Tomorrow, Wall Street will celebrate the largest IPO in history.
The first matches of the largest World Cup ever staged will kick off across North America.
One event revolves around reusable rockets, satellite networks and the ambition to extend human civilization beyond Earth. The other brings together 48 national teams and billions of viewers who will spend the next month arguing over lineups, referees and penalty decisions.
The 2026 Men’s FIFA World Cup will finally kick off today, as Mexico takes on South Africa at the Azteca Stadium in Mexico City. No World Cup has ever had a larger geographical footprint, with some host cities more than 2,500 miles apart. It will also be the first World Cup to feature 48 nations, four Debutants and seven Past Winners (Source: Statista)
On the eve of both the SpaceX IPO and the World Cup, the United States and Iran exchanged fire.
Again.
President Donald Trump said Iran would “pay the price” for refusing to make a deal. Tehran responded by declaring the Strait of Hormuz closed once more and claiming responsibility for attacks on two oil tankers operating in the channel.
Trump let slip (ahem) the secret plan the U.S. has been executing. Under the cover of darkness, over the past week, U.S. naval escorts have shepherded ships carrying roughly 100 million barrels of oil through the strait.
One hundred million barrels seems like a lot until you learn that global markets consume that much oil every five days.
Five days.
Traders are beginning to suspect Trump doesn’t have a plan for opening the Strait of Hormuz after all. And that all the social media puffery is just that: words without a solution. One of our deep subject matter experts on the region suggests that Trump has already lost the support of the U.S. Arab allies; he just won’t admit it.
That’s alarming, if true.
Brent crude moved higher overnight. Traders who spent much of the spring debating the timing of rate cuts are now crowding the rate hike side of the bet on Polymarket. The odds favor a European Central Bank rate increase today and at least one Federal Reserve rate hike before December.
We’re holding out for Kevin Warsh to buck the odds next week in his first FOMC meeting as Federal Reserve chairman.
The same week investors eye stratospheric profits in the company promising to put men on Mars someday, more sanguine bond traders are recalculating inflation forecasts based on the movement of tankers through a narrow waterway separating Iran and Oman.
⚓ The Cost Of Geography
For much of the past three decades, globalization has encouraged the belief that technology has steadily reduced the importance of geography.
Supply chains stretched across continents. Capital crossed borders with increasing ease. Executives optimized production around efficiency rather than resilience. A product designed in California could be manufactured in Taiwan, assembled in China and delivered to customers in Europe without anyone giving much thought to the shipping lanes connecting them.
The Strait of Hormuz never received that memo.
Roughly one-fifth of globally traded petroleum still moves through the channel. Refineries depend upon it. Airlines depend upon it. Chemical producers depend upon it. Container ships depend upon it. The modern economy often presents itself as a cloud of software floating above the physical world. A tanker captain navigating the Persian Gulf receives a daily reminder that the physical world remains stubbornly involved in the arrangement.
A missile launched in the Gulf eventually works its way into transportation costs, manufacturing costs, heating bills and airline tickets. Bond markets respond accordingly.
The route connecting a tanker in Hormuz to a mortgage application in Ohio involves more steps than most people realize, but it exists all the same.
🥇 Why Gold Hasn’t Cooperated
Andrew and I spent much of yesterday’s Grey Swan Trading Fraternity live briefing talking about oil markets, energy infrastructure and supply chains. One attendee insisted we address another elephant in the chat room.
“What’s happening with the gold price?” we paraphrase.
If the Iran war has now lasted more than one hundred days, why is gold down?
Since February 27, the day before the conflict began, gold prices have fallen roughly 18%.
In his column on MarketWatch Monday, Mark Hulbert examined the relationship between gold and geopolitical risk using the Geopolitical Risk Index developed by Federal Reserve economists Dario Caldara and Matteo Iacoviello.
Looking at rolling five-year periods since 1968, he found correlations ranging from -0.28 to 0.33. At times, gold and geopolitical risk moved together. During others, they moved in opposite directions.
When uncertainty spikes, investors tend to return to what has worked for centuries. From wars and recessions to inflation shocks and banking crises, gold has repeatedly served as a refuge when confidence in other assets begins to crack. That’s why the precious metal has earned its reputation as the market’s ultimate safe haven. (Source: TradingView)
Hulbert found similar instability when comparing gold with inflation, the U.S. dollar and broader measures of economic-policy uncertainty. Investors searching for a dependable formula encounter a problem. The formulas keep changing.
