Authored by Steve Cortes via RealClearPolitics.com,

For years, Democratic politicians and their allies in the legacy media have spread the damnable Charlottesville Hoax: the propaganda myth that President Trump praised bigots who rioted in 2017 in the Virginia town.

Of course, the opposite is true, as Trump actually said: “I’m not talking about the neo-Nazis and white nationalists because they should be condemned totally.”

Now, we learn that the entire hoax of Trump and Charlottesville is, itself, built upon another grand lie. The media and people like Joe Biden have continually pushed the narrative that some big, organic gathering of hateful Americans descended upon Charlottesville and represented some larger threat to the republic itself. But it now turns out that the “Unite the Right” rally was organized and financed by the highly partisan, left-wing Southern Poverty Law Center.

In a sweeping 11-count indictment, the Department of Justice and acting Attorney General Todd Blanche charge the advocacy group with criminal defrauding of donors and “manufacturing the extremism it purports to oppose by paying sources to stoke racial hatred.”

The charges contained in this indictment are akin to the fire department becoming an aggressive criminal arson enterprise, setting fires all across a town, and then demanding more budget and authority to fight the very infernos it set ablaze.

So…the end result is that America endured years of propaganda that convinced a large segment of the population – in contravention of the facts – that their president supported violent hate merchants. Even worse, masses of unskeptical Americans, who consume only legacy media content, believed that the entire America First populist movement was based on bigotry, rather than patriotism.

Now, nearly a decade later, the truth is revealed about the deception that lay beneath that grand lie. There was a layer of duplicity here that is almost difficult to fathom. Only true Marxists could excuse this level of propaganda. The SPLC created hate groups and activities like the Charlottesville rally, and the complicit media then weaponized these concocted offenses by spreading outright lies about Trump’s reaction to the staged events.

I myself played a role in this saga regarding Charlottesville, best explained by a timeline:

March 2019 – After more than a year serving as a contributor on CNN, I grew tired of the near-nightly lies told about Charlottesville during the primetime hits when I was on-air. I tried my best to debunk the myth, but was routinely shouted down, and even “benched” for short periods for daring to tell the truth. So…I wrote a column at RealClearPolitics with the exact Trump transcript and precise citations.

April 2019 – Joe Biden launched his 2020 presidential campaign based entirely upon the Charlottesville lie, claiming that the “bulging veins” of the racists convinced him to run for the White House.

August 2019 – Dennis Prager had read my RealClearPolitics article and had me on his radio show repeatedly to discuss what we branded as the “Charlottesville Hoax.” He also asked me to narrate a five-minute video for his online platform, PragerU, debunking the hoax, which went mega-viral, with well over 10 million total views.

September 2019 – CNN removed me from the air. Rebecca Kutler, now the head of MSNOW and then the director of talent at CNN, expressly told me that the permanent “benching” was because of the Charlottesville video, even though I was clearly allowed to make such online videos, per the terms of my contract. I asked to be released so that I could do TV elsewhere, and she refused. In other words, they paid me to be silent, to stay on the sidelines.

December 2019 – I was released from CNN.

June 2024 – Supposedly objective “fact-checking” site Snopes finally admits the clear reality of the full transcripts and video evidence that Trump never praised bigots at Charlottesville.

April 2026 – The Southern Poverty Law Center was indicted for millions of dollars in secret payments to racists to foment and organize racial unrest and events, including the Charlottesville event itself.

This entire sad saga matters.

First, it unveils the systemic duplicity of the left in America. Because their demand for “hate” far exceeds the actual supply, they had to pay to manufacture bigotry, so that they then could oppose it.

Second, the record reveals that lies build upon lies, while the truth remains, inherently, emancipating.

Whatever any citizen thinks of Donald Trump, the entire madness of Charlottesville represents a preventable and despicable tragedy. The actions of the SPLC were criminal and mafia-like. A young woman, Heather Heyer, lost her life because of this mayhem. More broadly, millions of Americans bought into an insidious lie and believed it for years, doing grave damage to the cohesion of our society.

Only a full accounting, now, can begin the process of healing and truth-telling.

California’s latest effort to tax its richest residents into leaving is barreling toward the ballot – only this time, it’s got a built-in ‘slippery slope‘ lever once voters hand them the keys.

