June 2025 DDD

[ducati916]

6/13/25

Boeing Dreamliner crash details emerge as India reportedly weighs grounding the 787​

More details are coming to light around Thursday’s deadly crash of Air India Flight 171.
The BoeingBA $200.60 (-1.62%) 787 Dreamliner had 242 people onboard including crew when it crashed into a medical school dining hall shortly after takeoff. The death toll, including people on the ground, has reached more than 240. As of Friday morning, there is only one known survivor who was onboard.

According to reports out of India, the Indian government is considering grounding its fleet of 787-8s.
The crash marks the country’s deadliest aviation incident in 29 years and is the first crash of a 787 Dreamliner in the aircraft’s 14-year history. More than 1,100 Dreamliners operate worldwide.

Boeing’s shares closed down nearly 5% on Thursday and continued their downward slide on Friday morning. Since market close on Wednesday, the plane maker has shed about $12 billion in market cap. Engine manufacturer GE AerospaceGE $235.11 (-1.45%) was also trading lower both days.







Full:https://www.wsj.com/business/energy...1?st=RtWmgc&reflink=desktopwebshare_permalink





Full:https://apnews.com/article/uk-brita...k-investment-27e13197344cf96b5b76c4503e5a8b9e





Treasury Secretary Scott Bessent came into office advocating his 3 Arrows plan – 3% of GDP deficit, 3m barrels/day more of oil equivalent production, and 3% real GDP growth, all by 2028.

This week, Bessent appeared to suggest that the 3% of GDP deficit arrow has begun creeping toward 4% (what was “3%” is now “under 4%.”)

The apparent increase in the deficit arrow is likely due to Bessent getting a better picture of the true state of affairs regarding US deficits after having spent 4-5 months in office.

It is looking more likely that in the end events will force the most likely outcome – a sustained period of significant financial repression (Nominal GDP > US interest rates) or a brief period of face-peelingly negative real rates (US NGDP way, WAY above US interest rates).



Full:https://www.polymathinvestor.com/p/what-would-prove-you-wrong-the-most




Full:https://www.bigtechnology.com/p/apples-20-billion-ticking-time-bomb








From Strazza

Welcome back for another Top Down Trade of the Week. This one’s a classic leadership scan. We start with the best sectors, then drill into the subgroups. We pick one, and then take a look at the top stocks in it. This week, Energy is the big standout—jumping to the top of our sector rankings.

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Healthcare and utilities also made a big move up on the leaderboard as growth sectors faltered. Here is a look at our overall industry rankings, which shows oil & gas cracking into the top 10.

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It’s not a surprise to see it there—crude oil has been squeezing higher, posting its best week since October 2022. That kind of price action tends to light a fire under energy stocks, and that’s exactly what we’re seeing. These are the Top 10 integrated oil & gas names, sorted by relative strength.

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My favorite setup from the list is Imperial Oil Ltd $IMO:

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Imperial Oil might just be the best-looking energy chart out there right now. The stock is making new all-time highs on both an absolute and relative basis. How many energy names can say that these days? Not many. After spending a year consolidating above the breakout level of a 15-year base, IMO is breaking out to fresh highs again. As long as we’re above 80, we like it long with a target of 140.

jog on
duc

 

[ducati916]

The Trump Organization said it will launch a mobile-phone service called Trump Mobile and plans to offer a U.S.-built smartphone later this summer, looking to take on the likes of Apple and Samsung.

President Trump has targeted phone makers in his tariff push, threatening extra levies on Apple if it didn’t shift to domestic production. No major smartphone manufacturer currently makes its products in the U.S., as the displays, processors and cameras they use are mainly sourced from Asia. America doesn’t have advanced manufacturing facilities akin to those in China or even India and Vietnam, where electronics assembly has expanded in recent years, nor does it have a mass of skilled laborers trained to do the required work.

The Trump Organization said the mobile service would work with all three major wireless carriers. It would rely on resale deals, known as mobile virtual network operator agreements, in which the carriers sell excess capacity on its networks and gain customers without having to bear the costs of marketing to them or signing them up.

The Trump Organization said customers would be able to use the new service using their existing phones, or purchase its T1 Phone beginning in August. They described it as a “sleek, gold smartphone” designed and built in the U.S.

The company said that the new Android phone would cost $499 and that it has a website available for preorders. The site details specifications for the device but doesn’t disclose the manufacturer. The company said the wireless service’s core “47 Plan” would be available for $47.45 a month.

The mobile venture would be overseen by Trump’s sons, who announced the launch at Trump Tower on Monday. Eric and Donald Jr. run the family business, which has expanded beyond real estate and golf courses into new areas, such as cryptocurrencies.

The president has said he isn’t involved in the family business’s day-to-day operations. The administration has strong influence over the heavily regulated telecom industry. Trump’s head of the Federal Communications Commission, Brendan Carr, has told operators including T-Mobile and Verizon to curb their diversity, equity and inclusion policies if they want their pending mergers to pass agency review.

DTTM Operations, the entity that manages Donald Trump’s trademarks, made filings last week indicating that he intends to use the trademarks “TRUMP” and “T1” for a mobile phone and wireless service. Intellectual-property lawyer Josh Gerben earlier reported the trademark filings.
AT&T, Verizon and T-Mobile didn’t immediately respond to requests for comment.

From JC;

Every bull market has its squeezers — those pockets where certain stocks rip and shorts get absolutely smoked. It’s all part of the game when traders are willing to take on risk. Look at areas like quantum tech, new nuclear, or lately, space stocks. These groups are prime spots where squeezes are either brewing or already in motion. Over the past couple weeks, names in the Procure Space ETF $UFO have been catching our attention. Here’s a cool visual we put together to break it down:

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Names like $RKLB, $PL, $RDW, and $ASTS are standing out as leaders — showing strong relative strength and momentum as they distance themselves from the pack. We’re seeing these show up in our Freshly Squeezed scan too — one of our favorite weekly reports.

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This scan hunts for names with the right fuel and the right spark for explosive upside: High short interest Elevated days to cover Short-term momentum That’s the recipe for a proper squeeze. When price starts ticking higher, short sellers become forced buyers — and that pressure can launch a stock into orbit. The more heavily shorted a stock is, the more potential fuel it has once it starts moving. And that’s exactly the setup we’re seeing in these space names. We’re especially excited about AST SpaceMobile $ASTS — this is a move we’ve been waiting on for months. The stock already hit our initial target, and there’s no reason to think it stops here. In fact, we see this as the early stages of a much bigger move.

During our recent interview, Anthropic CEO Dario Amodei said something arresting that we just can't shake: Everyone assumes AI optimists and doomers are simply exaggerating. But no one asks:

• "Well, what if they're right?"

Why it matters: We wanted to apply this question to what seems like the most outlandish AI claim — that in coming years, large language models could exceed human intelligence and operate beyond our control, threatening human existence, Jim VandeHei and Mike Allen write in a "Behind the Curtain" column.

That probably strikes you as science-fiction hype.

• But Axios research shows at least 10 people have quit the biggest AI companies over grave concerns about the technology's power, including its potential to wipe away humanity. If it were one or two people, the cases would be easy to dismiss as nutty outliers. But several top execs at several top companies, all with similar warnings? Seems worth wondering: Well, what if they're right?
• And get this: Even more people who are AI enthusiasts or optimists argue the same thing. They, too, see a technology starting to think like humans, and imagine models a few years from now starting to act like us — or beyond us. Elon Musk has put the risk as high as 20% that AI could destroy the world. Well, what if he's right?

How it works: There's a term the critics and optimists share: p(doom). It means the probability that superintelligent AI destroys humanity. So Musk would put p(doom) as high as 20%.

• On a recent podcast with Lex Fridman, Google CEO Sundar Pichai, an AI architect and optimist, conceded: "I'm optimistic on the p(doom) scenarios, but ... the underlying risk is actually pretty high." But Pichai argued that the higher it gets, the more likely that humanity will rally to prevent catastrophe. Fridman, himself a scientist and AI researcher, said his p(doom) is about 10%.

Amodei is on the record pegging p(doom) in the same neighborhood as Musk's: 10-25%.

• Stop and soak that in: The very makers of AI, all of whom concede they don't know with precision how it actually works, see a 1 in 10, maybe 1 in 5, chance it wipes away our species. Would you get on a plane at those odds? Would you build a plane and let others on at those odds?
• Once upon a time, this doomsday scenario was the province of fantasy movies. Now, it's a common debate among those building large language models (LLMs) at giants like Google and OpenAI and Meta. To some, the better the models get, the more this fantastical fear seems eerily realistic.

Here, in everyday terms, is how this scenario would unfold, Jim and Mike continue:

• It's already a mystery to the AI companies why and how LLMs actually work, as we wrote in our recent column, "The scariest AI reality." Yes, the creators know the data they're stuffing into the machine, and general patterns LLMs use to answer questions and "think." But they don't know why the LLMs respond the way they do.

Between the lines: For LLMs to be worth trillions of dollars, the companies need them to analyze and "think" better than the smartest humans, then work independently on big problems that require complex thought and decision-making. That's how so-called AI agents, or agentics, work.

• So they need to think and act like Ph.D. students. But not one Ph.D. student. They need almost endless numbers of virtual Ph.D. students working together, at warp speed, with scant human oversight, to realize their ambitions.
• "We (the whole industry, not just OpenAI) are building a brain for the world," OpenAI CEO Sam Altman wrote last week.

What's coming: You'll hear more and more about artificial general intelligence (AGI), the forerunner to superintelligence. There's no strict definition of AGI, but independent thought and action at advanced human levels is a big part of it. The big companies think they're close to achieving this — if not in the next year or so, soon thereafter. Pichai thinks it's "a bit longer" than five years off. Others say sooner. Both pessimists and optimists agree that when AGI-level performance is unleashed, it'll be past time to snap to attention.

• Once the models can start to think and act on their own, what's to stop them from going rogue and doing what they want, based on what they calculate is their self-interest? Absent a much, much deeper understanding of how LLMs work than we have today, the answer is: Not much.
• In testing, engineers have found repeated examples of LLMs trying to trick humans about their intent and ambitions. Imagine the cleverness of the AGI-level ones.

You'd need some mechanism to know the LLMs possess this capability before they're used or released in the wild — then a foolproof kill switch to stop them.

• So you're left trusting the companies won't let this happen — even though they're under tremendous pressure from shareholders, bosses and even the government to be first to produce superhuman intelligence.

Right now, the companies voluntarily share their model capabilities with a few people in government. But not to Congress or any other third party with teeth.

• It's not hard to imagine a White House fearing China getting this superhuman power before the U.S. and deciding against any and all AI restraints.

