Edward Meir's week in review and thoughts for the week of June 15, 2026

Media reports suggest a proposed “memorandum of understanding” would see the Strait of Hormuz reopen, with Iranian forces responsible for clearing mines during the first 30 days. Iran would not charge tolls on vessels during a 60-day period and would also reaffirm that it would not procure or develop nuclear weapons. All Iranian uranium would be diluted on site under the supervision of the International Atomic Energy Agency. Sanctions relief, including the unfreezing of Iranian assets held overseas, would be phased in, depending on the progress paid on the nuclear talks. In the meantime, Iran would be allowed to sell its oil during a proposed 60-day ceasefire extension.

Stocks

Optimism about a potential agreement hit the oil markets hard starting late Thursday after Trump’s announcement. By week’s end, crude oil prices rolled back all of their earlier gains and ultimately ended down by roughly 7%. WTI crude finished at a two-month low of $84.29 Friday, while Brent sank to $86.80. There was a $0.18c gallon weekly decline in distillate futures. Gasoline ended roughly flat on the week of a busy driving season.

In the US equity markets, the S&P 500, the NASDAQ and the Dow each finished up by about 0.7% on the week, recovering dramatically after Wednesday’s decline. Shares in airlines, homebuilders, cruise operators, financials, and material stocks all shot up, as falling oil prices eased inflation concerns. Chips stocks shrugged off a disappointing earnings report from Oracle and rebounded strongly by week’s end as well.

Of course, the week’s most anticipated equity event occurred Friday which was when SpaceX made its public debut. The shares, priced at $135, finished roughly 19% higher on the day in what was the largest IPO in history. Several AI firms are waiting to list their shares as well. If these issues also clear, some are suggesting these combined IPO roll-outs could behave like a substantial stimulus package given the wealth generated for both these companies and their shareholders.

Yields in the treasury ended the week on a modestly lower note. Two-year yields settled at 4.09% (down 7 basis points on the week) while the 10-year settled down five basis points at 4.49%.

Metals

In the LME markets, five of the six metals finished higher on the week, with the gains ranging between 1.3% (for copper) to nearly 2% (for lead). Nickel was the only loser, shedding about 4% on the week and now hovering at two-month lows.

Copper

We attended the Copper Club dinner in New York this past week. After the obligatory discussions about the Knicks, many people told us they believe the Trump administration will pass on imposing cathode tariffs when the decision gets announced early next month. At the same time, the administration could announce it would be prepared to raise tariffs at some later date — basically reaffirming existing policy. A decision to “stand aside” makes sense given that US refining capacity is simply not available in sufficient quantities to process scrap and/or concentrates into refined copper.

If this unchanged scenario indeed comes to pass, the inflow of cathodes into the US should slow, while conversely, some copper being stored in CME warehouses should start to move out. However, one warehouse operator told us that load-out rates in New Orleans are limited to 500 tons a day and so the CME could experience queues to get copper out, similar to what the LME went through with aluminum several years ago.

Precious metals

In the precious metal space, both gold and silver hit fresh lows earlier this week as the fighting between Iran and the US boosted the dollar, interest rates, and oil — all three a toxic combination for gold. In fact, gold prices came within $47/ounce of breaking below $4,000/ounce, while silver sank to $61.60 at one point, a three-month low.

The announcement about a possible deal sent both complexes sharply higher by late Thursday and going into Friday, trimming the losses for the week. Meanwhile, the Financial Times reports several central banks have been selling gold recently in an effort to support their currencies. The Turkish central bank is among them, reportedly selling and/or swapping about $20 billion of metal in an effort to boost the beleaguered lira. The Russians were reported to have sold gold as well.

Will there be a deal this time?

As of Monday morning, The Associated Press reported the US and Iran “reached an initial agreement that would extend their shaky ceasefire and lead to the reopening of the Strait of Hormuz, but significant challenges remain to ending the war, including whether Israel will continue its offensive in Lebanon.”

We will see what happens. Even if a limited agreement is in place to open the Gulf, we can expect further declines in crude — a net positive for the world economy and one that should generate far more stimulus than any IPO.

Macro readings and other news from the past week:

• We got a series of inflation readings out of the US this past week. The headline CPI inflation reading rose by 0.5% month/month, in line with estimates. Core inflation was up just 0.2% m/m after a 0.4% gain in April, but the annual rate clocked in at 2.9% compared with a year ago. Producer price readings were worse; prices increased by their largest annual amount in 3-1/2 years, up by 1.1% last month, twice as much as expected and duplicating the similar increase seen in April. In the 12 months through May, the PPI was up a whopping 6.5%, the biggest gain since November 2022 and well ahead of April’s 5.7% reading. Energy prices accounted for nearly 80% of the rise — up nearly 11% on the month, with gasoline up by 23%. Excluding energy and food, producer prices rose 0.8% m/m for a year-over-year increase of 3.3%. Having said that, we should see a rather substantial decrease in both the June CPI and PPI readings, especially if the current energy decline remains in place.

