Iran Deal Failure Scenarios — Full Breakdown & Transcript

[00:02] straight up wrong and ain't going to be in a wrong deal? Well, obviously then But what does it mean for the market and what does it mean for which stocks do poorly and which stocks do well? Let's break that down here because I'll say

[00:18] right now people are pretty damn pessimistic about this Iran negotiation. Uh we've got a lot of reporting from the Iranians that they are striking ships, Iranians that they are striking ships, that ships are hitting mines. Sentcom is

[00:33] having to brag about how secure the straight of Hormuz is on their blockade end while Iran says they have total control. We've heard all this. None of that is news. The only news that we really have is that Brent oil has gone

[00:48] really have is that Brent oil has gone way up over the last 6 weeks. The only saving grace is that the peak has stopped, which the last time we noticed a peak was stopping was in the 10-year Treasury yield, which is a big deal

[01:02] because the last time we called a peak in the 10-year Treasury yield around we were right. It was the peak within about five basis points, which is effectively the peak. We were looking at the different slopes and what was

[01:16] happening. We did it all live and here we are. We're under 5% which is great on the 10-year. Can the same thing be happening to oil? My hope is yes. Take a look at this. Oil over the last one month has skyrocketed from about 100

[01:32] bucks to as high as $17 per barrel of Brent. If we go back 3 months ago, beginning of August, we were at 79 bucks a barrel. So

[01:44] we were up substantially. 35 bucks a barrel is a lot. you know, somewhere around 30%. Can this start peeking out? Well, again, this latest latest rise suggests that there's no deal and this is going to go

[01:59] on forever. But what's actually being said, take a look at this. One of the said, take a look at this. One of the Ayatollah's interns wrote this on X that the Ayatollah has emphasized the need for proactive and timely communication,

[02:13] which is very interesting because they've been very dark. In fact, this negotiation over the last six to eight weeks that's been going on between the United States and Iran has been cast into the darkness. Some people actually

[02:26] say the less leaks out of the negotiations, the better. But it gives us a lot less to go on as to whether or not there's actually going to be a deal. well, what if we're wrong and there's not going to be a deal? What if we don't

[02:39] get a deal? We'll talk about that. But take a look at this. The Ayatollah further stressed that it's important to ensure that the conditions set forth by the country's officials for ending the war are met and by bringing the current

[02:55] state of neither war nor peace to an end. Basically in English, yo, we're in end. Basically in English, yo, we're in purgatory right now. This is bull crap. We are getting screwed economically. We can't sell our damn oil. We now have

[03:10] fighting going on on the border between Iran and Pakistan because we can't get truck shipments through. We're getting this Scotty B economic D-Day that is us. We're kind of getting screwed over here. But the we're getting screwed

[03:28] seems to have leveled out. Take a look at this. one US dollar to Iranian at this. one US dollar to Iranian realale basically peaked out around8 and has actually come off of its recent peak around 1835ish to be more exact. We're

[03:43] at 1817. So in other words, it takes 1.8 million realale to buy1 US. Uh the point of this is if things were expected to get even worse,

[03:56] we'd probably see the real lose more money. more people would be making bets and shorting the real. We're not seeing that right now. We're actually seeing that some of the pain is peeking out

[04:09] which somewhat aligns with this comment here from the Ayatollah that hey look, you know, we got to end this in the middle zone that we're in. To me, that's bullish. Okay, so we've got oil somewhat peeking out. Peaked out about 117. Now

[04:25] peeking out. Peaked out about 117. Now it's 113 114. We got the real peeking out. We got the Ayatollah saying look you know there a lot of people are under this going on forever. I think Iran realizes like it's kind of taking time

[04:39] bomb and they got to do something. So there is a reason to be bullish that they recognize hey let's get this over with. But what else is going on? Well, you've got the Iranian president who's in Moscow for gas forum with Putin, and

[04:53] Qatar is there as well, and they're excited to expand cooperation, but they sanctions against them. So, you can't really get started with this cooperation that they're trying to brag about here because of all the sanctions against

[05:07] Iran. Just the fact that the Iranian president is there though starting to make me wonder if they're sort of circling uh you know all their friends for the phase postwar of economic cooperation. Hey Putin, we're going to

[05:21] Guitar, we're going to do all these deals after the war. Whatever. This comes a day after yesterday, we had the Mecca meeting between Pakistan, Turkey, Mecca meeting between Pakistan, Turkey, Saudi Arabia, uh, altogether in Thran.