Even if U.S. companies do the right thing, or the U.S. government steps in to impose and use a kill switch, humanity would be reliant on China or other foreign actors doing the same.

• When asked if the government could truly intervene to stop an out-of-control AI danger, Vice President Vance told New York Times columnist Ross Douthat on a recent podcast: "I don't know. Because part of this arms-race component is: If we take a pause, does [China] not take a pause? Then we find ourselves ... enslaved to [China]-mediated AI."

That's why p(doom) demands we pay attention ... before it's too late.

Welcome to The Weekly Beat. Last week was packed with market earnings reactions. We saw double beats, historic selloffs, and a $100B surge in market cap. Investors were forced to separate strength from weakness. And with several prominent names sitting at critical levels, the stakes are only getting higher. In this week’s recap, we’re covering the key reactions from last week and previewing the setups we’re focused on heading into next week. What stood out to us last week Monday: Broadcom $AVGO reported a double beat and fell 5% on the news. This dip was quickly bought, and the stock closed the week at a fresh all-time high. Lululemon $LULU posted a double beat and slipped 19.8% in response to it. This was the worst earnings reaction since 2017. Tuesday: No earnings reactions in the S&P 500, but we spotlighted Adaptive Bio $ADPT, one of our favorite up-and-coming Biotechnology leaders. In Q1 2025, clinical testing revenue jumped 55% year-over-year, fueled by a record test volume. We expect the stock to continue climbing higher. Wednesday: J.M. Smucker $SJM reported mixed results and crashed 15.6%. This was the stock's worst earnings reaction ever. This was the catalyst for resolving a multi-decade distribution pattern. We think this new downtrend could last for years. Thursday: No earnings reactions in the S&P 500, but we covered a big newswire that hit the tape. Uber $UBER announced a partnership with Dicks Sporting Goods $DKS and Golf Galaxy to offer on-demand delivery from hundreds of stores nationwide. The timing couldn't be more interesting with this news hitting as both names approach key inflection points. Friday: Oracle $ORCL delivered a double beat and soared 13.3% to new all-time highs. The management team dramatically raised its forward guidance. This earnings report tacked on more than $100B to their market capitalization. What we're looking forward to next week Before Tuesday's opening bell, we'll hear from Jabil $ JBL, a $19B industrial machinery stock. They have been rewarded for 3 consecutive earnings reports, and we'll be watching closely for another strong quarter. After Tuesday's closing bell, we'll hear from KB Home $KBH, a $3.75B homebuilder. On Friday, the action heats up even more with earnings from Accenture $ACN, Darden Restaurants $DRI, Kroger $KR, and others. There will be a lot to unpack here at The Beat Report. We're most looking forward to the Lennar $LEN earnings report after Monday’s close, and here's why. The $28.5B homebuilding giant has suffered a nasty drawdown since peaking last September. LEN has been punished for 6 consecutive earnings reports

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Lennar is one of the largest homebuilders in America. They’ve got scale, brand recognition, and a significant footprint across high-growth Sun Belt regions. But lately, none of that has mattered. The stock has been punished for six consecutive earnings reports and is in a nearly 50% drawdown. Why? Margins are compressing. Pricing power is fading. And buyers are pushing back in the face of elevated mortgage rates. Even though demand has held up better than feared, the market is clearly skeptical about sustainability. The stock carved out a massive topping pattern and broke below its long-term trendline earlier this year. Price has been trending lower for months. If LEN can reclaim the VWAP anchored to the all-time high and hold above it, the path of least resistance will shift from sideways/lower to higher. This level is currently around $134. But if it continues falling? There will likely be a fresh leg lower. Either way, this chart is approaching a major decision point. We're watching closely. The intermarket implications?

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Homebuilders and Microsoft $MSFT (and Technology stocks broadly) have been dancing together for years. MSFT recently reversed a massive top and is now printing fresh all-time highs. Lennar is the 2nd largest component of the U.S. Home Construction ETF $ITB. If it can stop falling and reverse higher after its earnings report, we'll closely watch its peers for a similar scoop-n-score reversal. A recovery in the homies would be incredibly constructive for the bulls. Will it happen?

From JC;

• The All Country World Index is at all-time highs.
• A lot of investors think stocks are going down.
• Let’s exploit and profit from this vulnerability.

As traders and investors of any time horizon, what we’re doing in the market is exploiting the flaws of human behavior.

That’s the game we’re playing.

This isn’t about corporate fundamentals. And it’s not about the growth or slowdown of the economy.

That’s the kind of stuff they teach you in school. But that’s not what moves markets.

Prices of assets move up and down based on positioning.

The largest moves you see come from extremes in the way investors are positioned, or mispositioned to be more specific.

Understanding human weaknesses allows us to avoid making those mistakes for ourselves, of course.

But once we establish that aspect of the process, we can take it a step further and attempt to profit from the whole thing.

Stupidity isn’t the whole game.

But it definitely plays a big role.

The Basic Laws of Human Stupidity​

I recently finished a new English translation of Carlo Cipolla’s 1976 book, “The Basic Laws of Human Stupidity,” with a foreword by the famous statistician Nassim Taleb.

The book is brilliantly written – humorous at times, yet fundamentally an academic study with insights every investor would be wise to understand.

There are several basic principles to acknowledge about human stupidity.

One is that everyone always and inevitably underestimates the number of stupid people in circulation.

The probability that a person is stupid is independent of any other characteristic of that person.

In other words, it has nothing to do with race, nationality, gender, level of education, or income.



A stupid person causes losses to another person or group of people when he or she does not benefit and may even suffer losses.

Non-stupid people always underestimate the destructive power of stupid individuals.

A Tax on the Stupid​

In his book “The Psychology of Money,” my pal Morgan Housel talks about taxes on stupidity occurring naturally in society.

For example, in 2023 Americans spent more than $113 billion on lottery tickets, more than they spent on movies, books, concerts, and sports tickets combined.

This sort of irrational behavior can be seen across the market as well. And this is independent of trading experience or assets under management.

The irrational decisions by professional investors – with more money on the line – cause way more havoc than even the most reckless individual investors.

Our job as traders and investors of all time horizons is to acknowledge this behavior exists.

Then, we look for those irrational behaviors, particularly when they are at extreme levels.

Finally, we exploit them for our own selfish profits.

I talk to everyday investors all the time, and many somehow believe the stock market has been going down.

They truly believe that, after some of the greatest back-to-back years for the S&P 500 in American history.

And 2025 is off to a great start as well, particularly when you broaden the return data globally.

Is it stupidity?

Maybe.

Is it laziness?

Probably.

Is the complete misunderstanding of what’s actually happening, because they’re so easily distracted, a part of it?

Absolutely.

Here’s the All Country World Index hitting new all-time highs last week:



We’re here to identify divergences between perception and reality.

It’s the human flaws that we’re trying to exploit.

Understanding those flaws is a major part of it.

Everybody’s wrong.

We don’t want to fight that. Embrace it. Appreciate it.

And go profit from it!

Stay sharp,




jog on
duc

 

[qldfrog]

US market up, oil and gold down "because Iran seeks de escalation"..
Financial news
I look at al Jazeera headlines..
i quote
"Israel has attacked civilian targets in Iran, striking a hospital and an Iranian state TV building as the intensive strikes against the other rage for a fourth consecutive day, with the military confrontation between the longstanding enemies showing no sign of ending."
Hum wishful thinking maybe..i keep my oil and gold

 

[ducati916]

From Strazza;

I was joking with Patrick earlier, and I told him I buy every ticker he texts me these days. “Buy first. Ask questions later.” But I was just alluding to the fact that it seems like every bullish chart pattern is working out here. I talk to my friends about what I’m seeing and trading throughout the day, and many of us have been on the speculative growth train. It’s insane how well these junky stocks are working. And it’s a longer list of them every day. I know almost for a fact that a good deal of these are probably zeros over the long run. That doesn’t matter. What matters is that they are working now. It’s the kind of market to take shots on the crazy stuff. And we have been doing it more and more because we keep being rewarded. It’s that stage in the cycle where the worst companies are the best stocks. It’s starting to feel like one of those “throw a dart” markets again. Who remembers 2020? Good times, right? We’re going back there. Trust me, we are already well on our way. I can tell by the kinds of stocks I’m talking about and trading on a day-to-day basis. Today, a company that makes character-themed cups and stuffed animals for Disney parks announced a reverse merger and a new MSTR-inspired treasury strategy whereby they will be buying Tron tokens instead of Bitcoin. The market absolutely loved it, and SRM rallied over 500% on the news. Have you noticed the IPO market is back from the dead, too? This year’s leaders range from space stocks, to quantum computing, new nuclears, and electric helicopters. And how about the AI trade and semiconductor industry? It’s back from the dead. So when I saw BigBear.AI $BBAI come across my screen a few weeks back… I was downright giddy about it. I know exactly what to do with a stock like that in an environment like this. First of all, it’s a perfectly poetic name for a heavily-shorted hot stock. It’s the kind that rips bears' faces off once a squeeze ignites. And with a 23% short interest, that can happen any day. But more importantly, BBAI is one of the best-looking coil patterns out there. I’m all in on this chart. It’s my largest trading position right now.

​

I’m in common stock, warrants, and a couple of different calls. This is a textbook example of Brian Shannon’s VWAP pinch. Price is at the apex of the coil now, and it looks like it could be starting its next big move. The volatility squeeze indicator is at its lowest level of the year as the stock challenges a big polarity zone around $4. This pennant formed at the upper bounds of a tactical base back in May and has been chopping in a tight range since. I think all the supply has finally been absorbed, and the shorts are about to get squeezed as BigbearAI ramps back toward its Q1 highs. You'll find a beautiful base-on-base pattern when you zoom out on the chart. You’ll also notice just how critical the current level is.

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It’s more than just the VWAPs from the pivot high and low converging on price here. This $4 zone is also where the VWAP from the all-time high comes into play. In addition, BBAI is experiencing its first weekly momentum buy signal with the PPO in positive territory. We call this kind of thing a center-line crossover. It simply means bullish momentum is coming back into the stock— but from a position of long-term strength— following some corrective action. So I think it's decision time for BBAI, and I think the stock is going to ramp higher from here. A lot of speculative growth names have been taking that path these days. I don't think BBAI will be any different. I’m looking for a huge move in the coming days and weeks, and I’m positioned for it.

From CNBC:

“In finance, when you’re playing defense, you’re almost certainly losing,” [Ken] Griffin said to Citadel’s new class of summer interns Thursday evening. “There’s no other way to put it. Every time a portfolio manager tells me ‘I’m going on defense,’ I’m waiting to watch the red because that tends to be what happens next.”

