Monday Market Open

Gents,

Sorry, we are a bit late today. The markets are on fire, I got a bit too excited, and almost forgot to fire off the weekly MMO.

Gold’s up, S&P closed shy of +2%, 30 degrees and sunshine in the PNW, and I myself have consumed a few wobbly pops. Things are starting to look up.

Markets
Indicies and Commodities

As of Monday, June 15, Close

• Gold - $4,338.90 (+2.77%)

• Silver - up 1.4% on the open, moving higher

• Copper - $6.39/lb (flat)

• WTI Crude - $80.82 (-4.78%)

• S&P 500 - 7,554.29 (+1.65%)

• Nasdaq - 26,683.94 (+3.07%)

• Dow Jones - 51,671.03 (+0.92%) ATH

• TSX - 35,275.64 (+0.97%)

News
The Recap

• US and Iran apparently reached a preliminary ceasefire agreement - deal to be formally signed in Switzerland on June 19th. Includes lifting the naval blockades, sanctions relief for Iran, and the dismantling of Tehran's nuclear program. I will believe it when I see it. Seen this movie

• Oil dropped to a two-month low on the news. WTI closed at $80.82 - down nearly 5% on the day. The oil trade has been a wild fuckin ride, but congrats to the shorts.

• Nasdaq surged 3.07% - its best single day since March 31. Easing inflation fears sent tech ripping.

• SpaceX ($SPCX) IPO’d on Friday and is chad ramming right now, closed at $192 today, up over 40% since IPO. The largest IPO in history - $1.77 trillion valuation, now $2.5T+.

• Gold climbed above $4,300 for a third consecutive session. With oil dropping and rate hike fears easing, precious metals caught a bid. We’re laughing again.

• New Fed Chair Kevin Warsh holds his first policy meeting this week. Rate hold widely expected.

News
What Is On The Horizon?

• Tuesday - Fed meeting begins. Kevin Warsh's first meeting as Chair. Markets watching tone closely.

• Wednesday - Fed rate decision. Hold expected. Press conference will move markets

• Thursday - US housing data. Jobless claims

• Friday - University of Michigan consumer sentiment. With oil dropping and a peace deal in sight, does confidence bounce?

• June 19th - US-Iran peace deal formally signed in Switzerland. If this holds, it is the single most important macro event of the year or just another Trump-Fake.

Power Play
The Secret Sauce: The War Trade Is Dead. The Recovery Trade Hasn't Woken Up Yet

Three and a half months of getting shafted.

Oil at $95. Inflation running hot. Rate hike fears back on the table. The whole global economy constipated because one strait got blocked off. Now, apparently, that's "over."

Oil cratered 5%. The Nasdaq jammed. The VIX shit the bed. And a peace deal getting signed Thursday in neutral Switzerland is about to reopen the most important shipping lane on earth.

Here's what everyone is missing though.

The normie trade - sell oil, buy tech, pop champagne - is already happening. Every dickhead and algo on Wall Street is already doing that. You're late.

The smarter play is what comes next.

When Hormuz reopens, oil normalizes. When oil normalizes, inflation cools. When inflation cools, the Fed sits on its hands. And when the Fed sits on its hands, the stuff that got absolutely bodied during the conflict starts to move.

Miners. Small caps. Explorers. Critical metals. Biotech. The names that got the short end of the stick for three months while everyone was jerking it to oil charts.

Gold is still up 28% year over year, even after pulling back hard from $5,595. The junior explorers still haven't moved. Copper is at $6.39 with Goldman calling $13,735 a tonne and Citi calling $15,000. Small-cap tech, biotech, and emerging growth names that got completely ignored while the macro dominated are still sitting at discounts that don't make sense in a risk-on world. The materials and companies that go into defense systems, autonomous platforms, space, data centres, and robotics are still priced like they fall from the sky.

The war trade is done. All the scared money that cycled out of risky assets is sitting on the sidelines. We are back to a risk-on environment (I never fucking left), and that capital is going to start flowing back in fast.

Load your bags. We're not here to scalp index funds for lunch money.

Legal
Disclaimer

Disclaimer: This newsletter is for informational and entertainment purposes only and does not constitute financial advice, investment advice, or a solicitation to buy or sell any security. The content published here reflects the personal opinions of the author only. We have not been compensated, directly or indirectly, in any form including cash, stock, or any other consideration, to mention, feature, or discuss any of the tickers or companies referenced in this issue. We do not hold positions in any of the securities mentioned at the time of publication. Investing involves substantial risk, including the potential loss of your entire investment. Past performance is not indicative of future results. Always conduct your own due diligence and consult a qualified financial advisor before making any investment decisions. We are not registered investment advisors. We're just guys who like markets.