The markets have sold off hard since last Friday, should we be concerned? Nobody loves drawdowns but unfortunately, they are going to happen. We think the market was way overbought and in need of a period of consolidation. We are hitting an area of the market where we believe some good buys are beginning to emerge. The trend is up and this pullback is pretty much a classic period of consolidation.

One reason we think there has been so much selling is the very much anticipated SpaceX (SPCX) IPO. In other words, we believe a lot of investors are selling to free up cash because SPCX is not marginable yet, so the only way you can buy on Friday is with cash. We are hearing that SpaceX will be added to the major index almost immediately, and this will be one of the biggest IPOs in history. 

Elon Musk-led SpaceX is set to price its IPO Thursday night, with the space company planning to sell 555.6 million shares at $135 apiece and raise $75 billion for a $1.77 trillion valuation.

Two stocks to look at are Caterpillar (CAT), which has pulled back to its 50-day MA and is hitting support, and Oceaneering International (OII), which we think could break above 40.50 in the near-term for a solid breakout play.

6-11-26-CAT
6-11-26-OII

Early Thursday, the Labor Department said the producer price index rose 1.1% in May, with an annual increase of 6.5%, both hotter than estimates. The core CPI, which excludes food and energy, rose 0.4% on the month, in line with estimates, and 4.9% year over year, cooler than estimates.

Meanwhile, the Labor Department’s weekly initial unemployment claims unexpectedly rose to 229,000 vs. 225,000 in the previous week. Claims were anticipated to fall to 215,000.