Griffin, whose hedge fund oversees $66 billion in assets as of June 1, thinks cash would be a better place to hide out than what are often considered “safe trades” in a risk-off environment.

“If you are going on defense, just go to cash. Otherwise, you’re just in the ‘safe trades,’ where everyone else has already gone — and the safe trades are often where the losses are,” he said.





Persistent price pressures are bedeviling the Bank of Japan, Bloomberg relayed Thursday, with the monetary mandarins upgrading their inflation assessment ahead of the two-day policy meeting which concludes tomorrow. Japanese CPI excluding fresh food and energy rose at a 3% annual clip in April – the eighth sequential year-over-year acceleration in the past nine monthly prints – against a backdrop of 0.5% benchmark borrowing costs and largely status-quo investor expectations (interest rate futures point to little change to that overnight rate through the summer and a 0.65% bogey at year-end).

Bearish bond market dynamics likewise loom large over this week’s gathering, as 20- and 30-year Japanese government bond yields each marked multi-decade highs late last month, with 40-year borrowing costs ascending to a record 3.69%.

By way of response, roughly two-thirds of Bloomberg-surveyed economists expect that the BoJ will announce plans to slow down the tapering of open-market bond purchases from the ¥400 billion ($3 billion) per-quarter downshift introduced last summer. Better a bit more inflation than a busted bond market, the thinking may go.

The BoJ, which owns roughly half of all JGBs, whittled down its portfolio by ¥6.2 trillion during the first three months of the year, a record figure dating to 1996. That sum, however, pales in comparison to typical quarterly net purchases over the past decade, which routinely approached or eclipsed ¥20 trillion.

Stateside creditors may want to take heed of the BoJ’s decision. “Treasurys have become more sensitive to moves in Tokyo,” a Monday analysis from Bloomberg concludes, with correlations between those bond markets rising to their highest levels since 2020. Japanese investors represent the largest foreign contingent of U.S. bondholders, while the land of the Rising Sun commands a 16.7% weighting in the Bloomberg Global Treasury Total Return Index, second only to the U.S.

“The rise in Japan bond yields has meaningful spillover impacts globally,” commented Freddy Wong, head of Asia Pacific fixed income at Invesco. “As JGB yields rise, the relative attractiveness for sovereign bonds in other parts of the world decreases, which drives selloffs and increases volatility in other. . . markets.”

• The S&P 500 ($SPY) rose nearly +1% today, recovering most of the damage from Friday's sell-off.
  
  
• While $SPY is only up +2.6% year-to-date, Bespoke points out that it's on pace for its best intraday performance since 1995, gaining an average of 8.8bps from open to close.
  
  
• Other years with strong intraday gains—like 1995, 2003, 2009, and 2023—occurred in the early stages of multi-year bull markets.
  

The Takeaway: Despite modest year-to-date gains for the S&P 500, strong intraday performance suggests underlying strength, echoing past early bull market environments like 1995 and 2009.





Momo is weakening on NVDA.



In just two short weeks, on July 1st, under Basel Ill banking regulations,
gold will officially be classified as a Tier 1, high-quality liquid asset. This means that U.S. banks will be able to hold physical gold at 100% of
its asset value toward their core capital reserves.

No longer will gold be marked down to 50% as a Tier 3 asset as it was
under the old rules. This is a seismic shift in how regulators perceive gold, and it's likely to
shift some bank asset demand away from Treasuries and into gold.
Will this fact unlock the value embedded in the gold miner's reserves?

To quote J.P. Morgan, "Gold is money. Everything else is credit."





Charts from Gundlach




Something has fundamentally changed. That something is reversal of USD flows. Foreign capital is flowing out of US assets and USD.




Something else has changed. When 10yr rates rise, USD falls. Foreign capital exiting USD and US assets.




Something else has changed. 10yr rates rise, Oil on a lag. The Arabs are selling oil outside of the USD.



We have essentially already outright QE. QT is reversed.



Doubled.

This is why Bessent and Yellen could no longer term out the debt. Powell in trying to do the right thing has f***ed them both.






Will eventually turn out to one of, if not the greatest bubble of all time at least to date.

The price recently has been driven by the 'me to' BTC Treasury companies, copy catting MSTR and Mr Saylor. They do not use BTC as Gold is used by China and other sovereign nations, they simply hoard. With no sellers (of any size) and buyers that buy measured in billions of dollars, BTC has risen.

Not shown on the chart specifically, but you could reverse engineer and get an idea: how much has BTC in % terms risen with the rise of BTC Treasury companies?

I'm guessing the % is fractions of its previous rise.

In other words it is taking more and more cash to shift it meaningfully in % terms.

What if one of these late comers becomes a forced seller? It will be very ugly.

What happens when the price appreciation of BTC slows to a crawl? These companies stock prices suffer as their 'earnings' are BTC price appreciation. Sellers of stock will force selling of assets, ie. BTC.



NRG


The story Weil tells about NRG Energy is shaping up as one for the accounting books.The focus, as Weil calls it, is an “an accounting switcheroo” that NRG “used to make its earnings look less volatile.”

Without getting into the nitty gritty, which Weil has done here and here over the course of a few weeks in the WSJ’s Heard on the Street column, the tl;dr is that thanks to an accounting loophole NRG is making its earnings look better – and less volatile – than they really are.

Star of the S&P
​

That’s important, because as this chart from the WSJ shows, NRG has been one of the S&P 500’s biggest year-to-date gainers – whose shares have outstripped all utilities in part because of... its earnings.



FactSet via The Wall Street Journal
Central to Weil’s story is NRG’s derivatives trading. And how at the whim of management – through the magic of accounting – it has been able to “freeze balance sheet values for a large portion of its derivative contracts.”

The beauty of it is that this can be done without letting investors know what the impact to earnings has been. Pretty neat, huh?. As Weil writes, energy companies commonly use what’s known as “normal purchase normal sale,” or NPNS for commodity contracts. “What is unusual at NRG” Weil goes on to explain, “is that it switched to NPNS after the contracts began, which isn’t the way this typically works.”

The Kicker to All of This...
​

NRG CEO Larry Coben did an interview with Julie Hyman at Yahoo Finance, who asked...

I want to ask you about has to do with your derivatives trading business because The Wall Street Journal, I'm sure you've seen, has come out with a couple of stories yesterday sort of asking questions about that business and how the accounting around it works, and I wanted to give you the opportunity to respond to that.

Coben responded – and I’m highlighting the parts that caught my attention...

Look, we talked to the reporter. Derivative accounting is complex, and some people just don't understand it. Our investors and our stock stakeholders and our auditors have all looked at it numerous times. This is right down the middle, it's what every one of our competitors does, none of them are concerned about it in the least. We're not really getting any inbounds at all. They're kind of wondering why somebody is writing these articles because it doesn't seem to have a complete understanding of what derivative accounting – how it works in our industry.

Not letting go, Hyman asked again...

“How big a part of your business is derivatives trading?”

Coben responded...

It's not really, we don't really do – derivatives trading. What we do is we position portfolios for people, you know, if we know that we have to sell you power in three years, we'll buy a derivative to make sure we have the power in three years. We are doing far less of the, you know, speculative derivative trading than anybody in the space. We, you know, we do take some positions, but others take far more than we do. So I'm kind of confused by the articles, but I'm not concerned about them.

My interpretation...
​

• First, Coben starts by saying that “derivatives trading is complex” and “some people don’t understand it.” Me: It’s a fact, it is complex and some people don’t. To point it out is an attempt to cast doubt over the story.
• Coben goes on to say that they aren’t “really getting any inbound queries” about what Jon wrote. Me: That’s irrelevant and suggests the story is making a mountain out of a molehill. Truth is, if they truly aren’t getting many inbounds it’s probably because of the nature of the topic – not just wonky accounting, but wonky derivatives accounting.
• Corben, who seems affable enough in the interview, then says that while NRG does take “some positions... others take far more than we do.” Me: Point of order! Keep reading...

As Weil reported a few weeks earlier, in his first swipe at the company...

A comparison of NRG and other power companies is instructive. NRG in its proxy identified its peer group as the 21 companies in the Philadelphia Utility Sector Index, which includes NextEra Energy and Duke Energy. NRG’s net derivative assets were 61% of its book value as of March 31. The average for the peer group was less than 1%, according to a Wall Street Journal analysis. Property, plant and equipment represented 9% of NRG’s total assets, compared with 72% for the peer group.
Put another way, NRG, which isn’t in the utilities index, has a much different profile than the companies that are. It looks more like a risky energy trader.

Aura of Irony
​

Therein lies the best part of this story, with an aura of irony....

That last sentence of Weil’s story – that NRG “looks more like a risky energy trader” – might be easy to dismiss if most any other reporter wrote it. But what often gets lost in the noise is that while working for the Texas edition of the WSJ in 2000, Weil was the first person – period – to publicly blow the whistle on dubious accounting at Enron. Doesn’t hurt that he also has a law degree.

Now, nobody is suggesting this is Enron. That’s not the point of this. The point is that to suggest that this is too complex for Weil to understand or that he doesn’t know how derivatives accounting works, is absurd to the point of laughable.

The Reality...
​

Things like this don’t matter, of course, until and if they do... and when and if they do, then everybody acts surprised and wonders why they didn’t see it coming. In this case it would be because it was hiding in plain sight, which is the best way to hide in a market where respecting the risk is often an afterthought... as long as, that is, the stock is rising.

---

Continuing on the “Congress looking into forcing the Fed to cut paying interest on reserves to US banks” theme for the third straight week, this week Bloomberg reporter Steven Dennis posted the above. We forwarded Dennis’ X post above to our friend Lee Quaintance, a veteran bottom-up banking and plumbing expert and investor with Kopernik Global Investors, for his take in recreational weekend discussion format; we highlight a portion of our conversation as we thought it would be helpful:


Fed buys UST at $100 (from bank); bank gets reserves, Fed gets USTs. UST prices then fall to $70, while the Fed is also paying banks interest on $100 of reserves.


LQ: Yes.


Now Fed stops paying interest on reserves, so banks look to re-swap reserves back for USTs still trading at $70. There’s $30 more liquidity created years ago bidding for bonds (i.e., a form of delayed QE, like running down RRP was), no?


LQ: What this highlights is the technical insolvency of the Fed. In your example here, for every $70 in assets the Fed holds, it has $100 in liabilities. IOW, the Fed will not be able to absorb the wall of reserves flowing towards it in the event that IOER goes to zero. Should the Fed then decide not to absorb those reserves, overnight rates will be pulled to zero if not negative territory.

Alternatively, the Fed could force banks to hold reserves by reinstating a meaningful required reserve ratio policy. If so, those required reserves held by banks would operate like a Fed “tax” on the banks and, at the margin, consume bank capital which, further, could constrain bank lending looking forward.

