Market Recap: JOLTS Relief Rally, SMID Squeeze, and NVDA Back on Top

Markets rallied after stronger-than-expected JOLTS data eased fears ahead of Friday's NFP report. Small caps and laggards surged in a broad beta chase, while NVDA took back the top spot from MSFT. Institutional flows showed a clear rotation, with hedge funds buying Industrials and REITs, and long-onlys unloading Tech and Staples. Yields jumped, gold dropped, and VIX dipped—but volatility risk remains into Friday’s key print.

Today’s session gave the market something it desperately needed: a reason to chill out about Friday’s NFP report.

The JOLTS data came in hot (7.391M vs. 7.1M expected), easing pressure and setting the tone for a relief rally.

🧠 Sentiment Shift: JOLTS Beats, Retail Buys, Small Caps Surge

• The Small Cap index surged, breaking above its 100DMA for the first time in weeks. • Retail sentiment was red-hot. Buyers stepped in early and stayed active throughout the day. • NDX broke out of a multi-week range, now just 2.5% off all-time highs, despite 3 of the Mega 6 still down YTD. • And guess what? NVDA reclaimed the crown—it’s now back above MSFT as the world’s most valuable company.

🔄 Rotation & Flow: The Great SMID Beta Chase

This wasn’t just large-cap strength. It was a SMID cap squeeze, a laggard rally, and a beta chase all in one.

Per Goldman’s Peter Callahan: • Russell 2K Tech outperformed NDX by 180bps—top 5 spread of the year. • TMT momentum got crushed, underperforming by 230bps. • “Most Shorted” + TMT laggards surged +6% off Monday’s lows. • Investors rushed into names off 52-week lows, signaling a classic catch-up squeeze.

📊 Institutional Flow Breakdown

Goldman Sachs Desk Net Flow: 📉 690bps better to sell, driven by long-only supply in: • Consumer Staples • Consumer Discretionary • Information Technology

Long-Onlys: • 30% sell skew • Buying Real Estate, Utilities, and macro hedges • Selling Staples, Discretionary, Tech

Hedge Funds: • 550bps better to buy • Focused on Health Care, REITs, Industrials • Sold Comm Services and macro expressions

🔁 Bottom line: this was a day of sector reshuffling, catch-up rotation, and strategic unwinds.

💵 Macro Rundown: Yields Jump, Dollar Rebounds, Gold Sinks

• Treasury yields surged despite mixed data. • Factory orders were weak • JOLTS strong • Atlanta Fed’s Bostic came in hawkish, surprising the market “I’m not declaring victory on inflation yet.” – Bostic • Rate cut expectations for 2025 & 2026 dropped sharply • Middle of the curve underperformed • Yields reversed overnight gains and pushed higher • The dollar bounced hard off last week’s lows • Gold took the hit, falling in lockstep • Bitcoin? Wild price swings again—dropped and then launched 🚀 • Oil stayed elevated, WTI > $63 • Driven by geopolitical risk + strong labor market read

⚠️ VIX and Volatility Outlook

• VIX dropped to 17, but don’t let that fool you. • Friday’s payroll report is the wildcard. • A beat? Could fuel new highs or trigger profit-taking if rate cut odds shrink further. • A miss? Could spark downside volatility, especially with yields running hot.

Vol remains in play. Stay nimble. Watch the print.

What did GAR do today?

🟢 Options Recap: Nailed a nice win today at the open on HOOD, locking in gains on the 6/16 $70 calls. A new trade in HIMS was also added to the board, set to play out over the next couple of weeks. We're still holding open positions in PLTR and AMZN as we head into Wednesday's session.

📈 Futures Recap: The futures team nailed a win earlier today—our ES long from 5960 hit TP3 before trailing stops were moved up to 5985 and closed out on the pullback. Clean execution and a strong Tuesday!

📌 Final Takeaways:

• JOLTS beat = NFP fear pause • SMID, laggards, and “most shorted” names caught a major squeeze • NVDA back on top of the world • Long-onlys rotated out, hedge funds rotated in • Yields rising, rate cut expectations cooling • Dollar up = gold down • Eyes on Friday’s data to set the tone for June

This was a position reset day. The next move comes Friday. Stay sharp, stay tactical. — Carlos G GAR Capital