Indices

London +0.8% to 8,838. France +0.7% to 7,805. Germany +1.3% to 24,304. Japan -0.6% to 37,742. China +1.1% to 3,385. Hong Kong +2.2% to 23,793. India +0.9% to 82,189.

Commodities and Bonds

Crude Oil WTI +6.2% to $64.58/bbl. Gold +0.9% to $3,346.6/oz. Natural Gas +9.8% to 3.784. Ten-Year Bond Yield -0.2 bps to 4.505.

FOREX and Cryptos

EUR/USD +0.41%, USD/JPY +0.56%, GBP/USD +0.48%. Bitcoin +0.2%. Litecoin +0.7%. Ethereum -1.6%. XRP flat.

Top S&P 500 Gainers

ON Semiconductor (ON) +19%. Dollar General (DG) +17%. Micron Technology (MU) +15%. Microchip Technology (MCHP) +12%. Arista Networks (ANET) +12%.

Top S&P 500 Losers

lululemon athletica (LULU) -16%. Brown-Forman (BF.B) -16%. Tesla (TSLA) -15%. Kenvue (KVUE) -9%. Wynn Resorts (WYNN) -8%.

Some important market profiles are presented below:

Daily Recap

Monday's Recap:

China pushed back against U.S. accusations that it had violated a temporary trade agreement. Instead, the country blamed the US for failing to uphold a prior deal.

Tensions between the U.S. and European Union also rose after the US administration announced a doubling of steel tariffs to 50%. The EU warned that this decision adds further uncertainty to the global economy and increases costs for consumers and businesses on both sides of the Atlantic.

Yet Wall Street shook off increasing tensions in global trade and the markets ended up higher on the first day of June.

It was a good week for metals with the Russia-Ukraine war and the breakdown of talks between the US and China. Copper prices had the most impressive session, pacing up nearly 5%. and gold prices raced toward 3400 again.

Crude oil prices rose after the oil producing countries decided to raise output for July in their latest meeting. Goldman Sachs, JPMorgan, and Morgan Stanley warned that the dollar will continue to slide lower this year.

American consumers appear to be in a savings mood as their emergency cash reserves appear to be bulking up.

Notable movers to the upside:

• Meta Platforms popped appreciably on a report in the Wall Street Journal that the company is going all-in on using AI to create advertisements.
• Applied Digital skyrocketed almost 50% after the data center operator announced two 15-year leases with CoreWeave.
• CoreWeave rose nearly 10% when its alliance with Applied Digital was announced.
• BioNTech soared almost 20% on news of a multibillion-dollar collaboration with Bristol Myers Squibb to develop cancer treatments.
• Blueprint Medicines exploded over 25% after the biopharma company agreed to be acquired by Sanofi.
• CLF / STLD / NUCOR all surged in response to the newly raised steel tariffs.
• ULTA, a beauty products company reported a good quarter resulting from effective turnaround efforts and continued consumer demand.

Notable movers to the downside:

• Tesla slipped over 3% after vehicle deliveries across Europe continued to drop, including a 67% decline in France last month.
• Auto stocks dropped from fears of higher pricing due to hikes in steel tariffs.
• Sports-betting stocks, DKNG and others, dropped after the state of Illinois decided to tax the companies $0.25 per wager made on their apps.
• Advertising stocks sank on Meta Platforms' announcement of AI advances in its advertisements.

Tuesday:

Stocks kept the June momentum going yesterday, powering all three indexes up as new data showed the US job market is staying resilient amid trade tensions.

Elon Musk severely criticized President Trump's tax proposal, calling it a "disgusting abomination".

Job openings soared to 7.39 million in April, way above consensus estimates and a good sign of a healthy labor market.

Initially, investors appeared to still be jittery due to a looming pause date in tariffs between the US and China but later sentiment soared on better-than-expected jobs numbers and the US markets soared. The street appeared to be seeing past the high stakes game of parker between the US and China though a trading range between 5700 and 6200 seems to be developing.

The U.S. growth outlook was downwardly revised to just 1.6% this year and 1.5% in 2026. In March, the Organization for Economic Cooperation and Development (OECD) ECD was still expecting a 2.2% expansion in 2025. The fallout from Trump's vacillating tariff policies, elevated economic policy uncertainty, a slowdown of net immigration and a smaller federal workforce were cited as reasons for the latest downgrade.