Backers of the proposed “billionaire tax” say they have already cleared the first hurdle, gathering more than enough signatures (at least 1.5 million) to qualify a measure that would impose a one-time 5% levy on residents with net worths above $1 billion, the Wall Street Journal reports. On its face, the proposal is straightforward: a targeted strike at roughly 200 ultrawealthy individuals meant to plug a looming multibillion-dollar hole in California’s healthcare funding. But buried in the fine print-and now surfacing in a growing political backlash-is a provision that could allow lawmakers to revisit, revise, and potentially expand the tax later with a two-thirds vote. That clause is fast becoming the real story.

The initiative’s language allows the California Legislature to amend the law so long as changes are “consistent with” and “further the purposes” of the act (aka the slippery slope). In Sacramento, that phrasing is doing a lot of work. Critics argue it effectively hands lawmakers a tool that could evolve well beyond a one-time billionaire levy. With a two-thirds majority, the Legislature could lower thresholds, extend timelines, or reinterpret what qualifies as taxable wealth. In a state where Democrats already hold supermajorities in both chambers, that is less a hypothetical than a political reality.

This is significant

I get it — taxing Billionaires is popular

But the proposed tax in CA is something vastly more expansive

It would give the CA legislature a new power:

The ability to lower the threshold or repeatedly pass the tax

Simply with votes from the CA legislature https://t.co/YcBUy7gTJN

— Shaun Maguire (@shaunmmaguire) April 27, 2026

California, meanwhile, has done this kind of thing before where they kick the door open with a seemingly innocuous bill. For example, in 2012 voters approved Proposition 30 as “temporary taxes to fund education,” promising a sunset once the recession eased. Four years later, with the economy recovered, the same coalition returned with Proposition 55 and extended the high-income tax hikes for another 12 years—without extending the sales tax or returning to voters for full approval. Nearly identical “consistent with and furthers the purposes” amendment clauses appear in Proposition 64 (marijuana legalization) and Proposition 63 (Mental Health Services Act), and have been used repeatedly to expand taxes, regulations, and spending far beyond the original ballot language. The billionaire tax measure contains this exact same permissive language. Once voters bless a flexible wealth-tax framework, Sacramento has shown it will use that door when fiscal pressure returns – which, in California, it always does.

The proposal has already triggered a high-profile reaction among the very group it targets. One of the most prominent examples is Google co-founder Sergey Brin.

Sergey BrinPhotographer: Will Oliver/EPA/Bloomberg

In a late-evening confrontation at a Christmas party hosted by crypto titan Chris Larsen in a treehouse nestled in redwoods north of San Francisco, Brin and his wellness-influencer girlfriend Gerelyn Gilbert-Soto told Gov. Gavin Newsom they were leaving the state over the proposed billionaire tax, which could hit Brin’s massive stake in Alphabet and his fortune.

Newsom, who opposes the wealth tax, was still telling people about the lengthy exchange at the party months later, complaining of a lingering cold the pair had given him, according to the people, who asked not to be named discussing private conversations with the governor. -Bloomberg

Brin followed through: he relocated to Nevada ahead of the tax’s residency cutoff, purchasing a $42 million lakeside mansion on the Nevada side of Lake Tahoe. He has since poured more than $58 million into political efforts over the past four months, becoming the largest donor to the group Building a Better California, which is dedicated to fighting the wealth tax and pushing pro-business policies. His move and massive spending have become a symbol – if not entirely representative – of a broader anxiety rippling through California’s economic base. The concern isn’t just that billionaires might leave. It’s what happens if they do.

Also his wellness-influencer girlfriend (Gilbert-Soto) is pretty hot. 

California’s tax structure is unusually dependent on its wealthiest residents. Even a small number of departures can create outsized revenue swings. Analysts have warned the proposed tax could generate “tens of billions” in the short term-but also risk long-term losses if it accelerates outmigration. Gov. Gavin Newsom has echoed that warning, opposing the measure on the grounds that it could destabilize the state’s already volatile revenue system.

That leaves California facing a paradox increasingly common in blue-state fiscal policy: a push to extract more from the ultrawealthy, paired with a growing dependence on keeping them in place. Supporters argue the stakes justify the risk. The tax is designed to offset federal healthcare cuts projected to cost the state more than $28 billion annually and leave millions without coverage.

