Futures Slide As Tech Tumbles, Korea Crashes

US equity futures are sharply lower as a Semis/South Korea-induced selloff has spread globally slamming tech stocks and pushing SpaceX 3% lower and below its first day of trading price of $150. Nasdaq stocks lead sentiment and early trading lower with AI cost concerns back in focus, as Bloomberg notes that traders are pointing to a South Korean media report we first highlighted at 8pm last night, saying SK Hynix is slowing expansion of AI memory chip production and shifting emphasis to commodity DRAM. As of 8:00am S&P futures were -1.3%, and Nasdaq futures tumbled 2.7%, both near session lows. In premarket trading, Intel and Micron led a broader decline among chipmakers while SpaceX fell 4.3%, below its $150 initial trade price. Chinese equities in Hong Kong entered a bear market. Mag7s are dragging the indices lower with MSFT / telecom the safety valve. In Seoul, chip giants SK Hynix Inc. and Samsung Electronics Co. slumped more than 10%. According to JPM, today's sell-off "may reflect anxiety into MU’s print on Weds as well as the levered ETF mkt structure." Bonds are operating as a safety haven as the yield curve bull steepens, and USD is bid. Commodities are seeing further declines in Energy as US / Iran discussions continue and precious metals are getting hit due to USD (gold) and AI / Tech (silver). Ags are mixed. Today’s macro data focus is on Flash PMIs, ADP’s weekly employment print, and regional Fed activity indicators. 

In premarket trading, chipmakers, memory stocks and other AI-related firms slide during the broader selloff. Decliners include Micron (MU -7%), Intel (INTC -6%), AMD (AMD -6%) and CoreWeave (CRWV -5%).

• Nvidia leads most of the Magnificent Seven group lower (Nvidia -2%, Tesla -2%, Meta -0.6%, Microsoft +1%, Apple -0.3%, Amazon -0.6%, Alphabet -2%,)
• Avis Budget (CAR) climbs 4% as the rental car company entered into a settlement agreement with Pentwater Capital Management and affiliated persons to resolve a lawsuit seeking recovery of short-swing profits, the company said in a filing.
• Best Buy (BBY) falls 3% after the company said Matt Bilunas will step down as CFO and depart the retailer at the end of July after 20 years, including seven years as CFO.
• Edgewell Personal Care (EPC) rises 9% after people familiar with the matter said the maker of Schick razors has rejected an unsolicited takeover offer from private equity firm Yellow Wood Partners.
• IBM (IBM) gains 4% as JPMorgan upgrades to overweight and as the company announced it has joined the OpenAI Daybreak Cyber Partner Program.
• Primoris Services (PRIM) sinks 35% after the infrastructure construction company cut its adjusted earnings guidance for the full year.

In other corporate news, Oracle reduced its workforce by 21,000 employees in the past 12 months, a wider scale than previously known, including those whose jobs were eliminated by the use of AI. SoftBank’s founder said there’s little merit to building data centers in space, while acknowledging that AI competition is intensifying. 

In an ugly session that started with a rout in South Korea, the Kospi finished down 10% while Nasdaq 100 contracts lose 2.5% and are struggling to find a floor. European stocks are not immune with the Stoxx 600 down 1%. Other assets have been caught up in the equity selloff with spot silver down over 4% and Bitcoin dropping 3%. Memory stocks, many of which are riding triple-digit gains this year, recorded some of the steepest losses. SpaceX was poised to fall below its first-day opening price of $150. 

In Seoul, chip giants SK Hynix Inc. and Samsung Electronics Co. slumped more than 10%. Intel Corp. and Micron Technology Inc. led a broader decline among chipmakers in US premarket trading, while SpaceX fell 4.3%. Chinese equities in Hong Kong entered a bear market. 

BofA equity derivative strategists said the Nasdaq 100’s heavy concentration in technology stocks has fueled its outperformance versus the S&P 500 in both returns and volatility. That’s pushed the Nasdaq’s Bubble Risk Indicator (BRI) closer to a key level which often signals elevated near-term tail risks. Meanwhile, already jittery tech sentiment and volatility could turn on a dime after Micron’s earnings tomorrow. The chipmaker has been the largest contributor to S&P 500 gains this year, while technology stocks make up each of the index’s 10 biggest drivers of returns.

“Some of the recent performance in stocks has been highly speculative, fueled by a passion from retail investors for short-term gains,” Mark Dowding, chief investment officer for fixed income at RBC BlueBay Asset Management, told Bloomberg TV. “We may not like it this morning, but actually it’s healthy behavior.

The market selloff “is largely a blip, but it is tapping a real and more fundamental anxiety,” said Amanda Lyons, head of research at Energy Group Capital. “The blip part: it is a single piece of local trade press, landing into a jumpy tape and a day before a nervous Micron print, on a trade that is about as crowded and as priced-for-perfection as anything in the market.

One regular buyer of stocks, the corporates themselves, are exiting for the time being. Goldman’s Vani Ranganath estimates approximately 65% of companies have entered their blackout window ahead of 2Q results.

For the AI trade, attention is now shifting to Micron’s quarterly results on Wednesday after the stock rallied more than 300% since January.

“The real test is Micron,” said Amanda Lyons, head of research at Energy Group Capital. “I would watch the rate of change in pricing and any change to capex or bit-supply guidance far more closely than the headline beat or miss.”

Fed’s Goolsbee said he remains concerned about inflation and questioned whether all the factors driving prices up are temporary. US Trade Representative Jamieson Greer kicked off talks with Indian officials this week as both sides stepped up efforts to resolve the remaining differences holding up an interim trade agreement.

In other assets, currency traders are on high alert for intervention after further weakness in the yen. Gold slides, with Deutsche Bank following Goldman in cutting price forecasts for the metal.

European equities fell sharply at the open on Tuesday: the Stoxx 600 falls 1.1% to 632.10, with mining and technology shares leading declines while health care and food beverage stocks are the biggest outperformers. Here are the biggest movers Tuesday:

• Porsche shares rise as much as 1.8%, erasing early declines after the German luxury carmaker confirmed its forecast for the 2026 financial year
• Basic resources stocks are falling the most in the Stoxx Europe 600, with the sector index down as much as 4.6%, as metals fell across the board on inflationary concerns and progress of peace talks
• Hermes shares fall as much as 2.9%, extending its drop to 11% over the past three sessions, after HSBC downgraded its rating on the Birkin bag maker to hold from buy
• Epiroc drops as much as 5.6%, the most in three months, as UBS downgrades the Swedish mining-equipment maker to sell from neutral and says its valuation “has gone too far”
• Signify plunges as much as 18% after the Dutch lighting manufacturer announced new medium-term targets and an updated dividend policy that analysts say would mean big cuts to shareholder payouts
• Telecom Plus shares plunge as much as 33%, sending shares to their lowest level since 2012. The company’s new five-year plan will see it invest with the ambition of improving growth and the quality of earning
• Dometic declines as much as 11%, the most since March, with Danske Bank cautioning its upcoming 2Q report will be held back by tough US markets for its RV and marine divisions

Earlier in the session, Asian stocks fell reversing the previous session’s gains as a selloff in technology shares weighed on regional markets. The MSCI Asia Pacific Index dropped as much as 3.6%, with SK Hynix and Samsung Electronics among the biggest drags. Most of the region’s major markets were in the red, led by declines in South Korea, Japan and China. A sub-gauge of information technology shares slid as much as 6.1%, after rallying 2.3% on Monday. South Korean stocks tumbled 10% from a record high as investors dumped chip heavyweights on concerns that the rally has become overstretched, prompting the local exchange to briefly halt program selling. Japanese equities slipped as some AI-related stocks fell following a selloff in US tech megacaps.

“I think our Asian markets are tracking a rotation already underway in the US rather than a fresh risk-off move,” said Billy Leung, an investment strategist at Global X Management. “Hyperscalers have been leading the pullback on AI capex concerns and negative cash flow concerns.”

In FX, the Bloomberg Dollar Spot Index gains 0.2% although the yen takes top place among the G-10 currencies, climbing a few pips against the greenback. The Aussie dollar is the weakest, falling 0.7%.

In rates, treasuries are richer across the curve with gains led by front-end and belly, as oil steadies and stock futures slump after a selloff in Korean chipmakers stoked concerns about the artificial intelligence trade. US yields richer by as much as 4bp across front-end and belly with 2s10s and 5s30s spreads steeper by 1bp and 3bp on the day; 10-year is around 4.48%, 3bp richer on the day with bunds and gilts in the sector outperforming by around 1bp: German and UK 10-year yields falling 3 basis points each. SpaceX shares fell to the lowest level since their first day of trading ahead of a potential jumbo investment-grade bond sale that could be announced Tuesday. Focal points of US session also include June preliminary PMIs and a 2-year note auction. This week’s Treasury auctions begin at 1pm New York time with $69 billion 2-year note sale, to be followed by 5- and 7-year notes Wednesday and Thursday; WI 2-year yield near 4.20% is ~13bp cheaper than the May auction, which stopped on the screws.

In commodities, Brent crude futures fall 1% to around $77 a barrel. Other assets have been caught up in the equity selloff with spot silver down over 4% and Bitcoin dropping 3%.

Today's US economic data calendar includes weekly ADP employment change (8:15am), June Philadelphia Fed non-manufacturing activity (8:30am), June preliminary S&P Global US manufacturing and services PMIs (9:45am) and Richmond Fed manufacturing and business conditions indexes (10am). Fed speaker slate empty for the session.

Market Snapshot

Top Overnight News

• Korea's KOSPI plummeted 9.99%, its steepest drop in more than three months, on Tuesday as overseas investors sold chipmakers following regulatory signals that the sector's rally had gotten overheated. RTRS
• South Korea’s retail investors are ploughing profits from a world-beating stock market into an overheated property sector, confounding government efforts to cool real estate demand. FT
• Iran said $12 billion of its frozen funds were set to be released as part of ongoing talks with the US, with the two sides broadly signaling progress in negotiations to formally end their war. BBG
• The Trump administration and Qatar have warned the EU that it faces a gas supply crunch that would force up prices unless Brussels rewrites planned rules on methane emissions. BBG
• The yen erased losses after Japanese Finance Minister Satsuki Katayama said she spoke with Scott Bessent and that they agreed that “bold action” may be needed. Traders are on high alert for intervention. BBG
• Euro-area business activity shrank less than anticipated in June. S&P Global’s Composite PMI rose to 49.5 from 48.5, topping estimates but remaining below the 50 mark that indicates growth. BBG
• The UK’s economy contracted for a second consecutive month, with its PMI slipping to a 14-month low. BBG
• The Fed’s Austan Goolsbee told American Public Media’s Marketplace he remains concerned about inflation and questioned whether price pressures will persist after temporary shocks have dissipated. BBG
• TSLA logged a more than twofold jump in European monthly sales in May as Elon Musk’s electric-vehicle maker continues to rebuild strength in a region where Chinese rivals are gaining ground. WSJ
• US Senate passes bipartisan affordable housing bill.

Iran War Latest 

• Iran's Foreign Ministry Spokesperson Baghaei said "if the other party does not fulfill its obligations, we should not be expected to unilaterally fulfill our obligations", Iran International reported.
• Iran's Foreign Ministry Spokesperson said defensive capabilities and missiles will never be a topic of discussion. US commitment regarding Lebanon is completely clear.
• Iran's Foreign Ministry Spokesperson said quadrilateral talks were stopped early in Switzerland due to the witnessing of US threats. Thereafter, exchanges were via a mediator, Mehr reported.
• Iran's Foreign Ministry Spokesperson said Iran has no plans to let IAEA inspectors visit nuclear sites targeted in the conflict.
• Iranian President, ahead of trip to Pakistan, said Iran is seeking the full implementation of the clauses that have been signed within the framework of international law, Nour News reported.
• Iranian Parliament Speaker Ghalibaf said the Strait of Hormuz will be administered by Iran according to international law.
• Iranian President Pezeshkian said in phone call to Turkish President Erdogan on Monday that Iran is ready to pursue diplomacy as per international law.
• Iran Central Bank Governor said Tehran is not obliged to purchase US agricultural goods under current agreements, and states that remaining frozen assets can be used to buy non-sanctioned goods beyond essential items, according to Tasnim.
• "Iranian Foreign Minister Abbas Araghchi will visit Baghdad next Sunday", Al Mayadeen reported citing sources; The meeting will include a briefing on the progress of the talks in Switzerland and the preparations.
• Iranian Foreign Ministry said "America has issued the necessary license for the sale of Iranian oil and petrochemical products", Al Jazeera reported.
• Iranian Ambassador to the UN said any further attacks on Lebanon would be a red line.
• Iranian Ambassador to the UN said Hormuz talks will be held with Oman.
• Iranian Ambassador to the UN said there has been good progress in negotiations with the US.
• "Sources indicate that the Iranian Foreign Minister [Araghchi] will hold separate talks with Pakistani officials", Al Hadath reported.
• Oman's Foreign Minister said Iranian negotiators reaffirmed their commitment to international law and to ensuring safe, toll-free passage through the Strait of Hormuz.
• Oman's Foreign Minister meets with Iranian Parliamentary Speaker Ghalibaf, with the officials discussing regional stability and Strait of Hormuz.
• Shipping data cited by Al-Arabia showed at least 20 ships have crossed the Strait of Hormuz in the past 24 hours.
• One person reportedly killed by Israeli gunfire in a southern Lebanese town, according to Lebanese Civil Defense and a security source - timing unclear.
• Senior US official tells Al Jazeera that talks between Lebanon and Israel will continue to advance comprehensive peace and a security agreement between the two countries.
• Israeli National Security Minister Ben-Gvir said Israel must act alone against Iran's nuclear program and must maintain military freedom in Lebanon, hopes withdrawal from southern Lebanon will not happen and will do everything to convince PM Netanyahu.
• Israel military shells and fires at Khan Yunis in Gaza, according to Fars News Agency.
• Israel's PM, Defence Minister and Military Chief said Israeli military will continue to act to neutralise threats to soldiers and citizens, demolish terrorist infrastructure, and maintain security zone in southern Lebanon, according to a joint statement. Israel's leadership reaffirms that the security of Israeli citizens and IDF troops will remain its overriding priority, with no room for compromise.
• Israeli forces reportedly violate Syrian territory, conducting house searches in southern outskirts of Quneitra governorate.
• US-Iran technical talks in Burgenstock had a "breakthrough", talks proceed seemingly in a positive direction, Journalist Mallick reported.
• US President Trump, on Israel and Lebanon, said "we'll take a look at it"; said he gets problems solved fast, including with Israeli PM Netanyahu.
• US President Trump said if Iran doesn't stick to agreement, he will do what he has to do. As long as Iran respects us, we are not going to have any trouble. Could restart the blockade quickly if needed.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were subdued with initial choppy price action following the mixed performance stateside, where participants reflected on the progress in US-Iran talks, but communication stocks and the Nasdaq Comp underperformed. KOSPI, -6.9%, led the sell off, moving to a test of 8.5k to the downside. ASX 200 traded little changed for most of the session amid a lack of major fresh catalysts overnight and as the strength in financials and defensives offset the losses in the tech and commodity-related sectors. Nikkei 225 swung between gains and losses with the index briefly climbing to a fresh record high before reversing course, and is on track to snap its 8-day win streak. Hang Seng and Shanghai Comp conformed to the lacklustre mood in the region and the absence of any major fresh catalysts, with the Hong Kong benchmark pressured by losses in miners, and digital platforms stocks amid a rotation out of hyperscalers into semiconductors.

