By all accounts, we have a peace deal.

What the deal actually is, as of the time that I’m writing this, is unclear.

I keep coming back to what Academy’s Geopolitical Intelligence Group says: Iran has never won a war, and never lost a negotiation. Given how keen we seemed on getting a “deal” and how reluctant we seemed to be to risk American lives (admirable, but tricky in a conflict), I’m skeptical about the longer term prospects for a deal. But that is for another day.

In the meantime, how much more can the market rally on the “same” news? Sure, maybe this is more certain, but we have been busy rallying on similar headlines and ignoring how entrenched “higher for longer is on oil.” As of Sunday night, the January 2027 WTI contract is hovering close to $75. This was $55 before the conflict started. Those in the energy industry have been telling us about problems with diesel, chemicals, etc. Especially from Asia. Were they alarmist? Or, now that details of the “deal” are likely to come out, should we pay more attention to them?

My expectation is that the lows on bond yields and the highs on equities will dissipate as the trading day progresses — sell the “news” (or what passes for news these days).

Space

I have not bought ($SPCX) yet. I did try and participate in the IPO but, as a registered rep, my compliance department said no (we cannot participate in “hot” deals even if our firm is not involved).

I almost put in an order at $155, but missed the chance (long story, but work travel and trading do not go well together). In any case, I will be buying SPCX sometime in the next days or weeks.

I am not sure about valuation. I am convinced that government spending on space, particularly form a national security standpoint, will increase.

Honestly, I like the clause about 1 million people on Mars! I keep thinking, “space the now frontier“ (I did listen to the various voiceovers of “space, the final frontier” and still get chills.

AI

I see two distinct threats to AI.

The first threat, that I’m only worried about at the margin, is:

As costs increase and we move beyond the replacing of search (where AI has clearly won), will cost-benefit analysis support the current rate of spend on AI? I’m only worried about this at the margin.

The second threat, which is avoidable but seems like a realistic path, is political backlash against AI:

• The fear of the threat of job losses is real
• The fear of the inability to get hired as a junior is real
• Add in robotics and the fear of potential job losses grow
• Rising electricity prices, among other complaints surrounding data center build out, is real in many parts of the country.

The need for data centers and AI for national security is more real and more clearly defined.

But I do think the industry needs to do a better job of explaining the benefits or there is a risk of a political backlash.

That is unlikely to materialize as the IPOs occur, but something to be thinking about.

Bottom Line

Look for bond yields, globally, to drift higher.

Stocks will be far more dependent on the success of AI IPOs, the ongoing spend, and how SPCX performs in the coming days, than they are on the Iran deal.

I’m indifferent and confused, so am playing it close to home.

In the meantime, I’m adding to companies that will benefit from other countries and regions realizing production for security (ProSec) is going global.

• Category: Market Commentary
• Tag: Ai, Economy, Investing, Iran, Markets, Newsletter Midday, space, SPCX