Growth is Out. Value is In.
PCCM Weekly Market Update (June 28th, 2026)
Hello Investors!
This week was chock full of milestones.
First, we officially launched the PCCM fund with live trade updates and daily market commentary for paid subscribers.
Below is a preview of a few of the trades made last week. As a reminder, paid subscribers get full access to live trades, portfolio positions, investment deep dives, and live Q&A sessions.
Second, we hit 4,000 subscribers on YouTube! Huge thank you to everyone that has supported the channel which has in turn led to this newsletter. Much more to come on that front!
Today also marks two weeks since the launch of this Substack and chat, and we are proud of the growth we are seeing across Free and Paid subscribers. If you have any suggestions for the newsletter, please let us know by replying to this email!
Enough about milestones…let’s talk markets!
-Brian
By the Numbers
Equities
Stocks reversed direction this week, with the S&P 500 down 1.95%, and the tech-heavy Nasdaq down a whopping 4.60%. The Dow Jones Industrial Average by comparison was up a modest 0.60%.
The downturn was primarily driven by a selloff in AI-related growth stocks. The MAG7 (Ticker: MAGS) was down 5.87% for the week and the Semiconductor sector (Ticker: SOXX) was down 7.74%. Oracle, once a darling of the AI data center buildout, fell 19% this week, marking its worst weekly selloff since the 2001 Dot Com Crash.
In focus for Oracle is a $300B agreement the company signed with OpenAI, where the chatbot provider agreed to purchase $60B in computing power from Oracle over a span of five years. This agreement is set to kick in starting in 2027, six months from now. The clock is ticking, and investors are starting to worry that time could run out for the companies at the center of the AI circular financing trade.
This adds to a broader investment trend we have documented throughout the year of a rotation from risk-on to risk-off assets. With respect to equities, this is evident in the YTD performance of Growth vs. Value indexes.
Through the middle of the year, Value stocks are outperforming Growth stocks by nearly 13%. This may come as a surprise, as the media is packed sun up to sun down with coverage of high growth companies. While Growth staged something of a comeback from April through May, the trend has resumed in earnest.
With respect to equity exposure, our position at Pine Creek Capital is that growth stocks (and much of the rest of the market) are priced to perfection. This means that even the slightest deviation from the most optimistic of forecasts could lead to languishing asset values. We believe the opportunity for today’s equity investor lies in value stocks; companies with stable and growing cash flows that have been sold off below their intrinsic value.
Fixed Income
Interest rates dropped last week, with the 10-Year Treasury Yield at 4.38% compared to 4.46% a week ago. This continues a broader down-trend from the peak of 4.66% just over a month ago.
This trend is primarily driven by medium-term expectations for inflation and growth. While inflation has kicked higher over the last few months, the latest readings have not surpassed the expectations of forecasting experts. For now, this has assuaged fears of another inflation supercycle on par with what the US experienced from 2022 to 2023.
Additionally, expectations of the Fed Funds Rate through the end of the year have moderated slightly. The odds of four hikes are now under 1% from a high of nearly 4%, and the market now prices one interest rate hike through the end of this year as the most likely scenario.
This led to a modest increase in short term interest rates, with the 3-Month T-Bill increasing 4 basis points from 3.71% to 3.75%. Additionally, options markets are now pricing in an 89.6% chance of at least one interest rate hike by December 2026, with a notable 2% chance of four interest rate hikes by the end of the year. Currently, there is a 0% chance of any rate cuts before 2027.
We reiterate our view that overweight fixed income and underweight duration is prudent in the current environment.
Commodities
Bitcoin continues to sell off, with the speculative asset now under $60,000 per coin. The cryptocurrency has continued to fade throughout the year as investors question its viability as either a currency or an investment asset.
There were two major events this week worth noting related to Bitcoin. The first is that the Strategy Saga continues to unfold in-line with our analysis in last week’s newsletter. Here is an excerpt of that analysis:
At some point (soon it seems?), Strategy’s hands are tied and they can’t buy more Bitcoin, but they have to keep servicing their dividends and debt payments.