Top Asian News

• China's MOFCOM announces measures to stimulate the auto after-sales market; to support the integration and upgrading of the car rental industry.
• Japanese Chief Cabinet Secretary Kihara said will take appropriate action against FX moves if needed.
• Canada awarded Australia a USD 1.75bln contract for its over-the-horizon radar system, boosting Arctic early warning capabilities, and which marks Australia's largest ever defence export.
• Japanese S&P Global Composite PMI Flash (Jun) 52.50.
• Japanese S&P Global Manufacturing PMI Flash (Jun) 54.9 vs. Exp. 54.5 (Prev. 54.5).
• Australian S&P Global Manufacturing PMI Flash (Jun) 51.2 (Prev. 50.7).
• Blackstone (BX) President and COO Gray told Nikkei that the firm plans to invest USD 30bln in Japanese data center development over the next three to five years.

Large losses in Kospi (-9.9%) crept through to Europe (STOXX 600 -1%) with EU tech leading the losses. No specific headline driver for overnight losses in a typical non-conflict risk-off move (stocks/oil down, fixed/havens bid). As you would expect, South Korean heavyweights Samsung and SK Hynix (which account for over 50% of the index) led the declines, both falling 12%. Some analysts point out the mechanical rebalancing from leveraged ETFs exacerbated losses with a large share of the vehicle used to gain Kospi exposure coming as leveraged ETFs. Others point out positioning into Micron earnings due after the close on Wednesday. Given the above, Tech is the worst sectoral performer (bar Basic Resources), the sector posting losses in excess of 3%. The highest weighted chip constituents ASML -5% (Highest weighted in Europe+Tech Sector), Prosus -2.1% and STMicroelectronics -7.3%. For Basic resources, the sector has been dragged lower by declines in metals (Gold -2.5%, Silver -5.5%).

Top European News

• German Chancellor Merz outlines his support for a capital-based pension system, saying it "strengthens the system".
• German Chancellor Merz confirms plan to push forward with all pension reform proposals.
• Britain’s biggest business lobby group, CBI, said UK firms are not seeking another Brexit referendum and have little interest in rejoining a customs union with the EU, according to FT.
• UK's Burnham will seek to soothe markets as he marches on number 10 and will use a speech next week to pledge to grow the economy and commit to Labour's fiscal rules, according to The Times. Burnham is considering Miliband, Streeting and Mahmood for Chancellor.

FX

• G10s are entirely lower against the Buck (bar JPY), as USD attracts haven demand in a textbook risk-off market move (stocks/oil down, fixed/havens bid), signalling the market is gradually moving away from geopolitical trade. As you would expect, Antipodeans underperforms, Aussie fares the worst as metals suffer from the strong Buck, while JPY is the only currency stronger vs the USD after a sharp 30pip move lower as it sits towards 2024 highs.
• DXY firmer by 0.2% as it attracts haven demand amid tech weakness in Kospi/NQ (see equities at 09:25 BST for analysis). In terms of domestic newsflow, Fed's Goolsbee said services inflation was “a little disturbing”. The data docket is light but begins to pick up today (ADP weekly + PMIs due) heading into Thursday's GDP revisions and PCE data. DXY surpassed Friday’s high of 101.12, now looks to the May peak just below 102.
• JPY continues to whipsaw around multi-year lows against the Buck, with USD/JPY towards 161.50-162. Japanese officials continue attempts to bolster the Yen, but continue unsuccessful with the Greenback bid. Overnight, Japanese Finance Minister Katayama confirmed she spoke with US Treasury Secretary Bessent on Monday. Elsewhere, APAC trade saw stronger flash PMI data and mixed results of the latest 5yr JGB auction.
• GBP is weaker and tracks the firmer Buck with participants awaiting further updates from a likely incoming Burnham premiership. Despite Gilts continuing to outperform peers on optimistic Burnham reporting (Streeting added to Chancellor candidates/Burnham said to announce commitment to Fiscal rules), Miliband still in the picture for Chancellor is viewed by Sterling traders as an unwelcome option. As such, GBP awaits further press reporting and tracks the Buck with Cable remaining at 1.32, EUR/GBP unchanged. ING this morning writes “Regardless of politics, we keep favouring higher EUR/GBP on the back of a dovish view (no hikes) on the Bank of England”. EZ/UK PMIs were mixed (see fixed income for analysis), EUR saw fleeting strength on the French figure, which indicated a cooling of cost pressures; a move which proved fleeting as the German services and composite metric cooled (Some respondents' answers did not eclipse the signing of the US-Iran MoU).

Fixed Income

• A firmer start for fixed income as the complex benefits from the softer energy environment, though the influence of this has diminished amid recent updates from Iran, and the weak risk tone as the KOSPI closed lower by 9.9% and has weighed on European price action, with the European Tech sector lower by over 3%.
• USTs firmer by seven ticks in 109-06+ to 109-14+ confines, towards but just off highs as the mentioned energy move off lows has seemingly formed a ceiling in fixed or now at least. Ahead, we have the region’s Flash PMIs before 2yr supply. A tap that should benefit from a number of factors.
• Bunds firmer by just over 10 ticks and are just under that from the 126.74 high. Initially moving on the above, in-line with peers and with no real reaction to the latest pension reform commentary.
• The main updates, aside from the APAC moves, today have been Flash PMIs for June. Firstly, France’s figures sparked some modest EGB pressure as the components all came in firmer than expected. Internal commentary pointed to a possible peak in price pressures. Thereafter, Germany was below consensus but caveated by the majority of responses coming in before the MoU signing. Nonetheless, encouragingly, the series showed that inflationary pressures had started to ease off.
• Finally, the EZ figure was mixed and again most responses came before the MoU. But, it already showed that lower energy prices were filtering through to businesses with inputs cost rates and selling price inflation moving lower in June. Again, pointing to a potential price spike peak.
• Overall, the data chimes with those who believe that expectations for further ECB tightening are overdone. A point arguably added to by the pertinent commentary from President Lagarde on Monday. As such, upcoming hard and survey data will be scoured for confirmation that prices may have peaked which, alongside the stagnation in activity, may well see a dovish repricing in the period ahead.
• Gilts echoed the above, higher by 35 ticks at best and to a new WTD high of 89.19. Today’s strength also comes from reporting that Burnham will next week give a speech outlining his commitment to the fiscal rules; however, The Times briefing notes that Miliband remains in consideration to be Chancellor, a point that potentially caps any further upside.
• PMIs for the region were weak, though price commentary was also welcome and chimes with the view that the BoE is on hold for the foreseeable.
• The Netherlands sold EUR 1.98bln vs exp. EUR 1.5-2bln 3.50% 2056 DSL Bond: avg. yield 3.52% (prev. 3.51%).
• Japan sold JPY 1.9tln 5yr JGBs; b/c 3.11x (prev. 3.22x), average yield 1.905% (prev. 2.024%).
• Germany sells EUR 3.807bln vs exp. EUR 5bln 2.50% 2028 Schatz: b/c 1.90x (prev. 1.58x), average yield 2.57% (prev. 2.59%), retention 23.86% (prev. 22.80%)

Commodities

• Geopolitical newsflow remains focused on the US-Iran talks, and the sometimes mixed commentary filtering out from the respective officials. As it stands, there does not appear to be any cause for concern, with President Trump and VP Vance both sounding positive about the initial talks; the Iranian side also said good progress has been made. However, looking between the lines reveals some contradictory remarks. On Monday, VP Vance said that Iran would allow the IAEA to inspect nuclear facilities. However, Iran’s Foreign Ministry Spokesperson stated that there are no plans to let inspectors visit nuclear sites targeted in the conflict; the nuance of “sites targeted in the conflict”, potentially offers some hints to the inner workings of the proceedings between the US and Iran. Do note that the Iranian President is visiting Pakistan today.
• The biggest risk to the talks is Israeli actions in Lebanon. Several high-ranking Israeli officials have suggested that Israel will continue its military operations in Lebanon. Comments which come ahead of the US-mediated Lebanon-Israel talks, which are set to begin today. A confab which spans over a couple of days, and focuses on finalising “pilot zones” within southern Lebanon and long-lasting peace.
• Crude benchmarks traded sideways for much of the APAC session, before then moving to lows heading into the European cash open. Since, WTI and Brent have bounced a touch off lows, to currently trade towards the mid-point of the days range. In more detail, WTI Aug’26 (-0.5%) sits within a USD 72.48-74.45/bbl range and Brent Aug’26 (-0.6%) holds within a 76.43-78.23/bbl range.
• Spot gold (-2%) extends lower amidst the continued hawkish mood in markets, which have kept the USD elevated. For gold specifically, a number of sell-side banks have cut their price forecasts for spot gold. On Monday, Goldman Sachs cut their year-end target to USD 4,900/oz (prev. USD 5,200/oz). Its model focused on the Fed, whereby every 50bps worth of easing adds c. USD 120/oz of support to spot gold. Most recently, Deutsche Bank cut its gold forecast by 22%. Today, the yellow metal holds at the bottom end of a USD 4,091 to 4,198/oz range; it may find support at a recent low of USD 4,023/oz, if the pressure continues.
• Base metals follow the downbeat risk tone seen across broader markets. 3M LME copper is lower by c. 1.8% and holds within a USD 13,396.35-13,671/t range.
• Rabobank lowers its Q3 Brent price forecast to USD 79/bbl (from USD 103/bbl), and Q4 to USD 78/bbl (from USD 93/bbl); sees Brent averaging USD 74.50/bbl in 2027, and USD 71/bbl in 2028.
• US Department of Agriculture reported a new case of screwworm in a Texas goat, taking total number of domestic detections to 16 cases.

Central Banks

• Fed's Goolsbee (2027 voter) said inflation is well above target and going the wrong way, adds need evidence this inflation is temporary and services inflation is a little disturbing. said:. We haven't had stagflation shock, and the job market has been stable. Fed Chair Warsh's approach is let's have less speculation about rates, less forward guidance, while Goolsbee said he is pretty sympathetic to that approach.
• ECB's Kazimir said they are data-dependent, but the direction for policy is clear.
• ECB's Lane said that inflation risks being above 2% for some time; increase in energy prices is expected to keep inflation well above target into H1'27. Remains attentive to both sides of the outlook. Energy shock is feeding through to broader inflation. labour market resilience, solid household balance sheets and public investment should support activity.
• ECB's Escriva said service-sector inflation is showing very strong persistence.

Geopolitics

• Russia and Ukraine may swap Prisoners of War soon, TASS reported.
• Ukraine's capital Kyiv issues an air raid alerts and authorities ask people to seek shelter.
• North Korea leader Kim Jong-un said North Korea will further assert its status and role as a nuclear power, adds will accelerate broader plans, enhance nuclear arms technology and develop water deterrence capabilities. accused US and South Korea carrying out the most dangerous provocations through nuclear war machinery. To accelerate building of 10,000-ton strategic guided missile cruiser.
• China's Beihai Maritime Safety Administration announced that parts of the Beibu Gulf will be closed to navigation due to military training from 11:00-12:00 Beijing time on June 23rd.

US Event Calendar

• 9:45 am: Jun P S&P Global US Manufacturing PMI, est. 54.6, prior 55.1
• 9:45 am: Jun P S&P Global US Services PMI, est. 51.1, prior 50.7
• 9:45 am: Jun P S&P Global US Composite PMI, est. 52.1, prior 51.5
• 10:00 am: Jun Richmond Fed Manufact. Index, est. 8, prior 13

DB's Jim Reid concludes the overnight wrap

When I started in financial markets in 1995, Alan Greenspan was a towering presence and arguably the first Fed Chair to become a global rockstar. At that point, he was eight years into what would become a 19-year tenure as Chair of the Federal Reserve. However, my own memories pale in comparison to those of my colleague Peter Hooper. Peter joined the Fed in 1973, later moving to DB in 1999, and worked closely with Greenspan for over 50 years.

Peter has written a thoughtful remembrance following Greenspan’s passing yesterday at the age of 100. Drawing on first-hand experience as a colleague at the Federal Reserve and later recruiting him to be an adviser at Deutsche Bank, Peter highlights Greenspan’s intense curiosity, instinct for data and markets, and ability to identify structural shifts such as the 1990s productivity boom. In many ways, Greenspan was ahead of the data—something Kevin Warsh is attempting to emulate today—so there are clear parallels between the eras. It is a personal and insightful tribute from someone who had a ringside seat throughout Greenspan’s remarkable career, and it is well worth reading in full on the DB Research Institute site.

Moving onto the remembering another landmark in history, 10 years ago today, those of us on this island marched to the polls to decide whether we wanted to stay in the EU or not. Ironically, I had a long weekend planned in the French Alps and left for the airport immediately after voting and arrived to a fierce thunderstorm in the mountains and news that the UK had voted to leave. It all felt fairly biblical and instead of enjoying a break I spent all night and the next 3 days glued to my work laptop.

To mark the anniversary Sanjay and Shreyas have published a piece entitled "Brexit 10 years on: What's worked, what hasn't, what's next?" See it here ahead of our first in-person Deutsche Bank Research Institute event on Thursday reviewing the topic and all things UK related given the huge events of recent days. We may still be able to squeeze you in.

