Another solid session for the market with Energy (XLE) leading the way yesterday, followed by Materials (XLB) and Technology (XLK).

Leading the charge in the Materials Sector was Albemarle (ALB), which has been pinging our radar for a week. Oracle (ORCL) remains hot with a new deal with OpenAI, and Tesla (TSLA) held onto gains after positive delivery news.

Only 57% of the S&P 500 (SPX) companies were higher, and the real action is with smaller names, especially those in the semiconductor sector. The VanEck Vectors Semiconductor ETF (SMH) is picking up momentum after breaking out.

Flipping the Script

Yesterday, momentum names were slammed!  As the session wore on, selling triggered selling, which in turn triggered selling.

The last time “Momo” was a no-no was on the DeepSeek news.

Yesterday’s Factors

Momentum rebounded yesterday, as holders vacated the safety of revenue and low volume.

Dare I say small-caps looked great (80% of the S&P 600 finished higher).

Fed Watch

Suddenly, the July Federal Open Market Committee (FOMC) gathering is in play for a potential rate cut, as economic data and non-stop pressure on Fed Powell are changing opinions.

We will know a lot more after this morning’s jobs report is released.

That Dog Will Hunt

It's been a laggard among our recent positions, but our model portfolio will get a boost from the news that Datadog (DDOG) has been selected to join the S&P 500.

Today’s Session

The June jobs report, at 147,000, is significantly above the Wall Street consensus, while the U3 unemployment rate dipped to 4.1%.  On the surface, this will not move the needle enough at the Fed to put July in play.

Key Points

• June Jobs 147,000
• Private 74,000
• Government 73,000 (state and local)

Highlights

• Construction 15,000
• Transportation & Warehousing 7,500

Red flags

• Slower private sector growth
• Labor force -130,000
• Wage growth is slowing

Solid report – the initial reaction in bond yields moving higher is excessive.

#OBBB

One Big Beautiful Bill is done!

Pro-growth aspects of the Trump agenda are now in place, and we can expect to see an acceleration of deregulation. 

This is all excellent stuff, so put a little extra mustard on your hot dogs this weekend.

 

Reminder, the market will close early today at 1 P.M. EST and there will not be afternoon note. The market will also be closed on the 4th of July.

Happy Birthday, America! Wishing everyone a great 4th of July!

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