The outcome of Congress possibly forcing the Fed to stop paying interest on reserves to banks is still undetermined, but Dennis’ X post above suggests the discussion appears to be gaining in prominence fairly quickly in Washington DC.

We have no view on the likelihood of the outcome, but in our view, the market reaction to a cut in interest on reserves would be US bank stock negative, positive for LT USTs (yields down).

If we take a step back, such a move would likely also be construed by some investors as another step toward a much less independent Fed, with all that implies for the USD (negative longer-term), inflation expectations (higher over time), gold and BTC (higher over time), etc.




jog on
duc

 

[Garpal Gumnut]

@ducati916

I'm in the electric helicopter. I'm watching for inbounds !

gg

 

[ducati916]

Just PUT on a short position.



From JC;

• The Economist is upset again too.
• This behavior is consistent with uptrends.
• Stock and ETF prices are likely to rise from here.

When everyone is piling into the stock market chasing returns, that's usually a sign things are getting frothy and we're likely due for some type of correction.

To be clear, that is NOT what is currently happening.

Retail investors are selling their stocks.

ETF investors are selling into this strength as well, with total equity ETF flows back in the negative.

And the journalists are still trying their hardest to scare your parents.

I'm sure you're shocked to hear I believe everybody's wrong.

Retail Investors Have Sold ​

Goldman Sachs is out this week with data showing retail net buying and selling for every stock in the S&P 500 over the past month.

They've been selling at the most aggressive rate all year.



When retail is selling this aggressively, it's consistent with the early stages of an uptrend for stocks.

ETF flows suggest the exact same thing. ETF investors bought them up this spring, only to become net sellers once again as we approach summer.

These signs of disbelief are further evidence that everybody's wrong and that stocks will most likely continue to grind higher throughout the back half of 2025.

Journalists Trying To Be Scary​

We've talked about how angry the media have been and how much they don't like how well stocks are doing.

But the best fade of them all is once again The Economist.

It's great because they're journalists parading around as economists. So you get both.

Here are their latest scary magazine covers, published over the past few weeks:



I had a hard time believing they were willing to fight this massive bull market in stocks.

So I actually looked inside the magazine to see if it was just the cover that was scary and whether the article itself was more toned-down.

Nope!

The articles were even scarier than the covers.

Meanwhile, the S&P 500 Technology Index closed yesterday at the highest level in its entire history.



This is what we're doing here: recognizing when there's a divergence between what they're telling you and what's actually happening.

Everybody's wrong.

You're literally seeing it in real time.

Journalists Hate Crypto Too!​

Don't look now but they're trying to scare you out of Crypto as well.

Journalists parading around as economists are telling your parents it won't end well.

Therefore, we know it likely will.



This isn't hard.

We just need to pay attention to what's happening around us.

Prices of assets go up. Journalists scare out the retail investors. And then prices keep going up.

That's how this works.

It's when these professional distractors start telling everyone to buy stocks that we want to do the opposite.

Remember the stampeding robot bulls published right before the stock market crashed in 2020?



Yeah, that's the kind of thing that would turn us into net sellers.

And this ain't it.

Stay sharp,

If there’s one area of the market that still hasn’t woken up like it should, it’s small-caps. Nobody wants them right now. The hate is real. Bearish sentiment is building fast, and short interest in the Russell 2000 $IWM is at 18-month highs. Investors are pressing their bets, leaning hard against these stocks. But when the crowd gets this aggressive, the unwind is rarely quiet. Small-caps matter. They’re a real proxy for market breadth — covering everything from regional banks and biotechs to industrials and other under-the-radar names. And when they move, it usually means something bigger is brewing. Look at the Russell 2000 vs. Russell 1000 ratio sitting right on long-term support.

​

If small-caps are about to enter a fresh period of outperformance, this would be a logical place to start. Notice how every major bull run this century has seen small-caps leading — at least in the short term. We think this time is no different. Momentum’s been diverging positively for weeks now, with the 14-day RSIpushing higher even as prices grind lower. If small-caps catch a bid here, it would be a big win for market breadth and overall market health. We think it could happen anytime — and we want to be ready when it does. That’s when our Minor Leaguers Report comes into play. We publish it every two weeks for ASC Premium. Here’s this week’s table:

​

In this scan we focus on small- and mid-cap names between $1B and $4B in market cap — stocks with real breakout potential. This is where the upside lives. These are the names that can run 5x or 10x as they climb into large-cap territory. We’ve seen this movie before. When small-caps get going, they move fast — and they bring real market strength with them. So let’s be ready to move with them.

Middle East


The staggering success of the first phase of Israel's war in Iran has left its air force in total control of the skies over Tehran — and its leaders contemplating regime change in the Islamic Republic, Axios' Barak Ravid and Marc Caputo write.

• Why it matters: Prime Minister Benjamin Netanyahu has effectively endorsed the idea in a string of media appearances in the last 48 hours. But President Trump has remained unconvinced, at least so far, U.S. officials say.

Friction point: When the Israel Defense Forces thought they had a window to assassinate Supreme Leader Ali Khamenei over the weekend, Trump opposed it.

• A senior administration official summed up the thinking: "It's the Ayatollah you know versus the Ayatollah you don't know."
• That's not to say Trump couldn't decide to "swoop in and do some gigantic action," the official cautioned.

Driving the news: Trump issued an ominous warning overnight that everyone in Tehran (population 10 million) should "immediately evacuate," then announced he was leaving the G7 summit in Canada early.

• Speculation about an imminent U.S. attack spread like wildfire, before the White House denied it, and Trump himself suggested he might cut a deal.
• In an overnight strike on Tehran, the Israeli military said it killed Iran's top commander Ali Shadmani, who it described as the "closest figure" to Khamenei.

​

Via Truth Social
Behind the scenes: Israeli officials tell Axios that regime change isn't an official war aim.

• It was not one of the objectives approved by the Israeli security cabinet ahead of the war. Several Israel Defense Forces (IDF) officials said they've received no such directive from the political level.
• But discussions about it are getting louder and more overt.

Netanyahu openly stated on Fox News on Sunday that the war could bring regime change to Iran. Then yesterday, he contended that killing Khamenei could "end the war."

• Subtlety is not the objective. Netanyahu appeared on an Iranian opposition TV program yesterday called "Regime Change In Iran" and mentioned that nobody saw the fall of the Soviet Union or Syria's Assad regime coming until it happened.

The other side: The White House supports Israel's stated war aims of eliminating Iran's nuclear and ballistic missile capabilities, but not a broader mission to reshape Iran through force.

• "They might be more comfortable with regime change than we are," the U.S. official said, referring to the Israelis. "They may be more comfortable with destroying the country than we are."
• "But generally speaking, the world should want this bomb capacity to be destroyed, and eventually we're going to have to get that done."

​

Smoke rises after the IDF attacked Iran's state TV studios in Tehran yesterday. Photo: Getty Images
Reality check: Since the war started last Friday, there have been no widespread protests in Iran against the regime.

• Raz Zimmt, a top Israeli expert on Iran from the INSS think tank, told Axios that for now the regime is maintaining its cohesion and determination, and is even closing ranks in the face of the external threat from Israel.

International markets appear to have convinced themselves that the latest conflagration in the Middle East can be looked through as easily as all the region’s other flare-ups of the last decade. Are they right to do so?

Gold prices fell, Treasury yields rose, and equity volatility dropped Monday as Israel and Iran continue to pound each other with bombs and missiles. Most startlingly, stocks rebounded; relative to long bonds, they are their strongest since the day after President Donald Trump’s inaugural:


All the normal signs of a “risk-on environment” were in evidence. This despite the fact that an Israeli attack on Iranian nuclear facilities has long been regarded as “the Big One” that could transform the global risk environment for the worse. And yet the oil price fell Monday, and it’s far below its January peak:


Iran is now trying to find a way out of the conflict, but Israel has little desire to halt when it is on top. Arguably, there’s something “positive” in the absence of developments that might seriously constrict oil supply— closure of the Strait of Hormuz by Iran, or damage to Iranian oil production by Israel. But with Prime Minister Benjamin Netanyahu pressing on, the danger of such events in the future remains.

So can the market calm possibly make sense? Here are the cases for and against:

The Case for Calm

Middle East conflicts matter to markets and the global economy because they can impact the oil price. On that basis, Israel has chosen a “good” time. Oil inventories are rising, and the OPEC+ countries have been trying to restrict supply. Many will be happy for an excuse not to go through with this. Such dynamics point to downward pressure on oil. This chart from Harry Colvin of Longview Economics in London illustrates what’s going on:


Longview points out that the oil market has a way of seeing Israel-Iran conflicts coming, and pricing them. Crude makes a high when the news breaks, and then subsides. This happened during the missile exchanges in April last year. Colvin comments that “a similar playbook may repeat this time,” given that the oil price was up 20% Friday from its lows May 5 – possibly in anticipation of the resumed conflict.

Further, history suggests that the oil price needs to double before it can inflict a recession in the west. Evidently that happened in the 1970s. This chart, drawn up with the St. Louis Federal Reserve’s FRED service by Nicholas Colas of DataTrek International, shows that from 1987 to the pandemic, recessions all followed close after a doubling of the oil price:


The other two doublings, in 1987 and 2010, came when oil was “normalizing after hitting multi-year lows rather than breaking out to decade-plus highs.” As the recent low was $57.50, that would imply that West Texas Intermediate needs to reach $115 before it forces a recession — and probably top its post-Ukraine invasion peak, when it spent a few days above $120. With WTI at $72, that’s a long way off.

Beyond the current specifics, history suggests that the market can deal with big geopolitical shocks just fine. Hitler’s invasion of France and the 1973 Yom Kippur War were big exceptions. Beyond that, Jim Reid of Deutsche Bank AG relays this statistic:

Historically, the S&P 500 tends to fall around -6% in the three weeks following a geopolitical shock, only to recover fully over the subsequent three weeks... The bar for a more significant selloff is higher this time, as equity positioning is already quite light — currently -0.33 standard deviations below the mean, or in the 28th percentile.

Deutsche’s researchers list 32 political events since 1939 that led to selloffs. They took a median of 16 trading days to hit bottom, and 17 days thereafter to recover all lost ground. Small wonder that traders look at any geopolitical dip as a chance to buy.

There are also some surprises. The S&P 500 had recovered all its losses from the Cuban missile crisis of October 1962, the closest the world has come to nuclear Armageddon, within nine days. Two decades later, it would take 304 days to recover from another Caribbean confrontation, the US invasion of Grenada in October 1983.