Wes Crill of Dimensional Fund Advisors warned against treating gold as a vehicle for hedging specific events investors expect to occur. Campbell Harvey of Duke University and Claude Erb reached a different conclusion when they extended the time horizon. Studying periods measured in generations rather than years, they found that gold generally maintained purchasing power over very long stretches of time.
Investors often ask gold to perform two jobs simultaneously. One involves preserving purchasing power across decades. The other involves responding predictably to next month’s headlines.
The historical record provides considerably more support for the first assignment.
Doug Casey once described the U.S. dollar as “the prettiest mare at the slaughterhouse.” Gold has spent centuries watching monetary systems come and go. To gold bugs’ chagrin, it rarely offers guidance on anyone’s timetable.
To be 100% clear: our forecast for the gold price remains intact. Every time the nominal price drops is a buying opportunity.
⛏️ Copper, Power And The Great Race
The decline in gold has prompted some investors to question the broader hard-asset thesis.
Previous commodity supercycles unfolded during an era when debt burdens were lower, globalization was expanding, and supply chains were lengthening rather than shortening. Manufacturers pursued efficiency. Governments negotiated trade agreements. Production migrated toward the lowest-cost jurisdiction.
The current cycle is unfolding under different conditions.
Supply constraints, underinvestment in new production and sustained demand from energy transition and infrastructure buildouts are colliding at once. Even as growth cools in parts of the global economy, a rare supercycle is playing out in real time. (Source: Bank of America)
Globally, governments are carrying debt loads that would have been difficult to imagine a generation ago. Fiscal deficits continue expanding. Utilities are revising electricity-demand forecasts upward as AI infrastructure consumes more power. Semiconductor manufacturers are constructing fabrication facilities whose costs run into the tens of billions of dollars.
Freeport is spending billions to expand copper production while utilities across North America continue to revise electricity-demand forecasts higher. Taiwan Semiconductor is building fabrication facilities that cost more than many countries spend on defense. Grid operators from Virginia to Texas are scrambling to secure generation capacity for data centers whose electricity requirements would have sounded absurd a decade ago. None of those projects can be completed with software.
Steel, copper, uranium, cement, natural gas and financing are part of every one of those projects.
The charts below remain among the most compelling pieces of evidence I’ve encountered recently in support of the hard-asset thesis, particularly within mining.
📚 Umberto Eco’s Warning
What an odd mix today: SpaceX, World Cup, military adventurism, and a commodities cycle determined not to cooperate. Let’s add this nugget, too.
Along with our fascination with Trump’s unique brand of governing – policy by Truth Social post – we have been intrigued by the impact of social media in all our forms of communication, including our own.
This morning on TikTok, we found a unique post about the philosopher and novelist, Umberto Eco. It popped up after we clicked on a new chicken recipe our daughter had shared.
Eco wasn’t a politician. He wasn’t a tech entrepreneur. He wasn’t a pundit with a hot take and a podcast. He spent 60 years studying symbols, language and the ways human beings transform information into belief. His novel The Name of the Rose unfolds inside a 14th-century monastery where the most dangerous object in the building is a book. (Image Source: Interview Magazine)
In June 2015, while accepting an honorary degree from the University of Turin, Eco offered an observation that generated immediate controversy.
“Social media gives legions of idiots the right to speak when they once only spoke at a bar after a glass of wine, without harming the community. Then they were quickly silenced. But now they have the same right to speak as a Nobel Prize winner.”
For most of human history, ideas moved through institutions that imposed friction. Books required publishers. Journalists answered to editors. Scholars built reputations over years of work. Those institutions often failed. They excluded worthy voices and elevated unworthy ones. They also slowed information down.
A rumor written in anger at midnight can now reach a million people before sunrise. A post carrying no sources, no context and no accountability can spread farther than any correction. Algorithms reward engagement. Engagement frequently rewards outrage, certainty and emotional reaction.
Eco spent a lifetime studying how people become convinced. He watched symbols become beliefs and beliefs become convictions. By the time he made those remarks in Turin, social media platforms had already begun replacing editors, publishers and institutions with algorithms.
He died in February 2016, eight months after issuing the warning. The next story arriving in your feed will arrive wrapped in confidence. Whether it arrives wrapped in evidence is a separate matter.
Be careful what and whom you believe, yeah? Especially when it comes to your money.
~ Addison
P.S. If you missed this week’s Grey Swan Live!, be sure to catch the replay with Adam O’Dell: What Comes After SpaceX?
The IPO may dominate headlines, but the larger story involves where capital flows next. Adam explores the AI buildout, energy bottlenecks, hard assets, infrastructure spending and the next phase of The Great Race as investors search for opportunities beyond the most anticipated public offering in history.
