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@plur_daddy (2026-05-15) argues Xi likely did not make any strong public…

2026-05-15 · 12:02 UTC ·@plur_daddy ·4 min read

Brief

Plur Daddy argues a bullish geopolitical-financial scenario in which China quietly uses its leverage over Iran to secure an agreement that reopens the Strait of Hormuz while extracting concessions from the US. He cites a Reuters report that Washington and Beijing affirmed Hormuz transit should be free and open and interprets China’s position as preferring open flows (given its role as Iran’s chief oil buyer), with Iran potentially playing a timed hardline role to maximize Chinese leverage. He warns that high PPI prints in the US and Japan have reconnected Hormuz risk to inflation and central‑bank policy, raising volatility after the recent rally. Trading-wise he says he’s carrying less risk but retains doubled right‑tail LEAPS, plans to add on pullbacks, and expects a near‑term market boost if tariffs fall and NVDA sales expand to China.

Why it matters

@plur_daddy (2026-05-15) argues Xi likely did not make any strong public commitments; if he had, Chinese official language would be coded and Trump would be loudly publicizing it, yet Trump has been subdued and the NQ sits exactly where it was when the author first posted.

Key details

  • Reuters reported a US–China affirmation that transit through the Strait of Hormuz should be free and open; the author reads this as a signal China prefers Hormuz open and can use its leverage over Iran (major crude buyer and supplier of goods/hardware) to extract concessions from the US.
  • Macroeconomic linkage: recent high PPI prints in the US and Japan have re‑linked Hormuz → inflation → central bank channel, making markets more sensitive to Hormuz disruptions and increasing the odds of volatility after a blistering rally.
  • Trading stance and scenario specifics: the author carries less risk, keeps right‑tail LEAPS that have doubled and will add on pullbacks, wants to reload on AI stocks, and outlines a deal contour where China helps Iran in exchange for US tariff relief, NVDA chip access, token rare‑earth concessions and subtle Taiwan shifts (Jensen's late addition to the trip cited as a signal).
Source evidence

Reading the tea leaves it is looking like Xi did not make any strong commitments. Even if he did it would not be said directly, but I believe there would be coded language in the Chinese official statements, and Trump would be all over the press talking about it. His vibe about it has been more subdued. As I said, it was a possible scenario with good upside convexity, and the NQ is exactly where it was when I posted this, so was a free shot on goal.

From here it gets trickier because we have been in a regime where Hormuz didn't matter because the true earnings flow-through was minimal. That is changing now with the high PPI prints in the US and Japan, as the Hormuz -> inflation -> central bank channel relinks the market to Hormuz. After a blistering rally, the odds of volatility here are growing.

Trump is in a tough spot because Iran views Hormuz as its primary source of deterrence now (over nuclear) and does not want to let it go. The US can force it open through military means but that is a huge undertaking that would not be easy nor fast.

It's genuinely tricky because buying the unwinds has continually worked through this rally. It's difficult to be nuanced on Twitter as the crowd wants decisive views, I will simply say that the up/down feels more balanced than it has been, and I am carrying less risk than I have been over the last few weeks. If the market proves me wrong I am prepared to add back length quickly.

At the same time, can't get too bearish as I am growing in conviction that we are in the foothills of a great bubble and the NQ will be far higher over the medium term. Trade around things as we all must but don't fumble this. The most important thing is not fumbling this. I still have all my right tail LEAPS (which have doubled) and will be looking to add more on any decent pullback. I would also like to reload on AI stocks.

plur daddy (@plur_daddy)

Can Trump save the day on Iran with a China deal?

Posting about geopolitics is the easiest way to instantly look like a moron but I will throw out a highly bullish scenario that has been coalescing for me.

  1. Over the weekend we got a surprisingly hardline counter from Iran, seemingly walking back weeks of progress in the talks. This was chalked up to the split camps with Iran (IRGC vs. civilian gov). What if this was Iran doing China's bidding, to maximize Xi's leverage into the talks? The timing is uncanny. If I were China, this is exactly what I would do. There was no cost to Iran since clearly there were not going to be any attacks right before the Xi summit.

  2. Yesterday we got an article in Reuters that the US and China have agreed that transit through Hormuz should be free and open. Most notably, the US statement was affirmed by the Chinese. This is strong signal on what the Chinese are thinking.

  3. What do the Chinese want? You can make a strong case either way. The bearish view is that China wants Iran to control Hormuz because then they have de facto control over it. They can use that to isolate countries diplomatically. Iran controlling Hormuz represents a massive weakening of the US naval guarantee and imperial prestige. And if it spirals out into a full on ground war, that massively sucks US resources and opens up The bullish view is that China needs the spice to flow, and anything that negatively impacts global growth is bad for them as the world's factory. The damage to the US interests has already been done but a spiraling energy crisis could get very bad for China. Also Iran's geopolitical priorities (such as isolating Israel) are different from China's.

  4. Overall I've come to the conclusion that China prefers for Hormuz to be open and free, but they want to max extract from Trump in exchange for helping out. Xi gets to tout a big diplomatic win. Of course China doesn't have infinite leverage over Iran, but they have meaningful influence given they are the main buyer of their crude oil and thus the source of funds, and also of key goods and military hardware, and other forms of support.

  5. You can see the contours of a deal here. China helps with Iran, and throws in other token issues like rare earths. US drops tariffs (which have been weakened by the SCOTUS anyways), gives them NVDA chips, and perhaps some subtle shifts on Taiwan. Note that Jensen was not going on the trip, and then was added at the last minute. This is signal that his presence was specifically requested by China.

  6. If this deal comes together, we have the combination of 3 bullish events for the equity index at once. We have Hormuz reopening. We have tariffs being dropped. We have NVDA expanding sales into China. Put the geopolitics of the AI race aside, because clearly this is a massive own goal from that perspective, but I'm focusing on how the market is going to respond. This is a scenario, not a certainty, but there is a lot of logic to it. It's a win-win on both sides. It would be tremendously bullish.

— https://nitter.net/plur_daddy/status/2054551931939352806#m