The variability between apparently similar events is also marked. Recovery from the Six-Day War of 1967 took 40 days; getting over the Yom Kippur War took 1,475 days (thanks largely to the subsequent Arab oil embargo). Tail risks exist. The point is that they are unlikely, but risk managers need to take account of them.


jog on
duc

 

[ducati916]

Just ran a Z-score for NRG

Crude oil just ripped higher with its biggest 3-day rally since March 2022. And the timing couldn’t be more interesting. The energy trade looked like it was unraveling. But the bulls are stepping in and repairing the damage. Valid tops have turned into "not tops" and bear traps. This burst of upside momentum comes right as crude is bouncing off a major support zone, both in absolute terms and relative to the broader market. Energy stocks have been under pressure for months, but this looks like a potential turning point. Not only is the price action improving, but positioning is also offside. Short interest in the Oil & Gas Exploration & Production ETF $XOP just hit its highest level in years. A lot of the individual stocks have the highest short interest ever. The unwind could fuel a powerful move higher across the energy complex if these moves hold. Polarity 101

​

​

The major petroleum contracts are bouncing from key support zones that previously acted as resistance in 2018 and 2019. These levels have been successfully defended recently, a great example of market polarity. Prices are now pressing against declining trendlines from the 2022 peaks. This setup suggests a potential trend reversal if buyers can push prices through overhead resistance.

Oil News



As the Israel-Iran war shows no signs of abating, market participants are speculating whether Israel could target Iran’s oil export infrastructure after its strikes on the South Pars gas field.

- Up until now, Iranian oil exports have seen no impact from the barrage of missile strikes with May exports posting a multi-year high of 1.8 million b/d and June loadings keeping the same pace so far.

- Iranian producers of methanol, ammonia and urea have mostly shut production in a precautionary way, following strikes on the Tehran refinery, which the Iranian side reciprocated by hitting Israel’s 195,000 b/d Haifa refinery.

- Israel has no crude production of its own, relying for imports to meet its downstream needs, however the Leviathan and Tamar fields could be targets for Iran’s missile strikes, prompting the Israeli government to shut both fields down.

Market Movers

- US oil major ExxonMobil (NYSE:XOM) has started to drill the Lukanani-2 well using the Stena Carron drillship, seeking to build another production hub around the field that already saw one successful discovery in April 2022.

- The executive board of Canadian producer MEG Energy (TSE:MEG) urged the company’s shareholders to reject the $4.5 billion hostile takeover bid from Strathcona Resources, calling the bid inadequate.

- French oil major TotalEnergies (NYSE:TTE) has purchased a 25% interest in Chevron’s US Gulf of America offshore portfolio for an undisclosed sum, covering 40 federal exploration leases.

- Japan’s Mitsubishi Corp (TYO:8058) is in negotiations with private equity-held US shale producer Aethon Energy Management to buy its Haynesville assets for $8 billion, failing to reach a deal with UAE’s ADNOC.

Tuesday, June 17, 2025

Oil trading has seen some of its most volatile days in recent history as non-stop missile strikes exchanged between Israel and Iran ratcheted up fears of potential supply disruptions from the Middle East. Amidst unsubstantiated reports of the two sides seeking a ceasefire, the risk premium is back in the ICE Brent as the global crude benchmark remains around the $75 per barrel mark.

Diesel Gains the Most from Middle East Flare-up. US diesel futures saw an unprecedented surge in the wake of the Israel-Iran hostilities, rising even steeper than crude oil to $2.38 per gallon and improving the ULSD crack to a whopping $28 per barrel, as markets feared supply disruptions from the Middle East.

World’s Largest Gas Field Reduces Output. Israel’s strikes on Iran’s section of the South Pars field, the continuation of Qatar’s North Dome play into Iranian territorial waters, debilitated one of the four refining units of Phase 14 with a capacity of 4 bcm per year or 2% of the country’s output.

Egypt Doubles Down on Fuel Oil. Unable to tap into Israeli pipeline gas supplies after the forced halt of the Leviathan and Tamar offshore gas fields, Egypt is reportedly preparing to issue a hefty 1-million-tonne import tender for fuel oil, facing rolling blackoutsamidst peak summer temperatures.

Chinese Refinery Runs Dip Even Lower. China’s refinery throughput posted a 1.8% year-on-year decline to average 13.92 million b/d in May, the lowest levels since August 2024 as many refiners took capacity offline for maintenance works and saw operating rates decline to a mere 73%.

Urals Back to Trading Above Price Cap. As the European Union mulls lowering the oil price cap for Russia from $60 per barrel to $45 per barrel, the rise in global crude prices has brought the price of Moscow’s benchmark Urals grade back into non-compliant territory, around $62-63 per barrel.

UAE Expands into Australia’s Offshore Gas. ADNOC, the national oil company of Abu Dhabi, has offered almost $19 billion for Australia’s gas-focused producer Santos (ASX:STO), offering a premium of more than 27% to the Adelaide-based producer’s Friday closing price of $4.52 per share.

Russia-Ukraine Refinery Warfare Drags on. Overshadowed by the Israel-Iran conflict, the moratorium on energy infrastructure attacks between Russia and Ukraine is no longer intact, with Moscow claiming to have struck Ukraine’s only remaining refinery in Kremenchug.

A New Franco-Malaysian Tandem is Emerging. France’s state energy firm TotalEnergies (NYSE:TTE) continued its buying streak in Malaysian gas assets operated by Petronas, taking new stakes in several offshore areas, including blocks SK301b and SK313 with proven gas reserves of 4 TCf.

China Approves Mega Agriculture Merger. Following months of waiting, China’s market regulator has granted conditional approval to the $34 billion merger of agricultural giants Bunge (NYSE:BG) and Glencore-backed Viterra, despite noting that the new giant’s market share could reduce competition.

EU to Ban New Russian Gas Deals Despite Vetoes. Overriding the opposition of Hungary and Slovakia, Brussels is preparing to formally ban EU Russian gas and LNG imports by the end of 2027, adding momentum to TTF’s pricing upside as Europe’s gas benchmark rose to €38 per MWh.

OPEC Shuns Demand Worries. In its monthly report, OPEC curbed its 2026 outlook for non-OPEC supply to 730,000 b/d amidst expectations of stagnating US supply, whilst the oil group kept demand projection for both 2025 and 2026 intact, maintaining that economic growth will remain robust.

Glencore Takes Root in Singapore. Aster Chemicals and Energy, a joint venture between global trader Glencore and Indonesia’s Chandra Asri, agreed to fully acquire a 70,000 b/d condensate splitter in Singapore, buying the remaining half from petchem firm PCS, boosting its refining capacity.

UAE Tanker Collision Scares Markets. In what was initially believed to be a result of a missile strike, two oil tankers collided and caught fire near the Strait of Hormuz, with a VLCC carrying Iraqi oil to Zhoushan, China, hitting a ballasting tanker that was slowly moving away from its anchorage in Khor Fakkan.

The spring spending binge has fizzled out, a sign that any economic boost from efforts to beat tariffs is over. Why it matters: That leaves huge questions about the data policymakers use to assess the economy's health — with uncertainty about whether the spending pullback is only natural or a crack in the bedrock of the economy. Driving the news: Retail sales fell 0.9% in May, following a slight drop (-0.1%) in April. The auto sector was the biggest drag last month. Spending at dealerships fell by 3.5%, receding after a spending surge earlier this year as consumers sought to make purchases before tariffs took effect. The other drag came from building materials, which slumped by 2.7% — likely a result of easing demand after tariff front-loading, a weaker housing market, or a combination of both. Sales at gasoline stations fell by 2% last month, likely due to cheaper gas prices. The data is not adjusted for inflation. The intrigue: Stripping out autos and gasoline, retail sales fell by just 0.1%. Spending across other categories — furniture, clothing, and e-commerce — rose last month. The control group figure — which excludes autos, gasoline, building materials and food services — actually rose by 0.4% in May. That figure feeds into the calculation of consumer spending in the GDP report. The Atlanta Fed's "nowcast" of GDP suggests growth surging at a 3.5% annual rate, after an economic contraction in the previous quarter. But that, too, largely reflects a reversal of the import front-loading that previously pushed down growth. What they're saying: "The consumer hasn't pulled back but isn't spending lavishly and is understandably price sensitive," Oren Klachkin, a markets economist at Nationwide Financial, wrote in a note. "We foresee clearer weakness in retail sales over the coming months as pay back from the front-loading," Klachkin added, noting other factors like tariff-related price hikes and higher borrowing costs will also weigh on spending. What to watch: The report showed that sales at restaurants and bars fell by almost 1 percentage point, signaling some weakness in the services sector — a part of the economy not directly affected by the trade war. The bottom line: The weeks ahead will likely be marked with more shifts in the tariff backdrop, with key deadlines in early July. Such shifts could make economic data even more difficult to parse.

The Trump administration's signature tax and spending legislation is one step closer to becoming law — which means we're one step closer to knowing which competing factions among congressional Republicans will prevail on key issues. Driving the news: The Senate Finance Committee released the text of its version of the One Big Beautiful Bill Act yesterday, weeks after the full House passed its own version. While it's far from the final version that the Senate will pass, or that the House and Senate will eventually agree upon, it sheds light on how Senate Republicans are thinking about key fiscal trade-offs as the legislation gets closer to its home stretch. State of play: One of the biggest tensions among congressional Republicans is over how aggressively to cut Medicaid spending. Fiscal hawks want to cut more; moderate and populist lawmakers, less. The fiscal hawks won this round. The Senate draft goes further than the House did in tightening Medicaid provider taxes, a mechanism for reducing federal contributions to state Medicaid programs. That was one of several "notable adverse surprises on Medicaid," wrote Tobin Marcus, head of U.S. policy and politics at Wolfe Research, "posing problems for hospitals if maintained." Of note: The Senate version also differs from the House version on the deductibility of state and local taxes, maintaining the current $10,000 cap rather than raising it to $40,000, as the House does. Most Republicans would rather keep the cap lower, but that is a non-starter for a handful of swing-district moderates in the House whose votes are needed for the legislation to pass. What to watch: The Senate version makes some key business tax provisions — bonus depreciation for equipment and full expensing of research and development — permanent. In the House version, they're temporary. Business groups and conservative economists view those as among the bill's biggest drivers of future economic growth.

jog on
duc

 

[ducati916]

A longtime slump in the new housing sector is getting worse, according to indicators released in the last 24 hours. Why it matters: The broader economy held up during a "rolling recession" that hit the housing industry in recent years. That might not be the case this time if other sectors slow concurrently. Catch up quick: Builders broke ground on home construction in May at the slowest pace in five years. The issuance of building permits, an indicator of the appetite to build homes, also hit a five-year low. Sentiment among homebuilders dropped to the lowest level since 2022 in June. Lennar, one of the nation's biggest homebuilders, reported weaker-than-expected quarterly earnings, citing a soft housing market. State of play: Now the sector faces new Trump-era factors, including tariffs and deportations, that are holding back construction and limiting supply. Plus, in certain parts of the country, there is too much inventory compared to demand. Driving the news: Housing starts fell almost 10% last month to an annualized pace of 1.3 million, well below the rate that economists expected, the Commerce Department said this morning. Building permits also came in worse than expected, particularly for single-family homes. They dropped to an annualized rate of 898,000, nearly 3% below April. What they're saying: The National Association of Home Builders said sentiment among builders has only been lower than its June level twice since 2012. "Buyers are increasingly moving to the sidelines due to elevated mortgage rates and tariff and economic uncertainty," said Buddy Hughes, a North Carolina-based developer who chairs the NAHB, said in a statement yesterday. The big picture: Softer demand is being met by higher building costs, including for labor and materials. The industry is heavily reliant on immigrant workers, who are being targeted for deportations by the Trump administration. Meanwhile, tariffs on steel and aluminum have doubled to 50%, except for U.K. imports of the materials. The Trump administration is considering higher tariffs on wood materials, including lumber. "New construction has slowed as builders have pulled back on production," Lennar co-CEO Stuart Miller said on an earnings call yesterday. Miller said "labor and material costs — lumber is a particular headache — are generally increasing."