“This did not start as a political statement about rising inequality,” said union leaders backing the measure. “We are simply trying to solve a huge and immediate problem.”

But opponents say the mechanism matters as much as the goal. Their central warning is that once the state normalizes wealth-based taxation through a flexible statutory framework, the definition of “wealthy” can shift. Today that threshold is $1 billion. Tomorrow, critics argue, it could be far lower-especially in a legislature empowered to act without returning to voters.

What a mess… 

House Oversight Chairman James Comer is cranking the investigation into Rep. Ilhan Omar’s husband, Tim Mynett, into overdrive – demanding a full accounting of shadowy international business trips and deals that stretch from the Horn of Africa straight into Kenya, Somalia and the glittering skyscrapers of Dubai.

Omar has been making strange moves since February, after Comer fired off a no-holds-barred letter demanding every document and communication on Mynett’s travel and business dealings in Kenya, Somalia and the UAE. Since then, the story has exploded again with several stunning new twists: Omar quietly amended her 2024 financial disclosure in late March, slashing the reported $30 million fortune down to nearly zero; just nine days later, on April 4, the California winery central to those valuations was officially dissolved; forensic accountants have publicly torn into the revised numbers for major inconsistencies.

Ilhan Omar has to explain how a business who has no equipment, no location, no bottles, no stickers, appears to have no employee wages, no vineyard, no wine tasting room, no tours, no product, no shipping, no marketing, no lids, no boxes, no barrels, no license, no freight… pic.twitter.com/qKxYp3WhL7

— Angela Rose (@angelaroosee) April 25, 2026

The Feb. 5 letter ordered Mynett – president of Rose Lake Capital LLC and co-owner of the now-defunct eStCru LLC winery – to hand over every record related to travel or business solicitation in those three countries. The Feb. 19 deadline came and went with no public confirmation that Mynett ever complied.

Omar’s original 2024 disclosure, filed in May 2025, showed the two firms exploding in value from a combined $51,000 in 2023 to as much as $30 million the following year. Rose Lake Capital was listed between $5 million and $25 million; the winery sat between $1 million and $5 million. Then came the late-March amendment, in which Omar blamed an accountant’s error in netting out liabilities. The companies’ reported net value was wiped to zero and the couple’s total household assets were slashed to between $18,004 and $95,000.

Nine days after that amendment, California business records show eStCru LLC was officially terminated and dissolved on April 4. The winery had never owned a vineyard, tasting room or major production equipment. It produced only tiny batches at a shared custom-crush facility, had no active phone line and went dark on social media years ago. It was already dogged by investor lawsuits alleging fraud. One Washington, D.C., restaurateur, Naeem Mohd, claimed he invested roughly $300,000 after being promised a 200% return in 18 months – plus 10% monthly interest if late. A separate cannabis-related venture involving Mynett’s partner William Hailer ended in a roughly $1.2 million settlement after investors accused the duo of misappropriating funds.

According to Comer’s letter, Rose Lake Capital had marketed itself as a globe-trotting player with “deep global networks” built from on-the-ground work in more than 80 countries. Its website – later scrubbed of officer and advisor names, including former diplomats – hyped sustainable investments and solar-panel projects across Africa. One partner reportedly received a $10,699 business-class ticket to Dubai for deal discussions. The firm once claimed to manage $60 billion in assets – an eye-popping figure for a company that, according to earlier disclosures, had less than $1,000 in the bank in 2023.

Because of this, “unknown individuals may be investing to gain influence” with Omar. The timing has fueled even more suspicion: the reported wealth spike overlapped with the massive social-services fraud scandals ripping through Minnesota’s Somali-American community – the heart of Omar’s district – where authorities allege billions in taxpayer dollars were looted through fake daycare and nutrition programs.

Mynett’s past adds another layer. Before launching these ventures, he and partner Hailer ran E Street Group, a political consulting firm that pulled in nearly $3 million from Omar’s own congressional campaigns. Former associates described the pair as well-connected Democratic insiders.

Omar’s office has dismissed the entire inquiry as a “political stunt” and “smear campaign.” Mynett has not responded publicly to the document demands or the sudden shutdown of the winery.

President Donald Trump has repeatedly called for Omar to face criminal charges, linking her to what he claims is up to $2.5 trillion in Minnesota welfare fraud – a figure he has offered without direct evidence tying her personally to the full scale of the scandal.

