Sunday Setup: CPI Tuesday, Warsh Cloture Monday, Trump-Xi Thursday. Lebanon 39 Dead, Iran Still 'Reviewing'.

Sunday morning, 9:30 AM ET. The week ahead is the highest-stakes overlay of the second quarter, and the weekend tape did nothing to soften the binary risk: Israel ran the most intense night of strikes against Lebanon since the April ceasefire framework, killing at least 39 people across the south on Saturday with the IDF claiming hits on more than 85 Hezbollah infrastructure sites, while in Washington the Qatari prime minister departed Miami after a Sunday morning huddle with senior White House officials, reporting back to Doha that the gap on the Iran 14-point memo is now narrowest on the nuclear moratorium clause and widest on the Strait of Hormuz governance language. Tehran’s Foreign Ministry restated late Saturday that the proposal is still under review and that any agreement must be “fair and comprehensive,” which is the same formulation Iran used Wednesday and Thursday, and which the Witkoff and Kushner channel reads as a tactical stall to bleed Trump’s Beijing summit window. The new Supreme Leader Mojtaba Khamenei’s message read on state television Sunday morning re-endorsed “death to America” chants from a workers’ rally in Tehran, which is consistent with the public posture but not the back channel signal. Brent settled Friday at $101.29 and gapped roughly $0.40 lower in early Sunday electronic on the Qatari PM headlines before drifting back to $101.20 area; WTI sits around $97.60. June S&P 500 e-mini futures opened the Sunday evening session essentially flat (+0.03%) with Nasdaq 100 e-mini futures down 0.01%, with the cash market having closed Friday at fresh records on the S&P (7,398.93) and Nasdaq Composite (26,247) for a sixth straight weekly gain. The 10Y closed Friday at 4.38% and the 2Y at 3.90%, with the front end pricing 1.1 cuts for 2026 versus the 1.4 it priced two weeks ago. Bitcoin sits at $80,702 (+0.4% on the day, dominance up to 60.4%), gold near $4,712, DXY at 98.21, and the VIX at 16.74. The information sequence into Monday open is heavy and front-loaded: China April CPI and PPI overnight Sunday, Senate cloture on the Warsh Fed Chair nomination at 5:30 PM Monday, Cleveland Energy and Mosaic prints Monday alongside Existing Home Sales at 10:00 AM, then April CPI Tuesday 8:30 AM with Cleveland Nowcast at 3.5% versus 3.0% headline consensus, PPI Wednesday, Cisco AMC Wednesday, Walmart and Applied Materials Thursday before the Trump-Xi summit Day 1 in Beijing, and Friday capping with Powell’s term ending and Warsh sworn in by EOD. The book is positioned for a 35% CPI hot tail, a 60% probability the Hormuz kinetic pattern persists irrespective of memo paper progress, and a 55% probability the Trump-Xi summit produces no incremental tariff surprise on day one given the Iran agenda crowding it out.

Three things to internalize before Monday open:

1. CPI Tuesday is the higher-conviction event than the Trump-Xi summit on Thursday. The Cleveland Nowcast moved to 3.5% on the Brent move back through $100, a full 50 basis points above the 3.0% headline and 60 basis points above the 2.9% core consensus. The May energy passthrough offset that desks were modeling Friday is already fading on the weekend reports of a roughly 71 square kilometer oil slick from Iran’s Kharg Island terminal (about 80,000 barrels spilled since Tuesday per satellite imagery), which signals damaged export infrastructure rather than a clean technical halt. We hold the 2Y June 17 4.10% / 4.30% put spread at 12 ticks entry, mark 14 ticks (+17%), and add 0.05% NAV at the same strikes Sunday afternoon to bring sizing to 0.25% NAV into the print. A 3.1% headline / 3.0% core hot tail (we put it at 35%) flips the front end pricing back toward 0.9 cuts and pulls the 10Y to 4.45%, which drags multiples down even on a hot tape.

