This weekend is crucial

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Today, the Iranian and American negotiator arrive in Islamabad, Pakistan. This will be the first high level face to face talks since 1979. The fragile ceasefire that began Tuesday hangs by a thread. What happens this weekend could determine whether this war ends, escalates, or drags on indefinitely.

Let me walk you through what is actually happening, what is priced in, and what it means for your portfolio.

🇮🇷 THE ISLAMABAD TALKS

Vice President JD Vance will lead the US delegation, joined by Steve Witkoff and Jared Kushner. Iran's team will be headed by Parliament Speaker Mohammad Bagher Ghalibaf. This is the highest level engagement between Washington and Tehran since the Islamic Revolution.

The negotiations have a strict deadline as the temporary ceasefire will end in less than two weeks, on April 22.

However there are major differences on both sides. Iran's 10 point proposal calls for Iranian control of the Strait of Hormuz, the withdrawal of US forces from the Middle East, and a halt to military operations against allied armed groups (including Hezbollah and Houthi, Israel is not liking this at all).

But the main sticking point? Uranium enrichment. The White House says this is a red line Trump will not move from. Iran says its right to enrichment was explicitly agreed to in the ceasefire framework. Someone is lying, or both sides are talking past each other. Either way, this will be the first test of whether talks can produce anything real.

Pete's Take 👇

These talks are a coin flip. The fact that both sides are showing up is bullish (for peace and the markets). But deep mistrust remains. Iran's ambassador briefly posted that the delegation would arrive "despite skepticism of Iranian public opinion due to repeated ceasefire violations," thendeleted the post hours later. That tells you everything about the mood in Tehran. Hope for the best, position for uncertainty.

🇱🇧 LEBANON IS NOT PART OF THE DEAL

This is the second major crack in the ceasefire. On the first day of the US Iran ceasefire on Wednesday, Israel conducted its biggest wave of strikes on Lebanon since the war began.

Under Trump’s encouragement, Israeli Prime Minister Benjamin Netanyahu said Israel will begin direct talks with Lebanon on disarming Hezbollah. But make no mistake, the bombs continue while diplomats talk. Netanyahu has made clear that Israel's campaign against Hezbollah is not covered by the ceasefire. Pakistan's PM Sharif seemed to believe it was. Confusion again.

Iran's parliament speaker claimed three clauses of the 10 point plan had already been violated: continued attacks on Lebanon, a drone entering Iranian airspace, and attempts to ban Iran's uranium enrichment program.

Pete's Take 👇

Lebanon is the wildcard that could blow up the whole deal. If Iran feels compelled to defend Hezbollah, the ceasefire crumbles. Trump asked Netanyahu to be "a little more low-key" in operations in Lebanon, suggesting Washington knows this is a risk. Watch Lebanon very closely this weekend.

🛢️ HORMUZ IS "OPEN" BUT NOT REALLY

Markets initially cheered the ceasefire news. Brent crashed 15% on Wednesday, dropping from around $110 to the low $90s. Then reality set in.

The oil rally subsequently eased, but Iran has made clear that vessels must obtain its permission to pass. That is not freedom of navigation. Ships are expected to pay a toll.

So where does that leave us? Iran is allowing some ships through, but only on its terms. Iran confirmed it will allow the resumption of shipping across the Strait of Hormuz during the two week period, but transit must be coordinated with Iran's armed forces. This is not the same as "open."

Pete's Take 👇

The Hormuz situation is in limbo. Oil prices reflect that reality. The initial ceasefire relief rally has faded. If talks collapse this weekend, we could see oil spike right back above $100. If talks go well and Hormuz fully reopens, we could see Brent in the low $80s. The range is enormous. That is the definition of uncertainty.

📊 MARKET DATA

US markets extended their winning streak on Thursday, with the major indices now up seven consecutive sessions.

Oil prices remain volatile. WTI briefly touched $100 earlier in the session before pulling back on news that Israel would negotiate with Lebanon.

Gold continues to act as a safe haven, trading around $4,760.

🎯 Pete's Investment Takeaway

This is the calm before the storm.

The Islamabad talks this weekend will determine whether this ceasefire becomes a lasting peace or a brief pause before escalation. Markets are optimistic but not euphoric. The oil futures near $96 tells you uncertainty is far from resolved.

Key things to watch: Hormuz shipping volumes this weekend. Vance and Ghalibaf's statements after Saturday's talks.

You can monitor the Hormuz shipping volumes from this website: https://hormuzstraitmonitor.com/ 

Stay liquid, stay diversified, and remember that we might be a long way from a signed deal. But we are definitely moving in the right direction.

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Happy Hunting!

Pete
Invest with Pete

🚨‼️ By the way, I’ll never PM anyone on telegram or any other social media platforms. If you receive any “Pete” messaging you, these are scammers impersonating me. Pls beware!

The information provided in this newsletter is for informational purposes only and does not constitute financial advice. Readers should seek their own independent financial advice before making any investment decisions. Please note that while Pete is a portfolio manager, the opinions expressed in this newsletter are his own and do not represent the views of any organization. Always perform your own research and due diligence before investing.