Dismal, Tailing 10Y Auction Sees Lowest Foreign Demand Since Jan 2025 As Yields Soar

With 30Y yields trading on the wrong side of 5% today, all eyes were on today's 10Y refunding auction to see if it would be ugly enough to push yields to 4.50% or higher. Here is what happened.

Just after 1pm, the Treasury announced that the high yield on today's sale of $42 billion in 10Y paper was 4.468%, the highest yield since Jan 2025, and a 0.4bps tail to the When Issued 4.464%, the 4th consecutive tail for benchmark 10Y auctions.

The bid to cover was 2.402, down from 4.249 and the lowest since February (below the six auction average of 2.47).

Internals were also weaker, with foreign bidders awarded just 63.95%, down from 65.32% a month ago and the lowest since Jan 2025, and a far worse than the recent average of 68.5%. And with Directs taking 24.1%, the highest since Jan 26, Dealers were left holding 12.0%, slightly higher than the 10.3% recent average.

Overall, this was a very poor, tailing auction, and the only reason bonds yields are not much higher is because they were already very high to begin with, highest since July 2025 to be precise. However, the lack of demand suggests that the next move in yields is likely to be even higher, the only question being where will it stop...

Tyler Durden Tue, 05/12/2026 - 13:21

Pakistan 'Categorically Rejects' Reports It Hid Iranian Military Planes From US Attack

A day after initial allegations were first widely reported, Pakistan's government has issued a public rejection of claims that it hosted Iranian military aircraft in order to shield them from coming under US-Israeli attack during the opening weeks of Operation Epic Fury.

However, Islamabad in the statement did acknowledged the presence of some Iranian planes at its airports - but described these as legitimate escorts related to high level diplomatic visits and contacts.

Iranian jets targeted by US military during Epic Fury

"Following the ceasefire and during the initial round of the Islamabad Talks, a number of aircraft from Iran and the United States arrived in Pakistan to facilitate the movement of diplomatic personnel, security teams and administrative staff associated with the talks process," a Tuesday statement by Pakistan said. "Some aircraft and support personnel remained temporarily in Pakistan in anticipation of subsequent rounds of engagement."

The initial Monday headlines suggesting Pakistan sought to protect Iranian military assets resulted in some outrage in D.C. and among the pundit class.

A late in the day Monday CBS News report alleged that US-ally Pakistan allowed Iran to park military aircraft at its airfields, and thus outside the US-Israeli strike zone during Operation Epic Fury:

As Pakistan positioned itself as a diplomatic conduit between Tehran and Washington, it quietly allowed Iranian military aircraft to park on its airfields, potentially shielding them from American airstrikes, according to U.S. officials with knowledge of the matter. 

Iran also sent civilian aircraft to park in neighboring Afghanistan. It was not clear if military aircraft were among those flights, two of the officials told CBS News. 

President Trump and admin officials have repeatedly declared the utter and total destruction of Iran's air force and navy, but apparently some planes were missed.

According to more from CBS: 

Together, the movements reflected an apparent effort to insulate some of Iran's remaining military and aviation assets from the expanding conflict, even as officials publicly served as brokers for de-escalation. 

The U.S. officials, who all spoke only under condition of anonymity to discuss national security issues, told CBS News that days after President Trump announced the ceasefire with Iran in early April, Tehran sent multiple aircraft to Pakistan Air Force Base Nur Khan, a strategically important military installation located just outside the Pakistani garrison city of Rawalpindi. 

One well-known war correspondent who spends time in Pakistan appeared to back Pakistan's account:

As someone who was also in Pakistan for weeks after the Islamabad talks waiting in hope of round two, this checks out:

“Following the ceasefire and during the initial round of the Islamabad Talks, a number of aircraft from Iran and the United States arrived in Pakistan to… https://t.co/eLyANnlUMG

— Caitlin Doornbos (@CaitlinDoornbos) May 12, 2026

Islamabad is further framing the CBS story as one which seeks to dampen confidence in its role as a neutral mediator, as the warring sides still seek to hammer out a basis for future talks and a peace deal.

Tyler Durden Tue, 05/12/2026 - 13:00

"Actions Speak Louder Than Words": Can Tom Steyer Now Sue Katie Porter For Defamation?

Authored by Jonathan Turley,

California gubernatorial candidate Tom Steyer has run on the slogan of “actions speak louder than words.”

