Your Strategic Monday Round - Up

🌟 CIO Opening Remarks: On Fatherhood & the Markets

At Linda AGI, we believe this signals a new market regime— we are no longer in the waiting phase. The handoff is happening — from scared, sidelined capital to forward-looking allocators.

"Congratulations. You are a father now."

That’s what my dad told me when we had our first child, AJ. The words were simple — but they signaled something deeper: a passing of responsibility. From one generation to the next. From observation to action. From learning to leadership.

That same principle applies to the markets right now. We are no longer in the waiting phase. The baton is being passed.

Earnings are growing. Positioning is still wrong. AI and stablecoins are reshaping our financial and technological infrastructure. And despite geopolitical smoke, price is climbing.

Let’s dig in.

The Situation

What we are focusing this week

• Macro: 📈 S&P 500 Earnings at ATH: Capitalism > Tariffs

• Markets: ⚔️ Israel-Iran Conflict: Geopolitical Fear Is a Fading Opportunity

• Digital Assets: 💸 Stablecoins Quietly Rewrite the Financial Stack

• AI: 🤖 OpenAI o3-Pro, Gemini 2.5, ElevenLabs v3 — are they ready?

Macro: S&P Earnings → Still Climbing

Forward EPS at $280 — an all-time high for the S&P 500.

• Not driven by stimulus or government spending.

• This is pure private-sector performance – built on pricing power, productivity, and resilient demand.

• Despite tariffs, earnings have marched higher. That's bullish.

• No inflation shock, and the 10-year yield is easing 📉. That helps:

  • Mortgages → housing affordability

  • Real incomes → consumer spending

  • Input costs → margins

• Capitalism is doing its job — companies are not passing on costs at scale. That’s a green light for:

  • Tariff-sensitive sectors (industrials, semiconductors)

  • Consumer discretionary stocks priced for a recession that never arrived

  • High free-cash-flow equities

🔥 Geopolitics: Israel v. Iran — War Without a Market Impact (Yet)

• April 2024 was symbolic: Iran retaliated, Israel calibrated, and the market shrugged.

• June 2025 is different: This is 21st-century warfare — AI, cyber, kinetic precision. Israel has the tempo; Iran is reactive, and its hardliners are being eliminated systematically.

• Implications:

  • Conflict could last weeks, maybe longer.

  • Market impact is not on earnings — it’s on sentiment (risk aversion) and energy prices.

  • Oil spikes act as a tax on consumers (expect airlines and retail to underperform).

  • But as crude recedes, opportunities with value stocks emerge.

• 🛡️ Historical truth: Geopolitical risk is often best faded. We remain focused on what matters: earnings, inflation, and interest rates.

Digital Assets: Stablecoins Are the Quiet Revolution

Stablecoins = decentralized, programmable banks + dollar diplomacy.

• Visa and Mastercard shares each plunged ~7% after reports that Amazon and Walmart may bypass credit cards with their own stablecoinsreddit.com.

• In essence, stablecoins enable peer-to-peer USD banking, custody, and yield.

• They are creating an off-bank, off-balance-sheet financial system:

  • No branches

  • No tellers

  • 24/7 programmable infrastructure

• Winners:

  • Consumers (faster, cheaper payments)

  • Merchants (lower fees)

  • Stablecoin issuers (float revenue, user growth)

  • Private credit markets (on-chain USD lending)

• Losers:

  • Card networks

  • Regional banks

  • Legacy payment rails

This is how fintech quietly becomes crypto — and how the U.S. dollar gains even more silent dominance.

AI Weekly Wrap: Advancing… Cautiously

• OpenAI o3-Pro: Enhanced reasoning capabilities and new connectors (Google Drive, Dropbox).
  ⚠️ Real-world utility is still unclear, and there are security risks in enterprise workflows.

• Gemini 2.5 Pro: Launches an Agent Dev Kit plus Google Workspace integration.
  ⚠️ Powerful, but privacy concerns and inconsistent delivery remain issues.

• ElevenLabs v3: Emotional, multilingual text-to-speech (TTS) now in alpha.
  ⚠️ Overhyped for production use — its creator economy potential is still in very early days.

• Overall: The AI infrastructure keeps expanding, but trust, UX, and deployment hurdles remain. Keep an eye on emerging enterprise adoption, especially around Google’s Gemini and Microsoft’s AI ecosystem.

Closing Thoughts from the CIO Office

Fathers pass the baton. So do markets.

The current market isn’t one of despair — it’s one of hesitation. The baton is mid-air. Price has moved. Positioning has not. That’s your setup.

Stay long. Stay thoughtful. And Happy Father’s Day.

— John & Daniela @ Linda AGI