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There is now talk of a compromise proposal on the table that both Iran and the United States agree to. This news appeared about 3 minutes before the market opened. We discussed this with the course participants , and since this news broke, the market has started to rise, despite a slight weakness at the opening.
And I don't know if it's because it took people a while to realize it or to test it, but we're going to try to put the pieces of this puzzle together. Because today is October 20th, and it's the day I predicted would be the first day of what I call the "deal window ." The “deal window” is essentially the period when, in my opinion, it would be most beneficial for Iran, the US, and Israel to make a deal.
I know it sounds a little strange, and sometimes people say, " Kevin, you're daydreaming." But listen anyway, because remember: intellectuals listen to opinions they disagree with to see if they missed something. Here's my idea. My idea is that after the elections—I didn't mention this before —after the elections in both Israel and the United States, the motivation to make a deal increases with each passing day leading up to the elections.
I know many people think, "Oh, the Iranians just want to disrupt the election, so they'll walk away from any deal until the election is over." But the problem is that after the election, the motivation to make a deal on the part of the US—and this is a big risk—and on the part of Israel falls precipitously, like off a cliff.
Why rush anywhere now? You have no reason to rush into a deal after the election. You can spend as much time on this as you want. So, the Iranians know this. But the Iranians also know that the greatest willingness to make a deal will be right before the elections. It won't be in September. Leave it until right before the election, man.
That's when people go to vote anyway. And that means: okay, okay, we need a deal now. Yes, you understand? So, you know, there are real negotiations going on here. And I think that's why we're starting, and that's why we've identified this window of opportunity from October 20th to October 27th, mainly because of the election coming up .
Then at the end of that window we have the Federal Reserve. So, at the end of this window, we have elections in Israel. At the end of this same window, you have a Federal Reserve meeting. And then, on November 3rd, you have the midterm elections in the US. And now we have this coverage of the events.
The US and Iran are considering a fresh compromise proposal presented by Pakistan. Now, many other sources do n't yet delve into this as deeply as this article does. And I have a hard time claiming that this article comes from the most reliable source. But I will do my best to confirm some of this data.
Al Jazeera reports that Qatar is announcing the continuation of Iranian- American negotiations. And if we don't make a deal, a wider regional war could break out. Qatar says talks between Iran and the US are continuing despite rising tensions and fears of renewed fighting. As for the negotiations , they are ongoing.
We see the involvement of the parties. The fact that we are not hearing about negotiations is a good sign that we are doing our job. He stressed the importance of confidential negotiations. This is another interesting point: we actually heard almost nothing about it. Many media outlets are simply not talking about this potential deal with Iran right now.
So if we look at this article, knowing that Al Jazeera is indicating that the Qataris are saying, "Hey, the talks are ongoing. It looks like things are moving in the right direction ." Take a look at some of the notes we have. Pakistan and Qatar have presented a compromise proposal aimed at bridging the differences between the US and Iran, with both sides reportedly giving preliminary approval.
Note, this appeared 3 minutes before the market opened. So far, betting markets are not reacting to this regarding any Iran -US nuclear deal. This may be partly due to the conditions of what is required to actually pay out at the rates. So, this is Kalshi . This is a prediction market. You probably already know about it, but I like to look it over to see where the mass consensus is, right?
Because this way I feel like I can trade against others. Sorry. But I talk about it very openly on my channel. For example, I think if we make a deal with Iran, I think it will double. Of course? That's... the potential for just one rate hike this year, I think, doubles, from 22% to about 54 or 50%, in the case of an Iran deal, right?
So I think it's appropriate, and I put money into this deal, just for full transparency on Kalshi. Okay, but that didn't change the chances of a nuclear deal with Iran . So what is this talk about a nuclear deal? Well, talking about the nuclear deal is very important because Donald Trump previously agreed, "Oh yeah, we'll do a ceasefire, now, and I want to analyze in detail what exactly this difference is.
I just need to show this for a second, we'll talk about it , but briefly: Kalshi—a paid sponsor of Reinvest. I get $25 . kalshi.com/r/meetkevin. Use the code meet Kevin when you sign up or scan this QR code and you'll get a free 25 bucks when you make your first transaction. Okay, so let's deal with this Iran deal for a moment.
When we had a memorandum of understanding, what happened? What happened to the memorandum of understanding: Donald Trump faced a rapid rise in oil prices with no end in sight. Donald Trump faced an 11.8% drop in the Nasdaq, more than double its all-time highs, as of now . The Nasdaq is now down about 5.5% from its all-time highs, right?
You currently have a relatively stable oil market. You have a relatively stable yield market, yields that have actually peaked. We have already peaked at 5.27. We didn't look back. You know, this, I mean, jumped a little bit above that level. We know that, but, you know, at least I had the courage to make the prediction that we were reaching a peak.