The irony around the anniversary is that the shadow of Brexit partly claimed another UK Prime Minister yesterday with Keir Starmer resigning and heralding in what will be the 7th Prime Minister in that subsequent decade. The only viable candidate now seems to be Andy Burnham, who won last week’s by-election in Makerfield, after rival challenger Wes Streeting endorsed him yesterday to be leader. So, although nominations for the Labour leadership are set to open on July 9, currently it looks highly likely that Andy Burnham is the only candidate who would get more than 20% of MPs backing him to stand, meaning that a formal contest would be avoided. That’s reminiscent of when Labour last changed leaders in government back in 2007, when Chancellor Gordon Brown took over from Tony Blair without a contest. Under this timetable, Burnham could become the PM as soon as mid-July.

Against this backdrop, UK assets responded relatively positively, as it looks like a period of extended uncertainty and a potential summer leadership contest have been removed. Speculation that Streeting may get the job of Chancellor was seen as a positive as well given his more moderate tendencies.  The pound sterling was the strongest performing G10 currency on the day, up +0.14% against the US Dollar, whilst yields on 2yr (-4.5bps) and 10yr (-3.4bps) gilts moved in line with their European counterparts inspite of the political upheaval. Moreover, the FTSE 100 was up +0.72%, again similar to the STOXX 600’s +0.58% advance.

Another G7 country in the news is Japan and this morning the currency is fairly flat after seeing a strong spike yesterday afternoon London time after it got within a whisker of hitting 40-year lows. It hit 161.93 versus a low of 161.96 in July 2024. Beyond that you have to go back to December 1986 to see weaker levels. There was speculation over imminent BoJ intervention with JNN reporting an online emergency meeting between Finance Minster Katayama and US Treasury Secretary Bessent yesterday. This meeting has been confirmed by Katayama this morning, who stated that the US and Japan are aligned on FX policy. This morning it's hovering remarkably quietly at 161.60 given all the noise.

Less quiet are Asian equities which are falling on tech weakness. The KOSPI (-6.41%) is leading the declines, followed by the Nikkei (-1.66%), Hang Seng (-1.16%), Shanghai Composite (-0.37%) and S&P/ASX 200 (-0.26%). S&P 500 (-0.66%) and NASDAQ 100 (-1.19%) futures are also weak with the tech sell-off dominating.  

Early morning data showed that Japan's private sector activity expanded at its fastest pace in three months in June, driven by strong manufacturing output and a return to growth in the services sector, although firms faced the sharpest rise in input costs in nearly four years. The S&P Global flash Japan manufacturing PMI rose to 54.9 in June while the services PMI climbed to 51.8 from 50.0, indicating a renewed expansion in business activity after stagnating in May. As a result, the flash composite PMI, advanced to 52.5 from 51.1, marking the strongest pace of overall private-sector growth since March.

This all follows mixed markets yesterday, as tech worries overpowered investor optimism about progress in the US-Iran negotiations over the weekend. So that meant the S&P 500 slipped -0.37%, with the Nasdaq (-1.32%) and Magnificent 7 (-2.17%) posting even steeper losses, dragged down by declines by Alphabet (-4.99%) and Amazon (-4.75%).

Those equity losses were compounded by the latest rise in Treasury yields yesterday, as investors continued to price in a more hawkish Fed. Indeed, yesterday saw markets price in a 98% chance of a rate hike by the September meeting (up from 93% on Friday), and the 2yr yield (+4.8bps) closed at a 16-month high of 4.23%. Meanwhile, the 10yr yield was up +5.5bps to 4.51%, and significantly, the 10yr real yield (+8.0bps) hit a one-year high of 2.26%. That rise in real yields was something Henry looked at in a note yesterday (link here), exploring why markets haven’t rallied as much as might have been expected given the US-Iran deal and the slump in oil prices in the last two weeks.

Speaking of the Iran war, there were fresh signs of progress in the negotiations, with Vice President JD Vance saying that the weekend talks were “very, very good”. That follows comments from the Iranian side, who had previously said in the small hours of Monday that there’d been major progress to end the war in Lebanon. Moreover, the US issued a 60-day sanctions waiver to allow Iran to sell its oil on the international market, which was seen as one of Tehran’s demands for implementing last week’s interim deal. So that backdrop saw oil prices come down, with Brent crude (-3.31%) closing at a 3-month low of $77.90/bbl, whilst WTI (-2.32%) also fell to $74.82/bbl.

Turning back to Europe, ahead of this morning's flash PMIs, ECB President Lagarde said yesterday that she saw no more need for the ECB to have a “forceful response” to the Iran War. In comments to lawmakers, Lagarde said she saw inflation returning to target over the medium term, saying that the ECB saw “no evidence yet of de-anchoring of inflation expectations or second-round effects” that warrants a “more forceful policy response at this stage.” This contrasted with some of the more hawkish messaging from the ECB last week, which saw markets dial up their conviction of further tightening this year.

Those comments supported a rally in European government bonds, with yields on 10yr bunds (-3.4bps), OATs (-3.4bps) and BTPs (-4.3bps) all coming down. And there were larger declines at the front-end, with the 2yr German yield down -4.4bps as investors dialled back the likelihood of aggressive ECB rate cuts this year. Indeed, markets were pricing 32bps of ECB hikes by the December meeting at the close, down -4.5bps on the previous day. Otherwise, equities also rose, with the STOXX 600 (+0.58%) making a fresh gain, while the DAX (+0.62%) also rose. The CAC (-0.25%) struggled again and has been struggling this year largely due to its outsized luxury stocks weighting.  

To the day ahead now, we’ll get June flash PMIs for the US, UK, Eurozone, Germany, and France. We'll also see US June Philadelphia Fed non-manufacturing activity, Richmond Fed manufacturing index, business conditions, France June business confidence and May retail sales. Earnings include FedEx and Carnival.

Tyler Durden Tue, 06/23/2026 - 07:59

Sheer Madness: UK Tests Long-Range Missile For Ukraine To Bomb Moscow

Ukraine is making it clear they are seeking to "bring the war to Russia" - and this is what's behind the recent series of massive Ukrainian drone strikes on Moscow, which has wreaked havoc particularly on energy refineries, and air travel for the region. That Ukraine desperately wants to gain back what leverage they are able to is fully understandable, however, that NATO is backing such actions against a nuclear-armed superpower constitutes madness. 

Aside from covert targeting assistance, the UK is taking things in a more overt direction, having reportedly just tested missiles with a range of 300 miles which is intended to be sent to Ukraine's military. 

Illustrative file image

The British missile platform has the capability of delivering 500-pound warhead to Moscow.

The Telegraph offers some further details regarding context to the major Ukraine support program in the following:

The Ministry of Defence (MoD) challenged firms to build long-range strike weapons that can fly at more than 370mph, cost about £400,000 each and can be built at a pace of 20 a month.

Some 27 bids from industry were made with Dragon’s Den-style pitches held last February, before six UK companies were awarded contracts worth around £5m each to design prototypes for testing in just seven months.

By last December, only three suppliers remained: MBDA UK, which makes the Storm Shadow stealth missile, MGI Engineering, a UK small or medium-sized enterprise (SME) with a background in Formula 1 technology, and Rotron Aerospace, another UK SME with a history of working with the MoD.

And the publication confirms that "New systems that can attack targets more than 300 miles away have been tested at a range in the Hebrides, with further trials taking place in the UK over the coming months."

For missiles of this range and power, this is a relatively cheap price tag, and can apparently be rapid-produced at that.

UK Armed Forces Minister Louise Sandher-Jones has said the new missiles are intended to "complement" the Storm Shadow cruise missiles London sends to Ukraine.

"The UK stands shoulder-to-shoulder with Ukraine, and we will continue to provide the support it needs to defend itself against Russian aggression," she stated. "Project Brakestop shows what happens when we combine that commitment with the talent and ingenuity of British industry."

Ukraine has in tandem all along been advancing its domestic-developed long-range drones:

The open and brazen admission that these future systems could soon be use to directly target the Russian capital would be an insane escalation by NATO. Once NATO and Western systems begin blowing up buildings in Moscow, suddenly direct Russian military retaliatory action against Europe gets much closer to becoming a reality. Again, this is sheer madness and lunacy by some of Europe's most hawkish leaders.

Tyler Durden Tue, 06/23/2026 - 07:45

AfD Co-Leader Demands Ukraine Pay Reparations To Germany

Authored by Andrew Korybko,

Europeans and especially Germans have borne enormous costs to perpetuate the Ukrainian Conflict while receiving absolutely nothing of tangible benefit in return.

AfD co-leader Alice Weidel responded to Chancellor Friedrich Merz’s proposal to grant Ukraine associate membership in the EU, which was analyzed here and here, by declaring that “We need to know how this state-terrorist act against the most important infrastructure we had, namely the Nord Stream pipelines, came about and what role Ukraine played in it. The flow of payments should actually be moving in the opposite direction.”

She then added that, “Ukraine must pay reparations to the Federal Republic of Germany, because we have suffered enormous damage – and so has Europe as a whole – from the loss of cheap Russian fossil fuels.” Weidel made a solid point about the economic damage that the Ukrainian Conflict has caused to Europe, even independently of the Nord Stream terrorist attack, which she implied was committed by Ukraine like Berlin suggested but which the famous Seymer Hersh cited sources to blame on the US.

To elaborate a bit more on the background of Berlin’s innuendo, it sought the extradition from Poland last year of a Ukrainian suspect but was rebuffed by the judge for the reasons explained here, which lent credence in a lot of the public’s mind to the claim of Ukrainian culpability. Nevertheless, that narrative was already counteracted here, here, and here over the years long before the extradition request was made and rejected, but Weidel, many Germans, and a lot of folks across the West in fact still believe it.

In any case, having clarified the context of her implied accusation against Ukraine and circling back to her reparations demand, the EU spent hundreds of billions of dollars on aid for Ukraine and its refugees. When calculating the higher cost of fuel since then, including that which it still purchases from Russia, the total credibly approaches $1 trillion and might even surpass it by some estimates.

The most that the EU might receive in exchange is arms and reconstruction contracts for only a handful of companies.

That nowhere near justifies the enormous costs that the EU has paid to perpetuate the NATO-Russian proxy war in Ukraine, which highlights the ideological motives behind this policy. The liberal-globalists that rule the bloc are hellbent on inflicting a strategic defeat on Russia through NATO-backed Ukraine, to which end no cost is too high to pay, especially since it’s average Europeans and not them that are paying it.

This cynical policy is already backfiring in Germany by turbocharging the AfD’s rise.

It’s now the most popular party in the country by far and its appeal continues to grow since it’s one of the few forces apart from the Sahra Wagenknecht Alliance that’s speaking truth to power about this conflict and its crushing economic consequences for Europeans. Germany in particular has been hit exceptionally hard with growth crawling to a halt and many suspecting that the bloc’s largest economy is actually already in a recession that might soon be confirmed and then spread throughout the EU.

Weidel knows very well that Ukraine will never pay reparations to Germany and that even the hypothetical cession of its key industries to her country wouldn’t come anywhere near compensating the costs that Germans have already paid. Her rhetoric was thus meant to draw attention to these same costs. The more that Germans dwell upon them and realize that their country received nothing of tangible benefit in return, the more likely they are to support the AfD in a bid to bring about real change.

Tyler Durden Tue, 06/23/2026 - 03:30

Rubio Heads To Gulf Capitals As Washington Races To Lock In Iran Deal

US Secretary of State Marco Rubio is scheduled to visit Bahrain, Kuwait, and the United Arab Emirates this week, set for June 23–25, following the weekend breakthrough Switzerland-based negotiations with Iran, Department of State Spokesperson Tommy Pigott announced Monday.

The announcement comes on the heels of indirect talks between Iranian and American officials - the latter delegation which was led by Vice President JD Vance in person, which took place on Sunday in the Swiss resort of Bürgenstock under the mediation of Pakistan and Qatar.

"Secretary of State Marco Rubio will travel to the United Arab Emirates, Kuwait, and Bahrain from June 23-25. The Secretary will discuss a range of regional priorities," Pigott said in the official statement released by State. These countries will likely seek some kind of serious reconstruction reparations for the attacks they suffered through the opening months of Operation Epic Fury.

via Associated Press

According to the spokesperson, Rubio's diplomatic tour will focus heavily on the newly drafted US-Iran memorandum of understanding, alongside ongoing initiatives to restore free, safe, and regular commercial transit through the Strait of Hormuz.

Pressure has also been put on Oman of late to not side with Iranian demands for its own protocol for international vessel passage. Broader regional stability will top the agenda, even as official claims in terms of technical details agreed to by the warring sides is somewhat at odds.

"In Bahrain, the Secretary will also meet with the Gulf Cooperation Council to discuss shared priorities across the region," Pigott added.

The signed MoU accord establishes specific timelines for the United States to eventually dismantle its naval blockade of Iranian ports in exchange for Iran restoring safe shipping lanes through the critical Strait of Hormuz.

This is a big 'if' given that the Iranian side has signaled that this could take a long time, and as a 60-day window for formal negotiations - focusing especially on the nuclear file - is sure to be wrought with many hurdles and hold-ups.

Furthermore, Tehran has committed to refraining from seeking to acquire nuclear weapons. Tehran will seek among primary objectives for these subsequent talks the formal lifting of longstanding anti-Iran sanctions.

But already there's been plenty of disagreement on how that will look as well, in terms of the concrete details.

BREAKING: Secretary of State Marco Rubio will visit the UAE, Kuwait and Bahrain this week as the Trump administration seeks support from Gulf allies for its preliminary Iran agreement.

Rubio is also scheduled to meet with the Gulf Cooperation Council, bringing together key U.S.… pic.twitter.com/e6OvsqUHCc

— Fox News (@FoxNews) June 22, 2026

On Monday the US Treasury issued a temporary 60-day general license authorizing the production, delivery, and sale of Iranian oil. There's real positive momentum, this one big development reveals.

While this suggests that Washington is very serious about ending the war at this point, a lot could still go wrong, also as Israel and Hezbollah have continued sporadic fighting in Lebanon. At the moment an uneasy official ceasefire is on in south Lebanon, but this and other key sticking points remain huge question mark issues.

Tyler Durden Tue, 06/23/2026 - 02:45

Starmer's Gone, But UK's Right May Have Little To Cheer About

Authored by Remix News via Modernity News,

The deeply unpopular British Prime Minister, Keir Starmer, announced his resignation on Monday morning, but despite his upcoming departure, the right may have little to cheer about.

During a speech outside Downing Street, Starmer announced he was stepping down after holding office since July 7, 2024. In that election, his Labour Party won 412 seats, securing a comfortable majority and decimating the Tories, who had governed Britain since 2010.