[05:34] At the same time, we just had Iran's security chief meet an envoy from the security chief meet an envoy from the Houthis in the capital today. Now, why does that matter? Well, because the Houthies are causing a lot of problems

[05:47] and they might be contributing to why oil prices have risen so much. In fact, the Houthies put together a piece in the New York Times uh sorry, not the New York Times uh sorry, not the Houthies, uh the uh ambassador for Saudi

[06:00] Arabia to the United States put together a piece in the New York Times uh and they said or it was an op-ed titled there is no limit to what the Houthies will do. And basically they're saying look we need global coordination against

[06:13] the Houthis much like how the uh group ISIS was destroyed in the past. Uh they basically let the Houthies take control of the Babal Mandet strait that that

[06:25] portion of the Red Sea affects 10% of the world's trade and that because of the actions of the Houthis we've seen oil prices push well above $100 per barrel. And so I think it's interesting that this article was posted as an

[06:39] opinion editorial in the New York Times 11 hours ago and again it was put out 11 hours ago and again it was put out there by the here it is ambassador of the Kingdom of Saudi Arabia to the United States. So they put this oped out

[06:53] at the same time as now one of the Houthi officials is in Thrron at the same time as Thrron is meeting with Saudi Arabia and literally the Saudi Arabia ambassador is bagging on the Houthis

[07:07] but Thrron just met with officials from Saudi Arabia and the very next day is meeting with the Houthi envoy. Point is, lot of diplomacy happening all at the same damn time, which in my opinion is why we're seeing the real

[07:22] peakout, an oil peakout. All of this seems like it is leading to less aggression, not more. Something else that could be leading to less aggression, not more, is the fact that turnout in Israel for this election is

[07:35] turnout in Israel for this election is insane. And right now, BB is likely to lose his seat. and people believe that is going to lead to less aggression. Now, we'll see how this ends up playing out. This is the betting the prediction

[07:50] market right now. Uh Eisenaut, the competitor to BB, is expected uh to win with about a 46% chance. Uh BB only has a 15% chance of basically cleaning house and getting to the 61 seats they need to

[08:04] be able to pull off control. So BB's basically going to have to take his Orthodox Jews and his right-wingers and he's going to have to put together a he's going to have to put together a coalition with a dude who literally had

[08:16] his son die in Israel's war against Gaza. Point is, a lot of people expect that cooler heads are going to prevail once cooler heads are going to prevail once BB's sort of reign takes a little bit of

[08:29] a seat back. Right now, the New York Times is artic arguing that we have not seen this kind of turnout in Israel for an election ever. They say that 55.7%

[08:42] uh of of they they're already at 55.7 voter turnout 55.7% voter turnout by 4 p.m. Israeli time, which going back to 1973 when they started tracking it in little two-hour increments has never been seen before. So, in other words,

[08:58] kind of the same that you're seeing in the United States, which suggests that there could even be appetite from Israel to lower aggression and get a deal done. Now, this is all supposed to be about, you know, what if we don't get a deal,

[09:12] right? So, what happens if we don't get a deal? And poopy dupy kind of keeps a deal? And poopy dupy kind of keeps going on. Well, it's possible. And the first thing that we end up with problems with, and I'm pulling this up

[09:26] right here. Here we go. Uh, is going to be the rate market uh, for inflation expectations. If we cannot get a deal with Iran, these inflation expectations are likely to skyrocket even more than they already have. We are already peaked

[09:42] right here at the same peak level where the Fed was forced to raise on September which is not great because that essentially forces them into a hike.

