Things you need to know.

• S&P rallied again and is just 30 points away from kissing 6000.
• Gold down, dollar down, oil up, bonds down.
• Elon has a few things to say about the Big Beautiful Bill…
• And Trump says that XiXi is tough to deal with.
• EU and US have constructive conversations.
• Try the Flank Steak.

And yes – stocks started the day a bit lower (again) but ended the day higher, the dollar rose, bonds fell, gold fell and oil rose after a report showed us that the US labor market is just fine even in the face of all of the chaos over trade and tariffs. The JOLTS report saw a jump in job openings at +4.4% up from +4.3% which is good, quit rates fell to 2% – down from 2.1% and layoffs at 1.1% up from 1%, so in the end – what this tell us is that the labor market is steady and cautious at the same time.

Other eco data – Factory orders came in weaker than expected, Durable Goods were in line and all of that continued to fuel the narrative that rates are going down, in fact Raffi Bostic (Atlanta Fed Pres) told the crowd the now he sees 1 rate cut this year. And then Fed Governor Chrissy Waller tells the crowd that interest rate cuts remain possible later in 2025, even with potential inflationary pressures from tariffs, as he believed any tariff-driven inflation would likely be temporary. Temporary? Is that what he just said? They were all lining up against the President screaming about how tariffs were going to cause inflation to surge and destroy our buying power – What happened to that narrative? Whatever! In any event – you have to take what they all say with a grain of salt – because it depends on which way the wind blows – they are always jumping the fence, unable to make a decision and then stick to it. In the end, you only change your mind when the data changes enough to warrant it -and for now, the data hasn’t done that (IMO)! (But to remind you, I am not an FOMC member!)

And so by the end of the day – stocks were higher…The Dow gained 215 pts or 0.5%, the S&P up 34 pts or 0.6%, the Nasdaq up 156 pts or 0.8%, the Russell up 32 pts or 1.6%, the Transports gained 145 pts or 1%, the Equal Weight S&P up 58 pts or 0.8% while the Mag 7 rose 61 pts or 0.2%.

As noted the Dollar rallied by 0.5% – but remember, I described it as a ‘dead cat bounce’ after the significant decline we’ve seen in the dollar (-10%) – this morning the dollar is down 0.15% at 99.13 – support for the dollar is down at 98.

Gold – which had a $53 pt range – high of $3417, low of $3353 ended down 0.6% or $20/oz to $3376 on the rate cut narrative espoused by those two FED heads. Gold remains in the $3300/$3400 range. Any sense that inflation will continue to decline – should cause gold to retreat – trendline support is down at $3275 would represents a 3.2% decline. This morning gold is up $9 at $3385 as it continues to tease the $3400 level and investors remain skeptical about the future path of inflation.

Oil gained $1.30 or 0.8% to end the day at $63.41- leaving it solidly above trendline support at $62.19 Trendline resistance is at $65.81. This morning oil is down 20 cts at 63.21. There isn’t any new data or news on oil and OPEC is on track to increase production again in July – bringing more supply to the markets and that should help keep the lid on oil prices.

Bonds sold off a bit yesterday with the TLT down 0.2% and the TLH down 0.1%. Yields remain in line. The 10 yr yielding 4.44% and the 30 yr at 4.96%.

Eco data today is about Mortgage Apps, ADP Employment change – expected to show a 114k increase in jobs created and then we get the Services PMI’s from both the S&P and ISM. S&P is expected to be 52.3 while the ISM is expected to be 52 – both in expansionary territory – and remember we are a 75% services economy, so these are good numbers… (anything north of 50 represent expansion while anything south of 50 is contractionary). We will also get ISM prices paid at 65.1, which would be unchanged if its true. A higher number would suggest upward pressure on prices paid for services – which would be a negative while a lower number would suggest easing in prices for services and that would be a positive. And then at 2 pm – we get the FED’s beige book – which details ‘conditions’ in the 12 regional bank territories….and while this is a piece of data – it is NOT a market mover – on its own – by any stretch of the imagination.

After today’s eco data we will look at Friday’s May NFP report and that is expected to show 130k new jobs created with the unemployment rate staying steady at 4.2%.