Starmer revealed on the morning of Monday, June 22, that he had already spoken with King Charles III to inform him of his decision. The Labour Party's National Executive Committee will now develop a timetable for the election of a new leader, who will also become Prime Minister. He stressed that this process should be completed by the end of the summer holidays. Until then, Starmer will remain at the helm of the British government.

According to Reuters, the main favorite to replace Starmer is the former Mayor of Greater Manchester, Andy Burnham, who won a seat in the House of Commons during the Makerfield constituency by-election in northwest England on June 18, defeating Nigel Farage's party.

The right now has a challenger

Burnham may pose a grave challenge to Restore Britain and Reform UK, the two main right-wing parties running against the British left.

Under Starmer, multiple polls predicted a strong majority for Reform UK, with some even forecasting a blowout election victory.

However, the rise of Restore Britain had already siphoned off a number of voters from Reform UK, narrowing Farage's lead.

Now, with Starmer gone, some polls show Reform UK barely leading Labour in a general election. A new poll from Politico shows Farage winning 27 percent of the vote versus 20 percent for Labour under Starmer's current numbers - but when tested against Burnham, Labour's chances receive a significant boost. Some within Labour even describe Burnham as a "Reform Slayer," as he polls better against Farage than anyone else in the party.

Nevertheless, the Politico article also describes an uphill battle for Burnham, given how far Labour has fallen out of favour with British voters during Starmer's rule. Notably, Burnham is described as more left-wing than Starmer, who is categorized as a "centrist."

Although the Tories are still seen as a formidable election force, they have long since discarded any semblance of right-wing politics. Nevertheless, they are also siphoning voters away from both Restore Britain and Reform UK, retaining voters who might lean personally to the right but still vote Conservative out of habit.

The combined effect of vote-splitting on the right and Burnham leading Labour could deliver a shock upset in favor of Labour, ending Farage's dream of winning the office of prime minister.

British commentators point out that Starmer's position has been weakening for months. More than 100 Labour MPs - around a quarter of the parliamentary party in the House of Commons - had publicly stated they wanted the prime minister to resign or set a timetable for his departure.

Labour Party members pointed to a total loss of trust in the head of government and his leadership abilities. The government had recently been rocked by a number of high-profile resignations, including Health Secretary Wes Streeting and Defence Secretary John Healey.

Polling also showed that Labour members overwhelmingly wanted Burnham, nicknamed the "King of the North" after winning three consecutive mayoral terms. He is currently Labour's most popular politician. His recent victory in the Makerfield seat also bodes poorly for Reform UK and Restore Britain; the constituency is predominantly white and working-class, representing the exact demographic that these two right-wing parties are seeking to win over from Labour.

Tyler Durden Tue, 06/23/2026 - 02:00

Israeli Troops Deployed To Somaliland In Covert Mission

Via The Cradle

Israel secretly deployed a small contingent of forces to Somaliland earlier this year following its recognition of the breakaway territory, a senior Somali government official revealed to Middle East Eye (MEE) on Monday.

"According to our intelligence reports, the Israeli military selected Israeli soldiers of African heritage, especially Ethiopians, so as not to draw attention to themselves and to blend in more easily with the local community," the senior Somali official stated.

via Reuters

The Somali official said that Israel had deployed a group of 50 soldiers to Somaliland shortly after the recognition and the resumption of the war on Iran in late February.

On June 17, Israeli Defense Minister Israel Katz admitted to years of clandestine, "under the radar" security operations with Somaliland.

During a high-level meeting in Tel Aviv with Somaliland’s visiting president, Israeli officials confirmed that Israel is now directly involved in training the breakaway region's military and police.

"For many years, we cooperated under the radar in a series of operations that will remain classified. Now we are determined to bring our security cooperation to new heights, for the benefit of both peoples and for the benefit of stability in the region," Katz said.

In early June, CNN reported that the breakaway republic of Somaliland had provided Israel with an additional military position on the Horn of Africa, allowing Israeli aircraft to "potentially stop" long-range flights to Iran.

Israel's Channel 12 reported on 2 May that a senior official in Somaliland said the territory is ready to cooperate with Israel to confront what it described as the "threat" from the Yemeni Armed Forces (YAF) to the highly strategic Bab al-Mandab Strait.

The official said that any "disruption of maritime security" would push Somaliland to expand its relations with Israel, including to the level of a security alliance.

The official also noted that Somaliland currently cooperates with partners such as the US and the UAE, which maintain a presence in the territory’s Berbera Port, and said a similar partnership would be possible with Israel. 

AA is probably not happy about this. Reminder that Abdul Malik al-Houthi recently said in a speech that they are monitoring developments on “Somali soil” and that they will mot hesitate to strike israeli bases. https://t.co/3hFw1vdnK5 pic.twitter.com/OEOy3Z2hYr

— barry with the NED (@bonzerbarry) June 22, 2026

The UAE operates the Berbera Port, using it as a logistics hub to transfer arms and mercenaries to the Rapid Support Forces (RSF), which is responsible for committing alleged genocide against non-Arab tribes in Sudan.

Somaliland declared its independence from Somalia in 1991, and in December 2025, Israel became the first and only UN member state to recognize it as an independent and sovereign state. Israel later appointed Michael Lotem as its first ambassador to Hargeisa in April, drawing worldwide condemnation.

Tyler Durden Mon, 06/22/2026 - 23:25

Apollo Gates Private Credit Investors For 2nd Quarter As 17% Rush To The Exits

It would appear that the private credit crisis has not, in fact, been contained.

With the software bounce now dead and buried...

Software bounce is over pic.twitter.com/wcKtRt3NaR

— zerohedge (@zerohedge) June 22, 2026

... amid growing fears that the next round of the SAASpocalypse will be far worse (just look at the spectacular implosion in Accenture stock), the private credit firms that had tons of Software exposure ("but muh cash flows") are once again in the market's crosshairs, and after first Cliffwater, then Blackrock gated investors as redemptions requests soared even more in Q2 compared to the already skyhigh levels in Q1, today it was the turn of Private Equity giant Apollo Global Management to join the club and again limiting withdrawal requests from its largest non-traded private credit fund for retail investors, as broader concerns about the asset class persist. 

Apollo Debt Solutions, which has roughly $25 billion in assets, capped withdrawals at 5% of outstanding shares on Monday after investors asked to redeem 16.8%, according to a shareholder letter first seen by Bloomberg. Redemption requests in Q2 were more than 5% higher than the 11.2% investors wanted to pull in the first quarter when they were gated for the first time.

As shown in the chart below, for those hoping that Q2 redemption requests would moderate, well... the trend is not your friend. 

The fund, taking rare delight in glorious irony, reported that it has generated an 8.1% total net return since it was launched, which however does not appear to have impressed its shareholders who instead want their money and are capped at 5% of it. 

As we reported previously, private credit icon Cliffwater faced requests to pull 17% of shares from its flagship fund, while the world's largest asset manager, BlackRock, received about 13% earlier this month. Both funds enforced a 5% cap for their BDCs.

Apollo President Jim Zelter predicted - correctly - in May that redemptions from BDCs will continue for the next two quarters following a turbulent first quarter for the sector, and that such requests could even increase. Spoiler alert: when software stock puke again, and when BDCs write down their SAAS loans form par to their fair value of plus or minus 0, not only will the requests increase, there may come a day when there is a literal run on the private credit bank, with crowds of people gathering across various lobbies on Park Avenue demanding their money (good luck folks).

 

Tyler Durden Mon, 06/22/2026 - 23:09

Super El Nino: Famine Follows War?

Rory Green, TS Lombard's chief China economist, is the latest Wall Street strategist to warn of the mounting macro and food inflation risks that a super El Niño could release on certain regions of the world.

In a note titled "Super El Niño: Famine Follows War?" Green warns that war-related disruptions to energy and fertilizer markets, compounded by adverse weather conditions, could create a perfect storm for global food prices.

Green said, "In general, El Niño raises temperatures and significantly exacerbates both drought and heavy rainfall. For global macro, it is an inflationary shock via the food price channel – a shock that will likely be compounded by existing war-related high fertilizer costs."

He said within his coverage, "India is the most exposed to both growth and inflation risks, supporting our underweight Indian assets. Brazil and Mexico, too, will receive an inflation impulse."

In recent weeks, the Japanese Meteorological Agency became the first major weather body to formally declare the onset of a super El Niño in the tropical Pacific.

If that forecast is correct, adverse climatic disruption could persist for 2 or more years, raising the risk of drought, flooding, lower crop yields, and higher food prices across key agricultural regions.

Green noted that El Niño has typically been associated with "hotter and drier conditions in India, parts of South and Southeast Asia, and Central America. But at the same time, it brings higher rainfall to parts of southern South America, the United States and Central Asia."

Chart 1: GDP impact of past El Niño

Chart 2: CPI impact of past El Niño

El Niño Impact Watch:

If it proves "strong" or "very strong", the 2026 El Niño is likely to have a historically large impact on global food prices, given already elevated underlying inflation, existing supply-chain disruption and the current high cost of farm inputs. China, Korea and Taiwan are relatively well insulated from the shock. As are most DMs, with the exception of Australia, as the maps below and the charts above show. In our coverage, it is India and LatAm that are most exposed.

India Impact:

El Niño to hit prices, employment and potentially equities

India's Met Department recently warned that El Niño conditions will strengthen during the crucial monsoon season that accounts for ~75% of the annual rainfall the country receives. The Met Department (IMD) has forecast rainfall in the June-September monsoon to be 90% of the long-period average (LPA); if that projection bears out, India will face its worst monsoon since 2015. That year, the IMD had initially predicted below normal rainfall of 93% of the LPA, but the actual rainfall recorded was 86%, leading to drought-like conditions across many parts of India. Even though it is early days yet in this year's season with the rains just about setting in over south peninsular India, indications are that the monsoon is off to a weak start. Rainfall in the first 15 days of June has already been far below normal, as Chart 1 below shows, and the progress of the monsoon across the subcontinent has stalled.

A weak monsoon will exacerbate headwinds to growth that India's heavily energy import- dependent economy has been facing due to the surge in global oil prices. Damage to the summer-sown crop output is a risk to agricultural incomes and rural demand, as well as a potential inflation trigger. Rising food and fuel costs pushed headline CPI higher to 3.9% yoy in May, up from 3.5% yoy in April; May’s food price inflation rose at a faster pace to 4.8% yoy. We expect high commodity prices to spill over into broader inflation, and for headline CPI to breach the upper threshold of the Reserve Bank of India's (RBI) 2-6% flexible target by 3Q/FY27. At its early June policy, the RBI revised up its inflation forecast for FY27 to 5.1% vs 4.6% previously, cautioning against upside risks to its projection. It cited further downside risks to its GDP growth forecast for FY27 that is cut to 6.6% (vs 6.9% previously) owing to supply shocks from both energy and weather-related factors.

The government has been taking proactive measures to combat the El Niño impact, including increasing stocks of rice and wheat in state-run warehouses. How the El Niño impacts the monsoon will be clearer by end-July, when the IMD issues its updated monsoon forecast. July is the key month for crop sowing as the rains typically cover the entire country by the start of the month. Last week, Agriculture Minister Shivraj Singh Chouhan said almost 200 districts (a quarter of India's total) are "most vulnerable" to the impact of El Niño. The monsoon season's impact on crops is determined not just by the quantity of rainfall but also its geographical distribution. The accumulation of water in reservoirs – critical for the winter-sown crop – is also important to track: as of early June, the level was a little lower vs a year ago but higher vs the LPA.

For now, the markets are rebounding after tensions in the Middle East eased, but the Indian economy's resilience will be tested again soon if the monsoon fails: since 1951, 12 of 17 El Niño years have witnessed deficient rains. Foreigners remain net sellers in the equity market, although tax exemptions announced for overseas bond investors are pulling flows into local debt. Equities have been supported by local investors, but returns have been capped as momentum of domestic flows has been flagging recently

Brazil Impact

El Niño could weigh on power, food prices

A 'Super El Niño' could push up inflation, but Brazil is more prepared for extreme weather than in the past. As a country that spans across the South American continent, El Niño has an uneven impact on regional weather patterns. In southern Brazil, overall precipitation, the number of heavy downpours and the severity of storms tends to increase, particularly in the spring. Northern Brazil, including parts of the Amazon basin, tend to have drier weather, as does the country's northeast. While parts of the country's populous southeastern region see a limited impact, key states – including Minas Gerais, tend to be drier than normal. Across the countries, average temperatures tend to rise, and the number of heatwaves tends to increase. These factors, coupled with the greater frequency of extreme weather already effecting the country because of climate change, mean that Brazil runs an even greater risk of severe events this year, similar to the record floods in Rio Grande do Sul state in 2024.

The El Niño adds another layer of uncertainty regarding the economic outlook. Although we do not expect the El Niño to play a decisive role in the direction of the economy in H1/26, it could exacerbate existing issues in the economy, including inflation. Electricity prices, which typically tick up during the dry season (April to October) could rise even more if dry weather has a significant impact on hydroelectric reservoir levels in south-central Brazil, which holds the lion's share of the country's generation capacity. This would force the National Systems Operator (ONS) to continue to maximize the use of high-cost thermoelectric plants to offset the reduction in hydroelectric generation. This would mean that electricity costs would increase in the coming months through the so-called tariff flag systems, which is imposed to cover the costs of thermoelectric generation. Likewise, energy consumption – and spot market prices – tends to increase during heatwaves, as more households use air conditioning. The positive news is that Brazil is entering the dry season, Brazil's hydroelectric reservoirs are in a slightly more comfortable situation than in previous El Niño years, which could limit the impact of the weather phenomenon on power prices.

The El Niño could have an impact on food prices, but not in the short term. When temperatures exceed 40°C for prolonged periods, it generally takes three to four months for the hot, dry conditions to affect fruit and vegetable harvests. The effect on grain and oilseed crops takes even longer. Brazil has already harvested its summer soybean crop and the winter corn crop is in the ground and scheduled for harvest in August and September. At that point, farmers begin planting their summer crops. Even without the El Niño, there are already doubts regarding whether Brazil will manage to expand its soybean and corn crops in the upcoming 2026/27 season. This is because of unfavourable global prices, as well as higher input costs, which could force Brazilian farmers to reduce fertilizer use. While a modest decline in fertilizer application is unlikely to significantly affect yields in a single season, production costs for soybeans and corn will be higher for the 2026/27 season. This increase could influence the cost of meat and biofuels in the following year. In short, pressures from weather and fertilizer prices are present, but their impact on food prices is unlikely to be felt until early next year.