It may now be time for him to prove it and bring a defamation action against opponent Katie Porter for her accusations that he engaged in dirty politics.

Porter used a CNN interview to accuse Steyer of finding and leaking the infamous video of her abusing a staffer and yelling “Get out of my f**king shot.”

Katie Porter’s campaign for governor has languished at around ten percent, even after the implosion of Eric Swalwell as the frontrunner among Democratic candidates. At times, she appears to be seeking to win by profanity rather than policies, holding up signs reading “F**k Trump” and other insults.

On CNN’s Inside Politics, however, Porter may have gone too far with her rhetoric. She told Dana Bash that it was Steyer who stabbed her in the back with the video:

“Well, given that Tom Steyer is the person who leaked the video with me and the staffer from five years ago, he pretty clearly wanted to be governor bad enough to knock me down to do it.”

Steyer’s campaign immediately denied the allegation, insisting (through spokesperson Sepi Esfahlani) “Tom has nothing to do with that video. This is an attempt from Katie Porter to deflect from her past mistakes. Katie Porter only has one person to blame for her standing in the race, and it’s herself.”

As for Bash, the host clearly wanted to set the network apart from Porter’s claims, stating at the end of the interview “I should note that we don’t have evidence that Steyer leaked that video of you. If you have it, please bring it.”

That evidence has not been forthcoming.

The question is whether Porter has produced a more viable defamation case than a political campaign.

At the outset, Steyer would face the higher burden as a public figure.

In New York Times v. Sullivan, the Supreme Court crafted the actual malice standard, requiring public officials to shoulder the higher burden of proving defamation. Under that standard, an official would have to show either actual knowledge of its falsity or a reckless disregard of the truth.

The standard was later extended to public figures.  The Supreme Court has held that public figure status applies when  someone “thrust[s] himself into the vortex of [the] public issue [and] engage[s] the public’s attention in an attempt to influence its outcome.” A limited-purpose public figure status applies if someone voluntarily “draw[s] attention to himself” or allows himself to become part of a controversy “as a fulcrum to create public discussion.” Wolston v. Reader’s Digest Association, 443 U.S. 157, 168 (1979).

Steyer is a full public figure.

Yet, if Porter has no evidence of his connection to the videotape, this could satisfy either the actual malice or the reckless disregard elements.

However, is it defamatory to accuse a fellow politician of playing dirty?

The release of the videotape was not a criminal act and Porter does not suggest such a violation in her accusation. She is simply saying that Steyer will do most anything to win, including dirty tricks.

Richard Nixon, Hillary Clinton, and others have been accused of dirty tricks in politics. It is a standard accusation in politics.

Yet, Steyer has denied the allegation, so Porter is also effectively calling him a liar.

This is not a matter of opinion alone.

Certainly, Porter’s view of Steyer’s character and ambition is an opinion. However, whether he was the one who released the video is either true or it is not.

The Porter claim is meant to lower Steyer’s reputation with the public, though she can claim that all political battles are ultimately an attack on character, capability, or both.

The controversy touches on a sometimes subtle point of fact v. opinion.

The case reminds one of Mr. Chow of New York v. Ste. Jour Azur, 759 F.2d 219, (2d Cir. 1985), where a Chinese restaurant sued a food critic for a negative review. The reviewer made the following allegedly libelous comments:

(1) “It is impossible to have the basic condiments … on the table.”

(2) “The sweet and sour pork contained more dough … than meat.”

(3) “The green peppers … remained still frozen on the plate.”

(4) The rice was “soaking … in oil.”

(5) The Peking Duck “was made up of only one dish (instead of the traditional three).”

(6) The pancakes were “the thickness of a finger.”

The jury found for the restaurant and awarded $20,000 in compensatory and $5 in punitive damages. However, the court of appeals reversed, holding that the statements were protected as “opinion.” Notably, the statement about the Peking Duck came closest in the court’s view since it was a factual statement, but the court still found that it would not support the verdict due to the absence of malice:

Because of the absence of evidence showing either that Bridault or Millau knew that Peking Duck was not traditionally served as three dishes or that they subjectively entertained serious doubts about the accuracy of the statement that it is traditionally served in three dishes, we cannot say that the existence of malice has been established by clear and convincing evidence. Thus, this statement cannot support the judgment entered below.

Here, Porter claims that Steyer was the culprit behind the video release despite Steyer’s denials.

Generally, broadcast statements on the news are treated as libel as opposed to slander.

