The Deal That Changes Everything
How the Iran agreement reshapes the macro outlook and what it means for our portfolios.
MACRO
All eyes remain on the US-Iran deal. We’re waiting for it to be signed. If confirmed, it reopens the Strait of Hormuz — and that changes everything.
The inflationary effects of oil prices are expected to be temporary if Hormuz reopens. Markets are in wait-and-see mode until the deal is confirmed.
The US economy in the background looks strong. Job creation, GDP growth, financial conditions — all pointing in the right direction. Have a look at the chart below, which summarizes many indicators into the “market cycle” line. It’s pointing up, clearly.
As mentioned many times here, the backdrop for stocks remains favorable, absent geopolitical shocks. This remains a buy-the-dip environment until proven otherwise.
Note: right before I finished writing this week’s post, the announcement of a peace deal was confirmed by all parties. This would be very good news for the entire world. Fingers crossed.
INDEX & SECTORS
The market already knew something was coming.
The June 12 close — SPX up on the week, breadth recovering, semis bouncing, airlines and construction surging — didn’t happen in a vacuum. Smart money was positioning ahead of the announcement. JETS +6.61% in a week doesn’t happen randomly. Neither does LIT +6.85% or ITB +4.75%. The market was sniffing the deal out.
What the Iran deal actually changes (if confirmed!):
The entire bear case from last week rested on one chain: energy elevated → inflation sticky → Fed hawkish → rates high → growth repriced. The Iran deal breaks that chain at the first link.
Brent crude will fall. Hormuz reopening means supply normalization. Gasoline follows. That feeds directly into CPI prints over the next 3-6 months. The Fed gets cover. Warsh gets to be neutral rather than hawkish. The TNX yields likely pull back.
That is a complete macro regime shift in 24 hours.
What it means by asset class:
Energy (XLE) was already weakening last week (−1.34%) despite everything else bouncing. It was the tell. Now it faces real headwinds — lower oil prices hurt the sector directly. The 6-month return is still +28.98% but the momentum is gone.
The biggest beneficiaries: Airlines (JETS was already moving — now it has fuel cost tailwind), Consumer (lower gasoline = more disposable income), Housing/Construction (ITB already +4.75% — lower rates incoming = mortgage relief), Financials (credit easing environment), and critically — AI/Growth. If yields fall, the discount rate falls, and the entire long-duration growth trade gets re-energized.
Semis (SMH) were already back to +3.64% last week and sit at a 3-month gain of +57.48%. With the macro headwind now removed, the path of least resistance is back to the upside.
Breadth confirms the setup.
50 DMA participation back to exactly 50 — the neutral line — after being at 40 just one week ago. This is not a narrow, AI-only rally anymore. Breadth is broadening. That’s the foundation of a sustainable move higher.
The one thing to watch carefully:
The deal signs next Friday. Until ink is on paper, it’s a risk-on trade on an announcement, not a confirmed reality. Any breakdown in negotiations this week could reverse the move sharply.
Bottom line:
The Iran deal removes the primary macro risk that was hanging over everything. The bull case — mid-cycle earnings growth, broadening breadth, AI cycle intact, Fed now with cover to pause — just got materially stronger.
The correction is over. The question now is which names lead the next leg.
PORTFOLIOS
10X Momentum
I was stopped out of AVGO last week. The portfolio now holds three full positions.
Here is what I am doing this week.
Here is what I am doing this week.
Buy 715 shares of GENI (Genius Sports) at $7 entry. First stop loss at −20%. GENI is clearly recovering and has room to return to previous highs over the coming months. The company is growing fast, improving profitability, and is currently undervalued.
Buy 200 shares of ARQT (Arcutis Biotherapeutics) at $25.30 entry. First stop loss at −20%. ARQT flashed a strong reversal signal last week. The company is growing over 40%, improving profitability, and is undervalued.
Below the 2 charts.
10X Easy Doubles
I was stopped out of ONDS last week. The portfolio remains as is — I am doing nothing this week. If the Iran deal is confirmed, I expect several positions in this portfolio to move meaningfully.
That’s all for this week!
Important: This is not investment advice. Please consult a licensed financial advisor before making any investment decisions. AI tools used for editing.