The Market Has Three Problems Right Now: Oil, Bonds, and a Fed Chair Named Kevin

Let's do a quick vibe check on the macro environment: WTI crude is above $106/barrel, Brent is flirting with $110-111, the 10-year Treasury is at 4.63% — its highest since February 2025 — and 30-year yields just punched through 5% for the first time since 2007. Meanwhile, CPI is running at 3.8% YoY and PPI at 6%. The Fed's CME FedWatch tool shows a 98.9% chance of no rate cut in June and zero probability of a cut — and that's with a brand new Fed chair, Kevin Warsh, who was reportedly picked for his loyalty to Trump's rate-cut agenda. Awkward.

The Strait of Hormuz situation is the wild card nobody's portfolio is hedged for. BofA's Francisco Blanch is calling it an Indo-Pacific oil crisis, with a 14-15 million barrel daily supply gap being patched with inventory draws. China slashed oil imports from 11-12M to 8M barrels/day after a US double blockade — which is either a negotiating tactic or the beginning of something much uglier. $D surging 12% on the $NEE acquisition is the market quietly screaming that power infrastructure is the trade of the decade, not the year. And with only 44% of S&P stocks trading above their 50-day moving average while tech carries 85% of the index's YTD gains, this rally has the structural integrity of a Jenga tower at last call.

The AI industrial buildout is real — 5,000 enterprise AI factory clients, on-prem infrastructure demand exploding, memory and advanced node semis in short supply — but when gas is up 56% and vacant storefronts are spreading from Alabama to everywhere, the consumer discretionary story gets a lot less fun very fast.