Holding Through the UAE Strikes

This Week in Context

Week 19. 2026.

The ceasefire is dead. Iranian drones hit UAE oil facilities at Fujairah on Monday, the first strikes on the United Arab Emirates since the April 8 truce. A vessel linked to Abu Dhabi's state oil company ADNOC was hit. A terminal part-owned by Vitol caught fire. Brent crude closed up about 6% near $114 on Monday and pushed to about $117 by Tuesday morning.

Last week the book was built for this exact tape. 27% in S&P 500, 8% in emerging markets, 13% in gold, 5% in silver, 7% in Bitcoin, 40% in short-term bills. No moves this week.

the position

27% VOO, 8% VWO, 13% GLD, 5% SLV, 7% BTC, 40% BIL. Holding all six. No buys. No trims.

Macro Landscape

The Federal Open Market Committee (FOMC) held the policy rate at 3.50% to 3.75% on April 29. This was Jerome Powell's last meeting as chair. His term ends May 15. Four members dissented. The split was the widest since 1992. One governor wanted a 25-basis-point cut. Three regional presidents wanted to drop the easing bias from the statement.

The dissent count tells the story. Inflation is reaccelerating, growth is mixed, and the committee cannot find consensus. The 10-year Treasury yield closed at 4.42% on May 1, up from 4.31% on April 24.

Oil is the conduit. The December 2026 Brent crude futures contract is at a new high. The market is pricing crude above $90 a barrel for the next seven months. Higher oil pushes up bond volatility, and bond volatility pushes up yields.

I am not buying long bonds. The 10-year is in no-man's land. Cash at 4% pays better, and the fiscal story is firming, not fading.

Kevin Warsh is the nominee to take Powell's chair seat. The Senate Banking Committee advanced his nomination this week. The full Senate vote is expected the week of May 11. The reaction function under the next chair is the watchlist item I cannot ignore. Markets are betting on continuity. A four-vote dissent record is not continuity.

Sector Spotlight: Oil and the Inflation Pipe

Oil is no longer a temporary war shock. It is becoming the rate. The market is pricing sustained crude above $90 a barrel into the rest of the year. December Brent futures are up more than 40% year-to-date. War headlines fade. Prices come back. They are not coming back to $70.

Why the Fujairah strike matters. The United Arab Emirates was the safe stop in the Strait of Hormuz drama. With UAE infrastructure now in play, every barrel that needs to leave the Persian Gulf carries a higher risk premium.

I considered adding the United States Oil Fund (USO). The vote inside the panel I track tilts toward buying oil here. I declined.

the case for not adding USO

First, the futures roll cost on a USO position is real and grows when curves are in backwardation. They are now. Second, gold, silver, and Bitcoin already carry the inflation thesis at 25% combined. Third, $114 Brent is buying strength, not a dip.

The book carries the inflation thesis without piling concentration into a single price.

The Big Tech earnings tape last week (Alphabet, Microsoft, Meta, Amazon, Apple) printed clean. Cloud and AI capital expenditure guidance held up. That kept the S&P 500 from breaking through high valuations. The macro pipe (oil, sticky 3.3% Consumer Price Index per the Bureau of Labor Statistics, draining global liquidity) still caps how aggressive I want to be. 27% in VOO is the size that says yes to AI productivity and no to chasing.

Crypto Corner

Bitcoin pushed through $80,000 in Asia hours on Tuesday, trading near $80,700, the first sustained print above the level since January. Spot absorbed about $200 million of profit-taking at the $80,000 line, which is bullish on its face.

The signal is mixed under the surface. Spot volume delta turned positive (buyers pushing harder than sellers in the spot market) but historically that signal preceded the next leg lower in 2022, not the start of a new leg up. Open-interest-adjusted cumulative volume delta on the major derivatives venues is still negative for Bitcoin and most large-cap crypto, so the breakout is not yet backed by aggressive futures buying.

7% in Bitcoin is the right size for this setup. The on-chain framework I track still puts fair value in the $65,000 to $70,000 zone. No add at $80K. If price retraces to fair value, that is the scale-in target.

Looking Ahead

Watchlist for next week. Senate vote on the Warsh confirmation, expected the week of May 11. April Consumer Price Index print, May 12 release. Strait of Hormuz status. The strait has been largely closed since the war began February 28. That is more than nine weeks now. Big Tech follow-through. Earnings are in the rearview. Capital expenditure guidance is what matters from here.

The book opened from cash on April 20 has now run two w