Good morning! It’s only Monday and we already have a dispute brewing. After the Lebanon framework signed by the US, Israel and Lebanon, some traders believe that Lebanon has formally recognized the state of Israel. Do you think that as well? Let us know in the comments.
Outside of the Middle East, today we have a brief update on the midterms. On top of that, we take a look at a new Trump Phone, check a weird behavir on the Waymo market and give a small update on Claude Mythos.
Let’s take a look at the markets to make sense out of the news!
The Midterms Tracker
RED
RED fell slightly over the weekend. However, it moved less than 1 point, suggesting that it is only an adjustment, rather than a signal of a new trend. Overall, the index has been trading between 90.2 and 91.9 in the last month, signaling stability.
Senate
SENR had a slight volatility, most likely resulting from the Louisiana Primary aftermath. It resolved as expected and the Senate race continues to be extremely close. Index around a 100 suggest an even split between future Republican and Democratic control.
Traders seethe Senate control as a coin-flip!
House
The HOUSER index continued to trend lower. At 75 points, the index suggest that the House is effectively lost to the Democrats and the continued trend down only confirms that.
Main Events Of The Day
#1 The Strait Of Hormuz
The US and Iran continued to exchange fire over the weekend. However, just before the markets open, both sides agreed to stand down and talk, as reported by Axios.
That being said, the continued volatility around the Strait of Hormuz is making a sustained surge of traffic almost impossible. Additionally, the recent America-Israel-Lebanon framework is only going to make matters more difficult. Iran perceives it as a breach of the MoU and will most likely continue to make the crossing difficult.
Contrary to prediction markets, energy markets seem completely oblivious to the continued closure of the Strait of Hormuz, with WTI trading below $70 per barrel:
#2 Lebanon-Israel Market In Dispute
Thanks to the Lebanon Framework Agreement, there’s now a dispute on the Lebanon to recognize Israel market.
All thanks to the very first sentence of the first clause, in which both countries affirm each other state’s right to exist in peace and their mutual desire to live in security as neighboring sovereign states. Some traders believe it is enough to resolve the market, treating the agreement as a formal document between the two states.
Other believe that the market requires a specific document formally recognizing the state of Israel, or at least establishment of diplomatic relations. Neither has happened.
In our opinion this is a difficult issue. The framework agreement is surely a big step towards a normalization of relations between Lebanon and Israel. Is it big enough to resolve the market? We hope that Polymarket will qualify that as there are markets with later strike dates that would benefit greatly from such a clarification.
#3 Trump Mobile Is Here
Trump Mobile has finally released the phone. Well, actually it has happend a few weeks ago, but only now traders were sure enough to propose the market.
The phone itself has rather mixed reviews, but it’s here. And so Trump’s grift continues.
#4 Where Is Waymo?
There is some confusion on the market related to the number of cities Waymo will operate in.
All because Waymo has temporarily suspended service in six cities. Traders are now unsure whether these cities should count. However, it seems that after a brief volatility spike, the count is settled at 11 cities just a day before the resolution date.
#5 Claude Mythos Is Still Unavailable
Claude Mythos market has also experienced some volatility. Initially, traders have front-run the announcement that some organizations were approved to get access.
However, it seems that no such organization will get it by the end of the month. The market went from 15c, up to 93c, only to go back down to 25c in a matter of days.
There’s still time left for the market to resolve to Yes, making us think that we might see more volatility before the resolution.
Wrap up
That’s all for today!
We will continue to monitor the situation on prediction markets.
Make sure to follow prediction markets live to get fresh information on the conflict. Stay strong and see you tomorrow for another Morning Brief!
This is not official investment or life advice. Do your own research. These are only my opinions and I encourage anyone to do their own research before putting any money anywhere.