Mexico Impact

The most immediate impact is likely to come through agricultural prices. Adverse weather conditions have historically reduce agricultural output and, with a lag, feed into livestock prices as poorer pasture conditions and water scarcity raise production costs. Agricultural inflation hit 14.33% y/y during the 2023-24 El Niño, nearly three times the headline rate, with fruits and vegetables peaking at 25.69%. The 2026 starting point is no less uncomfortable. Fruits and vegetables spiked to 21.77% in March and, despite easing to 14.38% in May, remain well above headline, leaving the most weather-sensitive part of the CPI basket exposed to a renewed supply shocks. It's worth highlighting that El Niño affects Mexico in distinct ways, with northern states tend to see higher precipitation in winter, which tends to benefit export crops. But the weather phenomenon also boosts the risk of unseasonal frosts and floods that damage, with potential implications for the tomato, wheat, and maize harvests. In the centre-south, El Niño reduces rainfall and coffee, sugarcane, maize, beans, and avocados are the most exposed crops.

Bad timing for Banxico. The central bank cut rates to 6.5% in May and signalled that the easing cycle had likely come to an end, citing weak activity and a resilient peso. We continue to view growth risks as outweighing inflation concerns and believe additional easing in Q3/26 remains possible. However, a moderate-to-strong El Niño would complicate that assessment by pushing up agricultural inflation through supply-side shocks that monetary policy cannot easily offset. This would make any further easing harder to deliver, even as growth concerns continue to mount.

El Niño also exposes structural vulnerabilities to more extreme weather. Along the Pacific coast, warmer sea surface temperatures fuel a more active hurricane season, raising the risk of storm damage to coastal infrastructure and export agriculture. At the same time, the phenomenon puts urban water supply under pressure. Cutzamala, which provides roughly a quarter of Mexico City's water, fell to just 27% capacity during the El Niño. An exceptionally wet 2025 reversed much of that damage, bringing the system back to 67.7% by early June 202 – the highest level in the seasonal cycle in seven years. That buffer offers some protection, but a strong El Niño would still test it.

Green's note builds on a UBS report published earlier this month, which warned that El Niño risks could send food inflation higher across Asia.

The U.S. is not out of the woods just yet. Bank of America analysts warn that the energy shock of the last several months could ultimately feed into food inflation later this year, with a lag (read the report).

Now there has been what Daryna Kovalska, a commodity strategist at BofA, described as an "aggressive positioning washout" in the agriculture trade. However, she believes that the selloff in soft commodities such as corn is well overdone.

Professional subscribers can read the full note here at our new Marketdesk.ai portal. 

Tyler Durden Mon, 06/22/2026 - 23:00

Zero Sum: Cities Have Little To Show For Big Spending

Authored by Jeremy Portnoy via RealClearInvestigations,

America’s largest cities are increasing their spending at almost unprecedented rates.

A RealClearInvestigations (RCI) analysis of cities with at least 500,000 residents found they cumulatively raised their per-person spending by 18 percent over the last 10 budget cycles, accounting for inflation. The only equivalents on record are the spending surges ignited by the Great Society programs of the 1960s and Franklin D. Roosevelt’s New Deal during the 1930s.

But unlike those past eras, today’s cities do not have the revenue to support their heavy spending. State and federal funding have dropped off from their record highs during the COVID-19 pandemic, and local tax hikes have not kept pace with spending. Large tax increases or reductions in city services will eventually be required to address burgeoning structural deficits, placing a burden on future generations.

The tradeoff would be easier to explain if cities were making strides to improve life for their residents. Census data, however, shows that key quality of life metrics in major cities have mostly been stagnant during the spending spree.

Each of the 38 cities in RCI’s analysis of data from the Census Bureau, FBI, Department of Housing and Urban Development, and enacted local budgets increased their spending faster than inflation over the last decade. Yet the cities that boosted their spending the most were, on average, no more or less likely to see measurable progress in reducing homelessness, lowering violent crime rates, tackling income inequality, improving rent affordability, and more. That was the case for the 33 cities led by Democrats and the five cities led by Republicans.

San Jose, California, saw its violent crime rate increase by 50 percent from 2017 to 2024, even after it doubled its police budget. The city is now proposing cuts to police spending and creating new taxes to fund its rapid budget growth in other areas. Seattle is considering shutting down its homelessness agency after huge investments failed to stop homeless rates from reaching the worst level in city history.

Christopher Thornberg, founder of the policy consulting firm Beacon Economics, isn’t surprised that big spending hasn’t produced big results. He said that cities typically don’t have the financing, policy sophistication, and regulatory oversight to meaningfully improve the economic status of their residents.

But that hasn’t stopped some cities from thinking “you can be successful just fire-hosing money across the economy,” said Thornberg, former director of the University of California, Riverside Center for Economic Forecasting and Development. “It seems sufficient to brag about the money they spent without referring to whether that spending accomplished anything.”

The Tax Gap

In 2016, large cities collected $6,727 of revenue per resident from local, state, and federal sources, adjusted for inflation. They spent 14 percent more than that: $7,685 per person.

RCI

By 2025, revenues had increased to $7,063 per person, but outlays had skyrocketed to $8,827. The difference of 25 percent is the largest gap on record since at least 1940.

The gap was not caused by low revenues. Cities earned record amounts of sales and property taxes last year. Instead, the deficits were driven by expanded bureaucracy, rising payrolls, overtime costs, and pension liabilities.

From 2017 to 2026, the public workforces of large cities grew faster than their populations. There were at least 12 cities that added new municipal jobs even though their populations dropped (a handful of cities do not disclose their staff headcounts). In an extreme example, Memphis added more than 1,000 public jobs even though the city lost more than 40,000 residents.

Many of those new hires work desk jobs. Census data shows large cities increased their administrative expenses—mayor’s offices, human resources departments, accountants, zoning departments, and more—by 55 percent from 2016 to 2023, accounting for inflation.

But staff headcounts at core city agencies like police and corrections departments are generally decreasing, forcing cities to spend large amounts on overtime hours to keep their communities safe with the limited staff they have available.

Crucially, RCI found only a weak statistical link between increases in a city’s property tax collection and increases in its overall spending. Cities like Phoenix and Boston that boosted their per-resident spending by 88 percent and 75 percent, respectively, were not necessarily the ones with increased property tax revenue to support their outlays.

That suggests many cities have a “build it and we will fund it” mentality, enacting policies before figuring out how to pay for them.

Previous studies have shown that outside pressures from advocates for rent affordability and labor unions influence budgets, independently of what cities can actually afford to spend. Historically, that did not cause issues because city revenues were typically higher than expenses. That went out the window after the COVID-19 pandemic, when temporary federal grants expired, and cities did not make cuts to compensate for the lost funding.

“The problem is that when governments start to spend money, they find it hard to stop spending money,” said Thornberg. “And after a year and a half of partying, you can’t get back in those old pants. You have these bloated budgets in many cities, and now they’re struggling to get their budgets back in line with a reasonable amount of revenue that can be expected.”

More Spending, More Homelessness

To illustrate these budget dynamics in action, RCI took a look at how some representative cities have responded to major issues.

Homelessness in America’s largest cities jumped by 34 percent on average from 2017 to 2024, driven partly by increased housing costs and job losses during the pandemic. RCI’s analysis found no statistically significant association between increased public welfare spending and reduced homelessness.

While Los Angeles is the poster child for getting little bang for the bucks it’s spent to combat homelessness, it is not alone. Seattle and surrounding King County were among the biggest spenders, with money pouring into the Regional Homelessness Authority. It was created by former Mayor Jenny Durkan in 2019 to “significantly decrease the incidence of unsheltered homelessness.” Washington State has also lifted its spending on housing construction by six times since then. But homelessness in Seattle increased at a faster rate than in any other large city but one, and rent price increases were also among the nation’s highest.

It’s easy to see where things went wrong. A state audit released in April found that the Homelessness Authority overspent its $200 million annual budget by $45 million, with portions of the money completely unaccounted for or spent on administrative expenses the city never approved. The authority is also paying individual contractors close to $500,000 annually, an amount unlikely to be seen as reasonable for a salaried public servant.

To find leaders with the “lived experience” of homelessness and marginalization, the authority invited a convicted repeat sex offender to join its board in 2023. When another board member objected, alleging she had been molested by the man in the past, co-chair Shanéé Colston shouted her down. “I don’t care if they’re a sex offender!” Colston said, according to the Seattle Times. “This is an inclusive space, and we are equitable to all.”

Colston was later replaced. Seattle Mayor Katie Wilson has publicly said she’s not opposed to shutting down the authority for its failure to reduce homelessness.

Nor has Portland, another big spender on homelessness, been able to reduce its soaring rate. It created a Supportive Housing Services tax in 2020 that funded Sunstone Way, a nonprofit set up by the city that collapsed in March.

Sunstone Way’s former finance director recently alleged in a whistleblower complaint that she was barred from board meetings for trying to tell county officials about the nonprofit’s “severe cash flow pressures.” She claims that when she flagged a $210,000 overpayment to a food vendor, Sunstone Way’s CEO told her to ignore it because he had “made a deal” with the vendor, who was allegedly a personal friend.

Local auditor Jennifer McGuirk warned Portland’s Homeless Services Department in 2022 that it needed to monitor Sunstone Way’s spending more carefully after it billed the government for the payroll expenses of duplicate employees. McGuirk claims she was ignored.

Homelessness decreased in 13 of the 38 cities RCI examined, but the success stories related more to policy than spending. Detroit embraced advanced data modeling systems to share information between various nonprofits, avoiding duplicated efforts and creating a real-time list of homeless individuals rather than a single annual count like most cities conduct. Homelessness dropped by 17 percent from 2017 to 2024. Milwaukee provided free lawyers to low-income tenants facing eviction and now claims to have zero people living on the street.

“Cities that have had success in battling homelessness, it turns out, it’s not just that they’re spending money, but how they’re spending money,” Thornberg said.

Although many big cities explicitly state that their budgets are designed to reduce inequality, large cities’ Gini index—a measurement of how evenly wealth is distributed—was virtually unchanged from 2017 to 2024. So was the percentage of the population with health insurance. Poverty rates improved by 1 percent on average. Cities that increased their overall budgets at a faster rate were no more or less likely to see improvement in any of those three categories.

The 10 cities with the smallest topline budget increases since 2017 all saw their poverty rates drop or remain unchanged. Those 10 cities, including Minneapolis and Long Beach, now have an average poverty rate of 13.8 percent, lower than most of their peers.

Police Spending Up, Crime Down a Bit

Violent crime rates in large cities improved slightly from 2017 to 2024, with an average decrease of 50 violent crimes per 100,000 people. The average police budget increased slightly faster than inflation.

But again, there was no statistically significant association between spending levels and violent crime rates. Cities that increased their police budgets were just as likely to see crime rates rise as cities that decreased theirs.

The negligible improvement in crime rates is especially worrisome given that other city services are being sacrificed to fund police departments. In 2022, 40 percent of America’s largest cities said public safety needs were so high that it was difficult to balance their budgets. The burden grew even higher in the following years, as police funding increased as a percentage of total city spending in both 2024 and 2025, according to the National League of Cities.

Higher spending does not always mean more police officers. Even though budgets are up, police staffing levels dropped by roughly 7 percent from 2013 to 2023, according to the Council on Criminal Justice.

That’s unsurprising given how much difficulty police departments are having recruiting new officers. Thaddeus Johnson, a senior fellow at the Council on Criminal Justice who has been teaching at Georgia State University since 2014, said college students do not view public service as “glamorous” as they did just a few years ago. “I used to ask in every class, ‘Who wants to be a cop?’ and a quarter to half of the room would raise their hands. Since the pandemic, nobody has raised their hand in class, and I’m not exaggerating. There’s no interest among criminal justice majors in policing.”

In Phoenix, where spending and violent crime rates are both up, the police department has 650 vacancies. When the department does attract workers, they don’t always stay. Thirty percent of new recruits from 2023 to 2025 have already left.

The city can’t offer higher salaries to boost its retention rate because one-third of its police budget is spent funding future pensions for officers already on the force (payments to current retirees are funded by past years’ appropriations). Arizona’s pension investments lost most of their value during the dot-com bubble of the early 2000s, and the effects still linger.

It’s a similar situation in San Jose, where 40 percent of police recruits leave the force before they become sworn officers, compared to only 6 percent in 2017. The staffing shortages force officers to work long overtime hours, driving up payroll costs.

A San Jose city audit released this April found that one quarter of all the hours police officers worked in 2025 were overtime—twice as much as in 2015. Many overtime hours were spent on report writing by officers who never obtained the required approval from their superiors to work extra hours.

Johnson said low staff headcounts are not an excuse for rising violent crime. “If there’s a million officers on the street, crime will still happen,” he said. “It’s really about how you use those officers. What is your supervisor to officer ratio? The type of training the officers are receiving? The type of technology that’s available?”

San Jose increased its per-resident police spending by 66 percent above inflation from 2016 to 2023—far more than any other city with at least 500,000 residents. But it also saw its violent crime rate per 100,000 people increase by 50 percent from 2017 to 2024, again much more than any other large city.

The crime rate did improve significantly in 2025, but remained well above pre-pandemic levels. And while San Jose’s crime rate is not necessarily higher than other comparable cities, its rapid increase despite a spending boost highlights the challenges cities face when trying to improve quality of life through budgetary means.

There are several success stories like Dallas and San Francisco, which have seen violent crime rates improve after police budgets were increased. Others, like Boston, saw crime rates improve even though police budgets did not keep pace with inflation.

Johnson cited San Antonio as an example of efficient spending. He said the city smartly deployed its officers by assigning patrols to specific places and times when crime was more likely to occur, improving public safety without breaking the bank. San Antonio’s per-resident spending on police is lower than almost any other large city, yet its violent crime rate sank by 16 percent from 2017 to 2024.

Kicking the Budget Can Down the Road

Cities will eventually have to balance their budgets, but they may face difficulty raising taxes to do so. Katherine Loughead, a vice president at the nonprofit Tax Foundation, claimed the recent upward trend in taxation is already causing “widespread unrest” among voters.

Almost every major city has a law stating that its outlays and revenues must be equal, but that does not apply to capital spending on infrastructure and city-owned property like buildings and cars. Many cities also overestimate their revenues and underestimate their spending on paper, allowing deficits to develop.

They close the gap by issuing bonds, digging into reserve funds, selling municipal property, and ignoring obligations to fund public employees’ future pension and healthcare plans.

