Macro worldview (2.1.13 - Friday May 29 midday refresh - the April PCE prints in line at headline 3.8% / core 3.3% YoY (highest since May 2023 / November 2023) but with softer monthly pace (+0.4% / +0.2% m/m), and the Thursday May 28 cash close makes a fourth consecutive S&P record (7,563.63, +0.58%) THROUGH the hot annual print with VIX easing to ~15.6 toward the <15 melt-up leg; the 10Y eases to 4.46%; crude completes a ~20% monthly collapse (WTI sub-$88, Brent ~$92.56) on a tentative 60-day US-Iran memorandum to reopen Hormuz pending Trump sign-off; defense firms, gold rebounds, AI leads)

2.1.13 refresh, ~29.5 hours after 2.1.12 - the window runs from the Thursday May 28 ~8:21 AM ET pre-PCE moment through the Friday May 29 ~1:54 PM ET midday read. Two things 2.1.12 was waiting on resolved: the 8:30 AM ET April PCE print and the full Thursday cash close. The PCE landed essentially in line - headline 3.8% YoY (highest since May 2023), core 3.3% YoY (highest since November 2023), both matching consensus, but with the MONTHLY pace softening (headline +0.4% m/m from +0.7%, core +0.2% m/m from +0.3%) - so the formal stagflation invalidation indicator fired sticky-but-not-hotter, and equities took the relief: Thursday printed a fourth consecutive S&P 500 record (7,563.63, +0.58%) THROUGH the hottest annual PCE in three years, with VIX easing to ~15.6, now within a half-point of the <15 melt-up-confirmation leg. Meanwhile crude completed a ~20% monthly collapse on a tentative 60-day US-Iran memorandum. Net: Equity melt-up versus building recession risk steps up (+0.02), Persistent energy premium steps down (-0.04, band wider), Stagflation risk and Fed independence stress eases a touch (-0.01); the other four hold.

The melt-up confirmed through the PCE. Equity melt-up versus building recession risk steps 0.74 to 0.76 - the strongest melt-up tell of the sequence: the Thursday cash session made a fourth consecutive record DESPITE the highest annual PCE in three years - S&P 500 7,563.63 (+0.58%), Nasdaq Composite ~26,917 (+0.91%), Dow 50,668.97 (+0.05%) - confirmed at the ETF level this time (SPY 754.60 (+0.55%), QQQ 735.60 (+0.84%)), and VIX fell to ~15.61, the closest the <15 melt-up-confirmation leg has come. Friday midday extended the run near fresh records on the Iran-MoU optimism, the Nasdaq up ~8% on the month. The step is held to +0.02 because VIX is not yet <15 (let alone for five trading days), breadth stays concentrated in mega-cap AI, and the recession-risk tail is unmoved.

Crude completes a ~20% monthly collapse on the 60-day MoU. Persistent energy premium steps 0.72 to 0.68 (band 0.06 to 0.07) - the largest test yet of the structural-premium read. US and Iranian negotiators reached a tentative 60-day memorandum Thursday to extend the ceasefire, begin nuclear talks, and take steps to reopen the Strait of Hormuz and restore commercial shipping, and crude finished the month down ~20% from its 2026 peak (its worst month since the COVID crash) - WTI fell below $88 Friday, Brent ~$92.56. But the MoU is unsigned: President Trump said he will make a "final determination" after a White House Situation Room meeting and demanded the Strait be "immediately open, no tolls, for unrestricted shipping". WTI ~$88 still sits well above the <$80-for-30-days threshold, the energy complex only drifted (XOM 146.96, CVX 183.03, XLE 56.95) rather than collapsing with crude - a residual structural bid - and the IEA 1.78 mb/d deficit / summer "red-zone" read is intact, so the SequencedCondition is closer but not met.

PCE: sticky core, soft monthly, oil tailwind. Stagflation risk and Fed independence stress eases 0.83 to 0.82. The named invalidation indicator landed core 3.3% / headline 3.8% YoY - confirming above-target stickiness (the core is the highest since November 2023, far from the <2.5%-for-3-months invalidation leg) - but the in-line-not-hotter annual read, the soft +0.2% m/m core, and the ~20% monthly oil collapse are forward-disinflationary offsets, and the 10Y eased to 4.46% as energy pared its rebound and the interim Iran deal limited the inflation outlook. The binary tell resolved without an upside surprise, so the mean steps down a notch while the higher-for-longer core stays intact ahead of the June 16-17 FOMC.

Defense firms; gold rebounds; AI leads. Iran war rearmament cycle holds at 0.87 +/- 0.04: the Thursday defense tape FIRMED despite the peace-MoU optimism - LMT 537.33 (+1.17%), RTX 178.96 (+1.34%), NOC 559.29 (+1.44%) - the procurement bid holding on the $1.5T FY2027 budget, while the tentative MoU is unsigned and invalidation still requires durable peace IMPLEMENTED plus two quarters of declining DoD outlays. Gold structural debasement bid holds at 0.85 +/- 0.05: bullion rebounded on the otherwise risk-on day - spot ~$4,470, GLD 412.77 (+1.05%), GDX 87.18 (+2.04%) - the structural bid intact as easing yields helped. AI capex sustained but with China decoupling tail risk holds at 0.86 +/- 0.04: chips led the record day - NVDA 214.25 (+0.78%) and AMD 518.09 (+4.55%) - positioning rather than a new demand signal, the China export-control tail unchanged.

Warsh quiet; FOMC the next test. Fed leadership transition policy uncertainty holds at 0.51 +/- 0.09: the April PCE core 3.3% hardens the room-to-cut-versus-higher-for-longer contradiction the new chair inherits, but no Warsh-as-chair policy substance landed and the June 16-17 FOMC is the first substantive test.

Catalyst calendar from here. Whether President Trump signs the 60-day MoU after the Situation Room meeting, or the Gulf strikes escalate. The June 16-17 first-Warsh-as-chair FOMC. The May jobs report the following week.