As of April 26, 2026, the $30 million paper fortune has evaporated on paper, the vineyard is legally gone, and the international paper trail now leads from a quiet Sonoma wine label straight into East Africa and Dubai. The House Ethics Committee has the ball, Comer shows no signs of letting go, and citizen sleuths continue digging through the disclosures.

Whether this was a spectacular (if suspiciously timed) business success, a simple accounting blunder, or something far more troubling is the question lawmakers – and the public – now demand answered. The money trail is global. The clock is ticking. And the spotlight is burning brighter than ever.

* * * New ranch | Wagyu | Hotdogs (40) 

Maine Governor Janet Mills has vetoed a bill that would have temporarily limited the development of large data centers across Maine, despite expressing support for a broader pause on such projects, according to Maine’s website.

The governor said she would have approved the legislation if it had included an exemption for a $550 million data center redevelopment already underway at the former Androscoggin Mill in Jay, a project backed by local officials and seen as critical to economic recovery in the region.

Mills emphasized that while a moratorium makes sense due to concerns about environmental impact and rising electricity costs seen in other states, the bill in its final form failed to account for the Jay project’s potential benefits. The redevelopment is expected to bring hundreds of construction jobs, create at least 100 permanent positions, and restore a major portion of the town’s lost tax base following the mill’s closure in 2023.

The site says that Mills plans to move forward with an executive order to study the impact of large-scale data centers in Maine. She also signed separate legislation barring such projects from receiving state business tax incentives, signaling a cautious but measured approach to managing the industry’s growth.

“A moratorium is appropriate given the impacts of massive data centers in other states on the environment and on electricity rates. But the final version of this bill fails to allow for a specific project in the Town of Jay that enjoys strong local support from its host community and region,” she wrote. 

“The 2023 closure of the Androscoggin Mill dealt a devastating blow to the Town of Jay and its surrounding area. As a long-time resident of Franklin County, I know well how critical the mill was to generations of working families, and how important it is – and how challenging it has been – to promote reinvestment and job-creation at the former mill which is a brownfield site.  After prior redevelopment efforts failed, the Town of Jay worked for two years on a $550 million data center redevelopment project to finally bring jobs and investment back to the mill site.”

“I believe it necessary and important to examine and plan for the potential impacts of large-scale data centers in Maine, as the use of artificial intelligence becomes more widespread. Given the serious conversations about data centers here and around the country, I believe this work should commence without delay,” she concluded.

Meanwhile we wrote last week that the outlook for the US AI revolution looks increasingly more dim. 

That’s because, as Canaccord Genuity analyst George Gianarikas writes, “the American data center boom is hitting a formidable wall of logistical friction.” He is referring to the latest outlook by Sightline Climate, which is also reinforced by recent articles from Bloomberg and others, and reveals a sobering reality for 2026: nearly half of the nation’s planned 16-gigawatt capacity faces cancellation or delay, with only 5 gigawatts currently under construction.

This inertia stems from a volatile mix of local permitting hurdles, community resistance, and a desperate reliance on overextended global supply chains for critical components like transformers and helium.

That’s right: half. Despite $700BN+ of expected 2026 hyperscaler capex, nearly half of the data centers scheduled to begin operations in the US in 2026 “will either face delays or outright cancellations.”

The data, which comes from Sightline Climate’s 2026 Data Center Outlook,  suggests that just 30% – 50% of the ~16 GW of planned US capacity for the year will face risks, with only ~5 GW currently under construction!

* * * Know what’s not a massive bitch? 

This 2.5lb Tomahawk Steak

Several Gulf countries have discussed receiving dollar swap lines from the US, the WSJ reported last week. In the near term, there is an economic drag if volumes of oil and gas sales have fallen by more than the price effect can offset, or where tourist and business travel has dried up. The effect is similar to that of the pandemic: slowing growth and fiscal revenues, and accelerated demand for fiscal spending.

As the WSJ reported, UAE. Central Bank Gov. Khaled Mohamed Balama had raised the idea of a currency-swap line with Treasury Secretary Scott Bessent and Treasury and Federal Reserve officials in meetings in Washington. The Emiratis emphasized that they had so far avoided the worst economic effects of the conflict but might still need a financial lifeline.

