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Weekly Newsletter
📈 Strong Job Growth Fuels Rate Hike Fears
📉 Broadcom And Jobs Report Spook Markets
📊 Key Takeaways From This Week's Earnings
🏦 NBFI Stress Is Leaking Into Bank Equity
QUOTE OF THE WEEK:
“We still think that fundamentals justify what we're seeing go on in the equity market. So yes, we are constructive on our desk; we think the S&P 500 dips are buying opportunities, and we think that there's a clear path to 8000 and beyond this year." - John Flood, the head of Americas equities execution services - Goldman Sachs
KEY US ECONOMIC EVENTS NEXT WEEK:
Primal Thesis
MARKET CLOSE:
WEEKLY MARKET WRAP:
Good Afternoon. Markets took a breather this week after strong growth through out the earnings season. Strong jobs report raised fear of potential rate hike and also investors trimmed their winners to make space for upcoming mega IPOs starting with SpaceX. Fundamentally there is nothing wrong and any dip in my opinion is a buying opportunity as economy is resilient with job growth.
Below are the key things to note this week:US Labor Market Rebounds: The U.S. economy added 172,000 jobs in May, well above the 85,000 consensus forecast, signaling renewed strength in the labor market. March and April payrolls were revised higher by a combined 93,000 jobs, bringing those totals to 214,000 and 179,000, respectively. The unemployment rate remained unchanged at 4.3%, reinforcing signs that labor market conditions remain stable despite concerns earlier in the year.
FT
For the week:
CNN's Fear & Greed Index now stands at 42 (Fear) out of 100, down 18 points from last week. Details here
The top five trending stocks on Reddit are Micron, SPY, QQQ, Broadcom, and Marvel. Read More
Liquidity:
Banking Reserves + ON RRP: Banking reserves remain over $3 trillion. ON RRP balance remains immaterial.
Standing Repo Operations: The New York Fed’s standing repo operation (primarily reflecting SRF take-up) balance is $0.
Here is a summary of this week’s key economic releases:
Primal Thesis
Target Rate Probabilities for June 17th FOMC Meeting:
CURATED INSIGHTS & ANALYSIS:
Key takeaways from this week’s earnings:
Beats were universal; the reaction was not. Every company that reported cleared both the top and bottom line, and several still sold off hard. That tension is the week’s real story. When a stock has run 60% or more into its print, the result is already in the price, and merely good news becomes a reason to take profits.
AI’s center of gravity has shifted to connectivity. The standout numbers came from companies that move data rather than crunch it — custom accelerators, optics, data-center interconnect, networking. The picks-and-shovels trade has migrated from the compute layer to the wires, switches and cables that lash all that compute together.
The guide is the entire game. A raised forward outlook carried some names and a cautious one sank others, regardless of how strong the quarter just gone actually was. CrowdStrike beat and lifted its recurring-revenue outlook, yet trimmed its revenue guide and fell anyway. The market is paying for the next four quarters, not the last one.
Customer concentration is becoming its own risk premium. As AI spending pools among a handful of hyperscale’s, the suppliers feeding them inherit that concentration. Ciena’s slide had little to do with its results and everything to do with how few customers are driving them. It is a wonderful position to be in — right up until one of those customers blinks.
Durability still counts for something. Not every win this week was an AI moonshot. A medical-device maker posted its best growth year in a decade and raised its dividend for a 49th consecutive year; a hardware vendor showed that a large, skeptically received acquisition can actually run ahead of plan. In this tape, boring is a feature.
In short, this was a week where the numbers said one thing and the share prices often said another: the bar has been set so high that beating it is no longer enough — the outlook, the customer mix and the valuation now do the deciding. Time will tell whether the connectivity layer of the AI build-out proves as durable as the demand behind it, or whether the concentration powering these results becomes the thing that eventually unwinds them.
NY Fed: NBFI stress is leaking into bank equity:
A new New York Fed study finds that stress in non-bank financial institutions (private credit funds, BDCs, CLOs, and other lenders) is increasingly spilling over to banks. Banks with the highest NBFI exposure significantly underperformed peers during recent stress events, including the Tricolor and First Brands bankruptcies and Blue Owl’s OBDC II wind-down. With NBFIs now representing over 50% of global financial assets and driving much of recent bank loan growth, the research suggests that problems in private credit can create meaningful earnings, liquidity, and potentially credit risks for banks despite banks holding senior claims.