And I remember we were drawing on this graph. We're like, "Look, we're leveling up." Everyone is like, "It'll be five and a half." "It will go up to 6%." I'm like, " No, it won't work." "He's going down." And so we made our peak forecast at 5.27, and I mean, look how close that was . I think there were little moments here where he got to 5.31 or 5.32 or whatever, but the bottom line is that the pressure on Trump is weaker now.
And the reason I say this is because that summer deal we had was worthless, things are bad, we need a deal because the US economy is falling into a precipice, judging by the financial markets, not by the economy as a whole yet. And Trump needed to make a deal. So, we had a ceasefire, under which we agreed to discuss the nuclear issue in the future.
This is very different from what we have now. Now we have Donald Trump, who is keeping Iran at a disadvantage. Think about it. It used to be: open Hormuz, and then, in about 60 days, we'll talk about nuclear weapons. This was a preliminary agreement. Iran's current first proposal is to open Hormuz for 7 days, and then we'll talk about nuclear weapons.
But Donald Trump is now taking the opposite approach, saying, “Look, I don’t need a deal right now. The market is growing, oil is not soaring in price, profitability has peaked." Remember, the market on the Qs index bottomed out at around 561. Now we're somewhere around 720. We're well above where we were.
Profitability has peaked, and the market pressure on Trump has become much less. And that's compared to historical highs, a drop of 11% to 561. If you compare 561 to where we are now, that was 22% ago. This is 22% lower than now. So there is no pressure on Trump to make a deal right now, except for the election.
So, from a market perspective, Trump is in a better position to make a deal. He didn't have that opportunity last time, and so Donald Trump says: " I'm ready to accept the Iran deal, but I want more." And I think now he wants nuclear inspections. I think so because both the foreign minister and the president of Iran have said, "We would be open to nuclear inspections." And the head of the IAEA has already literally spoken out and said: "We are ready to quickly begin inspections." So let 's get back to this article.
Look at this. Preliminary approval of the plan. What does this plan include? Well, supposedly, according to these sources, according to the report, the sources say that the proposed arrangement includes confidential inspections of Iranian nuclear facilities by the IAEA and a partial concession, not a full one.
Remember how I said that Donald Trump wants a slightly better deal than last time? OK. Partial unblocking of $6 billion in frozen Iranian funds held in Qatar. So, if it's true that both sides agree to this, Trump gets nuclear inspections, and he can declare it a victory. He could then present his inspections as being better than the JCPOA inspections, which would have already ended by now anyway.
And he could have said, “Hey, we’re giving them back less of their money. We are still holding more of their money as collateral.” It looks like this deal is shaping up as a framework that Donald Trump could present as a victory, and Iran could present as a victory. For now, this may be what justifies the market's growth.
Now, remember, we talked about this during the morning broadcast for course participants, and there's a lot more to say about Iran here. But I want to make it clear : if you're not with us yet, go to meetkevin.com, join us, or reinvest1.com, it's the same site. Remember everything you receive. You get our Alpha membership every day before the market opens.
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The reported proposal aims to satisfy the demands of both Washington and Tehran, although the details of the agreement and the extent of prior approval by both sides remain unclear . True. The visits come against a backdrop of tensions and difficulties in advancing previous diplomatic efforts . Pakistan tried to position itself as a mediator.
However, despite the previous ceasefire, the region saw a new escalation within a month. One of the reasons, I think, why we've seen a new escalation over the course of a month is that we have n't really gotten a solution on the nuclear issue. The nuclear issue still remains a problem. And keep in mind, the terms of this nuclear deal here in the betting markets call for limits on uranium enrichment, the number of centrifuges, or nuclear operations, and the lifting, suspension, or modification of sanctions in exchange for commitments.
I think this is the easiest. Lifting certain sanctions in exchange for nuclear commitments is the simplest. But whether Iran will actually sign an agreement that limits to some extent the level of uranium enrichment or the number of centrifuges allowed , subject, of course, to some form of inspections, is a more complicated question.
However, the time to make a deal is between now and a week from now. Do you know if it's possible then that this will play out during this period? Perhaps. I mean, the volume here is, I would say, a little better. Let me see. What is the volume here? I guess I'm just not on the right page. Oh, there it is.
$22 million in volume here. The volume of bets on rate increases is not that great. Which, keep in mind, in terms of raising rates, the market is doing interesting things with yields right now. Look at this. 10- year bonds are falling again after the small jump we saw yesterday. So we can't even hold above 5.10 right now, which is great.
But 10-2 is also falling, which is the spread between 10-year and 2- year bonds. This suggests that the market is still pricing in rate increases. But long-term inflationary fears over the Iran war may be starting to subside a bit. This is one of the reasons why I'm such an "uber-bull" right now , okay?