The talks highlighted the U.A.E.’s concern that the war could inflict major damage on its economy and its position as a global financial hub, depleting its foreign reserves and scaring away investors who once saw it as a stable and secure place for their money. The conflict has damaged Emirati oil-and-gas infrastructure and shut off their ability to sell oil using tankers transiting the Strait of Hormuz, depriving it of a key source of dollar revenues. Meanwhile tourism, another key source of hard currency, has also been throttled as a result of regional instability. 

Emirati officials haven’t made a formal request for a swap line, which would give the UAE. central bank inexpensive access to dollars to support its currency or shore up its foreign reserves in case of a liquidity crisis. A swap line would also avoid forcing a liquidation of dollar-denominated assets. The Emirati officials argued that it was President Trump’s decision to attack Iran that entangled their country in a destructive conflict whose effects may not be over; they added that if the U.A.E. runs short of dollars, it may be forced to use Chinese yuan or other countries’ currencies for oil sales and other transactions, strongly hinting that UAE may be forced to seek financial backing from Trump’s arch-nemesis.

In that scenario is an implicit threat to the U.S. dollar, which reigns supreme among global currencies partially because of its near-exclusive use in oil transactions.

Gulf central banks hold dollar reserves in liquid assets like Treasury bonds and bills. However, using these reserves for fiscal support would be unwise according to UBS economist Paul Donovan who noted that “it would rapidly call into question the stability of the region’s currency pegs to the US dollar.”

The Emirati dirham is pegged to the dollar and backed by foreign-currency reserves of $270 billion, but the war has put it under pressures from capital-flight risks, stock-market volatility and other disruptions, analysts said. 

The credit-rating firm S&P Global said in a March 6 report that the U.A.E.’s “substantial fiscal, economic, external, and policy flexibility will act as an effective buffer” against the war’s economic effects. But it warned that “the potential for prolonged disruption” to its oil exports and damage to infrastructure “add clear risk to our expectations.”

The Fed used swap lines heavily used during the 2008 financial crisis, buying the currency of other borrowing central banks with dollars and later selling it back. It also used swap lines to support foreign central banks after the start of the Covid-19 pandemic. Countries that don’t have a swap line with the Fed can still exchange their holdings of Treasury bonds for dollars through a program administered by the New York Fed.

Gulf sovereign wealth funds are different. The region’s wealth fund holdings (in excess of USD 5 trillion) are not for currency stability, but to provide long-term income streams. Gulf sovereign wealth fund holdings skew toward US dollar-denominated assets, but they are generally held in less liquid assets.

Using these assets to meet short term fiscal needs risks disrupting US markets. That might risk a vicious downwards spiral (like the UK’s Truss debacle). Swap arrangements give Gulf economies the cash without creating disorderly markets. However, in the longer term, the need to reconstruct and rearm means that asset sales may be considered, UBS warned.

On Friday, Treasury Secretary Scott Bessent defended the possibility of the US participating in currency swaps with allies in the Persian Gulf and Asia who are seeking financial backstops due to the Iran war.

Discussions with those countries about US dollar swap lines “are part of ongoing, routine conversations that @USTreasury has been having with our partners over a number of years,” Bessent said in an X post, in which he offered a full-throated defense of additional swap lines.

Discussions with countries, including our Gulf and Asian allies, about U.S. dollar swap lines are part of ongoing, routine conversations that @USTreasury has been having with our partners over a number of years. They are a testament to the U.S. dollar’s primacy and the strength…

— Treasury Secretary Scott Bessent (@SecScottBessent) April 24, 2026

“They are a testament to the U.S. dollar’s primacy and the strength of America’s economic shield,” he said of the potential swaps adding that dollar dominance and reserve currency status are strengthened by constant long-term initiatives, including countering the growth of problematic, alternative payment systems,” he added. “Under @POTUS, this is American Economic Leadership at work.”

The assertion of swap lines’ benefits and commonness comes as the Trump administration considers offering the financial lifeline to the United Arab Emirates, CNBC reported Tuesday.

It also comes two days after Bessent said that “many” allies in the Persian Gulf are seeking the same backstop as the ongoing war wreaks havoc on the oil-rich nations’ economies.

A potential swap line runs the risk of being seen as an unnecessary bailout of a foreign country — especially if it’s a rich one like the UAE, which has one of the world’s highest per capita incomes.