NY Fed
FRONT PAGES:
SpaceX Roadshow Launches at Fixed $135/Share</u>: SpaceX kicked off its IPO roadshow Thursday with a single $135 fixed price — breaking Wall Street convention by skipping a range — targeting a $1.75T valuation, $75B raise, and June 12 Nasdaq debut under SPCX. Pricing locks Wednesday, June 11. ~78% of the offering is pre-pledged to Musk-aligned insiders; Morningstar pegs fair value at $780B (55% below ask). Japan tranche upsized 25% to $2.5B on retail demand; Google reportedly investing $11B alongside. Read
Anthropic Confidentially Files for IPO at $965B: Anthropic filed its confidential S-1 Monday, June 1, three days after closing a $65B Series H at a $965B post-money valuation — its first time eclipsing OpenAI ($852B). Revenue run-rate has scaled to $47B from $9B at end-2025. The filing puts Anthropic ahead of OpenAI, which is "readying" its own confidential filing, with a debut possible by fall. Anthropic, SpaceX, and OpenAI now tracking as the trillion-dollar listings of 2026. Read
Trump Confirms US-OpenAI Equity Stake Talks: Trump told reporters aboard Air Force One Friday that the government is in active talks with OpenAI about a direct equity stake, calling it "very interesting" and saying the arrangement would make the American public "essentially a partner." The framework — first pitched by Altman to the administration in 2025 — would seed OpenAI's proposed "Public Wealth Fund" with donated equity. Bernie Sanders endorsed the idea Wednesday. Per NOTUS, Anthropic is not in such conversations. Extends the precedent set by the $8.9B Intel stake last August. Read
Abel's First Big Deal: Berkshire Buys Taylor Morrison for $6.8B: Greg Abel's Berkshire Hathaway agreed Sunday to acquire homebuilder Taylor Morrison for $6.8B in cash — the first major strategic deal since Abel succeeded Warren Buffett as CEO in January. Offer of $72.50/share is a 24% premium; enterprise value $8.5B with debt. Berkshire ended Q1 with a record $397B cash hoard. Buffett (now Chairman Emeritus) praised Abel on CNBC: "Greg did that faster than I could have done it." Close targeted 2H 2026. Read
US Strikes Iranian Radar Sites as Hormuz Tensions Reignite: CENTCOM shot down four Iranian one-way attack drones near the Strait of Hormuz Friday and struck coastal radar sites at Goruk and Qeshm Island in response. Iran then fired seven ballistic missiles at Kuwait and Bahrain; six were intercepted. Even so, IAEA's Grossi indicated US-Iran talks may be edging toward a preliminary nuclear framework. WTI bled back near $80 after touching $84. The August 31 deal-by date now trades at ~53% on Polymarket. Read
EARNINGS UPDATE:
Broadcom. Non-GAAP EPS $2.44 versus roughly $2.35; record revenue $22.2B, up 48%. AI semiconductor revenue hit $10.8B, up 143% and nearly half of total sales, with AI bookings above $30B; adjusted EBITDA was 69% of revenue. Q3 revenue is guided to $29.4B with AI chips at $16B, up over 200%. Shares slipped on a small shortfall in the software segment before steadying.
CrowdStrike. Non-GAAP EPS $1.10 versus $1.07; revenue $1.39B, up 26%. Record net new ARR of $256M lifted ending ARR to $5.51B; operating cash flow set a record; a 4-for-1 stock split was announced. But Q2 and full-year revenue guides landed below the Street, and shares fell about 8% despite a raised net-new-ARR outlook.
Palo Alto Networks. Adjusted EPS $0.85 versus $0.80; revenue $3.00B, up 31% (including $388M from the CyberArk and Chronosphere deals). Next-Gen Security ARR and RPO both grew sharply, though acquisition costs drove a GAAP loss. Q4 and full-year revenue guides were lifted above consensus. Shares spiked as much as 12% on the beat-and-raise before fading.
Ciena. Adjusted EPS $1.64 versus $1.46; record revenue $1.57B, up 40%. Data-center interconnect drove the quarter as AI demand outstripped supply; adjusted operating margin reached 19.5%; full-year revenue guidance was raised to about $6.3B. Even so, shares fell roughly 16% on worries about heavy revenue concentration among two cloud customers.
Hewlett-Packard Enterprise. Non-GAAP EPS $0.79 versus $0.535, up 108% and above the high end of guidance; revenue $10.7B, up 40%. The Juniper integration is running ahead of plan; AI systems orders were $1.8B against a $16.4B cumulative backlog; networking margin held at 21.6%. HPE raised full-year EPS guidance to about $3.40 and free cash flow to at least $3.5B. Shares rose.
Credo Technology. Non-GAAP EPS $1.16 versus $1.02; revenue $437M, up 157%. Non-GAAP gross margin was 68.3%, and full-year revenue tripled to $1.34B at a 47.8% operating margin. Active electrical cables remain the engine, with three hyperscalers each accounting for more than 10% of revenue; the Dust Photonics deal extends Credo into optics. Q1 is guided to $465–475M. Shares ticked higher.
Medtronic. Non-GAAP EPS $1.55 versus $1.54; revenue $9.8B, up 9.9% (6.6% organic) — the strongest annual growth in a decade. Cardiac Ablation Solutions revenue jumped 78%; the MiniMed diabetes IPO closed during the quarter; the dividend was raised for a 49th straight year. FY27 non-GAAP EPS is guided to $5.90–6.00.
EARNINGS PREVIEW:
Date | Symbol | Name | Time |
10-Jun | ORCL | Oracle Corp | After Close |
11-Jun | ADBE | Adobe Systems Inc | After Close |
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