In order to service those payments, they’ll need to sell Bitcoin to raise cash instead of raising debt or selling shares. As Strategy sells Bitcoin, the price falls, kicking off a downward spiral. Every time Bitcoin falls in price, Strategy will need to sell more Bitcoin to get the same dollar value as before.
Over the last week, Strategy’s Preferred Shares (Ticker STRC), which were the subject of our analysis, have continued to break down, reaching a new all-time low of $71.25. For an instrument that is designed to behave more like a bond than a stock, this is a “mark of death” for a company such as Strategy.
We believe that a restructuring for Strategy’s capital stack is imminent, and could be seen as soon as Q3 2026, which could result in a total loss for holders of MSTR and Strategy’s other equity-like instruments such as STRC. The only way out for the company is for fresh capital. This is likely impossible, as Strategy is now competing with the likes of SpaceX, OpenAI, Anthropic, Google, Nvidia, as these mega cap companies rush to market with new stock and bond offerings.
In this restructuring, Strategy’s assets will essentially be held in escrow during negotiations with banks and lenders, which could paradoxically lead to a supply shortage in available Bitcoin, which could in turn lead to a short-term technical pop. This is speculation, however, and such a pop will only benefit technical traders.
Coming out of the restructuring, all Strategy equity will likely be converted to equity in a new entity, potentially at a 90%+ discount to pre-restructuring equity value. Though 90% feels optimistic.
While it is tempting to attempt to bet against Strategy, the downside risk is too great at the moment. Pine Creek Capital does not currently hold a position in MSTR, STRC, or BTC, and our long-term intrinsic value estimate of Bitcoin is $0.
Crude Oil continued its decline, dropping 5.81% to settle at $71.44 per barrel. The continued decline reflects an expectation of increased market supply of oil as the US has lifted sanctions on Iran, allowing the country to sell its oil on the open market through August of this year.
As discussed over the past few weeks, we believe that the market is underpricing the risk of a re-escalation of the Iran War. Despite renewed tit for tat strikes over the past week, oil has continued its decline. Our stance as of this writing is that it is more likely than not that we will see a breakdown in negotiations between the US and Iran. We believe there is material risk that the US could strike Iran’s oil facilities on Kharg Island without warning in an act of frustration.
Based on this belief, we are looking closely at opening a small position on crude oil for Pine Creek’s portfolio somewhere in the $65-$70 range, which we have previously stated could be an effective floor over the near term. Additionally, the asymmetric return profile of ~$100+ to the upside and ~$50-60 to the downside is attractive. If you are interested in following our trades in real-time, consider becoming a Paid Subscriber.
Gold, Silver and Copper declined 4.67%, 12.95% and 4.81%, respectively. The precious metals remain volatile as they are coming off of historic highs and multiple competing pressures drive prices. Our view remains unchanged: we believe Gold and Silver remain too volatile to hold exposure to, while Copper remains attractive as a critical metal for supply chains. PCCM does not hold a position in any of the three metals.
Earnings & Data
On Tuesday, we will get updated JOLTS Job Openings data, and on Thursday we will get a slew of employment data across Unemployment, Non-Farm Payrolls, Hourly Earnings, and Initial Jobless Claims. This is pivotal data that will help guide the Warsh Fed in determining whether and by how much to increase interest rates. Positive jobs data would bolster the case for higher rates, while negative jobs data could indicate the economy is not in a position to handle higher rates.
On Tuesday, Nike (Ticker: NKE) will report earnings after the close. Wall Street estimates earnings to be $0.11 per share vs. $0.14 per share a year ago. Nike is currently on our watchlist as a potential value stock to add to our portfolio.
That’s all we had for you this week, let us know your thoughts by leaving a comment! You can also like this article via Substack to show your support.
I fully agree that value stocks are the way to go. The FOMO crowd is crazy when it comes to AI and whatnot... I think they are all going to get burned.