• The US trade deficit narrowed slightly in April to $55.9 billion from a revised $56.6 billion in March. Exports increased 2.6% to a record $327 billion, while imports rose 2% to $383 billion. The Wall Street Journal notes since the start of Trump’s second term, the trade deficit has averaged at just over $70 billion a month, versus $72 billion during the Biden administration. This is only a marginal improvement, but things should start to improve as the more recent declines work through the data.

• Existing home sales increased more than expected in May, up 3.2% last month to a seasonally adjusted annual rate of 4.170 million units. Sales increased in the Northeast, South and Midwest, but were unchanged in the West. The median home price last month rose to $429,300, up 1.3% from a year ago, while the inventory of existing homes increased 3.3% to 1.55 million units. At May’s sales pace, it would take 4.5 months to exhaust the current inventory of existing homes. Separately, total mortgage applications rebounded 10.8% in the week ending June 5, with purchase applications up 7% and refinancing up 15%.

• The preliminary University of Michigan consumer sentiment index increased to 48.9 in June from May’s record-low 44.8 but remained well below year-ago levels. One-year inflation expectations eased to 4.6% from 4.8%, while longer-term expectations declined to 3.4% from 3.9%.

• The NFIB Small Business Optimism Index fell by 0.6 in May to 95.3, below its long-term average of 98.0. Only 16% of owners planned capital spending over the next six months, the lowest share since March 2009, while a record 14% cited labor costs as their biggest problem. The situation is far different in other parts of the economy, particularly in AI where optimism is running rampant.

• While the US trade deficit is shrinking, China is moving in the other direction. The monthly surplus came in at $105 billion in May, up from about $485 billion in April, setting another record high in the process. Exports expanded by 19% from a year earlier, outpacing the 14% gain in April. AI-related products provided much of the export momentum, with integrated-circuit exports up about 111% and shipments of automated data-processing equipment up 66%. More traditional labor-intensive exports remain comparatively weak. May imports experienced a strong month as well, up a whopping 27% vs. a month ago.

• After years of deflation, Chinese producer prices are now pushing higher, up by 3.9% y/y and 0.5% m/m. Separately, China’s new bank lending rose less than expected in May to about $77 billion in May after contracting in April.

• The World Bank lowered its 2026 global growth forecast to 2.5% from 2.9% in 2025, the weakest non-recession performance in nearly two decades. Growth is expected to recover to around 2.8% in 2027-28 as energy supply normalizes.

• UK GDP contracted 0.1% m/m in April, its first monthly decline since August. The economy still grew 0.7% in the three months through April, supported mainly by services and construction.

• Goldman Sachs now expects the Fed to keep rates unchanged throughout 2026 and begin cutting them only in June 2027. The bank previously expected cuts in December 2026 and March 2027 but pushed them back after stronger employment data. Goldman said rate increases remain unlikely, although they have become more plausible than before.

• It is unlikely the USMCA trade agreement will be renewed when it comes up for review in July as the Trump administration has serious misgivings about entering into another collective agreement and will likely negotiate bilateral trade accords instead.

• High prices have trimmed China’s appetite for copper, with May unwrought imports dropping 1.3% from April levels to 446,000 metric tons. Arrivals for the first five months of the year declined 7% to 2 million tons from the same period in 2025. Copper concentrate imports stood at 2.36 million tons in May, up 0.40% m/m, while year-to-date through May, imports were off by 1% from last year. On the flip side, China exported about 632,000 tons of aluminum in May, up by about 5.7% Y/Y. For the first five months of the year, exports rose by 10.4% to 2.69 million tons. We believe that Chinese aluminum production is now moderately above the government’s 45-million-ton production target.

This week’s US macro readings:

Monday, we get the Empire State manufacturing survey for June (expected at 13.9, last 19.6), followed by May industrial production (expected at .3%, last .7%). The June homebuilder confidence index also comes out (expected at 37, unchanged from last month).

Tuesday brings us May housing starts and building permits (expected at 1.41 million and 1.42 million respectively, last 1.47 million and 1.44 million).

Wednesday we get May US retail sales (expected at .5%, unchanged from the month prior) while the ex-auto sales number should come in at .6% (last .7%). We also get May pending home sales (expected at +1%, last 1.4%), and the Federal Reserve policy statement and press conference — Kevin Warsh’s first as Fed Chairman.

Thursday brings us weekly initial jobless claims (expected at 226,000, last 229,000), followed by the June Philadelphia Fed manufacturing survey (expected at 11, last -0.4%).

No data is out on Friday as it is the Juneteenth holiday.

We wish all our readers all the best for the upcoming week.