Short-term traders should prepare for Oil to drop below $70/barrel by month-end as a new US-Iran deal and the UAE’s exit from OPEC+ create a massive supply surplus. Investors should capitalize on the SpaceX "melt-up" toward $175 ahead of its expected NASDAQ 100 inclusion in approximately 13 days, which will trigger significant passive buying. High conviction remains in the VanEck Semiconductor ETF (SMH), specifically targeting memory and power semiconductors to play the hardware "pick and shovel" side of AI. Avoid the upcoming October IPOs for Anthropic and OpenAI, as enterprise spending is shifting away from premium models toward cheaper alternatives. The collapse in energy prices provides a "risk-positive" macro environment, suggesting a tactical tilt toward growth stocks and hardware through August.

Oil & Energy Sector

• The analyst reports a "done deal" between the US and Iran, with a signing ceremony expected in Switzerland.
• Key Terms of the Deal:
  • A 60-day memorandum of understanding to reopen the Strait of Hormuz.
  • Iran is permitted to sell oil globally without sanctions for at least the next 60 days.
  • Long-term clarity on enriched uranium and nuclear weapons remains "up in the air."
• Market Dynamics:
  • The market is currently in a supply surplus of 1.5 to 2 million barrels per day.
  • The US has been "sneaking out" roughly 3 million barrels a day from the Persian Gulf via "Operation Freedom," which was previously unaccounted for by many analysts.
  • China has been on a "buyer strike" since March, importing significantly less oil to wait for lower prices.

Takeaways

• Bearish on Oil Prices: Expectation for oil to drop below $70/barrel by the end of the month due to the supply surplus and the lifting of Iranian sanctions.
• OPEC Fragmentation: The UAE has left the OPEC+ group, leaving Saudi Arabia isolated in its attempt to support prices. This could lead to a "race to the bottom" as producers increase supply to maintain revenue.
• Inflation Hedge: Falling oil prices are viewed as a "very benign development" for inflation, suggesting central banks may soon abandon "inflation alarmism."

Anthropic & OpenAI

• The US administration recently implemented export curbs on Anthropic’s "Fable" model, restricting access for users outside the US.
• This move followed concerns that "guardrails" on the software were insufficient.
• Both companies are reportedly looking toward IPOs in October.

Takeaways

• "Too Big to Fail" Status: The analyst views government intervention as a sign that these AI models are now sovereign priorities. This effectively provides a "government put," reducing the risk of a total failure (left-tail risk).
• Shift in Activity: There is a noted trend of "blue chip" companies (e.g., Microsoft, Uber) reining in spending on premium models like Claude in favor of cheaper alternatives.
• Investment Stance: The analyst is cautious about participating in the upcoming IPOs, citing concerns that marginal activity is moving toward cheaper, non-premium models.

SpaceX

• SpaceX recently conducted a massive capital raise/secondary offering, which the analyst describes as the "biggest IPO of all time" (in terms of proceeds/scale).
• The stock saw a 15-20% increase on its first day of trading on the NASDAQ, with levels reaching near $175.
• NASDAQ 100 Inclusion: SpaceX is expected to be included in the index in approximately 13 days, which will trigger significant passive investment flows.

Takeaways

• Short-term Bullish: Expectation of a "melt-up" in price action until the end of June driven by passive flows and IPO excitement.
• Long-term Neutral: The analyst is not buying SpaceX at these levels, citing the difficulty of navigating price action immediately following such a large debut.

Semiconductors (SMH)

• South Korean export data (a leading indicator for global tech) shows a growth of almost 90% year-over-year.
• The analyst remains heavily positioned in "hardware companies delivering to the companies spending."

Takeaways

• Bullish on Hardware: Preference for the VanEck Semiconductor ETF (SMH) and specific sub-sectors including memory and power semiconductors.
• The "Pick and Shovel" Play: Rather than betting on AI software (Anthropic/OpenAI), the analyst prefers the hardware required to run these models, believing "heydays" are still ahead for the sector.

Macro & Central Banks

• European Central Bank (ECB): Criticized for hiking rates just 24 hours before the Strait of Hormuz resolution. The analyst believes their growth projections (0.5% quarterly) are too optimistic and will "take the under."
• Federal Reserve: There is a "window of opportunity" for the Fed to sound more dovish given the collapse in energy prices and the resolution of Middle East tensions.

Takeaways

• Liquidity: The overall liquidity picture remains decent until August, supporting a continued rally in growth stocks.
• Investment Theme: Focus on "sequential progress" in geopolitics leading to a "risk-positive tilt" in portfolios.