2. The Hormuz “NACHO” regime is now structural, and the memo signing is a paper ceiling, not a kinetic floor. Saturday’s read across is almost entirely bearish for memo probability and bullish for the energy curve. Israel killed 39 in Lebanon, the new Supreme Leader publicly re-endorsed “death to America” from Tehran, the Kharg Island oil slick is widening on satellite, and US blockade vessel disablement count remains at 4 with 57 redirected, with Iranian state media still reporting that the cargo vessel struck overnight Friday into Saturday cost one Iranian sailor’s life with 10 wounded. We mark memo probability at 32% Sunday morning, down from 38% Saturday morning, against a market still pricing roughly 52% via the Brent September call skew. We hold the Brent August $95/$108 strangle from Friday at $4.30 entry, mark $4.85 (+13%), and we add the XLE June 19 $99/$108 call spread sizing by 0.05% NAV at $2.40 mark to bring total energy long sizing to 0.55% NAV. The ceiling on the trade is a one-page MoU signed clean by Friday’s Trump-Xi handshake, which we put at 28% probability; the floor is a kinetic incident in the Strait that takes Brent through $108, which we put at 38% over the next 10 sessions.

3. The Trump-Xi summit Thursday and Friday is a tactical event with structural noise. Treasury Secretary Bessent confirmed Friday that Iran will be a topic in Beijing, which mechanically squeezes the time available on tariffs and rare earths to under half the agenda. Beijing’s deliverable list is the predictable set of Boeing aircraft purchases, US agricultural commitments, and the newly-floated “Board of Trade” framework that USTR Greer has been telegraphing. The base case is a “stabilizing visit” with surface-level deliverables and no incremental tariff escalation, which is constructive for the Trump-Xi summit equity beta names (BA, ag complex, AAPL, NKE) but neutral to negative for the rare-earth names that needed a hard concession (MP, USAR, REMX). We hold the BA June 19 $230/$260 call spread at $4.10 net debit, mark $4.65 (+13%), with PT $260 and the stop at $215 close.

The Sunday Mosaic

Iran / Hormuz Box Score (Sunday 9:30 AM ET)

Memo Probability Path (Updated Sunday)

The path is now consistently lower despite the Qatari PM weekend visit. Our read on the Witkoff-Kushner team is that they recognize the kinetic pattern is structural and are pivoting to a narrower one-page MoU that defers Hormuz governance to a separate Geneva Phase 2 track. That shift, if confirmed Monday or Tuesday, would mechanically raise the headline memo probability to 45% to 50% but lower the operational impact because the Strait stays kinetic regardless. The energy long is sized for that latter scenario.

Macro Calendar | Week Ahead May 11 to 15 (High-Stakes Sequence)

This is the highest-stakes economic data week of Q2, and the Iran-Trump-Xi-Warsh overlay makes it a binary week for the macro book.

Earnings Calendar | Week Ahead Detail

The week after (May 18 to 22) is the index-level event window for our book: NVDA AMC May 20 (consensus $78.8B revenue, $1.78 EPS, FY27 Q1 print), HD May 19 BMO (US consumer cross-check vs Walmart), TGT May 20 BMO, ADI, MDLZ. NVDA is the binary that defines the second half of Q2.

CEG Preview | Monday AMC

The Constellation Energy print is the cleanest read on the AI power demand thesis until NVDA on May 20. Consensus sits at $2.61 EPS (+22% y/y) on $8.71B revenue (+30%), with the key tracking metric being whether Q1 EBITDA approaches the $2.02B mark that confirms the Calpine integration is delivering at modeled pace. Options markets are pricing roughly a 7% swing through Friday, which we view as fair given the dispersion in the data center pipeline commentary expected. The PJM regulatory clarity timeline is the real catalyst, with management guidance on whether 2026 unlocks new hyperscaler capacity deals being the structural read for the AI power complex (CEG, VST, NRG, TLN, ETR).