[09:54] tomorrow, but this essentially sets up the forced hike uh for December, which I'm also looking at the uh KHI market for, hey, what are the odds of us getting just one rate hike this year, aka a oneand done? And the odds right

[10:09] now sit at 22%. I think we need an Iran deal to keep another hike in December, and honestly, we're going to need it. So, what happens hikes. Potentially three more rate

[10:22] hikes. Two to three more giving us three to four in this total hiking cycle. Now, remember when I bring up the prediction markets, Koshi is a sponsor of the my startup. And if you go to kshi.com/r/mevin

[10:35] Cali and make your first trade. You can also scan that QR code. So, what else happens in addition to rate hikes? Obviously, the rate hikes have to come to maintain inflation expectations because oil sits too high. But without a

[10:50] because oil sits too high. But without a deal slowly, the goal is that we don't go back to some crazy war aggression. Even Donald Trump has said we might do a war. I don't think there's an appetite anywhere for a big prolonged conflict

[11:05] again like what we saw in March. But rate sensitive stocks are likely to suffer. This means if you think a deal could be made, one closer and more risky

[11:18] kind of this one has real bankruptcy risk to it, but this little penny stock over here is interesting. I've got exposure to this at many different uh buy points. Uh but this is a uh mortgage play loan depot that's trading for about

[11:32] 63 cents right now. I think it bottomed around 50 cents. We've been talking about this in our course member live streams as well. is a very like very risky hot potato. But if we get a deal, this could do very very well. No deal,

[11:45] these are the kind of stocks that suffer. Solar related stocks, the Nphase, the Loan Depot, you know, these guys all hurt. Maybe even some of the consumer stocks like Dave and Busters gets hurt more because people just have

[11:58] less money to spend because gas prices are so high, right? That's where you see wondering, Kevin, what what if there's no deal and this sort of drags on for many months? What is that going to end up doing to

[12:12] hardware stocks? Well, my take on hardware stocks is that hardware stocks do not care. They do not care at all. And the reason I say they don't care is an extra 25 basis points makes zero difference to their ability to expand

[12:29] what they're doing at hyperscalers. So whether that's SpaceX borrowing $40 billion, signing a lease for $40 billion, Meta $96 billion, Broadcom with Anthropic $63 billion in custom financing, Anthropic to raise hundred

[12:45] billion from their IPO, you know, all that suck. Nobody cares about the extra 25, 50, or 75 basis points. Nobody cares. The only place that cares is sort of the meme market of credit default swaps, which even that might be peeking

[13:00] out right now. But the hardware boom is actually likely to continue once we get through Microsoft and Amazon earnings this week. Uh whether or not there's a deal, I don't think that's where there's an issue. So

[13:12] an issue. So bottom line, my take deal interest rate sensitives AI stocks can go to the moon rapidly and then eventually we end up with disinflationary forces from what AI pulls off because that's going to lead

[13:27] An Iran deal obviously leads to disinflation in oil prices which would be great. Uh if we don't get those, we're just going to have more hikes. And relatively high interest rates and the stock market keeps going to all-time new

[13:42] highs after all-time new highs, which is exciting. Like this morning in our alpha report, we indicated that we thought, and we said this yesterday as well, we thought 700 was a durable bottom. Okay, this was our alpha report the last two

[13:56] days. Durable bottom on 700. We hold 7:15. We keep going. The stocks that run AMD and Bloom Energy, that was our call out in the alpha report this morning. And right now, we're sitting at 721 on the cues, which means buying the dip

[14:11] again at 700 made sense. You can kind of see that 700 line right there. It's a very, very strong line. And we really only broke through it when Leo Fold got liquidated. But otherwise, despite these higher rates, we've really been on the

[14:25] shelf up here. I don't think the market cares much at all. And what's been artificial intelligence companies like Nvidia or even AMD have collapsed. That boom. And I think that next boom can happen whether or not we end up getting