Steyer could even attempt to argue that this is a per se category of defamation by impugning his integrity. It is not necessary in California to allege an actual criminal act so long as the statement attacks the person’s integrity as to bring him into disrepute. Maher v. Devlin (1928) 203 Cal. 270, 275. This includes falsely charging a person with “a violation of confidence reposed in him or with treachery to his associates.” Dethlefsen v. Stull (1948) 86 Cal.App.2d 499, 502.

It is admittedly a close case and Porter could argue opinion defenses. Truth also remains a defense if Porter can do as Bash requested and bring the receipts for the allegation.

In the end, Steyer may not consider the powder worth the prize when it comes to Porter. It would, however, make for a more interesting case than the campaign of either candidate.

Tyler Durden Tue, 05/12/2026 - 12:20

Shadow Wars: IRGC Operatives Tried To Infiltrate Kuwait, Firefight Ensues

Kuwait and Iran are barely separated by a small section of Iraqi coastline at the head of the Persian Gulf, but they do share a maritime border. But given the small oil-rich Sunni sheikdom's close proximity to the Islamic Republic, and given its historic role in hosting American forces and bases, it is to be expected that it would be heavily targeted in Iranian military operations.

Indeed, Kuwait has alongside the UAE absorbed some of the biggest ballistic missile and drone attacks out of Israel during the US-Israeli Operation Epic Fury. US forces have even had to retreat to other locations deeper in the Middle East or even outside the theatre, given the repeat attacks and looming threat of new attack even amid broader ceasefire.

But in tandem with an air war, there's has been a covert war happening in the shadows, with Kuwait's interior ministry newly announcing on Tuesday it has arrested four 'infiltrators' affiliated with Iran's Islamic Revolutionary Guards (IRGC). The ground attack incident is said to have happened earlier this month, and involved heavy exchanges of fire.

IRGC special operator, file image: Iran International

The elite IRGC operatives reportedly tried to enter the Gulf state by sea, per Kuwait state news agency KUNA. A firefight ensued, and the ministry later confirmed one member of Kuwait’s armed forces was seriously wounded in resulting clashes with the infiltrating small group of Iranians.

The Interior Ministry accused the IRGC operatives of seeking to launch "hostile" activities inside Kuwait. "Confession of the infiltration group to Kuwaiti territories during interrogation with them of their affiliation to the Revolutionary Guard in the Islamic Republic of Iran," the ministry stated.

KUWAIT HAS SUMMONED IRAN’S AMBASSADOR AFTER ALLEGING THAT IRGC PERSONNEL INFILTRATED BUBIYAN ISLAND & CLASHED WITH KUWAITI SECURITY FORCES

It appears that only two of the Iranian group are in custody while two escaped, per an initial statement. As for the operatives in custody, "They confessed to being tasked with infiltrating Bubiyan Island aboard a fishing boat rented specifically to carry out hostile acts against Kuwait," the official Kuwaiti statement added.

Other sources, including the defense ministry, say that all four have been detained and identified, amid early conflicting reports:

Kuwait’s Defense Ministry reported on May 3 that naval Col. Amir Hossein Abdolmohammad Zaraei, naval Col. Abdolsamad Yedaleh Ghanavati, naval Capt. Ahmad Jamshid Gholamreza Zolfaghari and 1st Lt. Mohammad Hossein Sohrab Foroughi Rad had been arrested in territorial waters after attempting to infiltrate Bubiyan Island.

Kuwaiti Armed Forces stationed on Bubiyan Island exchanged fire with the men during the confrontation, resulting in severe injuries to one service member.

Bubiyan is the largest of a group of eight islands belonging to Kuwait, lying in the north-western corner of the Persian Gulf. Importantly, the large island is home to Mubarak Al Kabeer Port, part of China's Belt and Road initiative.

Kuwait is a very small country and Bubiyan Island is not some distant place but strategically located close to population centers and energy sites although the island itself is empty. pic.twitter.com/Fdd8RU3NqS

— Alberto Miguel Fernandez (@AlbertoMiguelF5) May 12, 2026

That the alleged Iranian high-risk operation focused on an island with a key China-built port is quickly becoming focus of Western media reports. According to ABC:  

Kuwait accused Iran on Tuesday of sending an armed paramilitary Revolutionary Guard team to launch a failed attack earlier this month on an island in the Middle East nation home to a China-funded port project.

