1. Iran, Hormuz, and the $100 Oil Question
Trump launched “Project Freedom” over the weekend — the U.S. military escorting stranded civilian ships through the Strait of Hormuz — in hopes of bringing down some war premium in the oil market.
Well, WTI crude is still above $100 this morning, but off highs.
Don’t get too comfortable though: one Iranian drone, one tanker attack, and this trade could reverses fast.
Also, keep in mind OPEC announced production increase in June. Plus, UAE out of OPEC. In case this blockade ends, oil prices come down fairly hard. There’s a lot of oil trying to get out. $80-$82 has been a big support level, a break below that takes us to $72-$75 range. Upside: above the highs, we get a move that has a potential to break global growth.
2. Controversial Take…
Everyone and their grandparents are all in on AI.
We all believe data centres will be everywhere.
And, while all this happens, memory stocks are flying. Makes sense for them to catch a bid – memory is that missing thing/next phase of AI.
But, have investors lost their minds?
Some of the biggest/hottest names have every single characteristic of a bubble at the moment – rapid price acceleration, price movement significantly above historical averages, extremely high valuations, and euphoric sentiment.
Bubbles can go on for a while, but they pop in very spectacular ways. Just don’t get complacent here.
3. The S&P at Record Highs — Dip Buyers Active
The S&P 500 closed Friday near an all-time high.
The bulls now have “Project Freedom” plus tech strength equals buy every dip, right?
Markets are up, oil is at $100, inflation is a real concern again, and yet here we are. What happens on the back end of this – we are asking that at Zulfiqar Research.
The trend is intact for now. S&P 500 trades above its 50-day and 200-day moving averages. In fact, getting very far ahead of them. So, if we just get a dip to 50-day moving average, which we do more often, that’s roughly 6% below the current level.
You make more money following the direction of the market, but at the same time becoming complacent at a time when there are lots of risk could be dangerous to the portfolio.
4. Japan Just Spent $34 Billion to Save the Yen
This is one of the most underreported stories in markets right now.
USD/JPY blew through 160 last week — the yen’s weakest level since 2024 — and Japan reportedly spent over $30 billion in an intervention session to yank it back toward 155.
As I write this, it’s already creeping higher again on renewed dollar strength.
Japan is burning reserves to defend their currency – lots of issues at hand. The carry trade is alive and creaking — and when it really unwinds.
Don’t ignore this story as it has potential to cause a shock to the financial world.
5. Bitcoin, Gold, Silver & GameStop
Bitcoin was extremely reactive at $80,000 and couldn’t move higher. Watching it. On the downside, watching $76,000 (support for now, that’s where it broke from previous dreadful range).
Gold and Silver continue to find sellers. Short-term trends are pointing lower for now – with lots of choppiness. This is all happening with a lot of good news out there.
GameStop is looking to buy eBay. Makes somewhat sense… but also this happens while diluting shareholders. eBay market cap at the time of this writing $48 billion. GME market cap at little over $11 billion.