10 Things You Need to Know – SUPER SPEC SLOWDOWN EDITION!
What a week! Here's what happened:
- The FOMC left rates unchanged
- President Trump demanded rate cuts… again
- FOMC board member Christopher Waller echoed Trump by saying we should get rate cuts as soon as July
- We got lousy economic data including misses on retail sales and industrial production
- There were shocking rallies in select growth stocks
- Super-speculative stocks slowed down
- The Israel-Iran conflict had the world on edge
And a whole lot more!
So let's dig into the 10 Things You Need to Know About Markets Right Now:
1. The Super-Duper Spec Rally Is Slowing
We fired up our scanner to look for stocks with these attributes:
- Revenues below $100 million
- Market Cap over $2.5 billion
So forget about profits – these companies barely have any sales.
The results were pretty wild.
We came up with 23 stocks led by:
- NuScale Power (SMR): +167%
- Quantum Computing (QUBT): +142%
- D-Wave Quantum (QBTS): 107%
(numbers are as of Friday June 20 at 1:06 am ET)
And the average return this quarter is 47%.
Yes, 47%.
But over the last week, they are down an average of -0.2%.
Just look at the right column in this table – there's a lotta red in there.
So if you've been waiting for a slowdown in the wild ones, it may be here.
2. Next Week Will Be a Doozy…
Markets are supposed to be sleepy in summer… but look at next week's calendar.
It's jam-packed:
We have:
- Multiple Fed heads including Powell speaking
- Tons of key economic data reports including PCE Price Index, GDP, and Durable Goods
- Earnings from Fedex (FDX), Micron (MU), and Nike (NKE)
And that's on top of whatever headlines come out of the trade war and Middle East.
3. The Odds Don't Favor a July Rate Cut… YET
As of Friday afternoon, the CME's FedWatch tool shows that markets are pricing in a 14.5% probability of a July rate cut:
So Trump and Waller's calls for cuts aren't making a dent… yet.
If we get a wave of lousy economic data next week – especially a light PCE Price Index number – perhaps the odds start shifting.
4. CoreWeave Might Be the Most Crowded Short in the Market
For weeks, we've yammered on Twitter/X about the Put Skew in CoreWeave (CRWV) options.
As you can see on this options chain, the implied volatility on CoreWeave puts is basically double that of calls.
So traders are paying way more for CoreWeave puts than calls.
And what does that mean?
Everyone is betting against CoreWeave.
With so many people on one side of the trade, don't be shocked if CoreWeave just keeps rallying:
5. Sentiment Remains Weak
The latest AAII Sentiment Survey shows that 33.2% of investors are bullish.
This is off lows from earlier this year, as you can see on the chart:
But it's below the long-term bullish average of 37.5%.
In fact, we haven't had an above-average bullish reading since January 29, when 41% of investors were bullish.
Let's just remember that it's awfully tricky to turn sentiment numbers into actionable information for our trades.
But nonetheless, it's a sign that many investors still distrust the market.
And it's healthy because it means there's little euphoria in this market.
6. ARKK Is on FIRE
Did you notice that Cathie Wood's ARK Innovation ETF (ARKK) is up 75% from the April lows?
How'd this happen?
Good old-fashioned stock picking.
ARKK's biggest positions include Tesla (TSLA), Coinbase (COIN), Circle Internet Group (CRCL), Roku (ROKU), and Tempus AI (TEM) — all of which are up huge off the April lows.
And if we take a longer-term look, ARKK is +19% YTD and +56% over the last 12 months, crushing the SPY.
Well done Cathie!
7. Gold Failed
Last week we discussed the possibility of gold powering through $3,450 resistance.
Did it happen?
No.
Gold saw profit-taking this week, even with high uncertainty around the Middle East and on trade.
But with the way the world is going, it should be on your radar.
And on a related note:
8. Uranium Might Fill the Gap
The Global X Uranium ETF (URA) has been an absolute monster this year because of supply-demand dynamics, including AI driving growth for more nuclear power.
URA gapped up on June 16 on President Trump's executive order to support the domestic uranium industry.
However, it's now filling that gap:
Let's keep things in perspective.
URA is up 38% this year, so profit taking shouldn't surprise us.
Still, uranium bulls don't want it filling that gap.
9. Homebuilding Stocks Are a Mystery
Is it time to go bottom fishing in homebuilding stocks?
After all, housing demand is soft and supply is building.
But then we look at this 5-year chart of SPY vs. the SPDR S&P Homebuilders ETF (XHB).
And we find that the homebuilders are roughly on par with the overall market:
It feels like there's no edge here.
Yes, these stocks are well off the highs, but they're also not down so much as to be obvious bargains.
Maybe we'll get a signal from KB Homes (KBH), which reports earnings after the close Monday.
10. Candlesticks Can Fail You
The T3 house was built on a foundation of technical analysis.
Especially candlestick analysis.
But JR Romero argues that candlesticks can fail you.
Learn how and why in this extended lesson:
ATTN: Serious Options Traders
There Is Just ONE Epic Trade Every Week