We hold the CEG May 16 $310/$330 call spread at $4.20 net debit from Wednesday entry, mark $5.10 (+21%), and we are adding 0.05% NAV at the same strikes Sunday afternoon. PT $330 close.

CSCO Preview | Wednesday AMC

Cisco prints Wednesday after the bell with consensus at $1.00 EPS and revenue around $14.3B. The structural read is on the Silicon One traction in hyperscaler networking against Arista and Broadcom, plus the Splunk integration revenue ramp. The buyside whisper has been moving higher into the print on the back of MDB and DDOG observability comps, and the read across to NTNX, JNPR, and HPE will depend on the Splunk attach metrics. We have no position into the print but flagged a long-vol setup via the May 16 $72/$78 call spread for $1.45 net debit if we see a sub-3% pre-print drift, which would be sized at 0.10% NAV.

WMT Preview | Thursday BMO

Walmart is the consumer-side counter to the soft UMich 48.2 print Friday. Consensus sits at $0.61 EPS on $169B revenue, with US comps the key metric (cons +3.8%, with grocery the carry). The structural question is whether the tariff passthrough into Q2 guidance is +50 basis points or +100 basis points on COGS, which is the differentiator between a soft beat reaction and a hard beat reaction. We have no position into the print but are watching for the read across to TGT (May 20 BMO), DG, and DLTR. The April retail sales print at 8:30 AM Thursday is the cross-check.

What to Watch Sunday Through Wednesday

Tonight Sunday May 10

• China April CPI / PPI overnight (Watch deflation pressure; CPI 1.0% prior was a 4-month low)
• Iranian state media response to Lebanon strikes; Mojtaba Khamenei statement late Sunday possible
• Fujairah airspace status update (UAE GCAA restrictions through May 11 per Friday notice)
• US Sunday talk show take from Bessent or Vance on Iran timeline

Monday May 11

• China CPI / PPI digestion in Asia open
• Iranian Foreign Ministry briefing on memo response window
• 10:00 AM Existing Home Sales (Apr)
• 17:30 Senate cloture vote on Warsh
• AMC: CEG, MOS, SPG prints
• Pre-CPI positioning into the close (front end likely sold, back end mixed)

Tuesday May 12 (CPI Day)

• 8:30 AM April CPI print (3.0% headline / 2.9% core consensus, Cleveland Nowcast 3.5%)
• 13:00 $42B 10Y Treasury auction
• Fed Goolsbee speaks 16:00
• AMC: ZBRA, JD.com

Wednesday May 13 (PPI + Cisco)

• 8:30 April PPI
• 13:00 $25B 30Y Treasury auction
• AMC: CSCO, Tencent

Trade Ideas | Sized for the Sunday Mosaic + Week Ahead

▼ Long 2Y June 17 4.10% / 4.30% Put Spread (Add 0.05% NAV)

Add 0.05% NAV at the same 12 ticks entry to bring total sizing to 0.25% NAV into Tuesday CPI. Mark 14 ticks (+17%). The Cleveland Nowcast at 3.5% versus 3.0% headline consensus is the cleanest hot tail in our calendar. A 3.1% / 3.0% print (35% probability) pulls the 2Y back to 4.20% and the 10Y back to 4.45%, with the curve bear-steepening into Friday’s Powell handoff. PT trim level at 22 ticks; stop on a sub-2.85% core print.

Risk: Cool CPI at 2.9% / 2.8% reverses the steepener bid. Vertical caps loss at 12 ticks.

▲ Brent August $95/$108 Strangle (Hold + Watch)

Hold from Friday at $4.30 entry, mark $4.85 (+13%). The structure pays max on either a memo signing rally back to $94 by mid-July or a Hormuz re-escalation through $108 over the next 10 sessions. Sized 0.3% NAV. We are not adding given the +13% mark, but holding through CPI Tuesday and the Trump-Xi summit Thursday. PT trim level $7.50 (Hormuz tail) or $0.40 (memo signed clean).

