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The New TACO Trade? Tehran Always Chickens Out
Daily š„H.E.A.T.š„ Your Financial GPS
Matthew Tuttle
June 23, 2025
Waller Looking for a Job?ā¦.US Strikes Iran, Market Yawnsā¦Asymmetric Plays in Oil Companies and SPACsā¦Could Gold Triple From Here?ā¦.Is It Time to Look at Bitcoin Minersā¦The Real Opportunity in GLP-1s
Markets were slightly down last week, but there are still opportunities all over the place, if you know where to look. The weakness could be blamed on a trifecta of reasons: Middle East tensions, FOMC fallout, or triple witching volatility. But the bigger takeaway is this ā the marketās coiled, not collapsing. And itās looking for a spark.
š£ That spark could be the Fed. If Powell cuts faster than the market expects, the drift ends. But thereās palace intrigue too: Wallerās recent positioning sounds a lot like a man angling for the top job.
*FED'S WALLER STATEMENT
- WE ARE IN POSITION TO CUT AS EARLY AS JULY, UNEMPLOYMENT IS LOW & INFLATION IS CLOSE TO TARGET
- DON'T WANT TO WAIT FOR JOB MARKET TO TANK BEFORE CUTTING RATES
- 10% TARIFFS WOULD NOT HAVE MUCH IMPACT ON OVERALL INFLATION, WOULD BE 'ONE-OFF' EFFECT
ā Stock Talk (@stocktalkweekly)
12:49 PM ā¢ Jun 20, 2025
Of course a broader Middle Eastern war may put a cloud over things this week.
BREAKING: Iranās Supreme Leader responds to the United Statesā strikes on Iranian nuclear facilities:
āAmericans should expect greater damage and blows than ever before,ā he says.
ā The Kobeissi Letter (@KobeissiLetter)
2:45 AM ā¢ Jun 22, 2025
Interestingly, as I write this futures are green and oil is basically flatā¦..
Tensions in the ME have escalated with US bombing key Iran's nuclear facilities over the weekend. Market is now waiting to see how Iran reacts. Current market open suggests that base case is for a token response which will allow Iran to claim a counter-attack but with the aim of de-escalation. Key would be whether Iran would (or could) close the strait of Hormuz and disrupt global oil supply. With US and Israel planes reported to have almost clear access to Iran's airspace, the closure of the strait would be practically impossible.
This is the Million Dollar question and the one thing Don Duret pointed out in our podcast last week that could throw the world into a recession and knock the market down.
As Barronās put it, the restraint is strategic. But if that restraint breaks, oil doesnāt just go to $100 ā it goes nuclear. Supply chain shocks, inflation flare-ups, and military escalation are all on the table.
Speaking of oil, this caught my eyeā¦
š„Why XOM and CVX Could Be Asymmetric AI Power Plays
Most investors still see CVX and XOM as dinosaurs. But a closer look reveals they may be the most mispriced AI infrastructure plays on the planet.
You already know Iāve been bullish on AIās impact on energy infrastructure ā with a focus on natural gas, nuclear, and geothermal. What I missed, and what this article clarified, is just how deeply embedded Chevron and Exxon are in natural gas production and scalable power infrastructure.
Theyāre not just digging for oil ā theyāre laying the foundation for dispatchable power in the AI era.
Yes, their recent rallies were war-driven. But once the fog clears, donāt be surprised if the market re-rates them like power providers ā not oil dinosaurs.
Defense stocks look strong this morning. Long term readers know I am a fan of the mid cap names, especially the drones. Not sure I would chase the big names as the wind would get knocked out of them if we get a face saving response from Iranā¦.
Implications for Defense Stocks: Escalating global conflict translates to defense stock outperformance. ESLT's revenue base is most weighted into the region w/ 29% of sales to Israel, 27% to Europe, and 22% to N Am in FY24. Missiles & munitions represent 19% of LMT sales through MFC at 7% CAGR to '27 and 13% of LHX sales through AR (Javelin, Stinger, GMLRS, etc) at 6% CAGR to '27. We est NOC's B2 accts for 500MM of revs or 2% for NOC consistently largely of sustainment w/ an inventory of 20 in Palmdale. Each bomber is est to cost $1.157BB. RTX Raytheon represents 32% of total revs growing at 5% org to '27 w/ applicable products in Patriot, NASAMS, and AMRAAM. BA's weapons portfolio is $2BB+ of sales + KC46 $2.6BB (loss making) or a total of 20% of BA Defense on our ests this also includes JDAM, Harpoon, SDB-1, etc. NATO is expected to commit to 3.5% of GDP on defense at the upcoming summit from 2% today, which represents $150BB+/yr of incremental procurement, of which historically has been 2/3rds to US products.
ESLT could be a name I would take a look at thoughā¦.
The European defense stocks have a tailwind regardless of a broader Middle East warā¦.