The accusation by Kuwait of an Iranian link to the incident came just before U.S. President Donald Trump travels to Beijing for a meeting with Chinese President Xi Jinping.

Tehran has yet to acknowledge or own up to the incident, and is not expected to, unless it is an outright denial. 

One freight and oil transit industry headline from early March underscores just how ambitious and costly the China-backed project remains: Kuwait, China Advance USD 4.1 Billion Mubarak Al-Kabeer Port Project...

Kuwait and China have agreed to strengthen their commercial and maritime cooperation through the construction of a new container port on Kuwait’s Bubiyan Island. The project marks a significant step in deepening bilateral economic ties and enhancing the oil-rich country’s strategic position within regional shipping networks.

The Chinese majority state-owned firm China Communications Construction Company will undertake the Engineering, Procurement, and Construction (EPC) works for the project’s first phase.

The development of the new container hub in the north of the country is expected to expand Kuwait's port capacity and reinforce its role in both regional and global trade flows.

Chinese-funded Mubarak Al-Kabeer Port project 

And yet, current Kuwaiti oil export flows remain forcibly halted, due to the Strait of Hormuz closure and ongoing standoff, which has on the one hand seen Iran target 'unauthorized' foreign shipping with drones and missiles, and on the other seen the US Navy maintain its own blockade of Iranian ports.

Tyler Durden Tue, 05/12/2026 - 11:45

"Like Band-Aid On An Arterial Bleed": Ranchers Warn Trump's Proposed Beef Tariff Cut Offers Only Temporary Relief

Summary:

• Cattle ranchers respond with first-takes on proposed policies from White House 

• Tuesday: Trump team is "fine-tuning" an executive order aimed at reducing ‌domestic beef prices

• Monday: Tyson Sinks, Walmart Falls After Trump Moves To Temporarily Lower Beef Import Tariffs

Ranchers Respond

Following Monday afternoon's WSJ report that the White House will temporarily cut beef import tariffs, we spoke with three ranchers across America's beef-producing corridor, centered on the Great and Southern Plains, to gauge industry sentiment.

The message from all three, including Elkins Cattle Company, Beck Ranch, and KC Cattle Company, premier ranchers featured in the ZeroHedge Store, was broadly the same: the proposed policy may briefly ease pressure on ground beef prices at the supermarket, but it does little to address the deeper structural crisis facing the nation's cattle herd and could further weaken domestic producers.  

With U.S. herds already near historic lows and ranchers still battered by elevated costs for diesel, labor, fertilizer, equipment, and transportation, a flood of cheap imported beef risks pushing cattle prices lower without reducing producers' operating expenses.

In other words, Trump's potential move to ease beef prices at the store appears aimed at boosting affordability ahead of the midterms. What needs to happen is for the administration to push pro-growth policies that rebuild America's cattle supply over the medium to long term.

By Tuesday morning, Reuters reports that the Trump team is "fine-tuning" an executive order aimed at reducing ‌domestic beef prices.

"The president is committed to lowering beef and other grocery costs for everyday Americans, and the administration is accordingly fine-tuning potential executive actions to alleviate temporary shortages in the domestic beef market," the White House told the outlet in an emailed statement.

Here's the first take from Tim Elkins of Elkins Cattle Company (of Texas):

Here is how I see it:

Tariff-rate quota is basically a penalty threshold that gets removed. This in turn, allows imported beef to enter at lower tarrifs. US cattle herds are at record lows BUT we have slowly been rebuilding. By removing this barrier this is going to drive cattle prices down.

While that’s GOOD for consumers, it’s VERY bad for us cattle ranchers. Our input costs are still sky high. Think: Transport (diesel costs), tractor parts, labor, fertilizer etc. These costs DONT come down for us with this. It just makes us compete with lower cost, lower quality imported beef.

With supply rising due to this, it will lower consumer costs, but it doesn’t change our input costs. We already have been subsiding a lot of the costs because the consumer will simply not pay the prices, meaning lower profit margins to us.

To the point of barely surviving the way it is today with cattle prices are RECORD HIGHS. The main brunt of this will be felt amongst Cow-Calf operators (who grow herds) and stocker operations (feeders).

The BIG winners here, again, is the BIG 4 packers who have a monopoly on the industry. (Tyson, JBS, Cargill, National Beef).

Lowers costs for them while putting American Ranchers/Farmers in the backseat… If these imports suppress cattle prices, as I expect they will, US-based ranchers will likely not grow herds aggressively in a time where herds are already EXTREMELY low.