Risk: Brent settling in the $98 to $103 range collapses both wings. Sized to be losable.

▲ XLE June 19 $99/$108 Call Spread + Short May $96 Put (Add 0.05% NAV)

Hold from Wednesday at $1.95 net entry, mark $2.40 (+23%), and add 0.05% NAV Sunday afternoon to bring total energy long sizing to 0.55% NAV. The Lebanon escalation Saturday combined with the Kharg Island oil slick widening and the OPEC+ May 21 ministerial overlay all rotate energy into the bullish setup. PT $108 spread max.

Risk: A signed clean memo Friday with no Hormuz follow-on collapses the front of the energy curve. Structure caps loss at $96 strike assignment.

▲ CEG May 16 $310/$330 Call Spread (Add 0.05% NAV Pre-Print)

Hold from Wednesday at $4.20 net debit, mark $5.10 (+21%). Add 0.05% NAV Sunday afternoon to bring total sizing to 0.25% NAV into Monday AMC print. The Q1 EBITDA toward $2.02B confirms the Calpine integration pace, and the PJM regulatory clarity commentary is the structural unlock. The read across to VST, NRG, TLN, and ETR carries into Monday post-market. PT $330 close.

Risk: A guidance walk-back on the data center pipeline due to PJM uncertainty would compress CEG to $295. Vertical caps loss at $4.20.

▲ DDOG / MDB / ESTC Cohort Hold (Reiterate)

Hold the DDOG July 18 $185/$210 call spread at $5.20 net debit from Friday roll, mark $5.45 (+5%). Hold the MDB June 19 $260/$300 call spread at $11.20 ($0.15% NAV) and the ESTC June 19 $115/$130 call spread at $3.80 ($0.10% NAV). Total cohort sizing 0.65% NAV. The CSCO print Wednesday and the AMAT print Thursday are the cross-reads.

Risk: A Q2 enterprise commentary that walks back the AI-inference attach narrative. The verticals cap loss.

▲ AFRM Stock Collar (Hold)

Hold AFRM stock from May 7 entry $72, mark $86. Long the $75 put at $1.10. Short June $90 call for $1.85 credit. Net structure cost roughly $0.70. The GAAP profitability print is the structural multiple unlock from BNPL 12x to payments 18x. PT $115. Sized 0.5% NAV.

Risk: A 30-day delinquency uptick of 30 basis points or more on the Q1 cohort. The collar caps loss.

▼ COIN May 16 $200/$170 Put Spread (Hold)

Hold from Friday entry at $7.20 net debit, mark $7.95 (+10%). The $482M unrealized crypto mark exposes balance-sheet duration risk, and the Bitcoin range at $80,700 keeps the realized loss path open. PT $200 close. Sized 0.2% NAV.

Risk: Bitcoin rally above $90K in May would close half the realized loss path. Stop on a 4% rally.

▼ NET May 16 $230 Puts (Hold)

Hold from Friday entry at $5.40, mark $9.10 (+68%). Sizing 0.25% NAV. The 20% workforce reduction tied to agentic AI displacement is a structural margin signal, and we want to ride into Q2 commentary in late July. PT $215.

Risk: Q2 commentary that re-frames the layoff as productivity gain. Stop on a $260 close.

▲ PLTR June $160/$185 Call Vertical (Hold)

Stock at $137.80 Friday close. Hold the June $160/$185 call vertical at $4.85 net debit from Friday roll, sized 0.3% NAV. The +85% revenue growth print is the structural validation, the valuation pullback is tactical. PT $185. The NVDA print May 20 is the cohort halo catalyst.

Risk: Burry-style short escalation or a softer Q2 print from peers (NOW, MDB) that disappoints. Vertical caps loss.

