Last night, Trump posted on Truth Social. Four words changed everything: "The Deal is complete." The US and Iran have reached a peace agreement. The Strait of Hormuz is opening. The naval blockade is being lifted. And ships of the world, as Trump put it, can "start their engines."

This is the moment we have been positioning for.

On Sun, Pakistan's Prime Minister announced that a final text had been agreed upon. Trump confirmed it shortly after on Truth Social, ordering the immediate reopening of the Strait of Hormuz and the removal of the US naval blockade.

The deal is a 60-day memorandum of understanding. It covers an immediate and permanent end to military operations, the reopening of Hormuz, and the release of $25 billion in frozen Iranian assets. The formal signing ceremony is scheduled for Fri Jun 19 in Switzerland. Nuclear negotiations will follow over the next two months.

One thing worth noting: Israel has reportedly told Trump it does not consider itself bound to stopping military operations in Lebanon. So the situation is not perfectly clean. But for markets, the headline is clear enough.

Pete's Take 👇 This is the peace trade I have been talking about for weeks. The playbook said rotate into back into tech, industrials, and consumer discretionary when a ceasefire confirmation arrives. That moment is now. Do not chase everything at once. But if you have been patient and positioned, today is your reward. The next 60 days of nuclear talks will bring more noise. Stay focused on what the market is pricing, not every headline out of Geneva.

Brent settled at $87 last Fri. WTI closed at $84. And that was before the deal was confirmed. Futures are now pointing sharply lower as the Strait of Hormuz reopening removes the war premium that drove oil from the high $50s all the way past $140 at its peak.

For context, Brent had fallen nearly 20% in May alone. Friday was the lowest level since early March. Today could push it further. Fitch expects Brent to average $80 for the full year of 2026 if Hormuz opens. Goldman Sachs has already pulled all 2026 rate cuts from its forecast, expecting the Fed to hold rates until mid 2027 at the earliest.

Pete's Take 👇 Lower oil is both good and complicated. Good for consumers and for the broader economy. Good for airlines, cruise lines, and consumer discretionary stocks, which got crushed by the energy shock. Complicated for energy names like XLE, XOM, and CVX, which benefited from oil above $100. The sector rotation is real. Watch where the money flows today and this week. That is your roadmap for the next 30 to 60 days.

🏦 FED MEETING: KEVIN WARSH TAKES THE STAGE

The Federal Reserve meets this week, Jun 16 to 17. Markets expect rates to hold at 3.50 to 3.75%. The bigger deal is that this is new Fed Chair Kevin Warsh's first press conference.

Warsh is a known hawk 🦅 . He replaced Jerome Powell earlier this year after Trump nominated him. US PPI came in at 6.5% year over year in May. The oil shock has been the driver of inflation. If oil now crashes, the inflation picture changes fast.

Pete's Take 👇 Here is the thing. The Fed this week is almost a sideshow compared to the peace deal. Warsh will almost certainly hold rates. But his tone matters. If he signals that easing is now back on the table because oil is falling, markets will rally further. If he stays hawkish, we get some give-back. Either way, the structural picture for equities has just improved. Less oil inflation means less pressure to hike. That is good for quality growth and dividend payers.

🎯 Pete's Investment Takeaway

Mon Jun 15 is a reset day. Everything just changed.

For your portfolio this week: the peace trade is now confirmed. Airlines, industrials, consumer discretionary, and quality growth stocks are the sectors to watch. Energy names will likely give back some gains as oil drops. Gold may stay choppy until Warsh signals his rate direction on Wed.

Sector winners today: Airlines, cruise lines, consumer discretionary, quality growth. Sector to watch: Energy. It ran hard. Some profit taking is coming. Key to watch: Warsh's tone at the Fed press conference Wed. That is the next big market mover after today.

The formal signing is Fri Jun 19 in Switzerland. The next 60 days of nuclear negotiations will bring noise. Do not let that distract you from the bigger picture.

After a 2 weeks break, the Stock Market Genius Live will restart on Tue 9pm (SGT)

While I'm away, so many things happened. Iran-US War start and stop again, SpaceX IPO, new AI models are  released into the wild!

This episode of SMG Live, I will review the market direction and share how I am positioning my investments!

If you want to be a better investor, join the SMG membership and attend our live session on Tue! I also just realised the Stock on Spotlight for June 2026 which I’m excited about! I will also run through that during the LIVE session!

Sign up for SMG membership here, use promo code: SMG20OFF to get 20% discount!

Pete
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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.