The Wall Street Journal’s Markets A.M. newsletter on Monday raised the classic question of whether the market has peaked, after a tech stock wipeout on Friday and a spike in oil prices following renewed Middle East conflict. The newsletter invoked the famous Joe Kennedy anecdote about a shoeshine boy offering stock tips as a signal to sell.
The S&P 500 stood at 7,584.31 and the Dow Jones Industrial Average at 51,561.93 as of June 8, according to Federal Reserve data, after Friday’s rout. The newsletter, written by Spencer Jakab, said valuations are higher than they have been 99% of the time and that three of the largest initial public offerings are on tap, including highly anticipated SpaceX.
“The classic tale of someone who acted after an everyday encounter comes from Joe Kennedy,” the newsletter reported. Kennedy, patriarch of the political dynasty, told a story about receiving stock-market advice from his shoeshine boy in the late 1920s and realizing it was time to get out. Jakab wrote that the anecdote serves as a warning: “A rare few act on it and cash in their winnings near the top.”
Oil prices surged after Iranian missile attacks on Israel and the country’s response, reminding investors of ongoing geopolitical instability. Brent crude futures rose nearly 5% in early trading Monday, according to the Journal. Energy companies including Devon Energy, Occidental Petroleum, and Diamondback Energy saw their shares gain premarket, while airlines United Airlines and Delta Air Lines slid on concerns about higher jet fuel costs.
Stock futures were mixed ahead of the open. Marvell Technology and Flex were added to the S&P 500, sending their shares higher before the bell. Micron Technology, Nvidia, and Broadcom also advanced, suggesting the AI trade could rebound after Friday’s sell-off, the newsletter noted.
In European markets, Intesa Sanpaolo launched a roughly $35 billion takeover bid for domestic rival Banca Monte dei Paschi di Siena, a day after Banco BPM made a competing merger proposal. Shares of Monte dei Paschi surged 10% in Milan, while Intesa’s shares fell and BPM’s ticked up.
Strategy, the bitcoin-focused company formerly known as MicroStrategy, rose premarket as Bitcoin recovered from a slide below $60,000. Strategy shares had tumbled 24% the previous week.
The Journal’s newsletter concluded with an invitation to readers to share their own “shoeshine boy” stories, saying it would publish a selection a week later.