It’s why New York City Mayor Zohran Mamdani’s highly-touted “balanced” budget proposal for 2027 is not really balanced at all. Unable to avoid reductions to city services by taxing the rich and increasing property taxes, Mamdani escaped spending cuts by shoving pension liabilities into the future for another mayor to deal with. Fifty-four of America’s 75 largest cities did the same in 2025 with either pensions or retiree healthcare costs, according to Truth in Accounting.

Chicago is already feeling the effects of that approach. After underfunding its pensions for years, Chicago now has a pension debt larger than most state governments. More than 15 percent of its budget in 2025 was spent trying to fix it, rather than being used to support taxpayers.

This summer’s budget hearings in cities across the country will likely represent a new high-water mark in structural imbalances. If past practices prevail, rather than slash services or raise taxes, most city leaders will find clever ways to once again kick the can down the road.

Tyler Durden Mon, 06/22/2026 - 22:35

"But A Whimper": Retail Euphoria In SpaceX Fizzles After Stock Loses $600 Billion In One Day

It started off with a bang: SpaceX IPOed on June 12 with an opening price of $150 on their first day of trade, well above the offering price of $135, and within two days, enterprising traders were ravenously bidding up 380 calls (expiring in just days) in hopes of sending the stock soaring in hopes of orchestrating a gamma squeeze. 

They are going for it https://t.co/tT4cJns9nv pic.twitter.com/P6NTzq4tx2

— zerohedge (@zerohedge) June 16, 2026

In a note out this morning, Canaccord described the "new level of optimism" that accompanied the SpaceX IPO as follows:

SPCX dynamics indicate new level of frenzy: prior to this historic IPO, we felt AI optimism was robust and certainly at times overdone, but largely funded by rational (if not exuberant) institutions including large, well capitalized public companies and PE investors. In our view, SPCX has marked a new chapter in this saga, ushering in a greater level of retail involvement and driving the stock into the top 6 market cap companies in the world, and in its first week of trading, adding the equivalent of ~1/2 the value of META, with a market value much greater than sister company TSLA despite generating only ~20% of its revenue base. Despite the company name, revenues are skewed towards connectivity (Starlink contributing $11.39 billion), with launch services generating only $4.1 billion (AI compute was $3.2 billion in 2025).

Vanda Track was even more effusive, and in a retrospective published earlier on Monday wrote that "SpaceX's first week of trading was one for the record books. Retail investors bought a net $405mn of SPCX during its first 5 trading sessions, comfortably the strongest retail IPO debut in recent history. Retail buying was extreme during the first few sessions before moderating later in the week. The flow profile increasingly resembles a retail investor that is building long-term positions rather than chasing a short-term meme stock."

The scale of retail buying in SPCX last week becomes even more remarkable when put into context. Retail investors bought more SPCX last week than they bought across all other Mag 7 stocks combined (total activity of the last 5 days in NVDA, MSFT, AMZN, META, GOOGL and GOOG was $278mn combined). They also bought more SpaceX than the combined retail buying of SPY & QQQ over the past week ($352mn). For a stock that only started trading last week, SpaceX is already competing with the market's biggest stocks and ETFs for retail capital.

As has become the norm, while buying of the stock was off the charts, retail investors quickly congregated to various leveraged SpaceX products, which also attracted strong demand. Retail investors bought $65.8mn of the Leverage Shares 2x Long SPCX Daily ETF during its first few trading sessions (while a sizeable number, but it remains well below the type of activity normally seen during speculative retail frenzies). It still dwarfs recent thematic launches – the Roundhill Memory ETF DRAM attracted just $5.6mn during its first four trading days, and it took 22 sessions for cumulative retail buying in DRAM to exceed the amount already allocated to the leveraged SpaceX ETF.

Yet after bursting out of the gate, momentum has fizzled and hopes that the stock would gamma squeeze into orbit (on a reusable rocket, of course), quickly faded. The result: after peaking on June 16 - the day SPCX stock hit a record $225 and briefly topped Microsoft in market cap - daily retail flows have collapsed, and the retail turnover has become virtually nonexistent. 

This brings us back to what Canaccord said: while the bank concluded that based on the early performance of SpaceX, "Tech can likely keep its momentum in the short term", it warned that "a new, more dangerous layer of air is now underneath these stocks."

Sure enough, with the momentum gone, and the realization that trillions of shares are about to be unlocked, the stock has slumped for 3 straight days, culminating with Monday's plunge when, with SpaceX rushing to take advantage of the bond market euphoria to sell over $20 billion in investment-grade bonds for the first time before the bond window shuts in order to refinance an existing bridge loan with much higher interest, SPCX shares plunged 16.4%, shedding a record $600 billion in market value, and following a 5% drop on Wednesday and a 3.5% slide on Thursday, the stock is now just barely above where it broke for trading at $150 two weeks ago. 

Worse, the stock tagged its post-IPO opening price of $150 after hours, and should the stock open below that tomorrow, then everyone who bought in the open market (and held) will be underwater.

What is especially notable, or perhaps expected, is that the pump and dump is taking place with only 5% of SPCX float available for trading: 95% of the stock is still locked-up for trading. But that will change soon:

22V Research strategist Jeff Jacobson said that there is a 20% insider share unlock after Space's earnings announcement in early to mid-August. In addition, there is a 10% share unlock if the stock trades 30% above the IPO price, as well as 7% share unlocks set for around Aug. 21 and then again on Sept. 10.

Jacobson said insiders could potentially sell 44% of SpaceX shares by early September, increasing the current float by about 900%.

In other words, it's only going to get more difficult to lift the stock from here, and meanwhile, Michael O’Rourke, chief market strategist at JonesTrading said that “sellers are back in control,” adding that “anyone in the world who wanted to buy this has bought it already.”

In its take on today's move, Bloomberg wrote that today's drop in SpaceX "managed to bring much of the market down with it." 

We don't know if that's indeed the case yet, but in this market - which has been driven almost entirely by retail euphoria and momentum chasing from the March lows - should retail indeed get cold feet, first to SpaceX, then to the Memory bubble, and finally to Semi stocks which have become the main beneficiaries of the AI trade...

Divergence between Hyperscalers and Semis becoming untenable: massive capex spending is the key variable. pic.twitter.com/ifrtT9LJnR

— zerohedge (@zerohedge) June 22, 2026

... then it will be time to invert TS Eliot, as the selling whimper becomes a bang. 

Tyler Durden Mon, 06/22/2026 - 22:10

Flesh-Eating Screwworm Cases Rise To 15 After New Detections In Texas: USDA

Authored by Aldgra Fredly via The Epoch Times,

The U.S. Department of Agriculture (USDA) said on June 21 that three more cases of the flesh-eating New World screwworm have been detected in Texas, bringing the total in the United States to 15.

The latest cases involved a lamb in Crockett County and two calves in Edwards County, Texas. The USDA said in a post on X that it would immediately begin releasing sterile flies outside the affected areas in Crockett County following the new detection there.

According to the agency, the new cases in Edwards County were expected because they occurred within the current affected areas, where sterile flies were already being released.

“Because a fly’s life cycle is an average of 21 days, it takes multiple reproductive cycles for populations to die off following sterile fly releases,“ it stated.

”As such, we may continue to see cases occur in already affected zones—a sign that our surveillance is working.”

The USDA said it would continue carrying out “aggressive eradication efforts” alongside state partners, including deploying tens of millions of sterile flies each week in and around the infestation area.

On June 11, the Food and Drug Administration authorized the emergency use of generic nitenpyram for treating New World screwworm infestations in dogs and cats that weigh at least 2 pounds and are more than 3 weeks old. The drug is made by Felix Pharmaceuticals.

Acting FDA Commissioner Kyle Diamantas said in a June 11 statement that the agency has spent nearly a year preparing for the possible arrival of the screwworm in the country.

“As of today, under the Trump administration’s decisive leadership, the FDA has issued ten [emergency use authorizations] and three conditional approvals for drugs to combat this threat, and this count will continue to grow as we receive more animal drug submissions and unleash American regulatory speed,” Diamantas said.

New World screwworms are flesh-eating parasites that infect livestock, wildlife, and, in rarer cases, humans. Screwworm fly maggots burrow into the living tissue of animals, causing severe wounds that can be fatal.

According to the Centers for Disease Control and Prevention, at least seven people had died from screwworm infections in Central America and Mexico as of Jan. 20.

Texas Gov. Greg Abbott also deployed all available state resources earlier this month to eradicate screwworms after the first confirmed case in South Texas on June 3.

The screwworm fly was officially eradicated from the United States in 1966 through a strategy primarily involving the release of sterile males, which mated with females, resulting in infertile eggs.

Tyler Durden Mon, 06/22/2026 - 21:45

Iran Oil Exports Through Hormuz Hit Wartime High

While other countries line up on either side of Hormuz, hoping for clarity whether they actually can cross this time, Iran isn’t wasting any time moving its oil out of the Gulf via the Strait of Hormuz after the US lifted the naval blockade outside the chokepoint and the U.S. and Iran discuss a framework on a lasting peace deal.

Even as Western shippers and insurers remain wary of the conflicting signals about how open the Strait of Hormuz really is - after all it was opened once before just to close hours later and remain shut for over a month - Iran is rushing to evacuate barrels it wasn’t able to push past the U.S. blockade over the past two months.

At least three supertankers, carrying a total of 6 million barrels of Iranian crude, moved to transit the Strait of Hormuz early on Monday, in open AIS navigation showing Singaporean waters as a destination, vessel-tracking data compiled by Bloomberg showed.

That’s the most Iranian crude openly making its way out the key Iranian oil port at Kharg Island and into the Strait of Hormuz in a day since the war began on February 28, according to Bloomberg.

The three tankers seen entering the Strait of Hormuz outbound on Monday were signaling destinations offshore Singapore, a known ship-to-ship (STS) transfer area for Iranian crude before loading on the tankers mostly bound for China’s independent refiners, the so-called teapots.

The surge in Iranian shipments out of the Gulf and into waters near the Malacca and Singapore Straits would give Iran a lifeline to boost its exports that had suffered from the US blockade in the past few weeks.

Tyler Durden Mon, 06/22/2026 - 21:20

Chinese Grid Operators Resist Plans To Boost Renewables To Power AI

Authored by Charles Kennedy via OilPrice.com,

Grid operators are concerned that the Chinese drive to hike the share of renewable electricity powering AI would raise the risks for power firms as peak demand at data centers is difficult to forecast.

Industry analysts and officials have told Reuters that the Chinese strategic priority of having renewables power the majority of electricity demand at data centers by 2030 may not be feasible.

“From what we understand, they (data centers) cannot really adjust power consumption load much,” Reuters quoted Pei Shanpeng, a director of Chinese power firm State Power Investment Corporation, as telling attendees at a recent industry conference in Beijing.

“GPUs are very expensive, so once they are purchased, operators want to use them as quickly and as intensively as possible,” the official added.

China plans to use massively its renewable energy boom to power the data centers.

The country has just launched the world’s first offshore wind-powered underwater data center, using seawater cooling and renewable electricity to reduce energy, water, and land requirements. The 24 MW-capacity Shanghai Lingang undersea data center demonstration was developed by HiCloud Technology and the state-owned China Communications Construction.

A report from last year by the International Energy Agency (IEA) stated that the data center electricity supply in China was dominated by coal with a near 70% share as of 2025, followed by renewables with nearly 20%, nuclear close to 10%, and natural gas accounting for the remainder.

Solar PV and wind would add nearly 90 TWh of additional electricity for data centers by 2030, “supported by an increase in the share of renewables in the grid electricity mix, provincial co-location mandates and policies to prioritise the construction of data centres in renewables-rich western China,” the IEA said.

However, analysts and industry officials say the data center sector isn’t a good fit for renewable energy because of the lack of visibility about peak demand from these power-sucking centers.

Tyler Durden Mon, 06/22/2026 - 20:55

"Optimism Has Picked Up": Retail Operators See Consumer Relief After Gas Prices Tumble

As soon as the national average for 87-octane gasoline at the pump dipped below the politically sensitive $4-a-gallon level early last week, we observed multiple institutional desks begin to forecast that the light at the end of the tunnel was beginning to materialize for consumers, especially working-class households that have been financially battered by surging fuel prices over the past several months.

UBS analyst Mark Paski told clients about "early signs of a turn in U.S. consumer discretionary."

Then, Piper Sandler Chief Global Economist Nancy Lazar told clients, "If inflation has indeed peaked, that will boost real incomes (nominal incomes have been solid), a positive for both real consumer spending and housing, but don't expect robust growth in either."

Gathering more ground-level intelligence about possible consumer sentiment shifts, or at least the early chapters of it, Wolfe Research polled 270 industry contacts on the consumer outlook this summer.

"Optimism has picked-up a bit relative to April/May, but there are persistent concerns about higher gas prices, inflation reaccelerating & price competition in the 2H," Wolfe Research analyst Greg Badishkanian wrote.

Badishkanian continued, "Our checks occurred last week and at that point optimism hadn't reached pre-war levels yet. They were still concerned that if the conflict dragged on, it would hurt their respective industries."

He noted, "When we asked some of the operators within more discretionary segments about the impact of a potential lasting peace deal, they all thought it would boost sales and profitability in the coming quarter or two."

Where has operator optimism changed the most versus two months ago?

The read-through: Consumer sentiment is stabilizing, but the improvement is uneven. The weakest categories are RV dealers, home improvement, boat dealers, beer, auto dealers, fast food, and casual dining, all of which remain negative.

However, the strongest categories are Harley dealers, powersports, ag dealers, short-term rentals, convenience stores, and lodging.

The Harley outperformance is an outlier.

Operators expected that if the US-Iran conflict persisted into July, the impact would only be slightly negative.

Badishkanian and his team spoke with operators across various industries. Here is what they had to say

Leisure

We met with Harley's (HOG) investor relations to discuss trends in the business and conversation primarily focusing around retail sales, sustainability of the business, inventories, & new product launches. HOG highlighted that retail sales are accelerating, and dealer sentiment is improving for them, but there is still work to be done in order to maintain the momentum of the top-line. The team reiterated that inventories remain healthy worldwide, and mgm has prioritized destocking. The launches of the Sprint and Sportster models were brought up in the conversation as key initiatives for maintaining momentum into 2027. Mgmt highlighted that despite the newer, lower-priced bikes being lower margin they expect them to profitable and bring in a newer entry level customer to Harley.

