Good morning and Happy Friday. US equities were broadly higher yesterday despite Tech weakness. Rotational activity was evident as lagging sectors like Healthcare and Financials led the way higher. Oil and Treasury yields fell as Iran headlines leaned positive, providing a tailwind for the broader market and especially small caps as the Russell 2000 outperformed. The equity strength didn’t spill over into Bitcoin however, as the asset continued to slip and approach $60K. Outside of the payroll data news flow was relatively mild. S&P decided not to change its index inclusion rules to provide a fast track into the index for huge expected IPOs like SpaceX, Anthropic and OpenAI.

Heading into this morning’s May payroll report, equity futures were under pressure overnight though Dow futures were modestly higher. Tech/semis continued to slump in the pre-market (along with global peers). Treasury yields were flat. The jobs data came in hot, doubling the consensus estimate while the prior two months saw upward revisions totaling 93K. The 2y went from flat to +10bp. S&P futures fell to session lows on the jump in rates, tried to bounce but headed back to session lows.

Oil prices continue to drift a bit lower after peaking on Wednesday. ICE Brent is hovering just under $95 and its 50d ma after peaking ~$99 earlier in the week. The metals complex was hovering around unchanged ahead of the jobs report but has moved lower since. Crypto is pressured by those same dynamics but had already been moving sharply lower throughout the week and there is a new issue creating a bit of a crisis of confidence. Zcash (ZEC), a "privacy" token, is falling ~40% after a counterfeiting vulnerability within the tech stack was identified with the help of Opus 4.8. Bitcoin is down ~2% and 15% for the week holding just above the YTD lows ~62k. Ethereum is hitting new YTD lows ~1,650 down >5% and nearly 20% for the week.