This Week’s Topics

Israel-Iran Conflict

🛢 Oil surged $8.40 (+13.01%) after the strikes.

Here’s what’s driving the move—and why it matters more than you think:

1. Supply Fear Is Back

• Iran borders the Strait of Hormuz—a chokepoint for 20% of global oil.

• War increases the risk of export disruption—even without a full-scale conflict.

• “An attack on Iran could push oil to $120 and drive U.S. CPI up 5%,”
  said J.P. Morgan’s Natasha Kaneva.

2. Macro Inflation Pressure Builds

• A new “geopolitical premium” just hit every barrel of oil

• A falling dollar makes imported energy more expensive for the U.S., amplifying inflation just as oil spikes

• A falling dollar means oil gets more expensive globally—intensifying U.S. inflation risk

₿ Bitcoin Failed Its Safety Test

Despite global conflict, it moved like a risk asset—not a hedge.

1. Volatile Week, No Safe Haven Behavior

• Bitcoin spiked as high as $110,587, but couldn’t hold gains.

• It reversed sharply to $102,816, mirroring broader market risk-off sentiment.

• In a week of geopolitical stress, BTC fell with risk assets—not against them.

2. Safe Haven Narrative Weakens

• While gold rallied on the Israel–Iran news, BTC didn’t.

• Investors didn’t treat it as a store of value—just another risk trade.

• The “digital gold” thesis continues to fade during real-world crises.

3. Still, Exuberance Is Building

• Enthusiasm remains high: Bitcoin treasury adoption is rising, with some firms converting cash reserves into BTC.

• Circle’s IPO filing added fuel to the fire—reinforcing bullish sentiment in the crypto ecosystem.

• But this optimism hasn’t translated into strength on the chart—yet.

📉 Equities took a hit as fear quietly crept back into the market.

Here’s what triggered the move beneath the surface:

1. A Breakdown Was Brewing

• The $SPY was grinding higher inside a rising wedge—a pattern that often ends with a sharp reversal

• It finally broke down, confirming the bearish setup—and signaling weakness in broad market momentum

• High-yield bonds ($HYG) were tracing a similar rising wedge and also broke lower—showing risk appetite is fading

2. Volatility Was Too Quiet

• The $VIX sat near multi-month lows just as macro pressure was rising—a mispricing of fear

• As oil prices spiked, yields rose, and global conflict escalated, volatility finally began to tick higher

• When the market ignores real risk for too long, breakdowns get sharper and reactions more violent

🏦 Treasury Bonds Showed Mixed Signals After the War Headlines

Here’s how the “safe haven” trade played out—and what changed:

1. Initial Flight to Safety

• As the conflict broke out, yields dropped briefly—a classic “risk-off” move as capital rushed into U.S. Treasuries. This initial drop in yields reflected fear—but it didn’t last.

• The US30 Year Treasury Bond rallied to the top of its bull flag and has since reversed

2. Inflation Fears Reversed the Rally

• As oil surged and inflation expectations spiked, yields bounced back—especially on the long end.

• The 10Y and 30Y rates rose, pricing in the possibility of prolonged inflation.

• Bonds started reflecting a stagflationary risk: weak growth with sticky inflation.

Stagflation - What it means:

Inflation keeps rising. Growth (GDP) doesn’t.
Imagine inflation running hot and the economy barely breathing.
That’s stagflation.

It’s like trying to fight a fire during a blackout. The economy’s weak, but everything still costs more. Consumers can’t keep up, businesses can’t invest, and central banks are stuck—raise rates and you kill growth, cut rates and inflation spirals.

This isn’t just a bad combo. It’s a trap—and one of the hardest environments for investors to navigate.