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- Bulls Are In Charge Until Non-Farm Payrolls
Bulls Are In Charge Until Non-Farm Payrolls
Daily Update on SPY, QQQ, TLT, USO, BTC, COIN, Mag-7, Gold, PLTR
Yimin Xu
June 03, 2025
Hi YXI friends,
We saw a fairly positive close across risk assets on Monday, despite weaknesses at the New York open. Following our daily systematic signals and macro charts (more on this in the SPY section below), we remain bullishly positioned for the next couple of days.
I do think the wind could start blowing the other way after Friday’s non-farm payrolls. This is not necessarily because how bad the jobs data will be, but due to weaker seasonality and liquidity going into next week.
If you are looking for our Systematic Signals directly, you can find them in our dedicated morning note on SPY, QQQ, BTC, TLT, AAPL, AMZN, GOOGL, META, MSFT, NVDA, TSLA (free), PLTR (free).
Let’s dive in!
Table of Contents
DISCLAIMER: This newsletter is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.
1. YXI Daily Dashboard
The Three Daily Observations
The Atlanta Fed’s model updated its Q2 GDP estimate to 4.6%, higher than its previous estimate of 3.8%. This driven by Monday’s economic data on improved growths in personal consumption expenditures growth and real gross private domestic investment.
Global liquidity is expansionary versus 1 month ago, with a weaker US Dollar.
TLT traded down 1.3% on Monday, while GLD got bidded up by 2.7%, a 2.6 standard-deviation move. Risk assets mostly opened in red but managed to recovered to green at the close.
Click here for the past YXI article explaining many of the components of the dashboard.
2. SPY, QQQ, (SPDW)
SPDW is updated every Monday.
$SPY recovered from a red open to close in green on Monday. This intraday move is constructive for the bulls. It is now on the verge of a breakout from the past two weeks’ sideways range to reach our wave (iii) target at $607.
Ok, now we get to the juicy part - DO NOT forward or share the chart below, otherwise your friends would realise you are cheating.
SPY vs US10-JP10 Yield, 20-day lag (https://www.tradingview.com/x/crP3fmkJ/)
This is a chart of SPY versus the US vs Japan 10-year yield spread. The bank of Japan turned more hawkish at the beginning of the year to address rising inflation.
As the Japanese Yen is a funding currency for carry trading, the Japanese rate hike had the impact of increasing the costs of borrowing for carry traders.
(Carry trading is when one borrows at a low cost to invest in assets with higher yields / returns. Another example is if one sells the 2-year bond (pay 3.9%) and buy the 10-year bond (receive 4.4%) to capture the spread.)
However, there is a 20 trading day lag between the US/JP yield spread and the SPY moves, where the yield spread leads the moves in equities. When the US/JP yield spread topped in January, SPY topped a month later.
Now, that yield spread is rising this week, for the next two days, into the Nonfarm Payrolls. It meanders downwards thereafter.
SPY 30-year Seasonality
The weakening in US-JP yield spread next week (with the 20-day lag) coincides with our SPY seasonality warning for a weak June performance after Nonfarm.
My playbook is to stay bullish into Thursday and scale back risks before Nonfarm Payrolls on Friday.
I expect QQQ to challenge the resistance trend line overhead and the 1.382 extension at $527 this week.
3. FOMC Projections & Rates Futures
FOMC Projections
We use the Fed Funds futures market to understand the market expectations of future FOMC interest rate decisions.
FOMC Date | Before Meeting | Post Meeting | Hike/ Cut in % |
|---|---|---|---|
06/11/25 | 4.33 | 4.33 | 0 |
07/30/25 | 4.33 | 4.23 | -0.1 |
09/17/25 | 4.23 | 4.08 | -0.15 |
11/05/25 | 4.08 | 3.93 | -0.15 |
12/17/25 | 3.93 | 3.78 | -0.15 |
01/28/26 | 3.78 | 3.68 | -0.1 |
03/18/26 | 3.68 | 3.58 | -0.1 |
05/06/26 | 3.58 | 3.48 | -0.1 |
06/17/26 | 3.48 | 3.38 | -0.1 |
There were little changes in the overnight Fed funds futures. The market expects 3-4 cuts over next 12 months.
3-month SOFR Futures Yields
4. Summary Of Today’s YXI Signals
SPY, QQQ, BTC, TLT, AAPL, AMZN, GOOGL, META, MSFT, NVDA, TSLA, PLTR
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