pre mkt thoughts - 3 Jun 26

US yields broadly unchg on the day. More geopolitical murmurs out of Iran that all is not well. When will the market start to price this in? No idea. But SPCX IPO over the next 2 weeks gives us a date to anchor towards. Vol dynamics in equity space now has the put skew at one of the lowest vs calls - making it much cheaper to hedge and to buy protection, Consider variations of P/S or P/flies on indexes.
In the US session, all eyes were drawn to $MRVL which dragged up the rest of the photonics space which was underperforming over the last week. As of now, $MRVL trades at 330+, this is a 50% gain in ....1 day. For a rather large cap stock. We are in uncharted territories.
In asian markets, KOSPI was unch while NKY had an almost 3% surge led by photonics names outperforming. Memory wise, SKY Hynix has promised to double capacity in Computex, $285A Kioxia is seeking to tie more of its contracts under LTAs. $285A Kioxia is now trading at almost 80k. Last thursday it was at 57k.
Neoclouds saw a rotation within the sector with $NBIS and $CRWV trading down on the day while laggards like $IREN $CIFR $WULF had a catch up rally.
$NOK and $BB also saw strength, especially with $BB having a post hours surge past 11.7$. I continue to be bullish on both names, especially $NOK having triggered the same signals prior. A few notes ago, especially when $NOK had a dip to 14.6, i highlighted that it would be a good spot to deploy into.
Away from individual names, let me talk about where the market is broadly. Currently we are in a rotational phase of the market where liquidity is slushing from one sector to another. A hot ball of capital rotating down the liquidity stack. We see small cap stocks trading vast volumes a day. This is probably one of the highest % return time frames of a market. However the big IPOs upcoming are a sell signal to me as large players may take the chance to gross down exposure and shore up cash. Given the cheapness of put skew, this is probably the best times to be bidding protection.
Remember, you bring protection along not because you know you need it...but in case you need it!
Good luck