We caught up with Norwegian's (NCLH) VP of Investor Relations & Corporate Communications this week when we talked through the 3Q yields pressure, revenue management, marketing strategy, the Great Stirrup Cay initiatives, and shore side cost management. NCLH still expects 3Q yields to be under the most pressure for the full year, and the company has started to shift towards getting 2027 on the right trajectory. The Great Stirrup Cay Water Park and Pier are set to open on September 4th, with an expectation for 25bps of yield lift in 2026 and 75bps for the full year '27. The team also highlighted a greater focus on marketing spend, & corporate costs shoreside.

Restaurants

Yum! Brands (YUM) has entered definitive agreements to sell Pizza Hut for $2.7B. Pizza Hut (excluding Pizza Hut China) will be acquired by LongRange capital for ~$1.5B. In addition, Pizza Hut China will be acquired by Yum! China for ~ $1.2B. The company will continue to provide Byte (its proprietary tech platform), as well as select corporate services to Pizza Hut ex-China. Yum! expects the fees from these services to offset corporate G&A expenses historically allocated to Pizza Hut. Both transactions are expected to close in 3Q26.

FAT Brands completed the final step of its bankruptcy restructuring, with FBG Bid Co. acquiring assets tied to 13 concepts for about $595 million and transferring more than 1,700 restaurants to a lender-backed group. The company filed for Chapter 11 in January under roughly $1.5 billion in debt. Twin Peaks was sold separately for $359.5 million, and Smokey Bones ceased operations after no buyer was found.

Food Retailers

Kroger (KR) reported roughly in-line 1Q results with expectations and reaffirmed its FY outlook. ID sales ex. fuel increased +1.0% (64bps headwind from egg deflation) vs consensus at +0.9% and decelerated 60bps on a 2-yr basis from the prior quarter. Adj EPS of $1.58 missed consensus at $1.59. Kroger continues to expect ID sales of +1.0-2.0% (including ~130 bps headwind from IRA) with the midpoint in line with consensus at +1.5%. Operating profit of $5.0-5.2bn is 3.4% above consensus of $4.93bn, as questions persist about the level of price investments to come. The EPS range of $5.10 to $5.30 is 3c below consensus.

Ahold Delhaize (Not Covered) announced the nomination of Claire Peters as the new CEO of Ahold Delhaize USA. Ahold Delhaize US operates Food Lion, Giant, Hannaford and Stop & Shop supermarket locations in the US. Claire most recently served as the VP fo Worldwide Fresh at Amazon, but has also held roles at Woolworth's Group & Tesco.

Broadlines & Hardlines

The Joint Center for Housing Studies released their 2026 State of Nation's Housing report this week. The report and webcast to follow were cautious as the affordability crisis continues to worsen, remodel spend is still above pre-COVID levels and pull forward remains a challenge for the industry. Median Home Prices remain elevated vs median household income, at nearly 2008 highs, and affordable units supply continues to be constrained. Click here for our full takeaways and data parsing.

Target (TGT) continues to accelerate the pace of change in the business. One of the best examples of this is fun 101, where Target is allowing merchants to have more runway in these categories to make changes. Recent announcements like the Issac Mizrahi partnership, Olivia Rodrigo's exclusive music launch, and even increased focus on Trading Cards are driving customers back to TGT. We think further leaning into Fun 101 and these cultural events will be an important part of Target's go-forward strategy and whether the business can maintain momentum. Read Spencer's full takeaways here.

La-Z-Boy (LZB; not covered), a furniture manufacturer, reported F'4Q results which beat Street estimates, with F'1Q guidance also ahead of consensus. Management believes they have levers to drive growth in their business, while the timing of a return to growth in the broader industry remains uncertain, but remain optimistic about an eventual rebound in furniture and home furnishings, which historically grew +3% to +4%

CarMax (KMX; not covered) posted F'1Q (ending May 31st) results ahead of expectations with EPS of $1.31 vs FC 97c. Sales were up +6.2% to $8.01bn vs FC for $7.42bn, led by higher wholesale revenue, which grew +14% (units: +8.4%; avg selling price: +5.1%). Used unit comps were also better than feared at -0.8% vs FC -2.7%

A consumer inflection point appears to be approaching, but the timing still largely hinges on fuel prices staying well below the $4 national average.

Tyler Durden Mon, 06/22/2026 - 20:30

No New Laws Required... Private Biometrics Are Building The Digital ID Prison

Authored by Patti Johnson via The Burning Platform blog,

That “black pill moment” is arriving faster than many realize. Not primarily through sweeping new government mandates, but through private companies quietly normalizing biometric data collection under the banners of “security,” “fraud prevention,” and “child protection.” They are erecting the infrastructure for a world where you cannot easily participate in daily life, commerce, or even basic online access without surrendering your face, your license scan, or other biometrics. Once the systems exist and the data flows, laws can simply ratify what private actors have already made routine.

In a recent commentary “Digital ID Black Pill Moment”, I highlighted a sobering reality: 186 out of 198 countries already have digital ID systems in place. Only a shrinking handful of nations lack foundational national digital IDs. As I wrote, “the global push for digital IDs is far advanced, likely past the point of no return, aligning with the UN’s 2030 goal of universal legal identity and enabling a globalist digital currency system that could control access to everything.”

Facebook/Meta: Selfie or Stay Locked Out

Government mandates are not required to finish building the digital surveillance prison. Citizens are willingly submitting their biometrics to access social media sites. For example, I am no longer on Facebook. They banned me during the Covid era after I began sharing information about the true contents of the shots and alternative treatments. A friend just sent me a Facebook post and I could not view it without taking a selfie and sending it to FB. No way was I going to comply.

Try viewing certain Facebook posts or recovering a flagged account, and you may hit this wall. Users are increasingly prompted to submit a video selfie turning their head in different directions so the system can map facial geometry to “prove you’re a real person” or restore access. The company states it uses this to combat scams and compromised accounts, and claims the video is deleted after verification.

Here is what the prompt looks like:

blogger.googleusercontent.com

about.fb.com

This is not a rare case. It is quickly becoming the normal way companies handle account recovery, new account setup, suspected suspicious activity, or even basic access to articles and information on many websites. Your facial biometric data is sent to a private company that already holds huge amounts of user information and is under constant pressure and often partners with governments and international standards organizations.

Uber: Selfie + Driver’s License Scan Just to Ride

My husband recently tried to order an Uber ride and was required to submit a selfie plus front and back photos of his driver’s license before the app would proceed. Uber’s official materials describe identity verification (including selfies matched via facial recognition) primarily for drivers to prevent account sharing, and for riders it is often framed as optional for a “verified badge.” Yet real users are encountering these hard prompts in practice.

Here are examples of the verification flows Uber and similar platforms use:

ktla.com

i.ytimg.com

The stated reason is safety and trust on the platform. The practical effect is another private company harvesting and cross-referencing your facial biometrics and government ID data.

Banking, Finance, Telecom, and Beyond

Major banks now routinely use facial recognition or selfie verification for mobile app logins, high-value transfers, account opening (a process known as KYC, or “Know Your Customer” identity verification required by banking regulations), and fraud checks. Telecom providers require selfies for SIM card swaps (replacing your phone’s Subscriber Identity Module card) or account modifications. Gig economy platforms (such as ride-sharing or delivery services like Uber, DoorDash, or similar) use third-party services that demand selfie plus ID document verification. Some retail and payment systems are piloting biometric checkout.

Here is the kind of selfie/biometric prompt users see in identity verification flows used by banks and fintechs:

veriff.com

verifynow.co.za

Proponents say this reduces identity theft, speeds up processes, and improves security compared to passwords or one-time codes. The result, however, is the same: your face becomes the key to your money and services.

Driver’s Licenses Already Contain Biometric Data

Every U.S. state requires a facial photograph on driver’s licenses and state IDs.

That photo is biometric data. Many states’ DMV databases feed into facial recognition systems used by law enforcement. REAL ID standards and emerging mobile driver’s licenses (mDLs) are digitizing and enhancing this further. Eighteen states already have biometric-enabled digital driver’s licenses.

Age Verification Laws Accelerate the Trend

Florida’s HB 3 (Online Protections for Minors) restricts social media access for children under 14 and requires parental consent for 14- and 15-year-olds. To comply, platforms must verify ages using government ID or biometric data. The result is that adults, too, will need to submit ID or facial biometrics simply to access platforms like TikTok, Instagram, and others. Similar requirements are advancing under the UK’s Online Safety Act, which mandates robust age verification, including facial age estimation, for sites hosting potentially harmful or pornographic content, with ripple effects across social media.

Parents Should be the Gatekeepers Not the Government

Proponents argue these measures protect children from predators, explicit content, and addictive algorithms, while giving parents better tools to manage access. I believe the real solution lies with parents themselves. Parents should be the primary gatekeepers, setting firm limits and supervising where their children go online.

Today’s children, immersed in cell phones from a young age, are losing the ability to communicate effectively on a normal, personal level. If I were raising children now, I would not give them a cell phone. We grew up with perfectly fulfilling childhoods without them. Instead of relying on government-mandated biometric checkpoints, we should return responsibility to families. Yet the architecture being built creates a universal biometric gateway for internet participation: one that affects everyone, not just minors.

The Bigger Picture: Agenda 2030 and the “Cannot Buy or Sell” Infrastructure

This is not happening in a vacuum. It aligns with the UN’s Sustainable Development Goal 16.9 push for universal legal identity by 2030 and the broader frameworks of the Great Reset / Agenda 2030. Private companies are doing the expensive, politically risky work of normalizing biometric surrender and building interoperable databases. Once the data exists at scale, faces linked to licenses, accounts, transactions, and online activity, adding legal requirements for purchases, services, or internet access becomes trivial.

We are told it is all for safety, convenience, fraud prevention, and protecting the vulnerable. Yet the cumulative effect is a world in which opting out becomes increasingly difficult, anonymity erodes, and every interaction can be tracked, verified, and potentially scored or restricted through biometric identifiers.

The infrastructure for systems in which you “cannot buy or sell without an ID” is being assembled one prompted selfie at a time by Meta, Uber, banks, app developers, and verification vendors. This often happens before governments even pass the final laws.

We have been warned. The question now is whether we will continue feeding the system our most personal biometric data in the name of convenience, or whether we will recognize the trap while there is still room to resist, opt out where possible, demand real privacy protections, and support alternatives that do not require surrendering our faces to participate in society.

Tyler Durden Mon, 06/22/2026 - 20:05

Biden Judge Sparkle Sooknanan Blocks Trump Admin SAVE Act Database

A Biden-appointed federal judge - who quit her previous job as partner at the Jones Day law firm because they did work for the 1st Trump administration - just ruled against the administration's plan to create a database to verify citizenship to be able to vote in US elections. 

Judge Sparkle Sooknanan ruled on Monday that officials across several government agencies "haphazardly combined and repurposed the private information of millions of Americans, including citizenship data that they knew to be unreliable," in order to comply with the Trump administration's attempts to implement election integrity measures. 

A March executive order directed the Social Security Administration (SSA) to create a “State Citizenship List” derived from its data, naturalization records and the Systematic Alien Verification for Entitlements (SAVE) database, an existing database maintained by the Department of Homeland Security (DHS) that is used to determine eligibility for federal programs.

Since the EO, said Sooknanan, "states have partnered with the federal government to access the database and are actively removing United States citizens from voter rolls based on inaccurate information," she wrote in her 75-page ruling. 

"All in all, the federal government has knowingly trampled on the privacy rights of American citizens in a manner that threatens the sacred right to vote. This Court cannot stand idly by while that happens," she continued. 

According to Sooknanan - ruling in favor of the League of Women voters, efforts to establish the database were unlawful - and violated the Social Security Act, Privacy Act and Administrative Procedure Act.

BREAKING: We just won a court order blocking the Trump-Vance admin’s attempt to haphazardly consolidate Americans’ sensitive data into a massive government database.

This protects millions from baseless investigations and unlawful voter roll purges – a critical win for voting… pic.twitter.com/cZxduqtqRi

— Democracy Forward (@DemocracyFwd) June 22, 2026

Reacting to the ruling, far-left organization Democracy Now wrote "This protects millions from baseless investigations and unlawful voter roll purges – a critical win for voting rights." 

Meanwhile, DHS general counsel James Percival said on X: "t’s amazing how hard the Left will fight to stop us from solving problems they insist do not exist. Judge Sparkle Soknanan’s latest ruling preventing DHS from addressing alien voting is just the latest example." 

It’s amazing how hard the Left will fight to stop us from solving problems they insist do not exist. Judge Sparkle Soknanan’s latest ruling preventing DHS from addressing alien voting is just the latest example!

— James Percival (@DHSGenCounsel) June 22, 2026

Tyler Durden Mon, 06/22/2026 - 19:40

Waymo Recalls Robotaxis After Cars Drive Into Construction Zones

Authored by Jill McLaughlin via The Epoch Times,

Waymo has recalled its entire fleet of vehicles after some of its driverless cars were caught speeding into freeway construction zones.

The voluntary recall on June 13 of the California-based tech company’s 3,871 vehicles is to fix its 5th-generation Automated Driving System (ADS) software so that it will recognize and avoid construction zones.

“Waymo’s mission is to be the world’s most trusted driver, and the data shows that we’re making roads safer in the communities in which we operate,” a Waymo spokesperson told The Epoch Times.

The National Highway Traffic Safety Administration’s (NHTSA) estimates that the entire fleet carries the software defect, according to the agency’s safety report.

“Under certain circumstances the [autonomous vehicles] may enter and drive at speed in freeway construction zones due to inappropriately prioritizing the avoidance of other freeway hazards and/or failing to recognize the construction zone,” NHTSA stated in the report.

Waymo investigated one such incident on April 11 and five on April 19 in which Waymo cars autonomously drove past ramp closure signs into freeway construction zones in Phoenix, Arizona, according to the report.

The company’s field safety committee implemented driving restrictions on April 20 until more improvements could be made, according to the report.

On May 18, seven Waymo vehicles in the San Francisco Bay Area entered freeway lanes in construction zones by driving between cones designating the lane’s closure. In this case, the software did not prioritize avoiding the other freeway hazards or failed to recognize the construction zone.

The safety committee put restrictions in place after the May incident, Waymo reported.

The recall is a notice of the company’s intent to improve its software and address the problems.

Waymo voluntarily restricted freeway operations in May while making improvements to the software to avoid other freeway hazards.

No collisions or injuries were reported as a result of the construction zone incidents. The company started offering public riders trips using freeways last November in the San Francisco, Los Angeles, and Phoenix areas.

The 5th-generation Waymo Driver on the all-electric Jaguar I-PACE. Waymo

This is Waymo’s second full-fleet recall this year.