The Treasury can provide its own version of swaps using its Exchange Stabilization Fund (ESF), though traditional swaps are most often offered by the Federal Reserve. The arrangements can pose political risks for President Donald Trump, whose approval ratings on the economy have sunk as war-induced supply shocks rapidly raise prices for gasoline and other products, exacerbating Americans’ existing inflation woes. 

Trump, asked on CNBC’s “Squawk Box” Tuesday about a possible UAE swap line, appeared to say he is in favor of it.

“If they had a problem … I would be there for them,” Trump said.

Gulf countries have also raised billions of dollars in debt from investors – primarily PIMCO – in recent weeks via private deals, highlighting their push to have cash on hand as they face what the International Energy Agency has called “the most severe oil-supply shock in history.”

Bahrain also set up a roughly $5 billion swap line with the UAE. earlier this month to help improve financial stability, the countries’ central banks said.

Finance ministers and central bankers in Washington for the IMF and World Bank meetings said they didn’t expect an easy or swift recovery for the region.

“The basic logistics of scheduling tankers and bringing them back after the chaos we have seen, that will take possibly to the end of June,” said Mohammed Al-Jadaan, Saudi Arabia’s finance minister, during a panel on Thursday. “Anyone who’s counting for a quick recovery, even if there is a total end of hostilities, will need to recalculate that.”

The US is pressing its allies to rethink how they source essential minerals, urging them to accept higher prices if it means reducing reliance on China, which currently dominates much of the global supply, according to a new report from Financial Times.

According to US Trade Representative Jamieson Greer, countries working with Washington should expect to pay extra for materials obtained through a proposed network of trusted partners. He framed this added cost as a necessary trade-off to strengthen supply chain security.

The idea under discussion involves setting minimum price levels for critical minerals among participating nations. The goal is to make mining and processing outside China financially viable, while potentially using tariffs or other restrictions to block cheaper imports from non-participants.

“There is a premium we pay, and I call it the national security premium, and we will all pay a national security premium to have a secure supply chain,” Greer said.

Not everyone is convinced. Some US partners, speaking privately, worry that such a system could drive up expenses for key industries and provoke a response from China. Businesses in sectors like defense, car manufacturing, and renewable energy could be particularly affected if input costs rise.

The debate reflects a broader challenge: breaking China’s grip on these resources is difficult after years of heavy investment that gave it a leading position. At the same time, many developed economies are already dealing with inflation and high energy prices, adding to the sensitivity around any policy that could increase costs further.

The FT report says that Greer has pushed back on concerns about affordability, arguing that prioritizing low prices in the past is exactly what left Western countries dependent on Chinese supplies. In his view, paying more now is the price of building a more secure and resilient system.

Meanwhile, governments are wary of possible retaliation. China has previously used its control over mineral exports as leverage, and any coordinated effort to sideline its role could lead to countermeasures.

Despite these tensions, there are signs of cooperation. Earlier this year, partners including the EU and Japan expressed interest in working together on a joint framework for critical minerals. Ideas being explored include shared pricing arrangements, financial support to bridge cost gaps, and agreements to buy from one another rather than external suppliers.

Stocks futures fell and oil and the dollar jumped in early trading, as risk sentiment was dented after Trump scrapped his envoys’ trip to Pakistan for Iran talks, breaking down momentum toward a second round of peace talks between the US and Iran, even as the Strait of Hormuz remains indefinitely blocked. 

Futures contracts for the S&P 500 Index dropped 0.3% after the underlying index closed at a record on Friday, although with two-thirds of S&P constituents closing red: this was the second worst negative breadth all-time high for the S&P following the bizarre October record high when the S&P printed an ATH with 80% of stocks lower.

The last 2 all-time highs have been on negative breadth: Friday’s record saw 324 SPX companies close lower; this was the 2nd worst negative breadth record only after Oct 28, 2025 when the S&P closed at a record with 80% of S&P companies red. pic.twitter.com/J5TBJZvvLS

— zerohedge (@zerohedge) April 25, 2026

The dollar rose against most major peers, with risk sensitive currencies such as the South African rand among the biggest laggards. Brent crude oil rose more than 2% above $107, the highest in 20 days. US Treasury futures edged lower in early trading.

