June is historically one of the worst months of the year for stocks. How the next 24 hours go will probably determine the fate of the remaining 2.5 weeks. 

Stocks have proven resilient this year despite a persistent amount of uncertainty in other markets. In the last two months alone, we have both had reflation scares and recession scares. As a result, long duration bonds and the dollar have been fluctuating without much clear direction and the yield curve between the tens and the twos remains effectively fixed in the same place it's been throughout the last 7 months of what can best be described as a Goldilocks economic situation. 

That economic treading of water has turned out to be a perfect petri dish for record degrees of concentration in the stock market around disruptive A.I. companies who are understandably gobbling up market cap at a rate commensurate with which they are hogging growth and productivity in a stable but softening economy. 

The question now is not so much if there are impending shocks to the economy. We just had a reassuring jobs print, and markets have generally been good about keeping valuations in-line by punishing shares of companies who are struggling – look no further than the 60% spread of outperformance in favor of General Motors (GM) over Tesla (TSLA) to see how the market has been discerning between hype and fundamentals. The index valuation is lofty but that's effectively a function of the A.I. trade. 

Whether or not this will remain a concentrated, limited-breadth grind up in stocks or become a big melt-up should depend on how the rest of this week goes. It's a question I've been asking for about a month, since Nvidia's (NVDA) record earnings didn't translate into an explosive move for the index. Apple's (AAPL) big breakout Tuesday certainly doesn't hurt the case for a wider rally but with Apple it's hard to know sometimes as it also often acts as somewhat of a safety trade within big tech – quality more than momentum.

But if CPI manages to come in cool despite strength in employment, surprisingly strong wages, and ISM prices paid, it might manage to stamp out the last of the bears in bonds causing trouble for the rest of the market – embodied best by low-quality small caps – which either need a stronger economy or weaker inflation. 

On the flip side, if CPI is hot, it will probably require a significant recalibration in the dollar and interest rates that would all but kill the chances of a broader, frothier "Everything Rally," and likely set the month of June on a more corrective course.

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