Friday, June 26th, 2026
Pre-market futures are down at this hour, following another global-led tech selloff. This is perhaps best illustrated by another -6% drop in the South Korean KOSPI index, which has halted AI-trade enthusiasm with the investment concentration into local stocks SK Hynix and Samsung, two recently anointed trillion-dollar companies.
In any case, this week of trading had so far been established early on: sinking on the Nasdaq and, by consequence, the S&P 500, while staying in the green for the blue-chip Dow and small-cap Russell 2000. Trading 101 brings us to the notion that a rotation in thre market is afoot — taking profits from the massive gains in the AI space and putting them into more pragmatic companies, especially those demonstrating success but getting less love from the investment community until recently. Caterpillar CAT, for instance, is up +16% in the past month.
Trade & Inventory Numbers Bring a Couple Surprises
We’ve survived a week chock full of economic prints — PCE for May, Service & Manufacturing PMI, New Home Sales — and have stayed mostly on-trend throughout. The market remains agnostic (with a positive bias) of the future of the Strait of Hormuz, and the Asian hangover to the AI party has demonstrated its influence.
Advance Trade in Goods for May dropped significantly from expectations: -$105.8 billion — well off the revised -$83.0 billion reported a month ago. This is the deepest deficit since the record-low -$158 billion (from the month prior to “Liberation Day” tariffs, which wound up lasting one week in April of 2025) in March of last year. Total Exports reached -$11.8 billion, while Imports rose +$10.9 billion.
Advance Retail Inventories for May dipped 10 basis points (bps) month over month to +0.6%. Advance Wholesale Inventories last month dropped to +0.3%, half of April’s +0.6% and lower than the +0.4% expected. Historically, it’s a good sign for the economy for wholesale inventories to fall faster than the retail side. But it’s also important to understand that the closing of the Strait of Hormuz — considered a temporary condition by most analysts — has spoken loudly on inventory levels on a global scale in recent months, and they have been less than complimentary to economies around the world.
What to Expect from the Market Today and Next Week
Final June Consumer Sentiment numbers from the University of Michigan survey are due after the open today, expected to revise upward to 49.0 from 48.9 reported mid-month and 44.9 in the May tally. We started calendar 2026 in the mid-50s, but are wallowing at 10-year lows currently. Again, citing the real circumstances of the world economy — and multitudes of projections forward, including the “affordability crisis,” AI’s potential takeover and events ongoing in the Middle East — we can perhaps understand where consumers have been coming from.
Next week is Jobs Week — shortened by next Friday’s observance of Independence Day — with the modest rebound in employment data expected to continue. JOLTS for May, ADP private sector and Friday’s non-farm payrolls for June will help spell out where we are in the labor market. Based on previous accounts, we’ve gotten up from the mat of a year or so ago, where job losses per month had become commonplace.
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