SPEAKER_00 0:00

You know, it's like when you press the brakes on a car, you uh you expect to slow down, right? So the Fed has been stomping on the economic brakes with high interest rates, expecting inflation to cool off.

SPEAKER_01 0:10

Yeah.

SPEAKER_00 0:11

But suddenly we hear the engine actually revving higher.

SPEAKER_01 0:14

Right, which means they have to keep their foot on those brakes even longer. And I mean, that just completely upends the drive for everyone.

SPEAKER_00 0:21

Exactly. So welcome to today's deep dive. We are unpacking the July 17, 2026 pre-market briefing by Eli Levy of Canon Trading Company. Uh, you can reach them directly to Eli at Canon Trading.com, by the way. We're gonna explain why good news is suddenly terrible news for the market and how one single labor statistic just managed to reverse the entire like inflation is dead narrative. But before we get into this massive shift, we do have to read a quick mandatory disclaimer. Disclaimer. Trading futures, options on futures in 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 1:13

So to get into this uh this reving engine analogy, I mean the market was feeling pretty confident about inflation cooling down. But then initial jobless claims drop to just 208,000.

SPEAKER_00 1:23

Wow, just 208,000.

SPEAKER_01 1:25

Yeah, exactly. Which means fewer people are claiming unemployment. So the labor market is while it's still running incredibly hot.

SPEAKER_00 1:33

And that forces a massive reality check, right? Like if people are still working and spending, the Fed doesn't need to rush a rate cut at all.

SPEAKER_01 1:40

Right. It immediately revives that whole higher for longer fear regarding interest rates. We actually saw the 10-year treasury yield climb right back above 4.58%. Trevor Burrus, Jr.

SPEAKER_00 1:50

Which obviously triggers a huge flow of capital. Because I mean, if US debt is now paying a higher yield, global money just floods in to buy it.

SPEAKER_01 1:58

Oh, absolutely. And that drives up demand for the U.S. dollar. It actually pushed the dollar index over 101.

SPEAKER_00 2:04

Over 101. That's huge.

SPEAKER_01 2:06

Yeah, it is. And when those yields rise, the math changes entirely for high growth tech companies. Like future earnings suddenly look far less attractive to investors when you compare them to a guaranteed high yield bond.

SPEAKER_00 2:16

Well, you take the sure thing.

SPEAKER_01 2:18

Exactly. So we saw capital just aggressively flee AI and semiconductor stocks. It actually crushed the Korean and Taiwanese markets by over six percent.

SPEAKER_00 2:27

Over six percent. That is brutal.

SPEAKER_01 2:29

It was. And all that money rotated into safer health care and value stocks instead.

SPEAKER_00 2:34

Aaron Powell Well, and if capital is fleeing to the safety of the dollar to lock in those higher yields, that dollar flexing has to act like a wrecking ball for global commodities, right?

SPEAKER_01 2:43

Aaron Powell Oh, 100%. Because you know, gold is priced in dollars globally. So a stronger dollar makes it much more expensive for the rest of the world to buy.

SPEAKER_00 2:51

Aaron Powell Which just crushes demand.

SPEAKER_01 2:53

Aaron Ross Powell Right. That dollar spike completely broke gold's technical support. I mean it dropped straight through the level where buyers historically step in to keep it afloat.

SPEAKER_00 3:02

So it just kept falling.

SPEAKER_01 3:03

Yeah, it tumbled below that critical $4,000 an ounce mark. And that was purely because of the yield and dollar spike.

SPEAKER_00 3:09

Aaron Powell Wait, but if we look at energy, there is a pretty glaring contradiction in the briefing. I mean, US forces have been striking Iranian missile sites near the Strait of Hormuz for what, five consecutive days now?

SPEAKER_01 3:22

Yeah, five days straight.

SPEAKER_00 3:24

So with that level of geopolitical heat right on top of a major global export terminal, shouldn't crude oil be just skyrocketing?

SPEAKER_01 3:32

Well, it's a classic geopolitical paradox, really. But WTI crude actually slipped towards $79 a barrel.

SPEAKER_00 3:40

Wait, really? It went down.

SPEAKER_01 3:42

It did. It all comes down to what traders fear most. Right now, the market is pricing in a massive demand hit from that stronger dollar and the higher interest rates far more heavily than any geopolitical war premium.

SPEAKER_00 3:55

Aaron Powell So macroeconomic fears are literally overriding physical supply fears.

SPEAKER_01 3:59

Exactly. The macro picture is just dominating.

SPEAKER_00 4:02

Okay, well, if the dollar and rates are bullying tech, gold, and even oil that aggressively, that pressure has to be spilling over into physical goods too, like agriculture, right?

SPEAKER_01 4:13

Oh, definitely. The agricultural markets weren't spared at all. Grains gave back a big chunk of the rally they'd seen from the Black Sea shipping risks.

SPEAKER_00 4:19

Right.

SPEAKER_01 4:19

And over in the livestock pits, cattle and hogs corrected downward as well.

SPEAKER_00 4:23

And Eli notes in the briefing that this wasn't just a positioning squeeze, right? Like where traders are forced to frantically buy or sell just to cover bad bets.

SPEAKER_01 4:31

Yeah, exactly. It wasn't that at all. This was a fundamental repricing based on that labor data. And as for livestock, well, physical demand is simply cooling off as we hit the summer shoulder season. Yeah. You know, that in-between period where the early summer grilling rush has faded, but the late summer demand hasn't really picked up yet.

SPEAKER_00 4:50

Ah, gotcha. Man, it really makes you rethink how solid our economic assumptions are. I mean, if you're relying on the inflation is dead narrative for your portfolio, Thursday's data forced a hard reality check.

SPEAKER_01 5:04

It really did. And it leaves us with a pretty critical question to consider today. I mean, if direct military strikes near a major global export terminal can't rally crude oil against a strong US dollar, just how fragile does the market believe?

SPEAKER_00 5:20

That is a great question to leave on. 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.