The violent repricing we witnessed on Friday was not an aberration; it was the market confronting a reality it had desperately tried to ignore. The May jobs report—printing 172,000 against a consensus of 85,000—shattered the prevailing dovish narrative. We are not landing softly, nor are we crashing. We are experiencing a 'no landing' scenario characterized by economic resilience that will unequivocally force the Federal Reserve to maintain restrictive policy longer than anyone currently priced in.

When the underlying reality changes, one must pivot ruthlessly. That is precisely why we liquidated our duration hedge in TLT and aggressively trimmed our high-beta exposure in QQQ and NVDA. The de-escalation in the Strait of Hormuz removed the stagflationary oil threat, but this hot labor data introduces a different toxin: the sustained weight of high yields on growth multiples. A healthy, un-inverted yield curve is constructive for broad market cyclicals, but when the absolute level of rates rises abruptly, high-duration equities suffer a violent multiple contraction.

We enter this session holding nearly 33% in cash, a deliberate tactical choice. Our posture is highly defensive against further rate-driven tech weakness while remaining selectively long in the broader indices. Today, we will observe the bond market's secondary reaction to Friday's employment shock. If the 10-year yield stabilizes, we may look to redeploy capital into un-levered cyclical names. If the selloff accelerates, we will use our cash buffer to buy the capitulation. Doing nothing at the open is the only logical action; let the market reveal its true pain threshold.