STRAIGHT FROM THE TRADING FLOOR
by Michael P. Reinking, CFA & Eric Criscuolo
Published on 6/1/26 (a/o 9:00 am)
Good morning,
Last week, Iran optimism (or headline fatigue) helped major US indices continue to move higher as oil prices and yields backed off. The S&P 500 was up 1.4% extending its weekly winning streak to 9 consecutive weeks, which has only happened 10X since the inception of the index in 1957. The breadth beneath the surface was mixed with tech continuing to drive the gains. Last week software, which had been left for dead a couple of months ago, was the big outperformer with the IGV up 8% for the week and >20% in May after a solid round of earnings. That didn’t come at the expense of semis/memory with the ICE Semin Index up similar amounts over those time frames but also up massively YTD. For the week energy, consumer staples and yield oriented sectors led to the downside.
The weekend came and went with no resolution on the Iran front. President Trump has reportedly requested some changes to the MOU. The two sides have exchanged some fire over the weekend which is causing a bounce in oil prices and yields albeit modest in the context of last week’s move. US futures are mixed with S&P and Dow futures both modestly higher, with continued tech strength while R2K futures are pointing to a modestly lower open.
Last night Jensen Huang gave the keynote at Taiwan’s Computex announcing the company was moving into the personal computer space which is having ramifications across the tech landscape (+NVDA/MSFT/ARM, -AMD/INTC/QCOM). He also rolled out the Vera Rubin platform, talked about the rise of agentic AI and downplayed the imminent demise of the software sector: Salesforce, Service Now, SAP and IBM (also got upgraded) are all up >5%.
M&A is the other big story this morning. Over the weekend Berkshire Hathaway announced that it would buy home builder Taylor Morrison for ~$8.5. MGM is trading higher in the pre-market after reports that Barry Diller’s IAC, which owns 26.1% of the company, is trying to put together a bid for the rest of the company.
Treasury yields at the front end of the curve are moving up a couple of basis points with oil prices. After the open final S&P Global manufacturing PMI will be released followed by ISM manufacturing and construction spending at 10:00. The USD index is moving modestly higher.
Government Yields
European equities are mixed, trading on either side of unchanged across the continent. ECB commentary continues to lean towards a rate hike in June. Software names are seeing some strength with SAP and Dassault up over 5%. German Retail sales fell from last month, about inline with estimates. UK housing prices declined more than expected from last month as well. In Asia Japan’s Nikkei gained 1% overnight. Softbank jumped 14% and overtook Toyota as Japan’s most valuable company. The company is planning $88B, 5GW AI data center investments in France according to reports. Memory maker Kioxia rose 10% with Goldman Sachs upgrading to a Buy. MOF data showed a record amount of monthly yen intervention - $73.6B- between April 28 and May 27. However, the currency is almost back to ¥160/$, the threshold that set off the intervention. Capital spending was unchanged in Q1 year-over-year falling from Q4’s 6.5% increase and missing estimates of a 4.1% gain. China was mixed with Hang Seng up just under 1% and Shanghai slipping modestly. Mainland tech was lower (Cambricon -5%) while Hang Seng Tech saw gains (Tencent, Alibaba +2%). Official Manufacturing PMI of 50.0 ticked lower from last month but met expectations, while non-manufacturing improved and beat estimates. The private Manufacturing PMI reading (RatingDog) was lower than last month (51.8 vs 52.2) but slightly above expectations. 10y bond yields dropped to a ten-month low and “panda bond” issuance (RMB debt issued by non-Chinese companies) is on a record pace. South Korea is up ~4% with tailwinds from the multitude of Nvidia product announcement headlines.
Oil prices are up but are off the overnight highs currently up ~2%, after Iran’s President said Japan ships will move through the Strait with greater ease. US natural gas prices are down ~2% giving back some of last week’s rally. The metals complex is mixed. Gold which bounced sharply at the end of the week after tagging its 200d is pulling back ~1%. However, the rest of the precious metals complex is slightly higher. Copper is outperforming up ~2.5%. Ag is mixed. Crypto continues to struggle as the Senate returns this week to try and move the Clarity Act forward. Bitcoin is down ~2% after Strategy announced that it had sold 32 bitcoins to pay the preferred dividend. Within the complex pre-IPO perpetual markets continue to capture a lot of attention.
Earnings:
Pre-Market: SAIC
After-Market: CRDO, HPE
Economic Data:
US:
Last week, Iran optimism (or headline fatigue) helped major US indices continue to move higher as oil prices and yields backed off. The S&P 500 was up 1.4% extending its weekly winning streak to 9 consecutive weeks, which has only happened 10X since the inception of the index in 1957. The breadth beneath the surface was mixed with tech continuing to drive the gains. Last week software, which had been left for dead a couple of months ago, was the big outperformer with the IGV up 8% for the week and >20% in May after a solid round of earnings. That didn’t come at the expense of semis/memory with the ICE Semin Index up similar amounts over those time frames but also up massively YTD. For the week energy, consumer staples and yield oriented sectors led to the downside.