▲ SMH June 19 $310 / July 18 $310 Call Calendar (Hold)

Hold from Friday entry at $4.20 net debit, sized 0.2% NAV. The semis cohort tagged a fresh 52-week high last week with MU +13%, QCOM +9%, AMD +8%. The NVDA print May 20 is the pivot, and we want positive theta into June with vega exposure across the print. PT take-off at $7.50.

Risk: A volatility crush around NVDA print collapses the long July leg. Sized to be losable.

▲ BA June 19 $230/$260 Call Spread (Hold Into Trump-Xi)

Hold from Wednesday entry at $4.10 net debit, mark $4.65 (+13%), sized 0.20% NAV. The Trump-Xi summit Thursday and Friday is expected to produce a Boeing aircraft purchase deliverable (range 200 to 500 units cited in CSIS preview), which is the cleanest single-name Trump-Xi summit beneficiary. PT $260 spread max.

Risk: Iran agenda crowds out tariffs and Boeing deliverable is deferred to a working-level follow-up. Vertical caps loss at $4.10.

▲ Long Gold via $4,650 / $4,800 Call Spread vs Short $4,500 Put (Hold)

Hold from Friday at net entry $0.30, mark $0.85. Geopolitical bid intact, NACHO regime supportive, real yields stable, Lebanon escalation re-anchors haven flow. PT $4,900.

Risk: A clean memo signing + dollar rally would compress gold to $4,550. Put strike caps downside.

▼ Short USD/JPY July 17 158/154 Put Wing (Hold)

Hold from Friday at 28 pips credit, sized 0.10% NAV notional. Nikkei at 62,833 record on AI/SoftBank, BOJ June 13 carries 35% probability of a hike on the JGB tantrum dynamic. PT take-off at 12 pips.

Risk: A surprise BOJ hold + hot US CPI takes USD/JPY to 162. Hard stop on a 161 close.

Signal Tracker | Sunday 9:30 AM ET Mark

Assessment: 9 BULL / 12 BEAR / 8 NEUTRAL. The mosaic flipped slightly more defensive into Sunday on the Lebanon escalation, the Kharg slick widening, and the lower memo probability mark. We hold the book at +6.8% net long gross (unchanged from Saturday morning), with the NACHO trade financed by trimmed cash, the CPI Tuesday hot-tail hedge in place via the 2Y put spread, and the CEG long sized for the Monday AMC catalyst. The book is positioned for a 35% CPI hot tail, a 60% Hormuz steady-state through Q3, a 55% probability the Trump-Xi summit produces no incremental tariff surprise on day one, and a 32% memo signing probability against the market-priced 52%.

What Could Be Wrong

The Sunday mark is a structurally bearish read on the Iran path and a structurally bullish read on the labor and AI tape. The two biggest sources of error in this setup are:

1. A surprise one-page MoU announcement Monday or Tuesday morning that defers Hormuz to Geneva Phase 2. This would mechanically lift memo probability to 45% to 50% on the headline but keep the kinetic pattern intact. Brent would likely drop $4 to $5 on the headline before recovering, and the energy long would take a 30% to 40% mark down before the kinetic pattern reasserts. The right play is to hold size and let the dust settle, not chase the headline.

2. A cool CPI print at 2.85% headline / 2.75% core that reverses the steepener bid. This would make the Cleveland Nowcast look like noise from a one-month energy passthrough effect. The 2Y put spread caps loss, but the broader rates positioning would need to flip from bearish duration to neutral. We model this at 25% probability and it is the cleanest reason to keep the position size at 0.25% NAV rather than 0.50%.

The book is not betting on any single catalyst; it is positioned for the dispersion across the calendar to widen, which is the cleaner read on a week that has CPI, PPI, Warsh cloture, China CPI/PPI, four major US prints, and the Trump-Xi summit all within five sessions.

This note reflects information available as of May 10, 2026, 9:30 AM ET. Markets are closed for the weekend; futures open Sunday 6:00 PM ET. For internal use only. Not investment advice.