⏱️ 30 seconds, then get on with your Sunday
🔥 Inflation came in hot. The Fed's favourite gauge (PCE) hit 4.1% — highest since 2023. The Fed has flipped from "cuts coming" to "we might hike." That's the regime change.
📉 Tech got hit hard. Nasdaq −4.6% on the week as the AI trade unwound. But money didn't leave — it rotated into value, small caps and the Dow (which actually rose). Healthier than it looks.
🛢️ Oil cracked. Brent down 10%+ as Middle East tensions eased. Good for inflation, bad for energy stocks.
📅 Big week ahead: US jobs report Thursday (pulled forward — markets shut Friday for July 4th). It's now a "will-they-hike" referendum.
🍔 Deep dive: Wendy's became the week's meme squeeze (+42% intraday). We break down whether there's anything real underneath it.
📊 What just happened (the week in review)
The one thing that matters
Inflation is back, and the Fed has changed sides. May core PCE hit 3.4%, headline 4.1% — the hottest in years. Under new Chair Kevin Warsh, the Fed has scrapped its 2026 rate cut and is now hinting at hikes. Markets went from pricing cuts to pricing a 60%+ chance of a hike by September. Everything else this week flows from that.
The rotation, not the crash
The headline looked ugly — Nasdaq −4.6%, its worst run since February — but this wasn't panic selling. It was a rotation:
💻 Out of: crowded AI/chip mega-caps (Apple −6% on price hikes, chips dumped despite Micron's blowout earnings).
🏦 Into: value, healthcare, financials and small caps. The Dow actually rose ~0.6% and hit a record mid-week. The Russell 2000 (small caps) is up ~21% this year vs the S&P's ~10%.
📐 Breadth stayed healthy — 63% of S&P stocks are above their 50-day average, up from 50% at the start of June. Broad participation usually beats a narrow tech-only melt-up.
Why it matters for you: when leadership rotates like this, the easy money in one corner (AI) gets harder while opportunity opens elsewhere. Chasing the falling knife in chips and ignoring the strength in value would be fighting the tape.
Scoreboard
Market | Week | Note |
|---|---|---|
S&P 500 | ~−1.8% | Closed 7,354 |
Nasdaq | −4.6% | AI unwind |
Dow | +0.6% | Record mid-week |
FTSE 100 | +1.4% | Near record highs |
Brent crude | −10%+ | Below $72 |
Gold | −5% | 4th down week on dollar strength |
Bitcoin | ~−2% | ~$60k, ETF outflows |
🇬🇧 UK corner
Inflation held at 2.8% — better than feared, but a July energy price cap rise should push it up later this year.
PM Keir Starmer resigned on 22 June, triggering a Labour leadership race (Andy Burnham the frontrunner). Markets shrugged — it was already priced in. Watch: whether the next leader keeps Reeves's fiscal rules. Looser borrowing → higher gilt yields → pressure on domestic UK stocks.
📅 The week ahead (29 June – 4 July)
It's all about jobs — and it's a short week. 🇺🇸 US markets are CLOSED Friday 3 July for Independence Day, so liquidity thins from Thursday afternoon. 30 June is also end of H1, so expect quarter-end rebalancing flows.
The main event:
🎯 Thursday 2 July — US Jobs Report (pulled forward from Friday). Expected: ~100k–150k new jobs, unemployment ~4.3%. Hot number + strong wages → hike odds jump. Weak number → the only thing that revives cut hopes. This is the week's pivot point.
Also on the calendar:
🇺🇸 Wed 1 Jul: ISM Manufacturing + ADP jobs (Thursday's appetiser).
🇪🇺 Tue 30 Jun: Eurozone flash CPI (~2.3% expected).
🎤 ECB Sintra forum (Mon–Wed): Fed Chair Warsh speaks Wednesday — his first big international appearance. Watch for hike signals.
Setup takeaway: thin holiday liquidity + a market-moving jobs print = a recipe for sharp moves. Smaller size around Thursday is just sensible risk management, not a forecast.
🔍 Deep Dive: Wendy's (NASDAQ: WEN)
The meme squeeze of the week — is there anything real under it?
What happened: Wendy's exploded up to +42% intraday Wednesday (closing +25.6% at $7.87) after a WallStreetBets "save Wendy's" campaign collided with a beaten-down, heavily-shorted stock. Trading was halted for volatility. It closed the week at $7.80. 🍟
Why it caught fire — three ingredients:
🧑💼 A real catalyst: new CFO Steve Cirulis, who helped engineer the Potbelly turnaround (its stock rose 500%+). Gave the crowd a story to rally behind.
🩳 A crowded short: ~34–38% of the float was short (sources differ). Beaten down ~40% over the year to a multi-year low — classic squeeze fuel.
💰 Buyout chatter: activist Nelson Peltz / Trian own ~24% combined and have signalled they'll explore "value-enhancing transactions." Take-private speculation keeps simmering.
But the business is genuinely struggling:
📉 US same-store sales −7.8% last quarter — the standout red flag. Roughly five straight quarters of US declines.
💵 Profit fell 42% year-on-year; margins squeezed by beef and labour costs.
🏪 Closing ~200–350 US stores. Management is openly calling 2026 a "rebuilding year."
McDonald's and Burger King are eating its lunch in the value wars.
⚖️ The two sides
Bull case 🐂
Dirt cheap, ~7% dividend yield, credible new turnaround leadership, activist optionality, and a short base that can fuel further squeezes.
Bear case 🐻
The pop is sentiment, not fundamentals. Negative comps, heavy debt (~$2.7bn), a thin dividend cushion (72% payout), and a cold analyst crowd (median target ~$7.84 — basically where it already is).
📐 Levels to watch
Level | Value |
|---|---|
Friday close | $7.80 |
Support | ~$7.02–$7.27 |
Resistance | ~$8.25–$8.89 |
Key downside | $6.07 (multi-year low) |
Catalysts: any Trian buyout news · WallStreetBets volume holding or fading · next earnings (mid-August).
The honest read: meme squeezes are violent in both directions and can reverse hard. With 10%+ daily swings and volatility halts, this is a name where position sizing and a defined stop matter far more than picking a direction.
🐢 Swing of the Week: Johnson & Johnson (NYSE: JNJ)
After a powerful breakout from a multi-month base, Johnson & Johnson is showing a classic Turtle trend-following setup. Rather than chasing the initial move, the plan is to wait for a controlled pullback into support before looking for continuation.
New Turtle Setup
Level | |
|---|---|
Style | Turtle Swing |
Entry Zone | $248.19 – $254.66 |
Stop Loss | Below $220.84 |
Target 1 | $305.59 |
Target 2 | $381.99 |
Risk/Reward | ~1:1.5 (Target 1) |
Why it's on the watchlist
Trend is intact with higher highs and higher lows.
Healthcare sector rotation is gaining traction.
Political tailwind from Trump administration focus on domestic manufacturing.
The setup: Patience is key. Wait for price to retrace into the entry zone. If price closes below $220.84, the setup is invalidated.
🧭 The Setup, summed up
The market regime shifted this week: inflation up, Fed hawkish, oil down, tech rotating. The jobs report Thursday is the key that either confirms the hawkish story or cracks it. Into a thin holiday week, patience and smaller size beat hero trades.
Trade the plan, not the FOMO. See you next Sunday. 🫡
📋 Educational content only. Alpha One provides swing-trading education, not personalised investment advice. Nothing here is a recommendation to buy or sell any security. All trading carries risk.