SPEAKER_00 0:00

So um usually when we talk about financial markets, there is, you know, this expectation of math, like hard numbers driving very clear reactions.

SPEAKER_01 0:09

Right, logic, basically.

SPEAKER_00 0:10

Exactly. But today we're taking a deep dive into a briefing from Eli Levy at Ken Trading Company just to uncover what happens when that math gets completely hijacked by, well, whispers.

SPEAKER_01 0:21

Aaron Powell Yeah. Uh whispers is definitely the right word here. Because we're looking at how rumors regarding the Strait of Hormuz are just completely reshaping everything from crude oil to the US dollar.

SPEAKER_00 0:31

Aaron Ross Powell Right. And to really grasp the chaos of that, I mean, we have to start with the one piece of undisputed math on the board today.

SPEAKER_01 0:37

Aaron Powell Which is NVIDIA, obviously. I mean, they just dropped a staggering Q1 earnings report. Yeah. You're talking $82 billion in revenue and an $80 billion stock buyback. It uh it proves AI isn't just hype.

SPEAKER_00 0:49

For sure. Like companies are spending cold hard cash to build the actual infrastructure. But um before we step outside of tech and look at how that contrasts with the energy markets, we do need to pause for a mandatory reality check on risk. 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 1:32

Aaron Powell Right. So with that established, let's look at why traders are just so distracted outside of that tech sector. You look at energy and traders are completely ignoring the physical barrels of oil.

SPEAKER_00 1:41

They're just trading the headlines.

SPEAKER_01 1:42

Exactly. Both WTI and Brent Crude dropped up to six and a half percent. And that was purely on hopes of a US-Iran agreement reopening the Strait of Hormuz.

SPEAKER_00 1:51

But wait, I I just don't get that. Isn't the market pricing in a finished house when they've, you know, barely even poured the foundation? Like is the sell-off just completely ignoring the physical supply chain?

SPEAKER_01 2:01

Oh, absolutely. They are looking completely the other way because the physical tightness right now is massive. I mean, the EIA reported a 7.9 million barrel draw.

SPEAKER_00 2:11

Wow, that is a huge drop.

SPEAKER_01 2:13

It is, yeah. And the Strategic Petroleum Reserve, you know, our national emergency piggy bank saw a record weekly drop of 786,000 barrels. Furthermore, Halima Croft estimates that even with a deal, um, Hormuz flows would take four months just to reach 80% of pre-war levels.

SPEAKER_00 2:32

Wait, four months just to get to 80%?

SPEAKER_01 2:34

Yeah, exactly.

SPEAKER_00 2:35

That is wild. I mean, trading a headline while ignoring that physical shortage, it's like checking the forecast for rain while your actual house is actively on fire.

SPEAKER_01 2:43

Yeah, they're just looking at totally the wrong data.

SPEAKER_00 2:45

Aaron Powell And if energy is that fragile, you know, that structural shock has to be bleeding into industrial materials because copper dropped to uh roughly six dollars and ten cents.

SPEAKER_01 2:56

Aaron Powell Right. Which brings in Jeff Curry's thesis. Yeah. He argues that AI capital spending, de-globalization, and well, these exact types of Iran supply shocks are breathing a decade-long commodity supercycle.

SPEAKER_00 3:10

Right, because you can't build massive new data centers without power grids and like endless miles of copper wiring.

SPEAKER_01 3:16

Exactly. And you can't mine or move that copper without oil.

SPEAKER_00 3:20

So the tech math and the energy rumors literally crash into each other in the metals market.

SPEAKER_01 3:24

Yeah, they really do.

SPEAKER_00 3:26

But then um you look at agriculture and the disconnect gets even crazier. I mean, corn and soybeans briefly jumped on this massive headline about a US-China $17 billion purchase agreement. But the catch was China wouldn't even confirm the numbers.

SPEAKER_01 3:40

Yeah, it's essentially a ghost deal. And while the market is out there chasing these unconfirmed press releases, the hard data in the physical fields is genuinely alarming.

SPEAKER_00 3:47

Aaron Powell You're talking about the U.S. winter wheat crop, right?

SPEAKER_01 3:50

I am, yeah. Yeah. We're currently phasing the smallest crop since 1965.

SPEAKER_00 3:53

Aaron Powell 1965. I mean, you really have to stop and think about that. We are looking at generational scarcity in the food supply, yet traders are obsessing over phantom headlines. Aaron Powell Right.

SPEAKER_01 4:03

Instead of looking at the actual literal barren fields, this phantom geopolitical news is actively manipulating the buying power of the dollars in your wallet today.

SPEAKER_00 4:12

Aaron Powell Which brings us to the connective tissue of this entire war, you know, the US dollar itself. It's sitting near 99.4. So it's firm, but totally untrusted.

SPEAKER_01 4:21

Aaron Powell Yeah. It feels paralyzed. It's just holding its breath until the next Iran headline drops.

SPEAKER_00 4:27

Exactly. And uh a huge thank you to Canon Trading Company and Eli Levy for the source material driving today's deep dive. You can reach the author directly at Eli at canontrading.com to explore his full briefing.

SPEAKER_01 4:39

Definitely check it out. And um before we sign off, I want to leave you with this provocative thought. If the market is currently pricing in an immediate geopolitical fix for oil, how violently is that price going to correct upwards if that four-month recovery timeline actually proves too optimistic?

SPEAKER_00 4:56

Oh, that is definitely something for you to mull over. 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.