NATO countries have moved to increase defense spending with a long term goal of taking to 5% of GDP. We are typically skeptical of long term goals as goal posts do change, but it is also clear to us that defense spending needs to increase globally and not just for NATO countries. Defence has been one area that we have been bullish on, and we continue to maintain our overweight exposure.
An escalation should be good for Gold, which is currently flatā¦.
šCould Precious Metals Still Double or Triple From Here?
Gold and silver have paused ā but Iām still long and still bullish. If you caught last weekās podcast, Don Duret laid out the case for 10x upside in select gold names.
I donāt make long term price projections, I just trade what I see, which is why Iām in Gold and silver and the miners. I do recommend a long term gold position in my version of the permanent portfolio though. Don and I arenāt the only ones who like goldā¦
šŗšø Billionaire investor Paul Tudor Jones says, āAll roads lead to inflation. Iām long gold. Iām long #Bitcoinā
ā Bitcoin News (@BitcoinNews21M)
8:06 PM ā¢ Jun 19, 2025
If you want gold and bitcoin in one packageā¦ā¦
š„ SPACs Continue to Be Back
Chamathās trying to claw his way back into the SPAC game ā and thatās bullish. Say what you want about his DeSPACs, but when the cash-in-trust structure is intact, pre-merger SPACs remain the best asymmetric trade on the board IMHO. A couple of our favorites did well on Fridayā¦
Itās hard to be excited about single name stock ideas when you can just buy SPACs and make money consistently every day. Hopefully this cycle is similar to 2020-2021 in which case maybe we are in the 2nd or 3rd inning.
ā marginofdanger (@marginofdanger)
11:56 PM ā¢ Jun 20, 2025
Hmmmm.
You can try to pick your own SPACs or use an ETFā¦.
SPACs also fit very nicely into our Trumpās Inner Circle theme, which is investing in companies related to the people in Trumpās inner circle and investing in companies that benefit from his executive orders. Howard Lutnick and Don Jr. are involved with SPACs and there are many SPACs that cover Trumpās favored areas of the market. We are going to cover this, and more on Thursdayā¦.
It will be from this Thursday from 2-3PM. Click on the link above to register.
I continue to think this Genius Act is hugeā¦..
š„Why the GENIUS Act, Bitcoinās surge, and a wave of IPOs just rewired the future of financeāand who wins next
Clear Street just dropped a new report and it's a killerā¦ā¦
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We talked about Circle last week, and Iāve talked a lot about crypto Treasury companies. I have not talked a lot about the crypto miners. Thatās whatās most interesting about Clear Streetās reportā¦ā¦.
You know Iāve been pounding the table on crypto treasury companies ā but what I havenāt talked about enough is the evolution of crypto miners.
These companies ā CLSK, RIOT, MARA, CIFR ā are morphing from bitcoin miners into AI compute infrastructure providers.
Hereās the kicker: despite a brutal hash rate, theyāre still posting double-digit BTC production growth.
Thatās margin compression for the weak ā and scale dominance for the strong.
š§ Updated Ratings from Clear Street:
CLSK: Buy ā $28 target (raised)
CIFR: Buy ā $6 (unchanged)
RIOT: Buy ā $11 (unchanged)
MARA: Neutral ā $17 (was $16)
šŖ The Next Obesity Gold Rush Isnāt in Fat LossāItās in Muscle
The GLP-1s continue to be my kryptonite this year. I donāt own them in my HEAT Formula trading account at the moment, but do own them in my Permanent Portfolio. LLY has had a tough couple of daysā¦.
as has NVOā¦.
TD Cowen came out with an interesting report on Friday with the thinking that the real play is in anti-myostatinā¦ā¦
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According to Cowen, the real money isnāt in losing weightāitās in keeping the muscle?
Thereās a new class of drugsāanti-myostatin therapiesāthat could not only preserve muscle during weight loss but actually build it?
Their conclusion? This is the start of a $30 billion market. And the biggest biotech winners in 2026ā2030 might not be who you think.
š§ The GLP-1 Blind Spot
GLP-1s work. No debate there. They suppress appetite, slow digestion, and make people feel full longer. Clinical trials have shown 20ā25% total weight loss, rivaling bariatric surgery.
But hereās the dirty secret no one talks about:
Up to 40% of the weight lost with GLP-1s is lean massānot fat. That means youāre losing muscle and bone as fast as youāre losing your gut.
Thatās where anti-myostatin therapies come in.
According to TD Cowen, this could be a $30B+ market ā preserving lean mass during weight loss and building strength. Imagine a world where you pair GLP-1 for fat loss with myostatin inhibition for muscle retention.
This is no longer theoretical:
LLY and REGN are already running combo trials.
BHVN is the asymmetric play no one's watching.
š Potential Winners:
LLY: GLP-1 king + muscle trials
REGN: Cytokine wizardry + clear lean-mass science
BHVN: Cheap ticket into the muscle future
The next leg of the obesity trade isnāt about shrinking ā itās about staying strong.
GLP-1 was just the start. Myostatin is the muscle money.
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