We’ve been waiting patiently for a leadership handoff in the metals market. It’s happening now. Platinum and Palladium, the long-forgotten cousins of the precious metals complex, are waking up. Just look at the charts. A synchronized breakout is underway

​

​

The black line shows our Equally Weighted Platinum & Palladium Index, and the black line is Sibanye Stillwater $SBSW, one of the top producers of both metals. They have always danced together. Right now, they're both breaking out to new multi-year highs. In addition, Silver futures are also on the run. This type of rotation is exactly what we expect to see during the middle stages of a strong metals cycle. First, it was Gold. Then comes the rest of the group. These new trends are just getting started. One of our favorite stocks for this theme is SBSW. All of the trade details are here.

The conflict between Israel and Iran continues, despite Monday’s emphatic market bets that it was over. But the focus has changed. Initially the great fear involved Iran closing the Strait of Hormuz, a critical bottleneck for global oil supply.

Following Donald Trump’s early departure from the G-7 summit in Canada, and presidential social media posts calling for civilians to evacuate Tehran, and then for “UNCONDITIONAL SURRENDER!,” the question has changed. Will the US expand the war by involving itself directly? And also, what would intervention aim to achieve? Another post suggested that the purpose might have shifted from preventing nuclear proliferation to attempting regime change:

We know exactly where the so-called “Supreme Leader” is hiding. He is an easy target, but is safe there — We are not going to take him out (kill!), at least not for now.

Multiple news reports now suggest that the administration is considering direct action. The main reason would be that destroying the remaining Iranian nuclear facilities, deep underground, would require huge bunker buster bombs (formally known as Massive Ordnance Penetrators) which only the US possesses, and would need to be delivered from US heavy bombers with US pilots. This appears to be the backbone of the contention by Israel that American involvement will be needed if Iran’s nuclear threat is to be neutralized.

Without any physical escalation actually happening, yet, the composite effect was for the oil price to go right back to where it closed at the end of last week. In the process, any trader who bought at the bottom Monday netted a 9.25% profit in barely 24 hours:


Another factor driving the volatility is that this development came as an almost total surprise. Fund managers had been worried about lots of things, but not about an attack on Iran. We now have the latest survey of global fund managers by Bank of America Corp., based on responses completed the day before Israel’s attack begin. Such an event wasn’t even mentioned when they were asked to name the greatest tail risk of the moment:


Equities dipped on Tuesday, although not dramatically — the S&P 500 shed 0.84% — while equity volatility as measured by the VIX index jagged higher.


These gyrations have happened with no obvious concrete new developments, driven instead largely by the news flow produced by the president on social media. Is this a sensible way for markets to try to deal with the risks? Christopher Granville of TS Lombard suggests that traders are too focused on attempts to handicap different outcomes, when the situation is more fluid than that. He argues:

Day Five of the war (16-17 June) suggests a different perspective would be more useful – one that focuses less on outcomes and more on the process of attrition. This points to a pure volatility play, with frequent sharp (oil) market moves getting promptly reversed.

To show how this works, Tina Fordham of Fordham Global Foresight suggests that the market is treating the situation as an effective choice for the Iranian regime over its mode of demise: “Blaze of glory or humiliating capitulation?” This may not be a useful framework.

Granville argues that the stakes on either of the two polar outcomes are so great that “much more military degradation and social tension on both sides will be required before one or other outcome goes live.” As the “blaze of glory” is suicidal for the regime, he says that “it would first have to be mortally wounded.” Capitulation would contend with regime infighting and the lack of any trust in the US as a counterparty. “Unconditional” presumably means giving up the ability to enrich uranium, and would be such a drastic defeat that some change to the regime would seem inevitable. For Tehran, it would be a last resort.

There are further problems that go beyond the salutary lessons from Iraq and Libya. Fordham points out that the potential consequences of a fallen Iranian government were still not priced by markets. For example, as Europe and Turkey would have to absorb the fleeing masses, as happened during the war in Syria, “so the political risks aren’t limited to the oil price or the Gulf.”

Andrew Bishop of Signum Global Advisors further argues that if regime change is truly on the agenda, it cannot happen for a while, and not until hostilities are over:

The most salient impact of the war for Iran’s leadership and regime is likely to come after the war ends — with precedents suggesting that both autocratic leaders and regimes are particularly vulnerable to ouster in the months following a military defeat.

A final issue with regime change, if that is the aim, is that it will be hard to find one that is more palatable to Israel or the US. The National Security Institute’s Karen Gibson, a former general, told an event organized by Academy Securities that the prospect of a “US-aligned regime in Iran is really small,” as younger generations tend if anything to be more radical than their elders. “I don’t know how a non-Islamist regime would rise up.”

It’s a complicated and deeply scary situation. The odds remain that this conflict will continue to generate enough twists and turns to make money for traders. That is little comfort for most of us.

When semis finally started to perk up earlier this month, I zeroed in on one of the cleanest setups I’ve seen in a while: Micron $MU. It was coiling tight — right below a massive confluence of resistance. We’re talking the VWAP from all-time highs and the past cycle peak from the dot-com bubble. That's serious price memory. I don’t care what you call the pattern — flag, pennant, triangle — when it winds up like that at a key level, I’m betting on a breakout. So I stepped in and bought the MU 7/18 $120 calls for $2.40. Three days later, they doubled. I took half off the table and let the rest ride, risk-free. Fast forward to today… those contracts are trading above $10. That second half turned into a 4x. Here’s the MU chart we were watching:

​

That’s the kind of move we target every week inside Breakout Multiplier. Tight ranges. Defined risk. Explosive upside.

From Reuters:

Spanish lender BBVA is advising wealthy clients to invest up to 7% of their portfolio into cryptocurrencies, an executive said on Tuesday, in the latest sign some banks are warming to a sector long avoided by mainstream finance because of its risks.

BBVA's private bank advises clients to invest 3% to 7% of their portfolio in cryptocurrencies depending on their risk appetite, Philippe Meyer, head of digital & blockchain solutions at BBVA Switzerland, told the DigiAssets conference in London. . .

While many private banks execute client requests to buy cryptocurrencies, it is relatively unusual for them to advise them to actively buy them.


Today's Chart of the Day was shared by Charlie Morris (@AtlasPulse).

• • Silver reached a fresh 13-year high today, with futures closing above $37/oz for the first time since 2011.
    
    
  • After clearing resistance at $35 earlier this month, Silver is on pace for its best month in a year, rising more than +12% MTD. It’s finally catching up to Gold, with both metals now up +28% YTD.
    
    
  • If Silver holds above $35, it could test the mid-40s by year-end, representing the blow-off peak from 2011. Doing so would complete a decade-long base and unlock significantly more upside for Silver.

The Takeaway: Silver is printing multi-year highs and accelerating toward its 2011 peak. If it holds above $35 in the near term, it could test the mid-40s by year-end.





So just prior to the Fed:





Everything calm prior.

But all at lows. Could warm up.





**

Fed leaves rates unchanged.

jog on
duc

 

[ducati916]

Energy’s been one of the most active areas of the market lately, with momentum building across the board.

It feels like this forgotten corner of the market is finally getting the attention it needed.

Crude’s squeezing, heating oil has gone vertical, and gasoline’s catching a bid.

If this momentum sticks, I think Nat Gas is next in line.

Just look at the chart:

Natty gas been coiling right at the breakout level of a textbook bearish-to-bullish reversal for roughly three months.

But what really catches my eye is that price is setting up between two key VWAPs — one from the 2022 highs and another from the March pivot highs.

This type of compression in volatility often leads to explosive moves.

And with price finally piercing through resistance today, it may suggest this trend reversal is just getting starting.

In a market driven by rotation, this looks like a setup worth paying attention to.

Back in mid-March, I wanted some uncorrelated exposure — something outside the usual tech/equity playbook. Natural gas stood out, and $CRK looked like the cleanest setup in the space. It was coiling beneath a massive base breakout level. So I grabbed the CRK 6/20 $24 calls at $0.65 Boom — breakout. A couple of days later, we sold half for a double. Fast forward to this month… CRK was coiling again — this time above the breakout. Energy stocks were shaping up across the board, and I wanted to lean in harder. So I sized up my position with CRK 7/18 $27 calls at $0.70. Now? CRK stock is up 25% and running in a straight line higher. → Those June calls are up 900%. → The July calls? Already up 500%. Here’s how the system works: Identify the coil — a tight consolidation Wait for momentum — from compression, comes expansion Position with options — short-dated calls with asymmetric upside Double on the breakout — take profits fast on follow-through Let it free-ride — risk free reaction rallies turn into multi-baggers Here's the $CRK chart I was watching:

​

Crowding out credit growth to productive enterprise.

jog on
duc

 

[ducati916]

China’s role in the Iran‑Israel conflict isn’t born of strategic grandstanding, but of pragmatic energy calculus. Iran, tightly constrained by Western sanctions, has increasingly tethered its oil lifeline to Beijing, now accounting for approximately 85 percent of its oil exports. This near‑monopsony suits China: discounted crude in exchange for geopolitical reticence.

As reported by DW, Chinese foreign policy architect William Figueroa characterizes Beijing’s posture as disinterested—“no appetite to be involved”—not out of moral high ground, but capacity constraints. China lacks the regional military flexibility to act without risking broader escalation .

