Good morning, investors. It’s Monday, and the New York Knicks are NBA champions for the first time in 53 years.
The city has been celebrating all weekend. Pandemonium and joy in every bar and restaurant, across every street and avenue, on each rooftop and subway car.
To every Knicks fan, congratulations. Long time coming.
Now let’s talk stocks.
Tiny, big momentum
SpaceX pulled off the largest IPO in history the same day that small-cap stocks smashed records of their own.
The Russell 2000 — which includes the most economically-sensitive companies — closed at an all-time high in what was arguably the most exuberant day of the bull market yet, reinforcing the notion of a broadening rally.
The market proved it could absorb a new $2 trillion company in SpaceX without much strain.
The fact that small-caps have shown the strength they have with IPOs rattling indexes and the Fed weighing potential rate hikes is unusual and notable.
Compared to large incumbents, smaller companies need cheap money, easy credit, and economic tailwinds to work well.
They are also the first to flash warning signs when a recession looms.
Yet measured against both the S&P 500 and the Magnificent Seven, small caps just hit their strongest level since 2024.
What’s more, the Russell 2000 broke its relative line to a new high for this entire cycle.
Even with the handful of recent negative trading days, the S&P 500 has climbed 10 of the last 11 weeks.
Even the one negative week at the start of June was mild enough that there were still more advancing stocks than decliners.
When the average stock keeps climbing through a bump in the index, it doesn’t typically signal the end of a bull market.
As an investor and writer, I do my best to keep things simple.
And the story Friday is compellingly optimistic — the riskiest, most economically-sensitive part of the market just chose the biggest, most exuberant day of the year to make a new high.
Market snapshot
Elsewhere
🎯 The DOJ cleared Paramount Skydance's $111 billion takeover of Warner Bros Discovery. Antitrust officials approved the deal without conditions after an eight-month review, but California and New York attorneys general are preparing a counter-lawsuit. (Axios)
🛢 Brent crude fell to $87.33 in its lowest close since early March. Oil shed 3.4% Friday as talks of a peace deal with Iran ramped up and traders turned more optimistic on the Strait of Hormuz reopening. (CNBC)
Rapid-fire
The success of SpaceX’s IPO is a reassuring sign for the bull market (Yahoo Finance)
Meta’s Zuckerberg said the company made “mistakes” in its AI workforce reorganization (Reuters)
Charlie Javice is reportedly seeking a pardon from President Trump (CNBC)
The first AI World Cup is raking in billions of dollars already (Yahoo Finance)
Top quant explains how AI disrupts 78% of the stock market (Full Signal)
Home prices are soaring in rural America as buyers flock to the suburbs (Yahoo Finance)
All the details and data behind the SpaceX IPO (Opening Bell Daily)
This overlooked AI storage stock has 64% upside with memory demand soaring (Best Ideas Club)
Michigan consumer sentiment rebounds to 48.9 from record low (Yahoo Finance)
On this day
🗓 June 15, 1934: US lawmakers passed the Federal Credit Union Act, clearing the path for President Franklin Roosevelt to sign the bill into law to create the federal credit union system that today holds more than $2.3 trillion in assets.
Last thing
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