Think about that for a moment, okay? So I just want you to think about this situation. Now, between September 5 and September 15, 2027, the market is pricing in three more rate hikes, which , in my opinion, is absurd. At the same time, Nvidia is trading at a PEG ratio of 0.67, which is absurd, right?
And right now, what are we facing? We have Iran, I call it " deal or no deal." Okay, we're playing the "deal or no deal" game. Like, right now, what are you going to do? Music is playing. Howie came out. What will you do? So we're playing Iran's " deal or no deal" game, and the whole audience is like...
Okay? Then you have a Fed meeting coming up. And we have elections coming up. SpaceX earnings reports coming soon. Meta earnings reports coming soon. Tesla earnings reports coming soon. Well, Netflix earnings reports coming soon. Net, what is their ticker? NTFL, never mind, okay? Here you have all this nonsense.
So this is your wall of fear, okay? This wall of fear is reinforced by the fact that we are pricing in three more rate hikes and Nvidia's lowest valuation in 20 years. What? This is crazy, man. So when I look at this, my opinion, and this is where I'm stating facts, and you can call me delusional, but part of my opinion is based on the fact that we have very stable inflation expectations right now.
I'll draw a graph for you, because this is also very important to track. This is the 5- year break-even level, which is more sensitive than the 5- year forward rate. We raised the stakes because expectations became volatile, and here we are very well established. We are very stable almost in the bottom third of the entire graph.
But in any case, I think this is complete nonsense. There may be another rate increase. Of course? This is complete nonsense. Nvidia probably costs three to four times as much. This , you know, fear of catalysts . Bro, every time before an election people get nervous. Every time is an opportunity to buy on a dip.
So this is garbage. The Fed meeting, they'll hold it, so it's garbage. OK? All these reports, bro, people will forget about them as soon as they're over. Meta usually shows bad results, to be honest. But who cares? These are just reports. The shares will still move later. And personally, I think we will eventually come to an agreement.
So when you put that together, it sounds like, "Okay, Kevin." Yes, yes. Am I missing the real risks of this economy? No, this is not a real risk. The real risk is the labor market. Here is the real risk. And I am under no illusions about this. But look here. I want to be frank. There are still problems with Iran.
We potentially had an "incident" with a tanker involving military forces off the coast of Oman. If we look at the Alpha feed, we see comments about Bibi talking to Trump about the importance of removing the Iranian regime. This is obviously a very militant position. We usually hear such belligerent statements before deals, so I don't know what to think about this.
According to US officials, Iran is dragging out negotiations and maintaining a stalemate to influence the midterm elections. This will be presented by the United States as, "Hey, they're trying to sabotage our deal because they want to sink the midterm elections." This is the base scenario that everyone is already thinking about.
But this is like "Negotiations 101." Like, "Negotiations 101" is that Iran wants to break the deal because elections are coming up. Okay, this is Negotiation 101 level. " Negotiations 102," the next course you take, is like , we all already know that everyone thinks like that. This is where we can show sincerity by making a deal right before the election, when Trump and Bibi are also most likely to want to make one, because after the election their motivation will drop.
So there are different levels of negotiations here. It gets a little...It requires a little higher level of intelligence than room temperature, so it gets a little more complicated. Okay. So, then... they talked about the mine here. Yes, here she is. Look at this. Iran's IRGC says oil tanker hit by mine.
That was yesterday. And so it's unclear to me whether this is another mine they might have stumbled upon, or whether it's the same one. But there are problems in the Strait of Hormuz . Let's be realistic. The hardline, militant factions of the IRGC will continue this fight until they are literally forced to stop.
As for the KVIR , the situation seems to be getting a little more complicated for them. There's talk now that their funding...and this is CENTCOM data, so it's probably a little biased, maybe even a lot, but CENTCOM reported that they froze Iranian cryptocurrency transactions worth about $350 million .
And they also froze $25 billion in Iranian oil exports. This is added to other suffering that the country is going through, like if I go in...let's look for Iran's currency. And we'll come back here. So, if we look at the chart for a year, we can even look at one month. One month doesn't show this so clearly.
If I go to the annual chart, you'll see that. Here, please. The higher this graph rises, the more the Iranian currency depreciates, and the worse the situation in Iran becomes in terms of inflation and money printing. So, this is problematic. In addition to that, there is this post from CENTCOM. To be fair , this is American propaganda.
But the CENTCOM post right here, the newsletter they put out, that...So, what's with the blondes always wanting to show me that little blue square? Now every commercial I see is like this. This is so annoying and I...I won't, I refuse to press it. I refuse to click on...I hate ads. I can't stand it, but everyone...I can't even make a video without it.