Notable movers to the upside:

• DG shares surged more than 15% after the company beat quarterly earnings raised its full-year forecast. The shares are up nearly 50% for the year.
• PINS rose nearly 5% after getting an upgrade from JP Morgan.
• JOBY, an electric air taxi manufacturer, rallied after an announcement of a entering the Saudi Arabian markets.
• NVDA is back to being the world's most valuable company after its rising stock price.
• SIG, a jewelry company, proved once again that diamonds are forever. The shares rose over 10% after great quarterly earnings announcement.
• CRDO, a high-speed connectivity solutions provider, exploded nearly 15% thanks to crushing earnings forecasts after it tripled its sales last quarter.
• MLTX, MoonLake Immunotherapeutics, soared nearly 20% on news of a possible acquisition by Merck.

Notable movers to the downside:

• BMBL, an online dating app, dropped due to a PJ Morgan downgrade due to fears of losing market share to its competitor, Hinge.
• HIMS, a healthcare company, fell on news that it will acquire European digital health platform Zava.

Wednesday:

Traders sold Nasdaq 100 futures early in the day following a bad ADP job report but buyers stepped in quickly and rising prices trimmed losses to trade positive at the opening bell.

Notable movers to the upside:

• THOR, a recreational vehicle manufacturer, posted better-than-expected earnings and shares rose almost 5%.

Notable movers to the downside:

• Dollar Tree (DLTR) fell over 9% after the retailer projected weak earnings because of tariffs.
• CrowdStrike (CRWD) plunged 8% after Bank of America (BAC) downgraded the stock.

Thursday:

All gloves appear to be off as the two MAGA "dads" appear to be headed for a nasty divorce.

Shares of Tesla fell 14% on Thursday as President Donald Trump threatened to pull government contracts for CEO Elon Musk's companies, escalating a war of words. The move dropped the EV maker $152 billion in value, putting it below the $1 trillion benchmark

Tesla is facing more fundamental problems, with plummeting sales of its electric vehicles in major markets in Europe and a declining brand reputation in the West.

Tesla is also under pressure to launch a long-delayed, driverless ride-hailing service.

Economic hopes took another hit today after jobless claims rose for a second straight week to an eight-month high. Markets fell on the bad news.

It appeared that crypto is bringing its signature unpredictability to traditional finance when a stablecoin stock is paused for volatility twice in its first few minutes of trading. CRCL, Circle Internet Group, debuted at twice its IPO price on the NYSE. Could this mean that investors are welcoming crypto companies? CRCL closed up over 160% on its first day of trading.

Circle can be a good bet for a crypto bull. The company is profitable, its earnings have been rising, and demand for the stock is strong. It does face competition, particularly from Tether. Tether issues USDT, the largest stablecoin on the market and its market cap dwarfs that of Circle's at $158.8 billion.

The European Central Bank cut its interest rate by 25 basis points.

Notable movers to the upside:

• Planet Labs exploded nearly 50% thanks to the satellite imagery stock beating Wall Street forecasts, posting its first quarter of positive cash flow and record revenue.
• MongoDB soared well over 10% after the software company crushed analyst estimates for the last quarter and projected better-than-expected earnings for the next quarter.
• Five Below continued the trend of discount retailers beating expectations, rising over 5% on an impressive beat-and-raise earnings report.
• Scott's MiracleGro rose 11.04% after the fertilizer company reiterated its healthy forward guidance.

Notable movers to the downside:

• Tesla fell yet again today, down another 15%, thanks to a growing rift between CEO Elon Musk and the US President.
• Procter & Gamble fell almost 2% after the consumer goods giant announced it will slash 7,000 jobs over the next two years.
• Brown-Forman tumbled almost 20% on poor earnings for the alcohol maker and worse-than-expected forecasts for the coming year.
• Kimberly-Clark lost over 2% due to an agreement to sell a majority stake in its international Kleenex tissue business.
• PVH plunged nearly 20% after the parent company of brands like Calvin Klein beat earnings estimates last quarter but predicted a much worse quarter ahead.
• ChargePoint Holdings lost almost 25% market cap due to a rough quarter.

Friday:

Stocks jumped Friday after the latest nonfarm payrolls data came in better than expected, easing concern the economy faces an imminent slowdown. It appears that the labor market is holding up well, despite some slowing growth trends. In addition, the feud between Elon Musk and the US president appeared to be in a bit of a lull state.

The S&P surpassed the 6000 level for the first time since February and stocks closed out the first trading week of June in positive territory.

Treasury yields ticked up in response to the solid May jobs report and the US president again urged the Chairman of the Federal Reserve bank, Jerome Powell, to cut interest rates by a jumbo-sized full point to pour "rocket fuel" on the economy.

What is at stake for Elon Musk?

