Pre Market Briefing

US-Iran re-escalation in the Gulf of Oman rolls back part of Friday's Hormuz-reopening rally. 

Transcript

SPEAKER_01 0:00

So it is Monday, April 20th, 2026, and uh the opening bell was just absolute chaos today.

SPEAKER_00 0:07

Yeah, total whiplash.

SPEAKER_01 0:08

Right. Over the weekend we saw that ceasefire completely collapse, and then the U.S. Navy actually seized an Iranian flagged ship in the Strait of Hormuz.

SPEAKER_00 0:16

Which just upended everything. But you know, before we jump in, we should clarify our mission for this deep dive.

SPEAKER_01 0:21

Oh, absolutely.

SPEAKER_00 0:22

We are staying entirely impartial regarding the geopolitics here. Right. Our goal is strictly to look at the market data and see how this is all playing out.

SPEAKER_01 0:31

Exactly. And to do that, we're relying on the pre-market briefing from Canon Trading Company. It's put together by Eli Levy, and uh if you want his daily insights, you can reach him at Eli at Canon Trading.com.

SPEAKER_00 0:42

Disclaimer: Trading Futures, options on futures, and retail off-exchange foreign currency transactions and other financial instruments involve substantial risk of loss and are not suitable for all investors. Past performance is not indicative of future results. Carefully consider if trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

SPEAKER_01 1:11

Okay, so getting into the actual energy markets, the whiplash here is just insane.

SPEAKER_00 1:15

Oh, it really is.

SPEAKER_01 1:16

Because on Friday, WTI, which is our U.S. crude benchmark, it crashed like 11%. Everyone thought a ceasefire would keep the Strait of Hormuz open.

SPEAKER_00 1:25

Right, the market priced in peace.

SPEAKER_01 1:27

Yeah, but then Monday hits. Tehran closes the strait in retaliation, and boom, crude surges over six percent instantly.

SPEAKER_00 1:34

But here is the fascinating divergence. While crude is just completely panicking, our domestic natural gas benchmark, Henry Hub, is sitting near its lowest level since late 2024.

SPEAKER_01 1:44

Wait, really? You'd think a massive Middle East shock would just lift all energy prices.

SPEAKER_00 1:49

You would think so, yeah. But natural gas in the U.S. is heavily insulated. We've just had this massive injection like over 59 billion cubic feet last week.

SPEAKER_01 1:59

Oh, wow, that's huge.

SPEAKER_00 2:00

Exactly. Plus, the weather's been super mild, so domestic storage is practically overflowing. So gas is happily oversupplied at home, while crude is freaking out over international transit.

SPEAKER_01 2:12

That makes sense. So basically, global capital is terrified of these transit bottlenecks and it's fleeing into financial bunkers.

SPEAKER_00 2:20

Absolutely. Safe haven demand is exploding.

SPEAKER_01 2:22

I mean, look at gold. It's up 40% year over year. It hit$4,870 today.

SPEAKER_00 2:28

Yeah, and silver is right there with it. Inventories on the ComX exchange are nearing critical delivery levels.

SPEAKER_01 2:34

Because people are actually taking physical delivery.

SPEAKER_00 2:37

Yes. Industrial buyers are hoarding the physical metal. They're terrified these shipping disruptions will halt their manufacturing entirely.

SPEAKER_01 2:44

Wow. And what about currencies? Same story. Capital is flooding into the US dollar and the Swiss franc. The CHF is uh it's doing what it always does, acting as a natural shock absorber during Middle Eastern conflicts.

SPEAKER_00 2:57

Aaron Powell Because of the political neutrality, right? But let me ask you about that gold price,$4,870. Is that just a temporary conflict premium? Or is the market like pricing in long-term stagflation?

SPEAKER_01 3:10

Aaron Powell It's definitely leaning towards structural stagflation. Aaron Powell Really. Yeah. Traders are terrified that central banks won't be able to cut interest rates because these energy bottlenecks keep pushing the cost of everything up.

SPEAKER_00 3:21

Aaron Powell Which drags down growth while keeping prices high, the classic stagflation trap.

SPEAKER_01 3:26

Exactly. And you can actually see that inflationary fear hitting the physical earth right now. Let's look at agriculture. Aaron Powell Right.

SPEAKER_00 3:33

The brief talks about this what do they call it? Acreage switching risk?

SPEAKER_01 3:37

Yes. So the shipping disruptions in the Gulf are making fertilizer wildly expensive globally.

SPEAKER_00 3:42

Okay.

SPEAKER_01 3:42

And since soybeans require significantly less fertilizer than corn, the current economics are heavily favoring farmers planting beans over corn this spring. Wait, wait, let me push back on that for a second. Most of the fertilizer used in the American Midwest is produced domestically, right? Or imported from Canada. Right. So why would a naval standoff in the Gulf of Omen force a farmer in Iowa to suddenly change the seas he puts in the dirt?

SPEAKER_00 4:08

Aaron Ross Powell Because fertilizer is a globally fungible commodity.

SPEAKER_01 4:11

Oh, I see.

SPEAKER_00 4:12

Yeah. So even if an Iowa farmer buys domestic fertilizer, that U.S. producer can suddenly sell that exact same product overseas for a massive premium.

SPEAKER_01 4:22

Because of the gulf shortage?

SPEAKER_00 4:23

Exactly. Yeah. So to keep the product here, the domestic price has to skyrocket to match the global price. That sudden spike just destroys the profit margin for corn.

SPEAKER_01 4:33

Wow. So that farmer literally has to plant soybeans just to survive the season.

SPEAKER_00 4:37

Yeah, it completely rewrites their entire business model in a weekend. It exposes how fragile our highly optimized global supply chains really are.

SPEAKER_01 4:44

That is just mind-bending. A single blocked waterway dictates the price of crude, the strength of the dollar, and literally what crops get planted in America.

SPEAKER_00 4:52

Aaron Powell Which all shows up on your grocery receipt eventually.

SPEAKER_01 4:55

Right. Which leaves you with this to mull over. If a single seas ship can rewrite global agriculture in 48 hours, are we entering an era where commodities are priced primarily by military strategy rather than actual supply and demand?

SPEAKER_00 5:09

Disclaimer: Trading futures, options on futures, and retail off-exchange foreign currency transactions and other financial instruments involve substantial risk of loss and are not suitable for all investors. Past performance is not indicative of future results. Carefully consider if trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.