What the hell? I really hate advertising. I hate this so much. By the way , did you know that our next discount coupon for Reinvest One expires, it seems, on October 30th. So hopefully we'll have a deal by then. In any case, where did we stop? Oh, yes, Times of India. So this post from the Times of India is just a retweet of a CENTCOM post where they imply that this is some kind of newsletter that they probably created with AI.
But somehow they froze approximately $350 million in cryptocurrency. And the problem here, or the argument from the US side, is that now it is becoming difficult for the IRGC to even pay its soldiers because they can no longer receive money through crypto, as they have found a way to seize or block certain platforms that provide these transactions or accounts.
You know, they go to Binance and say, "Yo, these addresses, we need you to freeze them, baby ." Who knows the exact details of how this happens? We don't know. Iran obviously denies this. Here's an important point: Iran denies that collapse is imminent. These are, apparently, Donald Trump's constant arguments that Iran's collapse is imminent.
The militants can no longer pay their soldiers. As a result , the IRGC is finding it increasingly difficult to finance its allies. There was a Reuters report that Hezbollah received $200 million from Iran in September, and the US State Department immediately issued a statement: "Fake news." They didn't receive any money.
We're blocking everything." At the same time, the World Bank says that Iran's GDP is down 7.7%, which obviously isn't good for Iran either. So we know that the economy is struggling. But each side has their own reasons for a deal. I think the time is right now. And this kind of surprise visit is also very interesting.
So, Hegseth apparently met with Bibi in a surprise visit a few days before the election. There are two ways this could go. One way this meeting could go is that Hegseth went there to discuss things. In short, hey, we're going to make a deal. Here's our proposal. How do we get you involved in this process?
We didn't get you involved last time. Can we get the Israelis involved this time so that we have a really solid peace deal? And I think the big mistake last time was that they didn't get the Israelis involved. So I think it's quite It's possible that Hegseth's visit to Bibi before the election is a symbolic gesture, but also a support for the deal.
The timing is perfect, that this visit took place yesterday. Of course, Israel has to show a firm stance: we won't stop until the deal is done. Okay? But the deal could be an argument in favor of the deal being done. Consider also that the Iranians themselves are acknowledging the financial difficulties they face due to the sanctions .
That was an admission today, in addition to the Ayatollah himself supposedly acknowledging the economic challenges they face a couple of weeks ago. So you're getting hit from all sides. And now that Trump has effectively cornered the Iranians, there's hope that we can put all the pieces of the puzzle together.
The timing of the election, the structure of this potential deal, which would include confidential IAEA inspections—and everyone could claim some kind of victory. Iran will get unblocked funds, sanctions relief, and economic aid. The United States will get nuclear weapons inspections, which is what they wanted.
Now you can de- escalate this war—conveniently, right before the election, and convenient for a stock market rally if it does happen. That's the element that's somewhat supported by other information that we're finding. And that's consistent with the fact that the deal is moving in the right direction , not the wrong direction, which I think is helpful.
Now if we look at that, we see that the QQQ index is up 50 basis points after it lost 715. You can also see that Loan Depot is up 7%. It's just a crappy stock that you shouldn't hold. It's just going to keep going down. Most of the people who hold it have nerves of steel, because they believe that we're not going to see three rate hikes, but rather that we're going to see a job market shakeout over the next year or two, that will push the 10-year bond lower and lower.
And eventually that will trigger a bottoming process for these mortgage instruments. LDI has serious concerns about bankruptcy. But I think they have enough liquidity to last them through the next year, and they just entered into a new deal to sell and monetize some of their balance sheet, including some of their MSRs, and some of their portfolio.
And that gives them plenty of capital. And they're not losing that much money. I know that sounds crazy. But it's essentially a penny stock . A penny stock that's sensitive to interest rate changes. And I think one of the reasons it's moving today is the expectation that yes, we could actually be getting ready to do a deal in the next 10 days.
So that could be an interesting driver. Obviously people are also moving into healthcare just because they're a little bit wary of what's happening with the artificial trend. intelligence. One of the purchases that we made as part of the Alpha membership is Moderna. And we bought it here when the hype around the 190 level died down.
We bought it around here in the 135 to 145 range. It's currently at 229. So it's an asset that's been performing really well . It's not all perfect, but I will say that this transition into healthcare, I think , is just getting started. So I'll be honest about that. I'm generally bullish . The window of opportunity is open, but that doesn't mean that volatility is going to go down to zero.
We're still going to have volatility because the deal hasn't been signed yet. Once we get a deal, think about what's going to happen. So if there's a deal, any bad news, any negative can be ignored because we're going to see the yield curve flatten. We're going to see the enthusiasm come back into this market.
And then we're going to hit the 800 target for QQQ before the end of the year. If we get a deal, we'll se. This is .
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