Trump: No rush with Iran... Restocking missiles... How about oil reserves?... It's bullish for energy producers and arms makers... Debating shapes and more earnings on tap...
Is this thing over yet?...
Today marks 60 days since the start of the "ceasefire" between the U.S. and Iran.
Back on June 17, both sides signed a 14-point memorandum of understanding, which included a 60-day negotiating window.
As far as our eyes can see, that window has closed with no resolution – far from it. The Strait of Hormuz has essentially been "closed" again for weeks, with daily tanker traffic reduced to about 10% of what it was pre-war.
Reports about further negotiations are vague. "They're good poker players, but they're dying," President Donald Trump told Fox News this morning, referring to Iran's Revolutionary Guard, which has maintained power in the country. "I have no time schedule. I'm not in a hurry."
So it goes.
Oil prices aren't as high as they were in the spring when the war began and uncertainty spiked, but futures prices for Brent crude and West Texas Intermediate ("WTI") are still about 50% higher than at the start of the year.
Oil futures were up roughly 2.5% today and the major U.S. stock indexes were slightly lower across the board.
Restocking time...
Another consequence of the prolonged conflict? Drawdowns...
First up: weapons.
While the White House has denied recent reports that the military has used up more than 50% of specific stockpiles of defensive and long-range missiles after months of bombing Iranian targets, the government just made a move that suggests restocking is necessary...
This morning, the Department of Defense announced that the U.S. Navy is awarding a $22.9 billion contract to Raytheon, an RTX (RTX) business, "to accelerate production of the Tomahawk missile, a critical long-range strike capability." From the government's press release...
"The Department called upon industry to expand munitions production, and RTX has answered that call," said Under Secretary of [Defense] for Acquisition and Sustainment Michael P. Duffey. "This Tomahawk award increases our ability to equip the Joint Force, ensuring our Warfighters never face a fair fight."
This contract rapidly fields capabilities to meet modern threats while providing industry partners with the stability required to expand their workforce, increase manufacturing throughput, and fortify supply chains. In addition, it advances the Department's Acquisition Transformation Strategy by accelerating critical weapons delivery and reducing procurement lead times.
Acting Secretary of the Navy Hung Cao added that the deal will produce Tomahawk missiles at "unprecedented speed."
In short, the military complex is humming once again...
I (Corey McLaughlin) am reminded of a recommendation that Dan Ferris made back in November 2024 to Ferris Report subscribers. He wrote then...
This is the golden age of defense stocks.
The war in Ukraine has been making headlines since February 2022, and the Israel-Hamas war has been raging since October 2023.
Neither of these battlegrounds will be the last of the 21st century. And as tensions around the world ramp up over the coming decade, so will shares of arms dealers.
It's a sad reality, but you must be ready for it.
The fund that Dan recommended in that issue – a basket of defense and aerospace stocks, which includes RTX – is up about 130% and remains a buy. Dan's Ferris Report subscribers and Stansberry Alliance members can find that and all his open recommendations here.
It's not just missiles... what about oil reserves?...
As we've noted this year, the U.S. Strategic Petroleum Reserve ("SPR") has been tapped as an emergency source of crude since the start of the war to offset the disruption in supply that would normally flow through the Strait of Hormuz.
The drawdown has now pushed the reserve below 300 million barrels – its lowest weekly level since January 1983, and well under half of its capacity.
Now, the U.S. is the world's leading oil producer and the largest exporter of natural gas, so we're not without energy, despite what's going on in the Middle East.
However – and this is the part that trips up a lot of investors – American barrels of oil aren't a straight plug-and-play substitute for the crude that comes from the Middle East.
U.S. shale production (represented by the WTI benchmark) is mostly light, sweet crude.
But many Gulf Coast refineries were built decades ago specifically to process the heavy, sour (and cheaper) crude from Saudi Arabia, Iraq, and similar Gulf producers, as well as from Canada.
Remaking those refineries for a lighter slate is an expensive, multiyear undertaking. So even as the U.S. exports record volumes of its own light, sweet crude, it continues to import heavy sour barrels.
Supply matters...
While a 40-year low in the SPR likely sounds troubling, and is a real and symbolic consequence of current world events, it doesn't move gasoline or energy prices much on its own.
Overall domestic supply and supply from the OPEC cartel members matter more. But if there's some other emergency that comes up – a hurricane, pipeline attack, more war (the SPR was also drawn down at the start of the war in Ukraine) – the situation could get much more concerning.
And prices are already relatively high and have been rising lately because of supply disruptions.
A gallon of regular gasoline is averaging $4.06, about a 30% jump from a year ago, and up from $3.98 a month ago. A gallon of diesel in the U.S. is averaging $5.45, up from $5.06 a month ago and $3.70 a year ago.