And then after the bell yesterday – Elon makes headlines, sharply criticizing the Big Beautiful Bill – expressing a range of emotions – calling it a “disgusting abomination”. A “massive, outrageous, pork-filled” piece of legislation. Arguing that it would “massively increase the already gigantic budget deficit to $2.5 trillion” while burdening Americans with “crushingly unsustainable debt.” He went onto call out elected officials saying, “Shame on those who voted for it: you know you did wrong,” all while suggesting that voters should “fire all politicians who betrayed the American people” in the 2026 midterm elections. WOW! I wonder if the Democrats are going to welcome him back to the party! TESLA’s for everyone!

This morning US futures are up…..Dow up 65 pts, the S&P up 12, the Nasdaq up 38 and the Russell up 7.

Also – after the bell – CrowdStrike – reported softer than expected forward guidance and so the traders and algo’s are throwing a temper tantrum…taking the stock down 7% in the pre-mkt….at $453. But no one should be surprised here because the options market was predicting an 8% move in either direction…so if they beat then we could expect a gain of about $30 – taking it into brand new territory but if they sensed a disappointment then watch for a decline of $30…taking it back into the mid-range of the May month. And this morning it is down $35 at 453.71 – taking us back to last week – where I think it finds support.

Here is my appearance on Fox Business yesterday ahead of the earnings with Charles Payne where we discussed this –

https://video.foxbusiness.com/v/6373838225112

European markets are mixed – France, Germany and the Euro Stoxx all up about 0.8% while Italy and Spain are lower by 0.1%. Talks between the EU and the US are moving in the right direction – with EU trader commissioner Maros Sefcovic telling us that the meetings were ‘productive and constructive while advancing in the right direction’.

That’s much better than China – with Donny now calling Xi Xi a tough negotiator, difficult and extremely hard to make a deal with and this will only raise the temperature in the room….so I wouldn’t expect anything substantial deal with China just yet.

The S&P closed at 5970 up 34 pts… We are just 30 pts away from 6000…..the question is will be kiss and penetrate it or will it be a false alarm? My sense is it will be a false alarm….and that the mkt will continue to churn here – because it just feels tired and the RSI is bumping its head on being ‘overbot’ – so caution is warranted. Warranted does not mean SELL, it just means don’t chase anything!

Call me for a free (no obligation) portfolio analysis. 561-931-0190

Take good care,

kpolcari@slatestone.com

Sources:  Bloomberg, CNBC, Reuters, Wall Street Journal

Disclosure: The content provided in this material is designed for educational and informational purposes only, and it is important to note that it does not constitute personalized recommendations. This commentary is not nor is it intended to be relied upon as authoritative or taken in substitution for the exercise of judgment.  The comments noted herein should not be construed as an offer to sell or the solicitation of an offer to buy or sell any financial product, or an official statement or endorsement of Kenny Polcari or SlateStone Wealth.

The market commentary is the opinion of the author and is based on decades of industry and market experience; however, no guarantee is made or implied with respect to these opinions, which may not necessarily align with our firm’s standpoint.

While considerable effort has been invested to ensure the accuracy and dependability of the information presented, we must clarify that we cannot guarantee the accuracy of third-party information. Our usual sources for third-party data include channels such as Bloomberg.

Pan Seared Flank Steak w/Red Wine Shallot Sauce

This is easy to make and will present like you spent hours preparing. For this you need:

A Flank Steak, butter, garlic, s&p, Red Wine, Shallots, Balsamic Vinegar (a good thick one) and olive oil.

Begin by melting a stick of butter – now season the steak with s&p, add chopped garlic and massage. Now pour the melted butter and massage that into the meat as well. Cover and set aside.

In a small pan – melt more butter (1/2 stick) with some olive oil – so that the butter does not burn. Now toss in sliced shallots – maybe like 4 shallots in total – sauté for 5 mins or so. Now add in ¾ cup of red wine (your choice) and 2 tblsp of the nice thick balsamic vinegar. Bring to a boil and then turn to simmer. Reduce by half – will only take a couple of min. Turn off the heat and whisk in one more tblsp of butter. (Can never have enough butter)

Preheat the oven to 400 degrees.

In a large oven proof skillet – add a touch of olive oil and heat up. When ready – add the flank steak to the pan and sear on both sides – 3 – 4 mins per side. Now place it in the oven for 5 – 8 mins (depending on thickness). Remove and cover – let rest for another 5 mins.

Prepare you to serve platter with fresh kale – When ready – slice the flank steak across the grain and arrange on the platter with the kale. Looks good, no? Now you can spoon the red wine shallot sauce over it all or you can keep it on the side and let your guests serve themselves. Serve this dish with smashed roasted potatoes and a lg mixed salad.

Buon Appetito