In May, the U.S. Transportation Department issued a recall of Waymo’s 3,791 vehicles after one of its vehicles drove into a flooded and impassable road in San Antonio, Texas, and was swept away despite the car detecting that the road might be impassable.

The company notified federal and state regulators before filing a voluntary federal software recall that was published by the NHTSA, according to a company spokesperson.

New Ojai Rides

On May 28, Waymo rolled out its newest vehicle—the Ojai—featuring its 6th-generation technology serving riders in San Francisco, Los Angeles, and Phoenix.

The boxy, baby blue robotaxi is a fully electric and designed to be fully autonomous. The vehicle is designed for full accessibility with braille and screen readers.

The 6th-generation Waymo Driver is integrated into the all-electric Ojai. Waymo

The doors open like an elevator and the cabin is meant to feel like a “living room on wheels” with large LED screens and customizable temperatures and music, Waymo said.

Waymo plans to expand Ojai’s service area to include Denver, Las Vegas, and San Diego before opening it to more cities later this year, according to the company.

Tyler Durden Mon, 06/22/2026 - 19:15

China Gold Imports Soar To Two Year High, As Hong Kong Gold Bar Imports Surge Ahead Of Clearing System Launch

China’s monthly gold imports reached their highest in more than two years in May, showing the world’s biggest buyer’s appetite for bullion remained resilient as prices remained under pressure; the number prompted some to scratch their heads as to where all this gold is going in light of tepid official central bank purchases, coupled with the lowest gold withdrawals from the Shanghai Gold Exchange since the covid outbreak. 

As Bloomberg reports, imports were around 163 tons last month, the highest since March 2024, according to customs data released on Saturday. Volumes for the first five months of 2026 were about 692 tons, up by about 76% from a year earlier. 

Chinese demand for physical bullion bars, as well as metal linked to gold accumulation plans (low-barrier products that allow investors to buy gold incrementally), have been among the main drivers of the surge, said Song Jiangzhen, a researcher at the Guangzhou Southern Gold Market Academy. 

China also started implementing a new import licensing regime for gold from June 1, with certain banks facing fewer restrictions. But the change may have prompted some banks to use up their existing quotas before the new system began, Song said.

Curiously, in its latest official monthly update, China's central banb, the People’s Bank of China (PBoC) only increased its gold reserves by nearly 10 tonnes last month, its 19th consecutive month of bullion purchases. The State Administration of Foreign Exchange (SAFE) announced on Sunday that China's official gold reserves rose by 320,000 troy ounces or 9.95 tonnes in May to a total of 74.96 million troy ounces or 2331.52 tonnes.

China's total foreign exchange reserves rose to $3.4422 trillion at the end of May, increasing by $31.7 billion or 0.93% from April. This is the highest level for China’s FX reserves since November 2015; they have remained above $3.3 trillion for the past 10 months.

SAFE attributed the growth of reserves to a number of factors, including a firmer US Dollar Index and rising global asset prices, adding that China's sound economic momentum has underpinned the stability of its reserves.

Experts have noted that China's rising foreign exchange reserves are closely linked to the country’s export performance.  China's total foreign trade in the first four months of 2026 rose to $2.39 trillion, an increase of 14.9% year-on-year, with exports rising by 11.3% percent to $1.37 trillion and imports rising 20% percent to $1.01 trillion, according to the latest data from China's General Administration of Customs

According to the latest central bank gold purchase tracker from Goldman, of the 59 tonnes of gold purchased by central bank in April, China's PBOC was estimated to have bought 24 tonnes of gold, or well below the recent pace of imports which are about 5x greater. While the pace of central bank gold purchases has moderated to ~50 tonnes/month on a 3-month (seasonally adjusted) and 12-month moving average basis, Goldman views the ongoing diversification trend as structural.

Goldman remains bullish on gold, with continued central bank diversification the main structural driver of the bank's constructive base case for gold prices, contributing 9% to its forecast for appreciation by Dec26. As we highlighted last week, a recent World Gold Council survey supports Goldman's optimistic view: a record 45% of the 76 central banks surveyed between February and May expect to increase their own gold reserves over the next 12 months, while ~90% expect global reserves to rise with the remainder expecting broadly stable holdings. As a result, Goldman assumes continued central bank accumulation of 50t/month in 2026 and 40t/month in 2027.

Meanwhile, as Kitco notes, China’s domestic gold market has shown definite signs of cooling in recent weeks. 

“Amid heightened market uncertainty, gold ETFs have seen an overall reduction in assets under management, with several funds experiencing significant net outflows,” noted a report from Gelonghui Finance. “As of June 3, 14 gold ETFs recorded combined net outflows exceeding RMB 10 billion [$1.48 billion] over the past month.”

“The previously widely accepted investment view of 'buying on dips amid falling gold prices' has started to face divergence under current volatile market conditions,” they added.

Gold prices have retreated by about a quarter from the record highs reached in January, weighed down by EM selling (most notably Turkey in the early days of the Iran war), and global inflation fears amid the war in the Middle East which have pushed the US dollar sharply higher. While strong buying from Chinese consumers was a key catalyst for the January frenzy, domestic demand has since moderated, but without a major slump.

Adding to the mathematical mystery, the latest numbers from the Shanghai Gold Exchange (SGE) showed that gold withdrawals in May totaled only 63.5 tonnes – the lowest level since February of 2020 during the first wave of the COVID-19 outbreak, and around half of what they were in March of this year. Industry professionals told Gelonghui Finance that “while short-term gold price volatility may persist, the core rationale supporting gold’s strategic allocation value remains intact over the medium to long term.”

In other words, there appears to be a gap between near record imports, tepid official central bank demand, and muted gold withdrawals from the SGE. 

This is not a new development: as we documented previously, China is well known for indicating just modest central bank purchases, even as total Chinese purchases of gold on the London OTC market are orders of magnitude higher. 

China reported 5 tonnes of gold purchases in February (160k oz per PBOC).
China actually bought 50 tonnes of gold in February (per GS) pic.twitter.com/oQifGszNcQ

— zerohedge (@zerohedge) April 13, 2025

Separately, Bloomberg also reported that at least four of the 11 banks participating in Hong Kong’s new gold clearing system are importing large bullion bars in preparation for the mechanism’s planned launch in July.

Traders are receiving orders from some of the clearing banks to move 400-ounce gold bars into the city, Bloomberg reported citing people familiar with the matter. The bars meet the London Good Delivery industry standard.

The 400-ounce bars are typically traded by banks and sovereign entities in London, the world’s largest bullion trading hub, but are less common in the Asian market, which is dominated by much smaller kilobars. The banks need to build up inventories to allow for physical delivery when clearing begins next month.

By launching its gold clearing system, Hong Kong is securing first-mover advantage in a push to become Asia’s preeminent hub for bullion trading. Last week, Singapore announced its own plans to launch a clearing mechanism by the end of the year.

Both cities are aiming to capitalize on strong demand in Asia, where many investors remain bullish about the long-term prospects for the precious metal as an alternative store of wealth despite the recent drop in price as the war in the Middle East fanned concerns around inflation and higher interest rates.

In an emailed response to questions, a spokesperson for the government agency behind the system, known as the Financial Services and the Treasury Bureau, said the clearing company had been “working closely with the market to formulate the framework and rules of the clearing system” and that preparatory work had entered its final stage.

Eleven banks are on the board of the Hong Kong Precious Metals Central Clearing Company. Some of these lenders will become clearing banks from the launch, whereas others will take longer to build up their bullion capacity. While Hong Kong plans to start by using the London Good Delivery standard, its future plans are still to be decided, the people said.

In Singapore, the clearing system will be aligned with the London Good Delivery framework for large bars, as well as delivery and settlement standards for kilobars adopted by major exchanges in Chicago and Shanghai.

Tyler Durden Mon, 06/22/2026 - 18:50

Ron Paul: Trump's Attempt To End The Iran War Infuriates The Uniparty

Authored by Ron Paul

Against the odds, the Memorandum of Understanding signed by the US and Iran appears to be holding, after threats and counter-threats. It may collapse, but it has survived a first round of talks between the two sides in Switzerland over the weekend.

President Trump started a war on Iran against all sober guidance and in violation of the US Constitution's requirement that only Congress can declare war. There must be a reckoning for our elected leaders who violate their oath of office, the Constitution, and simple common sense.

However, what is more telling is the reaction when President Trump finally took the correct move and attempted to end the war. The neocons who had hailed him as a great leader – Levin, Bolton, Pompeo, etc. – suddenly turned against him when he turned against further escalation of the war.

via CNN

Even Trump’s top funder, Miriam Adelson, attacked Trump in her newspaper Israel Hayom. "You could have been the greatest president of all, but you failed," the newspaper wrote in an editorial.

Not much gratitude from the Israel-first crowd, even if the war was started to benefit Israel.

And more telling even than this was the reaction of the "opposition" party in Congress, the Democrats. They attacked him harder for ending – or at least pausing – the war more than for starting the war in the first place!

Sen. Adam Schiff (D-CA) called the MOU a "capitulation." Sen Chris Murphy (D-CT) called the MOU an "embarrassing document." Sen. Amy Klobuchar falsely claimed that President Trump was paying Iran $300 billion to re-open Hormuz.

This is more evidence – as if any is needed – that our foreign policy is run by the "uniparty." When it comes to wars, there is no Republican Party nor is there a Democratic Party. There is only the "yes!" party.

Congress remains silent in the run-up to war. Congress remains silent when the President launches a war. Congress even remains silent when the war begins going badly. It is only on those rare occasions that a president takes steps to correct his mistake that Congress finds its voice.

Yes, there is plenty to criticize. After weekend talks, the US side, led by Vice President JD Vance, is celebrating as a "breakthrough" that the Strait of Hormuz is open again and that Iran has reportedly agreed to the return of UN inspectors. But the Strait was open before this war and UN inspectors were in Iran before President Trump unilaterally pulled out of the JCPOA "Iran Deal" in his first term.

The only difference now is that we burned through likely several hundred billion dollars, we lost dozens of aircraft and other military equipment, and we likely lost more service members than the Pentagon is admitting.

It is a reminder of why the Founders intended to make sure that any war must be declared by the people’' Representatives before the first bullet is shot: it should be very hard to launch wars.

Nevertheless, those who are truly against the wars should, in my opinion, hold their fire for the time being in hope that a lasting resolution can be found. The President is being attacked from all sides by the war party. Now may not be the best time for the peace party to join in.

Tyler Durden Mon, 06/22/2026 - 18:25

JD CEO Warns 700,000 Delivery Workers Will Be Replaced By Robots "Sooner Or Later"

The founder of China's largest e-commerce and logistics companies fired off a warning shot to hundreds of thousands of delivery workers that the rise of automation and AI adoption in the last-mile will result in hundreds of thousands of job losses "sooner or later." 

Richard Liu, founder and chair of JD.com, told the audience at the Asia-Pacific Economic Cooperation CEO Forum in Beijing on Sunday, according to the Financial Times, that 700,000 delivery workers will be replaced by robots "sooner or later."

"In the future, when robots are delivering parcels, sooner or later, there will be a day when couriers are basically no longer needed," Liu said, adding, "It will definitely be robots delivering parcels. But I really do not want our 700,000 brothers to go without meals, without jobs."

Liu's timeline for the robotic takeover of last-mile delivery was vague and uncertain, but a number of robot delivery companies are already in pilot programs or commercialization across major Chinese cities.

He said JD has signed deals with 120 schools to retrain couriers for roles such as robot maintenance and repair, noting that the rise of robots will require new technical jobs. 

Liu elaborated on the shift of some couriers into robot repair jobs, saying "robots are machinery . . . they will always, at some point, have faults."

His comments come as China's gig economy continues to expand, with temporary and blue-collar platform workers expected to reach 320 million this year, or about 40% of urban employment. At the same time, youth unemployment remains elevated, raising concerns that robotics and AI could squeeze both blue-collar and white-collar workers.

The pace at which China adopts automation across its economy should outpace the U.S., given that development is happening at hyperspeed and many of the world's robotics supply chains are based in the world's second-largest economy.

You were promised robots that take the night shift.

The pitch writes itself. Machines that never tire, never quit, never ask for a raise. The end of human labor as we know it.
Here's what the money actually bought.

Figure is worth $39 billion. It has 40 robots loading parts at… pic.twitter.com/eeLXjHKp82

— Rand Group (@randgroup) June 22, 2026

Earlier this month, Barclays internet equity analyst Ross Sandler published a note titled "Autonomous Food Delivery Likely Hits Critical Mass By 2030," outlining how automation in last-mile delivery could push delivery costs down to as little as $1 per order in the US. 

"The promise of autonomous food delivery is still a few years out, but showing very positive signals in markets that have been quick to embrace it. AVs should reduce the cost of delivery for both marketplaces (currently $8-$10 per order) and for consumers (tipping, $5 per order) down to as low as $1 per order," Sandler wrote in the note.

He continued, "As witnessed already in select APAC geos with low delivery costs, when this kind of improvement happens to the cost curve, consumer adoption should go through the roof. China's online food delivery penetration is 40% of orders in tier one cities, well ahead of the US, with cost being the biggest delta." 

"UBER and DASH have a number of strategies in place in both SDR (sidewalk delivery robotics) and drones, but claim that these efforts are not likely to hit a material percentage of orders until 2030 and beyond."

The analyst sees "sidewalk delivery robots as the nearer-term opportunity. Current costs are around $5 to $7 per drop, but could fall toward $1 over time as utilization improves. Drones offer faster delivery and a larger "wow" factor, but regulatory hurdles, battery limitations and airspace approvals make the path more complicated."

A recent UBS note on forecasts for global shipments of humanoid robots suggests the surge will begin later this year or next and really erupt in the 2030s. 

There was also news earlier that Nvidia is pushing to develop software and chips to improve humanoid robot safety and enable closer human interaction, including physical collaboration in workplaces.

First signs:

• $150 Humanoid Robot House Cleaning Service Threatens To Undercut Maid Services

The next evolution of AI is robotics, displacing blue-collar jobs in the physical world. We suspect the adoption rate will be much slower in the U.S. than in China because supply chains are not as robust in the West. But for workers in jobs that can be easily replaced by robots, such as last-mile delivery or production-line work, it may be time to find a construction job as the historic data center buildout progresses.

Blue-collar or white-collar, no one is safe from the AI revolution, as Goldman analysts revealed the top 20 college degrees most exposed to AI job disruption (read here). 

We suspect that, just like data center buildouts and localized resistance, there will be public uproar when jobs are eliminated by robots later this decade.

Tyler Durden Mon, 06/22/2026 - 18:00