That's tough on consumers and businesses that must account for fuel costs. But the situation has been working out for producers...
U.S. shale producers like Diamondback Energy (FANG), Devon Energy (DVN), and ConocoPhillips (COP) pump largely domestic, low-cost barrels, so their production isn't directly disrupted by the conflict in the Middle East. And they're benefiting from higher oil prices.
ExxonMobil (XOM) and Chevron (CVX) have also posted some of their strongest quarterly profits in years. Commodity Supercycles subscribers are sitting on roughly 100% and 55% gains, respectively, in positions in these companies.
The energy sector of the S&P 500 Index, measured by the State Street Energy Select Sector SPDR Fund (XLE), is up around 40% year to date and has rallied since the start of July – when optimism around a U.S.-Iran deal started to unravel again. Energy stocks were up more than 1% today, the only sector with significant gains.
The risk for energy stocks, of course, is if the Iran situation somehow resolves and oil prices fall. Energy producers' profit margins would suddenly decline. But for "everyone else" like U.S. consumers, that wouldn't be so bad. And the economy would get a boost.
In the meantime, energy producers are well positioned. And the longer major geopolitical conflicts go on, so are arms makers.
The story this year is all about guns and oil. Some things don't change.
Earnings and letters...
This week brings a round of earnings reports from big retailers like Walmart (WMT), Home Depot (HD), and Lowe's (LOW).
I'll be curious to read the earnings and hear commentary from executives on consumer trends and what they indicate about the current state of the economy.
If you listen to Treasury Secretary Scott Bessent, "the K-shaped economy is over."
In a television interview last week, Bessent pointed to recently reported 5.5% year-over-year wage growth for the lowest quartile of full-time workers. Meanwhile, weekly pay for higher earners only grew 1.5%. He described that as a "C-shaped economy."
"The lower end of wage earners are finally calling it back," Bessent said. We're not so sure.
As Dr. David "Doc" Eifrig wrote in Retirement Trader on Friday...
That's a fair observation. But we don't buy into the narrative that the K-shaped economy has magically disappeared.
It's the classic political spin... Bessent is painting a rosy picture of the economy while many households are frustrated.
The truth is, the divide between America's economic winners and losers remains as stark as ever...
A brief uptick in the bottom quartile's wages can't undo years of compounding inflation, elevated interest rates, and soaring housing costs.
Lower- and middle-income families still spend a disproportionate chunk of their monthly income on essentials like groceries, shelter, and energy. These prices remain stubbornly higher than before the pandemic.
As a result, lower-income households are barely treading water.
And the entire economy isn't immune to this divide... Debt problems are piling up. As Doc wrote...
Today, 12.9% of America's credit-card debt is at least 90 days past due. That's just below the 13.7% high back in 2010.
For millions of Americans on the lower branch of the "K," financial strain is a daily reality. As of 2025, 57% of American adults are living paycheck to paycheck.
In his latest Retirement Trader issue, Doc noted that many retailers will cater to one side of the K-shaped economy or the other, selling discounted products that lower- and middle-class families can afford, or luxury items to higher-income families.
Of course, we're here to help you take your finances and portfolio into your own hands – to grow and protect your hard-earned money from the realities of market volatility and ever-present inflation.
That's why Doc recommended a trade seeking a nearly 40% annualized return on a retailer that's "uniquely positioned to win on both sides of today's divided economy." Retirement Trader subscribers and Stansberry Alliance members can find the details here.
New 52-week highs (as of 8/14/26): Alpha Architect 1-3 Month Box Fund (BOXX), DXP Enterprises (DXPE), iShares MSCI Spain Fund (EWP), Cambria Foreign Shareholder Yield Fund (FYLD), Global X MSCI Greece Fund (GREK), Helmerich & Payne (HP), iShares U.S. Aerospace & Defense Fund (ITA), NewMarket (NEU), State Street SPDR Portfolio S&P 500 Value Fund (SPYV), and State Street Industrial Select Sector SPDR Fund (XLI).
In today's mailbag, a reply to another subscriber's feedback on inflation in Friday's mail... Do you have a comment or question? As always, send your notes to feedback@stansberryresearch.com.
"One of your respondents recently commented that Coca-Cola had doubled in price since before the pandemic, and that there is an affordability gap until wages catch up. Many of us buyers are now retired, so our 'wages' are not going to catch up. Pepsi Cola has gone up similarly, so I have stopped buying. They experience a modest increase in costs, and they go up a lot, but not back down if their costs go down." – Subscriber R.M.
All the best,
Corey McLaughlin
Baltimore, Maryland
August 17, 2026
