Week in Review: May 29 - Jun 6, 2026

Performance Snapshot

This week AlphaWizzard returned -2.5%, matching the S&P 500 (-2.5%) and holding up better than the Nasdaq (-4.5%) by 2.0 percentage points. The selloff followed Friday's jobs report, which showed 172,000 new jobs versus the 85,000 economists expected. That strength made investors expect the Federal Reserve to keep interest rates high for longer. Higher-rate expectations lifted the 10-year Treasury yield to 4.54% and pulled money out of rate-sensitive growth stocks. Year-to-date performance remains strong at +26.6% compared to SPY's +8.2% and QQQ's +14.8%. Our systematic approach continues to demonstrate disciplined risk management, maintaining a maximum drawdown of just -8.8% since inception versus -9.1% for SPY and -11.8% for QQQ.

The F1 Dashboard

Our F1 Dashboard maintained a steady CRUISING mode this week at 49% equity exposure.

Market Radar

Markets experienced a classic "good news is bad news" scenario this week, driven primarily by Friday's blockbuster jobs report. U.S. employment growth surged to 172,000 new jobs versus consensus expectations of just 85,000, nearly doubling forecasts while unemployment held steady at 4.3%. The robust data sparked fears that the Federal Reserve might need to combat an overheating economy, sending the 10-year Treasury yield spiking to 4.54% and pushing rate hike odds from 50% to 57% for somewhere later this year.

The Treasury sell-off created a risk-off environment that particularly punished growth sectors. The Nasdaq suffered its worst session since April 2025, plummeting 4.2%, while the S&P 500 declined 2.6%. Technology stocks bore the brunt of the selling pressure as higher yields made growth valuations less attractive. Meanwhile, geopolitical tensions persisted with continued U.S.-Iran conflicts in the Strait of Hormuz, though energy markets showed some stability with gas prices actually declining 17 cents week-over-week to $4.35 per gallon.

Looking ahead, all eyes turn to incoming Fed Chair Kevin Warsh, who will take his first FOMC podium on June 17th. After the most divisive confirmation in Fed history (54-45 Senate vote), investors are eager to gauge his communication style and policy stance. The personality change from Jerome Powell's tenure may initially create volatility as markets adapt to Warsh's approach to discussing economic conditions and monetary policy.

Under the Hood

Note: The portfolio was rebalanced the previous week, so positions were held unchanged through this week.

Top Contributors

Laggards

Sector Performance

Here's how the major sectors performed this week and how our stock picks in each sector compared to the sector ETFs:

*Our Return is the weighted average of portfolio holdings in each sector. Impact is each sector's NAV-weighted EOD impact in percentage points (pp). Σ Impact (-1.79pp) sits above the headline NAV (-2.50pp); the 0.71pp difference reflects cash-sleeve carry, dividends in period, and intraday execution by the daily risk overlay (the model uses end-of-day prices, while live trades happen throughout the day).

Our sector performance showed remarkable stock selection this week, with significant outperformance in Consumer Cyclical (+6.1% vs sector ETF), Financial Services (+3.8% vs sector ETF), and Technology (+1.8% vs sector ETF). While Technology remains our largest exposure at 42.6% of the portfolio and contributed -1.6% to returns, our holdings meaningfully outperformed the XLK technology ETF's -5.6% decline. Consumer Cyclical and Financial Services demonstrated exceptional relative strength, with both sectors generating positive absolute returns despite challenging market conditions. The main drag came from Basic Materials, where our holdings underperformed the sector by -9.3%, though the sector's small 2.2% weight limited the portfolio impact.

Earnings Scorecard

CIEN delivered a solid earnings beat on both EPS ($1.64 vs $1.49 expected) and revenue ($1.6B vs $1.5B expected), yet the stock declined -15.9% during the week. This reflects the challenging market environment for technology stocks, where even positive fundamentals were overshadowed by rising rates and sector rotation concerns. The earnings quality was strong, but macro headwinds dominated individual stock performance this week.

Pit Stop

This week's strongest individual performer was DOCN (DigitalOcean Holdings), up +8.9%. For our Pit Stop spotlight, we turn to STRL, which demonstrated resilience in a challenging market environment.

STRL - Sterling Construction Company Inc

Sterling Construction delivered exceptional performance this week with a +2.5% gain while most markets declined, adding +0.07% to our portfolio returns. The company specializes in heavy civil infrastructure construction and has been a standout performer with remarkable 6-month gains of +171.8%. STRL's resilience during this week's market turmoil likely reflects the infrastructure sector's relative immunity to rate concerns, supported by ongoing federal infrastructure spending and the company's strong project backlog. The stock continues to benefit from robust demand for transportation and industrial construction projects across key markets.

Week Ahead

Next week brings critical inflation data that could significantly impact market direction and Fed policy expectations following this week's strong employment report.

Portfolio Earnings

No portfolio holdings are scheduled to report this week.

Key Events

Wednesday's CPI release will be the week's defining moment, particularly after Friday's robust jobs data elevated rate hike probabilities. Markets will scrutinize both headline and core inflation prints for any signs that price pressures remain elevated, which could further support the Fed's hawkish stance. Our systematic approach remains well-positioned to navigate volatility as we maintain our disciplined 49% equity exposure, ready to capitalize on opportunities while managing downside risk through this critical data week.

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