This doesn’t fix anything and in fact kicks the can down the road to a bigger problem. Also, most of this will be seen in “Trimmings” of the cow often used to make ground beef/hamburgers.

Due to the quality of the animals coming in from oversees being so much worse than US raised beef, it is HIGHLY unlikely that you will see your higher end steak prices come down at all.

Our “trimmings” prices, which typically is the only area cattle producers can make any return on, will be forced lower, which will CRUSH US beef producers.

However, your typical McDonald’s burger, at today’s prices, will just return the difference to big corporations and the BIG 4. By NO WAY, does this support US ranches/farms. Rather, puts most on the brink of total collapse.

I think personally that this is a serious threat on US producers and will strain many ranchers to the point of shutting their doors.

Over time, we have put the BIG 4 in the driver's seat while ignoring the folks that have done all the heavy lifting and doing the right thing day after day.

Second take is from Annalisa Beck of Bech Ranch (of Wyoming):

Tariff-rate quota suspension is intended to address short-term beef supply shortages and high consumer prices. This will only be a short-term fix.

The price of the calf at auction is currently at its highest. The entire cattle-raising part of the country is in a drought.

The price of hay, fertilizer, diesel fuel, and other inputs are at their highest. Those high-priced calves haven't even hit the store shelves yet; we are about a year away from that.

However, we have seen a dramatic increase in the direct-to-consumer prices, especially in the operations that don't raise all of their own cows from birth (some are selling their ground beef for $18/lb - this makes me want to choke).

The only way to fix the problem long term is to lower input prices (diesel, fertilizer, hay), lower the price the rancher is getting at auction (which will actually force more ranchers out of the system), or realize that $12 for a pound of ground beef that will feed a family of 4 at $3/serving is really not that expensive when everyone is ok with a $7 12 oz latte, or a $14 value meal that only feeds one person.

I think instead of screaming that the prices are too high, we need to educate the consumer that good, locally raised, nutrient-dense food is worth the investment.

The third take is from Patrick Montgomery of KC Cattle Company (of Missouri):

I understand why the Trump administration is doing this. Beef is too expensive at the grocery store. The cattle inventory is at historic lows. RFK is publicly pleading with American ranchers to stop selling their breeding stock and they won't, because the economics of ranching are broken. Your average cattleman wants to retire and there is no next generation replacing him. Trump needs consumer prices down by the midterms and suspending the TRQ is the fastest lever he can pull.

I get it. But this is a band-aid on an arterial bleed.

The real problem is structural and neither side of the aisle will touch it. Fix the money. Not through more subsidies. Not through grants. Bring back an actual free market for agriculture.

America is not capable of feeding its own populace anymore.

Here is why.

Crop land. America's farmland overwhelmingly produces corn and soybeans. Much of that goes to export or gets processed into products we should not be consuming. Why? Because it is heavily subsidized and farmers are incentivized to grow it. This has been the case for over 50 years, dating back to Earl Butz's "get big or get out" USDA policy in the early 1970s. Before Butz, American farms were diversified. After Butz, we became a monoculture economy. Ironically, Butz was Cargill's guy.

If our country ripped away those subsidies today it would be disastrous because we have lost the ability to grow anything else at scale. We don't have the implements for American farmers to produce vegetables and diversified crops at volume. We have degraded our soil health with decades of artificial fertilizers, herbicides, and fungicides. We do not have the logistics infrastructure to move a consumable product from an American farm to an American kitchen. And we have lost the institutional knowledge. Three generations of farmers have known nothing but corn and beans.

Protein is equally broken. Why would anyone start a ranching operation to break even or lose money and on a good year net 2%? Warren Buffett would not invest in that business and neither will the next generation of farmers.

Since the pandemic we have exported our beef production to countries like Brazil at an accelerating rate. According to Austin Frerick's book Barons, Brazil dedicates a landmass the size of Vermont and New Hampshire combined to producing beef for the American market. Brazilian companies own controlling equity in two of the Big Four packers. JBS is publicly traded and their annual 10K filings over the last few years are fascinating if you understand what has been happening to the domestic supply chain. Why would Brazilian-owned companies care if American ranches disappear? That is good for their business. Happy to go deeper on that if it is useful.

Our largest pork producer is Smithfield, owned by a CCP-held entity. Given the current state of the world that should concern everyone.

