PSE Sub Email #25 — Roadmap Update, May 2026

TL;DR

Akhil Patel reports that US markets have rallied hard in April after the March fall, with S&P 500 and Nasdaq making new highs — suggesting the bullish scenario remains intact. However, market volatility is here to stay as the Iran conflict continues, and the market remains sensitive to war headlines. A new Fed Chair (Warsh) with instructions to lower borrowing costs is incoming, which could support markets but reignite inflation. Gold, silver, and bitcoin are not strong “buys” currently but bear watching for response to monetary policy shifts.

Key Points

• Bullish scenario intact: S&P 500 and Nasdaq made new highs in April. The Dow has not confirmed (as of writing), but the S&P/Nasdaq are more important for reading US market direction. This suggests 2026 may follow the 2006 bull-year path rather than the 1966 bear-year path.
• War narrative deception: US claimed Iran’s nuclear capability was “completely and totally obliterated” last summer, then in February presented a new WMD-style argument. Akhil calls this “complete bollocks.” The true story of the Riyadh embassy drone strike (which destroyed the CIA’s offices) was concealed for a month.
• Oil inventory warning: Oil inventories falling dramatically — “not many weeks from” refineries having to shut down. This adds urgency to a deal.
• Markets reactive to headlines: Oil, currencies, agricultural commodities, and stocks all moving on latest news. Risk management essential, especially around weekends when news breaks.
• Global market divergence: Japanese Nikkei breaking upward (AI/semiconductor exposure + weak yen + low rates). European FTSE and Australian All-Ords moving sideways (lower highs, higher lows). Earlier in the year all were powering into new highs together.
• Narrow market leadership: Majority of market gains driven by a fairly narrow set of tech companies (AI and semiconductors).
• New Fed Chair Warsh incoming: Clear instructions to reduce borrowing costs. If effective, supports the market but brings inflation back stronger. If bond yields are held in check via monetary policy intervention, real yields fall → gold and silver rise.
• Gold/silver/bitcoin not strong buys yet: But responsive to monetary policy developments. Watch for shifts.

Notable Quotes

“Truth is the first casualty of war.” — Akhil Patel (citing the proverb) “Markets have been particularly reactive to headlines: oil, currencies, agricultural commodities and, to a certain extent, the stock market have made moves on the latest development or the most recent piece of news—false though it might in time prove to be.” — Akhil Patel

Watchlist Changes

None explicit — but Akhil flags gold, silver, and bitcoin as “bear watching” rather than strong buys.

Emma’s Analysis

This is a critical Roadmap update because it confirms the bullish scenario is still alive — S&P/Nasdaq new highs in April suggest 2026 may follow the 2006 path (bull year with deteriorating fundamentals) rather than the 1966 bear-year path. However, the narrow leadership (AI/semiconductors only) is itself a late-cycle warning sign — in 2006–07, the market was similarly narrow (financials/real estate). The divergence between US markets (new highs) and European/Australian markets (sideways) is also noteworthy — in 2007, global markets peaked at different times with the US lagging. The incoming Fed Chair Warsh’s mandate to lower rates is the key variable: if he succeeds in suppressing yields, it extends the cycle but makes the eventual reckoning worse (more debt, more inflation, more speculation). This is the “pushing on a string” dynamic. The oil inventory warning is severe — if refineries shut, the economic impact would be immediate and dramatic, potentially forcing a ceasefire. This email reinforces the view that we’re in the final 6–12 months of the cycle expansion phase.

[Source: PSE, sub-email-25-2026]