The Monday Morning Playbook: Week of June 9, 2025

Good morning,

Last week, I highlighted short-term risks to the major indexes.

The thesis was, with everything else correcting since early May, tech and momentum stocks were next to potentially catch-down or consolidate.

Instead, everything else caught higher.

Good.

The biggest story last week was small caps, which broke out through multi-month resistance, hitting a 3-month high and arguably completing a major inverse head and shoulders pattern.

They aren’t leadership. But if the measured target on lagging small caps is 17% higher, what does that say about the potential for the rest of the market?

And yea yea the economy. I hear it, I get it. Plenty of reasons to be negative. But what is the market saying?

What would you say about a hypothetical economy if I told you:

1. Long-term interest rates are moving gradually higher

2. Industrials are hitting all-time highs

3. Credit spreads are near their lowest level in 20 years

4. And small-caps just hit a 3-month high

You’d probably say things in the economy are just fine.

It’s a similar story for inflation, which will be in focus this week with CPI on Wednesday and PPI on Thursday.

A lot of people say it’s a problem. But as today’s report will show, the market simply isn’t worried about it.

This week’s report will review:

• What the market is saying about the economy

• Important moves from last week

• More strength in metals

• Inflation and expectations for the Fed

• Key relative strength charts

• and more!