The success of Musk's companies – which have received at least $38 billion in lifetime government funding, per the Washington Post – largely hinges on being in Uncle Sam's good graces. Investors are worried the fight sets Tesla up for potential regulatory hurdles and shunning from Trump supporters. The EV maker relies on federal subsidies to build charging infrastructure. It also requires government approval for its autonomous car efforts, the backbone of its long-term growth plans.

The proposed US tax bill aims to broadly eliminate a $7,500 EV credit by the end of 2025, which could dent Tesla's annual profits. Another bill aims to block California's ban on gas-powered cars by 2035, draining Tesla of another $2 billion in net income.

Tesla's upcoming self-driving taxis are getting caught up in red tape, having just received a fresh probe from the National Highway Traffic Safety Administration over how its robotaxis will perform in inclement weather. Tesla's promise of a self-driving feature accounts for a significant portion of its valuation.

Musk's brain implant company Neuralink needs the FDA to greenlight its products.

X bonds dropped in value amid the Musk – Trump fight, creating potential fundraising complications for its subsidiary xAI.

What is at stake for the US government?

Finding a replacement for Space X as a vendor. The company is set to receive $1.1 billion from NASA this year, while its Starlink satellites serve the Pentagon and the government's rural internet expansion efforts.

Notable movers to the upside:

• Rocket Lab, a SpaceX competitor, received an upside boost with the US president's threats to cut off SpaceX governmental contracts.
• Omada, a digital chronic care saw its shares jump up more than 30% after an IPO price of $19/share.
• CRWV, an AI cloud computing company, tied up with Applied Digital and saw its stock go up over 8%. CRWV is up over 150% in the last month.
• TSLA, the electric vehicle maker, recovered by more than 6%, a day after plunging 14% as CEO Elon Musk and the US president were engaged in a very public feud.

Notable movers to the downside:

• WOOF, the pet food company, slumped 22%.
• AVGO, the giant semiconductor company, dipped nearly 5% on weak cash flow for the second quarter. Still several analysts raised their end-of-year price targets.
• LULU, the athleisure clothing retailer, dropped over 20% after missing earnings estimates. The company continues to maintain strategic price increases to mitigate the effects of higher tariffs.
• DOCU, the electronic signature company, plunged nearly 20% when it cut its full-year earnings forecast.

Considerations for the Coming Weeks

Only a handful of stragglers are due to report quarterly earnings. The notable ones might be GME, CHWY, ADBE and ORCL.

AAPL will be in the spotlight with its annual developer's conference, WWDC 2025.

The economic data calendar is quite full.

The US Treasury Secretary and other officials are scheduled to meet with their Chinese counterparts in London for continuing trade talks. The two countries have argues over numerous issues and China continues to accuse the US of impeding the progress of these talks.

Strategies to Consider

1. AVGO: after a big run-up before earnings and then disappointing earnings results, an iron condor may be in order. IV is still attractive for selling premium.
   For July 18th expiration, sell the 200/220/280/300 iron condor.
   premium: around $400
   buying power: $1600
   Return on investment: 25%
   POP: 68%
   probability of 50% profit: 83%
   
2. LULU: after a large drop following devastating earnings, IV is still attractive enough for selling premium.
   For July 18th expiration, sell the 220/240/300/320 iron condor.
   premium: around $400
   buying power: $1600
   Return on investment: 25%
   POP: 68%
   probability of 50% profit: 83%

In Case You Didn't Already Know This...

Now that Uber and its ilk have made the luxury of a personal driver like Miss Daisy's available to the masses, the next big thing is starting to gain popularity: not having a driver at all.

Alphabet-owned Waymo recently surpassed 10 million paid driverless rides, and is poised to see 20+ million by the end of the year, the Wall Street Journal reports. And that's with the self-driving taxis only available in a handful of cities, including tech's spiritual home of San Francisco. Its rise has been rapid as people in those cities stopped seeing cars with no one in the driver's seat as a threat and started seeing them as a convenient way to get around. Per the WSJ:

• There were 1 million paid Waymo rides as of 2023, and 5 million by the end of 2024.
• People were paying for 10,000 Waymo rides per week in August 2023. From there, the number grew from 50,000 per week in May 2024 to 100,000 per week in August of that year. It now sits at more than 250,000 per week.

That means riders beyond early adopters are now willing to hop in a driverless cab. A recent viral post on X suggested that data firm YipitData showed Waymo going from 0% to 27% of San Francisco ride shares between August 2024 and April 2025. Bloomberg reported in April that the same data firm found 20% of Uber rides in Austin during the last week in March were Waymo rides, just weeks after a partnership between the two companies rolled out there.

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