Still, China’s leverage through energy dependence is undeniable. Iran’s oil-for-infrastructure deals and shadowed military nods were strategically banked on Beijing’s commitment. Yet today, when conflict flares, China leans on diplomacy, not arms. It presses for de‑escalation, cautioning both Tehran and Jerusalem to respect sovereignty, even rarer is criticism of either side .

The energy dependency is a double‑edged sword for Iran. Beijing’s near‑total reliance on Iranian oil funds Tehran’s missile program and nuclear ambitions, aggravating Israel’s security paranoia. But it also binds China into a delicate balancing act: supporting Iran’s financial engine, while publicly prioritizing stability over alliance .

China’s strategic calculus is clear: high stakes in Middle Eastern energy flows, particularly through the Strait of Hormuz, where Iranian turbulence can rattle global oil markets. Yet China remains reluctant to step into the fray militarily. For Iran, this means continued economic lifelines without the military umbrella it may have hoped for .

China, the unwilling oil financier, perches on the periphery holding Tehran’s purse-strings but keeping its own hands clean. China offers Iran economic oxygen, but not military shelter, its cowed neutrality now the least risky of many bad options.

“I’m gobbling up COIN calls.” It’s what I told Breakout Multiplier members I was doing during last week’s strategy session. Today, Coinbase stock rallied 16% after Congress passed the Genius Act, providing regulatory clarity for stablecoins. The company also announced the launch of a stablecoin payments stack for e-commerce platforms. The news tanked blue-chip payment names, Visa and Mastercard. And that’s just the disruptive nature of this business. I think Coinbase is one of the most exciting long-term growth stories out there. They keep doing all the right things. And now that they finally have a clear and supportive regulatory backdrop, they can execute freely. But that’s why I own the common stock… The short-dated calls I’ve been pounding the table about have nothing to do with that. Instead, that trade has everything to do with bull flags. We came into the month with a growing list of indexes and stocks resolving short-term continuation patterns to the upside. In the weeks since, some have seen tremendous follow-through while others have had more lackluster reaction rallies. But very few have failed…. and that’s been great information. When I see the same pattern play out and complete the same way repeatedly… I act accordingly—I look for that formation, and I buy it—over and over again, for as long as it works. Here it is in Coinbase:

​

Why should it do anything different from the other bull flags? With Bitcoin and speculative growth trading at new highs, why shouldn’t it follow? Today, COIN followed in a big way as the crypto industry leader blasted higher out of this coil. I dumped almost all my weekly calls as they ripped deep into the money. I’m holding a small bit for potential Friday fireworks. It was the best single day of the year for my trading account. I plan to redeploy the profits into some fresh bull flags over the course of the coming days. Speaking of bull flags, we discussed another one on last week’s call: CRK. We doubled down on the position Thursday, and the stock is up about 25% since. We sold a double almost immediately, and as of today, those calls are up about 500%. We were also in some June CRK calls that expire Friday. Those hit 10x today.

jog on
duc

 

[ducati916]

Today's number is... 13.44% 13.44% is the annualized return of the S&P GSCI Commodity Index when the 10-day moving average of its 40-day percent change is above the 120-day Here’s the chart:

​

​

Let's break down what the chart shows: The candlesticks in the top panel show the S&P GSCI Commodity Index price. The middle panel plots the 40-day percent change with 10-day (blue) and 120-day (orange) moving averages. The black line in the bottom panel shows the spread between those two MAs. Grey shading highlights periods when the 10-day average is above the 120-day. The Takeaway: This tactical model doesn’t just track price. It tracks the trend in momentum. By smoothing the 40-day rate of change in the index, it identifies when strength is building or fading. When the 10-day average is above the 120-day, the model turns bullish. When it slips below, the model turns bearish. When the momentum trend is positive, the S&P GSCI Commodity Index delivers an annualized return of 13.44%. When the trend is negative — with the 10-day below the 120-day — the annualized return collapses to just 0.04%. Buy-and-hold splits the difference at 6.65%, but with a far rougher ride. This simple overlay captures nearly all of the return and avoids the deepest losses. Technically, this is a trend-of-momentum overlay. It filters for conditions where price isn’t just rising — it’s accelerating. Momentum pays — but only when it’s trending. Commodities aren’t breaking out. But momentum is turning up. If this trend continues, it could start pulling capital back into Energy, Materials, and other real asset plays. That’s when the rotation gets real. So what now?

For the first time ever, Robinhood $HOOD popped up on our radar — and it made a statement. Christopher Payne just bought 26,500 shares at $74.18. That’s a $2 million open market purchase. His own cash. No fancy options or restricted stock grants. Payne joined Robinhood’s board in December. Before that, he was the COO at DoorDash, CEO of Tinder, and held key roles at Amazon, Microsoft, and eBay. The man knows tech. He knows growth. He knows the business. This comes as HOOD is breaking out above its post-IPO high and completing a massive multi-year base:

​

This chart couldn’t look any better right now. It’s one of my favorites out there. You see, there are hundreds of reasons an exec might sell stock — taxes, diversification, paying for a daughter's wedding, you name it. But there’s only one reason they step in to buy with their own cash: they believe the stock is going higher. And what makes this even more interesting is the fact that it’s the first insider buy at HOOD since 2021. Robinhood isn’t just a trading app anymore. It’s becoming a full-stack financial platform — brokerage, retirement, credit, cash management — built for the next generation. The company is now worth $70B. Just last year it was completing a major reversal base. Funny to think it used to be part of our 2 to 100 Club universe. I’ve unlocked this post from last year so you can see what I mean. That scan tracks high-growth stocks as they move from $2B to $30B in market cap, focusing on the strongest names in top industries like Software and Semis. These are the next $100B companies — and HOOD is on track to become one. Here’s is yesterday’s table:

​

If you want trade ideas like these delivered every week, you can join the 2 to 100 Club here. That’s all for today!

Full:https://www.wsj.com/finance/investi...a?st=oDpd3s&reflink=desktopwebshare_permalink




I remember going to see it when it first came out in the cinemas with school mates. Still enjoy it today.


jog on
duc

 

[Captain_Chaza]

But Which Commodity?

History teaches us that GOLD and OIL do not go in the Same Direction for very long
Crikey! If you look at URANIUM and IRON ORE it is like comparing CHALK and CHEESE

As with all INDECIES they only make Great Conversation IMHO

Salute and Stay Well

 

[ducati916]

From JC;

I don’t know if you heard, but the FIFA Club World Cup is playing out across the U.S. this month. The best teams from every country are here—Real Madrid, Manchester City, PSG, Flamengo, Al Ahly, Boca Juniors, and River Plate. For those who like soccer, it’s a great time to enjoy. Yesterday, Inter Miami made history—becoming the first club from the US to defeat a European team in an official FIFA tournament. And of course, Messi delivered. He scored a ridiculous goal to win the match and reminded everyone why he’s in a league of his own. These players are different. Like Jordan in basketball, Tiger in golf, or Brady in football—when they show up and carry the team, everything changes. The odds tilt in your favor. Same thing happens in markets. We think of semiconductors as the Messi's of this game. These are arguably the most important companies on the planet. They power the global economy and carry major weight in the indexes. How they perform often sets the tone for the rest of the market. Semis just failed to complete a nasty top relative to the S&P 500.

​

Bulls are now scoring points and pushing higher, invalidating any negative implications from a potential breakdown. When we look at this chart, it’s impossible to bet against U.S. equities. If semis are in good shape, then the rest of the market, and risk assets overall, have a much better chance of doing well. We just released our latest Junior Hall of Famers report. It highlights the next 150 largest companies in the U.S., helping us spot emerging trends before they make headlines. (Stocks #151-300 in Market-cap). Maybe someday, these will be the most valuable companies out there. Take a look:

​

Take a look at the types of stocks that are showing up in this scan. They're not the largest 150 stocks. They're the next set of companies, where the market caps fall around that $30B - $70B size. If you've been paying attention, huge winners have been coming out of here regularly.

Oil News;


Friday, June 20th, 2025

The unpredictable nature of the Israel-Iran conflict has seen Brent bounce in a wide range of $70.56 to $79.04 per barrel this week, set for a slightly bearish closing around $77 per barrel after the Trump administration pushed out the timeline of its potential involvement in the Gulf. US Federal Reserve decisions, OPEC+ policy, Chinese imports – all the usual bullish factors - have been on the back burner this week as the outcome of the Israel-Iran row will dictate further price movements.

Iran Discounts Its Oil to Expedite Sales. Sellers of Iranian crude oil to China have slashed their prices, offering discounts of 3.50 per barrel below ICE Brent for prompt July-delivery cargoes, seeking to expedite the pace of exports as Shandong ‘teapot’ refineries struggle with high oil prices.

Chevron Eyes Full Singapore Divestment. US oil major Chevron (NYSE:CVX) sought non-binding bids for its remaining 50% stake in the 290,000 b/d Singapore refinery it jointly operates with PetroChina (SHA:601857), eyeing to sell most of its Southeast Asian assets amidst a wider divestment drive.

Kazakhstan Denies OPEC+ Exit. The government of Kazakhstan refuted reports that it is considering an exit from OPEC+, despite a recurring overproduction problem that saw May output average 1.803 million b/d, some 21% or 325,000 b/d above its quota, angering other producers within the oil group.

The UK Tries Hard to Kill All North Sea Exploration. The UK government has issued a new set of stringent environmental rules for new fossil fuel projects, demanding that so-called Scope 3 emissions (from using the fuels extracted) must be included in any project’s environmental impact assessment.

Canada Readies to Become LNG Exporter. Canada could witness its first ever LNG cargo soon as the $40 billion LNG Canada project begins its commissioning procedures, with the cooling down of 6.5 mtpa capacity Train 1 starting this Monday and ending Sunday, pushing the country’s AECO prices higher.

Israel Shuts Its Only Operational Refinery. Israeli refiner Bazan was forced to temporarily shutter its 197,000 b/d Haifa refinery after an Iranian missile struck its dedicated power plant, leaving Israel with no operational refining as the other plant, the 110,000 b/d Ashdod refinery, is undergoing maintenance.

Petronas Becomes Suriname’s Drilling Champion. Petronas, the national oil company of Malaysia, has signed a deal to develop Suriname’s offshore Block 66, marking the fourth block to be operated exclusively by the NOC and becoming the most important E&P acreage holder in the country.

Mozambique Mulls Lifting LNG Force Majeure. The government of Mozambique has expressed readiness to lift force majeure on the construction of TotalEnergies’ (NYSE:TTE) 20 billion Mozambique LNG project, in place since an Islamic State attack in April 2021, seeking to launch the plant by 2029.