The weekend came and went with no resolution on the Iran front. President Trump has reportedly requested some changes to the MOU. The two sides have exchanged some fire over the weekend which is causing a bounce in oil prices and yields albeit modest in the context of last week’s move. US futures are mixed with S&P and Dow futures both modestly higher, with continued tech strength while R2K futures are pointing to a modestly lower open.
Last night Jensen Huang gave the keynote at Taiwan’s Computex announcing the company was moving into the personal computer space which is having ramifications across the tech landscape (+NVDA/MSFT/ARM, -AMD/INTC/QCOM). He also rolled out the Vera Rubin platform, talked about the rise of agentic AI and downplayed the imminent demise of the software sector: Salesforce, Service Now, SAP and IBM (also got upgraded) are all up >5%.
M&A is the other big story this morning. Over the weekend Berkshire Hathaway announced that it would buy home builder Taylor Morrison for ~$8.5. MGM is trading higher in the pre-market after reports that Barry Diller’s IAC, which owns 26.1% of the company, is trying to put together a bid for the rest of the company.
Treasury yields at the front end of the curve are moving up a couple of basis points with oil prices. After the open final S&P Global manufacturing PMI will be released followed by ISM manufacturing and construction spending at 10:00. The USD index is moving modestly higher.
Government Yields
- US 2yr +3bps to 4.03%, 5yr +2bps to 4.16%, 10yr +2bps to 4.45%, 30yr +1bps to 4.98%
- USD index: +$0.20 to $99.06
European equities are mixed, trading on either side of unchanged across the continent. ECB commentary continues to lean towards a rate hike in June. Software names are seeing some strength with SAP and Dassault up over 5%. German Retail sales fell from last month, about inline with estimates. UK housing prices declined more than expected from last month as well. In Asia Japan’s Nikkei gained 1% overnight. Softbank jumped 14% and overtook Toyota as Japan’s most valuable company. The company is planning $88B, 5GW AI data center investments in France according to reports. Memory maker Kioxia rose 10% with Goldman Sachs upgrading to a Buy. MOF data showed a record amount of monthly yen intervention - $73.6B- between April 28 and May 27. However, the currency is almost back to ¥160/$, the threshold that set off the intervention. Capital spending was unchanged in Q1 year-over-year falling from Q4’s 6.5% increase and missing estimates of a 4.1% gain. China was mixed with Hang Seng up just under 1% and Shanghai slipping modestly. Mainland tech was lower (Cambricon -5%) while Hang Seng Tech saw gains (Tencent, Alibaba +2%). Official Manufacturing PMI of 50.0 ticked lower from last month but met expectations, while non-manufacturing improved and beat estimates. The private Manufacturing PMI reading (RatingDog) was lower than last month (51.8 vs 52.2) but slightly above expectations. 10y bond yields dropped to a ten-month low and “panda bond” issuance (RMB debt issued by non-Chinese companies) is on a record pace. South Korea is up ~4% with tailwinds from the multitude of Nvidia product announcement headlines.
Oil prices are up but are off the overnight highs currently up ~2%, after Iran’s President said Japan ships will move through the Strait with greater ease. US natural gas prices are down ~2% giving back some of last week’s rally. The metals complex is mixed. Gold which bounced sharply at the end of the week after tagging its 200d is pulling back ~1%. However, the rest of the precious metals complex is slightly higher. Copper is outperforming up ~2.5%. Ag is mixed. Crypto continues to struggle as the Senate returns this week to try and move the Clarity Act forward. Bitcoin is down ~2% after Strategy announced that it had sold 32 bitcoins to pay the preferred dividend. Within the complex pre-IPO perpetual markets continue to capture a lot of attention.
Earnings:
Pre-Market: SAIC
After-Market: CRDO, HPE
Economic Data:
US:
- 9:45 S&P Manufacturing PMI (final)
- 10:00 Construction Spending
- 10:00 ISM Manufacturing
- 11:30 3/6mo T-Bill Auction
- China Rating Dog Manufacturing: 51.8 vs. 51.4 cons., prior 52.2
- Germany Retail Sales: -0.3% vs. -0.4% cons., prior -0.3%
- UK Home Prices: -0.6% vs. -0.1% cons., prior 0.4%
- India Industrial Production: 4.9% vs. 3.9% cons., prior 4.1%
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