The soft start to a very busy week – the bulk of the S&P is set to report in the next few days including most Mag 7s (MSFT, AMZN, META, GOOGL, AAPL) – comes after efforts to resume US-Iran peace talks collapsed over the weekend when Trump abruptly canceled a planned trip by his top envoys and Tehran said it won’t negotiate under threat. The setback adds to concerns for global equities at or near record highs (hedge funds just sold the most tech stocks in two years) with Brent crude oil rising to a 20 day high elevated bond yields from Sydney to London driving up borrowing costs.

Investors are still encouraged by strong corporate earnings and the AI boom “while keeping the US-Iran situation on their side mirrors,” said Indosuez Wealth strategist Francis Tan. But “the market is driving at 120km/h now and may have less reaction time when it is really time to change lanes.”

There have been some signs that investor enthusiasm for the biggest beneficiaries of the month-long rally may be waning. According to Goldman and BofA’s trading desks, investors should hedge across rate sensitive areas of the market such as small caps, regional banks and gold, adding that underperformance might still shake out those holding gold as high beta risk asset.

Separately, markets will remain on edge as major central banks including the Fed and Bank of Japan deliver policy decisions beginning Tuesday (no surprises expected). While investors expect them to all leave rates unchanged, traders will be alert to signs officials are worried about the inflation threat posed by the biggest disruption to oil supply in history from the Iran war.

A fresh round of speculation that policy tightening may come in coming months would be negative for government debt, which has already underperformed other assets in recent weeks as stocks and credit markets rallied with traders looking past the war. The Bloomberg GlobalAgg Index, a measure of global investment grade debt, has slid 1.7% since the Iran war broke out against the 1.5% gain in global stocks.

While the aggressive policy tightening cycle that was penciled in during the first part of the Middle East war has been partially unwound, “markets have been forced to recognize that the inflation threat is not over,” Marc Chandler, chief market strategist at Bannockburn Capital Markets wrote. April inflation reports are unlikely to offer relief from firm March readings and the spill over in to core prices is becoming more visible.

But the big variable for markets this week will not be geopolitics but earnings, with tens of trillions in market cap, some 42% of the S&P, set to report: Alphabet, Microsoft, Amazon.com and Meta are set to report Wednesday, followed by Apple a day later. The companies are worth nearly $16 trillion combined, representing a quarter of the S&P 500 Index’s market capitalization.

“It’s going to be a critical week,” said Keith Lerner, chief investment officer and chief market strategist at Truist Advisory Services. Results need “to validate this recent move,” he added.

By Peter Tchir of Academy Securities

Markets have been almost totally dismissive of the conflict in Iran. Frankly, the number of countries, including oil-rich nations, that had been firing at each other seemed quite high, yet most markets shrugged it off. While the Strait remained closed, or blockaded, or blocked, the market remained in Open Sesame mode this week.

Moonshot

Artemis II wasn’t the only “moonshot” we’ve seen.

The SOX index has jumped almost 50% since March 30th. That would be incredible, but 18 straight days of gains is wildly impressive! (Even the NY Mets could only do the same thing 12 days in a row, but in the other direction).

The lower chart is RSI (Relative Strength Indicator and one of my favorite technicals to look at). This index went from the cusp of oversold, to heavily oversold, to overbought territory in 2 weeks and gets “more” overbought by the day. Every strong chip earnings report not only “skyrockets” that stock, but it also pulls up the entire sector.

The AI and Data Center Buildout narrative remains completely intact even as “war” rages. If anything, the need for domestic AI and Data Centers is growing as physical security concerns continue in the Middle East.

Not Sure if “Laggards” Is the “Right” Word, But…

Quantum computing has bounced, but unlike the semis, it is not even at the highs of the year, let alone the highs from last year!

If you own a “quantum” ETF, you likely have seen far better returns in the past few weeks than this chart would indicate. But that is because the ETFs own a lot of semiconductors. QTUM (Defiance Quantum ETF), the largest “quantum” ETF at $4.1 billion, has TER as its largest holding. INTC, STM, and MU were the next largest holdings. So, I tried to identify 4 tickers from WQTM that seemed to be more “pure play” quantum.

We have yet to see a real breakout in Uranium and Rare Earths stocks.