Libya Raises Concerns over Greece’s Oil Exploration. Libya’s Tripoli government has objected to Greece’s exploration drilling plans off the island of Crete, with US oil major Chevron (NYSE:CVX) eyeing two potentially oil-prolific offshore blocks, arguing the acreage falls within its exclusive economic zone.

Norway Brings Key Oilfield to Peak Capacity. Norway’s national oil firm Equinor (NYSE:EQNR) said that its flagship Johan Castberg project, the largest FPSO in the country’s territorial waters with 220,000 b/d production capacity, is now producing at peak capacity, less than four months after its commissioning.

US Supreme Court Sides with California Refiners. The US Supreme Court sided with Californian refiners that had opposed the Golden State’s tight standards for vehicle emissions and EV mandates, bringing California’s Biden-era exception from national emission standards back into the limelight.

Shale Champions Turn to Lithium Mining. US oil major Chevron (NYSE:CVX) acquired on lease some 125,000 net acres in northeast Texas and Arkansas to develop lithium resources via direct lithium extraction, following ExxonMobil’s 2023 entry into Arkansas’ Smackover brine formation.

Spain Blames Power Plants for Nationwide Blackout. Almost two months after Spain witnessed a nationwide power outage on April 28, the Spanish government blamed grid operator Redeia for failing to maintain an appropriate voltage amongst surging renewable generation in the country.

China Doubles Down on South Sudan Despite Civil War. South Sudan agreed to enhance cooperation with China’s national oil firm CNPC to restart oil production in several fields damaged during the country’s ongoing civil war, seeking to lift production from 70,000 b/d now closer to 200,000 b/d.




The Federal Reserve is always powerful. For decades, and certainly since the Global Financial Crisis, it has probably been the single most important driver of the world economy and markets. It hasn’t lost that role, but for the coming few months it is out of the driving seat. What happens next at the Fed is contingent on what happens on a number of other fronts. Thus, as Points of Return suggested last week, in deference to the Beach Boys, we need to wait all summer long for clarity on where monetary policy goes from here.

The Fed left rates on hold, as universally expected and justified in the opening sentences of its statement:

Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace. The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.

As to where the Fed thinks it’s going next, the latest “dot plot,” in which each member of the committee gives an estimate of future fed funds, created the most interest. The median member still expects two cuts during the last four meetings of this year. That was hailed as good news initially by markets, but it’s difficult to make much of it.

This is how the terminal breaks down the shift in the dot plot; gray dots are from the March meeting and the yellow dots are the most up to date. There are some subtle changes in there, but the obvious first reaction to this chart is accurate; it really hasn’t changed that much despite all the drama of the last three months:


As might be expected, forecasts diverge more as we look further into the future. The rates market, as gauged by Bloomberg’s World Interest Rate Probabilities function, has consistently predicted that fed funds will be somewhere between 3.0% and 3.25% by the end of next year. That implies a couple of more cuts by then than the Fed currently predicts, which in turn suggests that traders are more worried about growth than the central bankers are:


When it came to economic projections, the dots showed the central bankers growing slightly more negative about growth prospects for next year, while also expecting slightly higher inflation — so stagflationary at the margin, and neutral when it comes to the direction of the next rate move.

Somehow, all of this was taken as dovish enough to prompt a lot of people to buy two-year bonds, which are sensitive to the fed funds rate. But the press conference by Chair Jerome Powell, which started 30 minutes later, reversed almost all of it:


The critical passage from the Powell remarks that moved bond yields back upward was this one:

Ultimately the cost of the tariff has to be paid, and some of it will fall on the end consumer. We know that’s coming, and we just want to see a little bit of that before we make judgments prematurely.

Until the Fed is really confident that tariffs haven’t triggered a significant bump in inflation, in other words, it’s going to have to stay on hold. The risk of a commodity price spike created by the Middle East conflict adds to the arguments to wait and see. To quote Standard Chartered Plc’s Steven Englander, we should “take the summer off.” Englander also suggests that Powell is implicitly arguing for fewer than two cuts this year:

Given the absence of references to softer activity, and how frequently he referred to price increases from tariffs, we think it is possible that Powell was among those who saw zero or one cut.

The Fed chair is only very rarely outvoted, so it’s significant if he is now one of the hawks.

All of this, however, goes beyond the broad outline that nothing the FOMC announced made any change of any significance to the likely course of rates ahead. The committee obviously didn’t want to move the needle, and it succeeded. Once there is clarity on the Middle East and on tariffs, then it can be more active. For now, it’s overseeing low unemployment, declining inflation and booming asset markets, despite everything.

For both stocks and bonds, this was an unusually quiet FOMC day, with the S&P 500 closing down 0.03%, and the 10-year bond yield unchanged. Oh for such calmness and predictability in the Middle East.




The biggest takeaway from the most recent US inflation print was that tariffs are still not showing up in any significant way. If it carries on like this for a few more months, rate cuts are likely. But there’s another risk to those likely two cuts by year-end, and it’s naggingly beyond the Fed’s control — the surge in food prices. Last month, food inflation climbed to 0.3% month-on-month, its fastest pace since 2021. The monthly advance surpassed the average pace of inflation growth in the last five months:


While tariff pressures may have something to do with this price growth, the escalation in the Middle East poses an additional upside risk that hasn’t yet shown itself in food prices. The concern is that closing the Strait of Hormuz, a possible desperation tactic by Iran to shut off the flow of oil, would also affect agricultural commodities. The passage is a major transit point for fertilizer producers in the Gulf region. Iran ranks among the largest global exporters of urea anhydrous ammonia. Other fertilizer producers like Qatar, Saudi Arabia and Oman also rely on the passage. That helps to explain a recent rise in the futures market:


Key staples like corn, wheat, and soybeans rose significantly. Although they aren’t quite at the levels they reached in 2022 after Russia’s invasion of Ukraine, which directly affected crop production, there’s no telling how high they could rise if the Middle East conflict spreads further. Throw in the likely eventual impact of tariffs, and consumers would be facing the prospect of paying higher prices for food.


It’s hard for the Fed to ignore this, because food prices have grown very political. The escalating price of groceries, particularly eggs, was arguably the single most important driver of the Democrats’ defeat in the presidential election. And the last spike in agricultural prices, coming just as inflation was taking off after the pandemic, contributed to the food price surge of 2022:


Wednesday’s 4.4% price surge of wheat was the biggest since July 2023. Bloomberg News reports that trend-following traders have significantly scaled back a net bearish bet in wheat and could soon flip to a net bullish stake, according to Bridgeton Research Group. The latest Commodity Futures Trading Commission data showed the short in wheat at the lowest in seven weeks.

The fundamentals aren’t that worrying, away from the current very visible risks. Bloomberg Intelligence’s senior commodity strategist, Mike McGlone, argues that good weather is likely to boost supply, which will eventually curtail any potential sustained price surge. Corn, soybean, and wheat prices are more likely to decline than rise into year-end unless there's a Corn Belt drought. Prices are likely to return to 2019 levels:

Our bias is with the low probability of a Corn Belt supply shock versus the potential for another good production year, backed by the trend of superabundance in oil and liquid fuels continuing to pressure prices. Absent a drought, legislation to buttress biofuel demand or exports may help buoy the grains.

Although Powell plays down the conflict’s risks to US energy prices, it is challenging to extend the same assurance globally. Until tensions flared up, Bloomberg Economics’ Ziad Daoud argued that the global disinflation story was looking solid even in the face of tariff uncertainty:

Tariffs have played a role: dampening demand, weakening the dollar, and lowering oil prices. But the Iran-Israel war threatens to reverse that. Crude is rising again. And if the conflict escalates further, so will consumer prices.

While the promising May inflation data, coupled with the latest Fed dot plot, suggests that US rate cuts are on the horizon, the path is far from smooth. The significant surge in food prices adds a layer of uncertainty, even if it’s short-lived. In the near term, the combination of geopolitical instability, looming tariff effects, and volatile commodity markets poses a clear and imminent danger to consumer food prices. Consequently, while disinflationary trends might persist in other sectors, food inflation presents a stubborn hurdle that could complicate the Fed’s timing.



jog on
duc

 

[ducati916]

Last week:





jog on
duc

 

[ducati916]

Full:https://finance.yahoo.com/news/us-attacks-three-main-nuclear-015149574.html


Not good.

jog on
duc

 

[UMike]

.....


Not good.

jog on
duc

.
Sorry but this is good. Hopefully this festering wound on the world gets settled soon.

Regime change???? Short term Pain for long term Gain.

 

[divs4ever]

so you think Trump will be impeached ?

the UN will probably completely ignored now

the festering sore is political corruption in Washington

this Biden on steroids ( rules for thee .. but not for ... )

Putin and BRICS will be awash with new members

 

[qldfrog]

.
Sorry but this is good. Hopefully this festering wound on the world gets settled soon.

Regime change???? Short term Pain for long term Gain.

Let's remind ourselves:
Afghanistan, Irak, Libya, Syria. And we do not go back to Vietnam...
Has the world been a better place after each of these US big bully act?
And i am not looking at flowers and tree huggers but:
Is the west position, inc the US , better after than before..not even caring for lives lost etc..ok..pure cynical strategic/political view.
This is a monumental mistake and Iran is hard to love, i consider the green plague..not our local Greenies, as a civilizational threat.
But unless we were really on the edge of a nuclear strike, who knows, i think Israel has led the US far too much into an involvment which will be painfully costly.
I hope they at least succeeded to actually destroy capacity here; as for the pipe dream of reinstated West friendly regime in iran..good luck
Will be good for gold?

 

[UMike]

Anything is better than a country that believes in and encourages martyrdom to have a Nuke.

Off to the Iran-> Israel WAR THRREAD.

 

[ducati916]

Full:https://www.wsj.com/world/middle-ea...defensive-interceptors-official-says-fd64163d


Israel is running low on defensive Arrow interceptors, according to a U.S. official, raising concern about the country’s ability to counter long-range ballistic missiles from Iran if the conflict isn’t resolved soon.


The U.S. has been aware of the capacity problems for months, the official said, and Washington has been augmenting Israel’s defenses with systems on the ground, at sea and in the air. Since the conflict escalated in June, the Pentagon has sent more missile defense assets into the region, and now there is concern about the U.S. burning through interceptors as well.


“Neither the U.S. nor the Israelis can continue to sit and intercept missiles all day,” said Tom Karako, director of the Missile Defense Project at the Center for Strategic and International Studies. “The Israelis and their friends need to move with all deliberate haste to do whatever needs to be done, because we cannot afford to sit and play catch.”


Full:https://www.washingtonpost.com/world/2025/06/17/israel-iran-missile-conflict/




The second Iraq war saw the USD fall significantly.


jog on
duc