From the desks of Stanley Katz & Lauren Madera
ON THIS DAY IN 1777, THE FLAG RESOLUTION WAS PASSED BY THE U.S. CONTINENTAL CONGRESS, FORMALLY ADOPTING THE STARS AND STRIPES AS OUR NATIONAL FLAG. MAY THE U.S. MEN’S NATIONAL SOCCER TEAM REP IT WELL IN THE WORLD CUP!
Markets advanced modestly for the volatile week ending June 12th (DJIA: +0.66%, S&P 500: +0.65%, Nasdaq: +0.70%). Markets were initially on edge after weekend missile exchanges between Iran and Israel and reports of additional U.S.-Iran hostilities. Inflation data added to the unease. May’s Consumer Price Index (CPI) rose 4.2% year-over-year, its highest reading since April 2023, driven largely by energy prices. Producer prices told a hotter story, with the Producer Price Index (PPI) up 6.5% year-over-year, its highest reading since November 2022. The European Central Bank (ECB) responded to similar pressures on Thursday, citing elevated inflation risks tied to energy costs and raising interest rates for the first time since 2023. Meanwhile, sentiment in the U.S. shifted decisively with President Trump’s decision to cancel planned strikes. Oil prices retreated and risk appetites returned, leaving markets slightly in positive territory by Friday’s close. The week’s biggest headline, however, may have been corporate rather than macroeconomic: on Friday, SpaceX completed its initial public offering, the largest IPO on record.
SpaceX’s listing is only the first of three highly anticipated initial public offerings (IPOs) expected this year, with OpenAI and Anthropic potentially following later in 2026. Parnassus Investments addressed the moment directly in “A Message about the Upcoming IPOs.” Chief Investment Officer, Todd Ahlsten, cautioned that he remains wary of these offerings given their association with what he describes as the broader “AI hype cycle,” and he expects heightened volatility to persist as each listing works its way through markets. Part of that concern stems from simple capital allocation. SpaceX’s roughly $75 billion offering alone could absorb a meaningful share of available investor capital, potentially leaving less appetite for the OpenAI and Anthropic deals that may follow. For even long-term investors, highly anticipated, headline-grabbing offerings carry valuation and timing risks that are worth weighing carefully rather than chasing.
Charles Schwab’s Liz Ann Sonders and Collin Martin used their latest On Investing podcast to share highlights from their respective midyear outlooks for the second half of 2026. On the fixed income side, Martin expects the Fed to remain on hold through year-end, given persistently high inflation and continued elevated Treasury issuance. On the equity side, Sonders highlighted that earnings remain the most powerful fundamental support under the stock market, though she noted that historically, when earnings growth has been above 20% (as it is now), forward returns have tended to be somewhat weaker, since markets often begin pricing in an eventual slowdown. She also pointed to a notable shift in market breadth. After roughly 60% to 65% of S&P 500 stocks were outperforming the index by late February, that figure dropped to the mid-teens before recovering to about a third more recently, a trend she sees as supportive of a more stock-picker-friendly environment.
Below are links to a number of third-party research reports that we have read and analyzed over the past week. We hope you will find the information interesting, useful, and worthwhile.
Parnassus:
Schwab:
Capital Group:
BlackRock:
First Trust:
Stanley Katz & Lauren Madera, Financial Advisors
ClientFirst Financial Strategies, Inc.
937-293-5500
Source for weekly stock market returns: Barron’s.
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