REMX (for Rare Earths and Critical Minerals) and URA have bounced, but Uranium is still lower than it was before the war. If you look at the “small reactors” which were all the rage, their chart looks a lot more like the chart from the quantum stocks. Even in rare earths, names like MP, which the U.S. government invested in, is more than 35% lower than its high last October.

A warning sign? A rational reassessment? The next asset classes to “catch a bid”?

Bitcoin, where the news has generally been good, is still hanging around the $76k to $78k range. It has “recovered” the 100-day moving average, but has not rushed to “close the gap” with the 50-DMA. I’m watching this closely as another “next leg” of this rally. I cannot help but wonder if some of the “ceiling” on Bitcoin is due to concern that there may be some level of selling pressure from a country like Iran. Iran may not have Bitcoin, but given the fact that they allegedly asked for “safe passage” payments in crypto, it seems plausible that they do. Given the blockade and seizure of vessels, it would create pressure to sell (or transfer it to someone else who sells it) to fund their economy (if they have any).

I’m leaning towards a “breakout” as people look for anything remotely adjacent to new tech/chips that isn’t at its highs.

Markets Ignoring Stubborn Oil Prices Out the Curve

While we still see issues in LNG, Diesel, and Jet Fuel (also in the distillates and chemical industry), let’s go back to the big 2 – WTI and Brent.

WTI spiked to $120 March 9th and again got to almost $120 on April 7th. It is “comfortably” lower now, at $95. Brent spiked to $120 three times during the conflict and is “only” at $106. A bit less comforting than WTI.

But the story, as several people in the admin have pointed to, is what is happening to oil “out the curve.” When the admin was pointing this out, there was a pretty quick drop from “elevated” front end contracts as you moved out the curve. Now we are sitting at just under $80 for the November contract. That is closer to the highs of this conflict. The November contracts are now near their highs (since that “crazy” first weekend). It is difficult to be encouraged by this.

The further out the curve you go, the more it includes people “in the know” and less about speculation. And this pricing is consistent with the warnings that we keep hearing from participants in the physical products. I suspect that even in the event of a good deal with Iran, pricing out the curve doesn’t back down much from here.

It is possible that equities are fully pricing this in and don’t care. That the AI and Data Center story and current round of earnings are enough to cover this possibility.

I cannot help but wonder if we are being a bit complacent, especially since AFFORDABILITY has been an issue and has not dissipated in any way, shape, or form (at least not for the “average” American).

Maybe I’m looking too hard for something that might derail the rally (as opposed to the prior section when we were looking for what might benefit from the next wave), but I do have some concerns that people “in the know,” already “know” oil is going to remain uncomfortably high (for consumers) even if a good deal is reached.

Bottom Line

On rates, 4.25% is still the “midpoint” of our range. I think you buy 10s above 4.4% and sell if we get to 4.1%. Maybe a touch too wide of a range, but there is a lot of noise out there.

On credit, IG remains boring. HY has some interesting risks, so maybe a touch more cautious there, while I cannot help but want to nibble at the private credit/BDC space. IGV (software ETF) hung in last week, despite some headlines from the private credit side that could have hurt, and despite the massive rally in AI/Data Centers – which until recently didn’t seem good for software. IGV, BDCs, and Private Credit seem to be various forms of the same trade, and it is difficult not to scale in a little here, once again under the theory that they are under-owned and at some point capital will come looking for stocks with a story that is well off its highs.

On equity. European ProSec! Is Europe finally getting the joke? They are lending money to Ukraine to buy weapons. It has been reported that Sweden has been interdicting “ghost” ships to stop Russian oil sales. Many of the European stocks in the ProSec™ theme have been outperforming similar stocks in the U.S. Yes, Europe is more exposed to oil prices than we are, but that is precisely why you want to buy into their energy industry – the realization that they have to do something to reduce their exposure to regions outside of their control and harness their own resources!

I have to admit, I’m not even checking (or at least barely checking) Twitter for Iran headlines. Markets are closed, so nothing to say about them now, and by Sunday night, the story may have changed anyway, which in turn might look completely different by Monday morning. As a strategist, I think I’m either in the depression or acceptance phase of grief as it relates to trying to manage risk around the conflict.

Good luck and Academy will continue to try to bring our unique resources to bear on the geopolitical situation to help you navigate it as smoothly as possible!