Proflex Market Update - Wk 25

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Markets trading close to All-Time Highs

“Macro relief meets geopolitical tension—forcing markets into wait-and-see mode.”

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Despite heightened Middle East tensions over the weekend, markets opened strong on Monday, suggesting investors see light at the end of the tunnel as the conflict appears locally contained. As we discussed on Friday’s community macro call, while headlines were alarming, the underlying reaction from commodities and capital flows suggested measured caution—not panic.

Last week, markets saw modest pullbacks as cooling inflation data was offset by sticky core prices and mixed messaging from the Fed. The S&P 500 settled at 6,016.63, just below recent highs, while the Nasdaq and Dow also posted small declines. Overall sentiment remains constructive but cautious, with traders opting to wait for clearer catalysts before repositioning.

Insight from the Proflex Macro Call

📌 Oil as the Panic Thermometer

One of the sharpest takeaways from our weekend macro call: Oil gave the cleanest read on geopolitical stress. Prices jumped to $77 after the Iran–Israel conflict flared up—but quickly retreated to $73, suggesting that while the market is alert, it’s not yet pricing full-scale crisis.

This behavior reaffirms oil’s role as the first-mover in global fear pricing, particularly due to its dependence on the Strait of Hormuz, which handles up to 30% of global supply. Don’t just watch gold or VIX—watch crude.

You can watch recording of the full weekly discussion here:

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Key Drivers This Week

🔹 Inflation Cools, but Core Stays Firm

Headline CPI came in softer at 0.1% MoM (2.4% YoY), but Core CPI held steady at 2.8%, tempering hopes for an aggressive Fed pivot. As a result, futures markets trimmed their 2025 rate cut expectations to just one by year-end.

💡 Impact: Rate cut hopes deferred to December; yield curve remains flat; USD strengthened as rate differentials persist.
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🔹 Single-Stock Moves Overwhelm Indices

Earnings season delivered mixed reactions: Oracle jumped +6.8% on strong cloud growth, while Adobe dropped -5% despite solid numbers. Meme stocks made a brief return with GameStop up +4.4%, and semiconductors saw some rotation after Broadcom’s cautious AI outlook.

💡 Impact: High dispersion returns; stock pickers and hedged strategies outperform; volatility premiums remain elevated.
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🔹 Tariffs & Geopolitics Return to Forefront

Trump’s renewed tariff threats on China lifted U.S. industrials (e.g., Cleveland-Cliffs +10%) while pressuring multinational exporters. Meanwhile, the Iran–Israel conflict caused gold to spike 2.5% and oil to briefly test $77, though both cooled as tensions appeared contained.

💡 Impact: Defensive rotations accelerating; commodities rising on macro risk; market still not fully pricing global supply shock..
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🔹 Bitcoin Steadies Above $106K

Bitcoin bounced back sharply from midweek lows, regaining the $106K level as institutional demand returned—highlighted by BlackRock’s $239M ETF stake. The asset continues to behave more like a high-beta growth stock than digital gold.

💡 Impact: ETF inflows anchoring BTC; momentum traders and long-term allocators both active; volatility compressing despite macro risks.

🔹 Gold Breakout Strengthens

Gold hit $3,407/oz as central bank accumulation continues and geopolitical risk adds fuel. The move began well before the Iran-Israel headlines, suggesting longer-term macro conviction behind the bid.

Impact: Gold’s uptrend confirms regime shift in safe-haven flows; outperforming both bonds and real rates.

Proflex Playbook – Stay Hedged, Stay Rational

This is a macro trader’s environment—where headlines drive daily re-pricing, and liquidity overshoots fundamentals. As always, we urge our community to:

✅ Stay hedged using structured options
✅ Use macro moves to rotate, not chase
✅ Allocate to core themes with long-term tailwinds: AI, gold, Bitcoin

If you’re in All-Access or Managed Portfolios, you’ve seen how this playbook translated into steady gains through April and May. For everyone else—now is the time to engage, not retreat.

📣 Join the Macro WhatsApp Group for weekly calls, market insight, and real-time macro signals.

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Until next week,

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— The Proflex Team
​ Trusted Macro Insights. Calm Investing. Tactical Trades.

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