[14:42] a deal with Iran. It would obviously be nice to get a deal with Iran, but you know this rise mostly intraday right here on AMD. I think this is just the beginning of what these stocks can do and it happens regardless of whether or

[14:55] not we're right or wrong about Iran. Uh I don't see like how I could be doubly wrong would be have you or a loved one child been affected by social media? Morgan Morgan can fight to help you. If you or your child spent years growing up

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[16:08] could be doubly wrong would be we go back to a full-on allout, you know, crazy war. I don't see that as likely. This is the sort of financing sheet we put together in the other uh uh the other video, but I don't see that as

[16:23] super likely. But I think what we should do is just write down a quick bottom line, if we will. Okay. So, let's do a bottom line here. It's a little messy. I didn't clean it as well

[16:38] as I could have. Bottom line. All right. as I could have. Bottom line. All right. So, deal. Okay. Moon. And that's easy. That's like everything. Moon all. Okay. No deal.

[16:54] And then big war. These are the three scenarios right These are the three scenarios right here. Okay. I would put a big war like here. Okay. I would put a big war like the odds of this at about 5%.

[17:08] So I wouldn't be investing in anticipation of a big war but this would be bad. Okay, big dip dip big. Okay, low odds

[17:21] Okay, big dip dip big. Okay, low odds over here. Uh no deal and deal. Okay, let's say this is by you know November 4th. uh some form of a deal by by basically, you know, once the election's over. Um,

[17:36] how do we want to do this? By no. Yeah, I'm still hoping we get a deal within the next 24 hours, but let's just for the longer term here say uh a deal by November 4th.

[17:51] Everything Moons, you know, these these probably right here. I mean, I I still lean. By November 4th, my number is 70%. And no deal. I guess I have to subtract

[18:06] go, you know what? I'll go uh that's fine. I'll just do 25% right here. Okay. give it. Be sort of consistent with what we've talked about. Uh this would be we've talked about. Uh this would be Moon. All this would be Moon uh Moon AI.

[18:22] So specifically hardware uh some software that's sort of my view on uh on the outlook here. Uh yeah I mean I always

[18:37] like to give the context of why I think that way and that's why I put together all this sort of extra info as to like how this all sets up. But I think studying this on a daily basis is is one of the reasons why when we put together

[18:50] always perfect, but when we put them together, I think that's why we lately it seems like we're right a lot. And knock on wood, I like that. Again, no when we put these together, a lot of it is just based on reading between the

[19:05] even going, you know, deep into earnings calls or revisiting old documents to see up. And so if you're not part of that yet, I really encourage you to join us at reinvest one.com. Uh the next coupon expires in 3 days. You get the alpha

[19:19] reinvest stocks terminal, the homes terminal, the research terminal, all liveream, and the agentic AI blueprints coming out in Q1. Dude, we've got a lot.

[19:31] There is a lot coming out. I cannot wait uh for this terminal to come out. It's going to be actually pretty gorgeous on the uh iPhone Duo as well. So, we're the uh iPhone Duo as well. So, we're gonna have a really nice terminal uh you

[19:45] know, set of widgets that we're crafting. I just put a little background it's kind of cool. But we'll have a really nice widgets for each of these cuz you know when this thing goes into it little pause mode over here. I don't

[20:00] think it will. Certainly not with a security key in it. Uh but anyway, when this nice little widget mode. Yeah, there we go. So, you get a photo, whatever widgets you want to put in here. I want all that to be the reinvest

[20:14] really cool. So, I'm I'm excited about what we're building and it's so cool because it's this little startup that you all have kind of seen us build over time. I feel like we're kind of doing it all together. So, uh really remarkable.

[20:28] But anyway, that's my take on what happens if I'm wrong and we don't get a deal. It's still bull. If you like that video, check this one out. I think >> Why not advertise these things that you told us here? I feel like nobody else

[20:41] see how it goes. >> Congratulations, man. You have done so you. >> Kevin Pra there, financial analyst and YouTuber. Meet Kevin. Always great to get your take.