The part that scares me most. Syngenta controls the proprietary seed genetics that go into American farm ground. Syngenta is directly owned by the CCP. Subsidized dollars from American farmers flow directly into a Chinese state owned company that controls what we can plant and how we plant it.

So what is the fix? Fix the money.

We do not need more subsidies. We need food sovereignty. American farmers cannot compete against imports produced under less regulation at cheaper cost. Suspending the TRQ makes that problem worse in the short term even if it helps consumers at the register.

I do like the SBA access-to-capital piece. That is the single hardest barrier in farming. But without structural reform, those dollars end up subsidizing the mega corporations that sit between the farmer and the consumer, not the farmer.

One more layer to this that I think matters.

Peter Zeihan has been writing for years about the unraveling of the post World War 2 global trade order. The system established at Bretton Woods in 1944, where America guaranteed freedom of the seas and open markets in exchange for alliance solidarity, has governed global commerce for 80 years. That system is coming apart. We are watching it in real time. The fallout with the EU. Britain going its own direction. The fracturing of traditional trade partnerships including with China. Increasingly common conflicts involving Iran and Venezuela designed to apply pressure. Our own push toward energy independence.

The world is becoming less global and more national. Most people in Washington understand this when it comes to energy. When it comes to semiconductors. When it comes to defense manufacturing.

The question I hear no one in power asking is this. What happens if we poke the bear and they turn off our food? What is the contingency plan for a country that cannot feed itself without foreign controlled supply chains, foreign owned processing, and foreign owned seed genetics?

Maybe that plan exists and it is classified. But I do not see how it works when the same entities that control our protein processing also have deep economic ties to the countries we are applying pressure to. Follow the ownership structures. Follow the money. The vulnerability is not theoretical. It is sitting in plain sight.

That is why food sovereignty is not a consumer issue. It is a national security issue. And until the people making policy treat it that way, we are going to keep putting bandaids on a problem that requires surgery.

Support America's independent, family-run ranchers with a purchase from the ZeroHedge Store.

Tyson Sinks, Walmart Falls After Trump Moves To Temporarily Lower Beef Import Tariffs

Tyson Foods and Walmart shares moved lower around noon in New York, while major Brazilian meatpacker Minerva Foods moved higher on a Wall Street Journal report that says the White House will temporarily cut beef import tariffs

According to the WSJ report, the plan would suspend the annual tariff-rate quota, which imposes higher duties once import limits are reached, allowing more foreign beef to flood the U.S. at lower tariff rates to suppress soaring prices.

The move comes as the U.S. cattle herd has fallen to a 75-year low, driving the latest USDA national average supermarket beef prices to near $7 per pound, squeezing meat processors and pushing consumers into trade-downs to cheaper proteins such as chicken and pork.

Walmart shares are down about 2.5% around noon.

Tyson Foods shares dropped about 4.5%.

Meanwhile, Brazilian meatpacker Minerva is up nearly 2%.

Related beef coverage: 

• "No Quick Fixes": Supply-Chain Deep Dive Shows Beef Prices To Remain High

• US Beef Cow Cycle Low Set To Deepen, Keeping Steak Prices High

• DoJ Opens Criminal Probe Into Meatpacking Cartel As Food Stocks Slide

The move by the Trump administration to put a ceiling on ground beef and steak prices comes ahead of the midterm elections, as a race to make things more affordable in the wake of the energy price spike following the U.S.-Iran war becomes a central focus again.

We suspect U.S. ranchers won't be too happy about foreign meats set to flood the U.S. in even greater quantities. 

Tyler Durden Tue, 05/12/2026 - 11:33

'Could Resonate Globally': Korea Sparks Market Chaos With 'AI Tax' Threat

Korean markets were under pressure overnight after politicians floated the idea of tapping AI profits. 

Bloomberg reports that a top South Korean policymaker said the nation should pay citizens a 'dividend' using taxes on AI profits, with the obvious read through to Samsung and SK Hynix. 

The comments in a Facebook post by presidential policy chief Kim Yong-beom fueled sharp swings in Korean stocks on Tuesday as investors struggled to parse the scope of the proposals.

“Excess profits in the AI era are, by nature, concentrated,” Kim wrote.

Memory companies, core engineers and asset holders in Seoul are highly likely to receive substantial benefits, while much of the middle class may experience only indirect effects, he said.

The size of any potential dividend, and other details on how Kim’s proposals might be implemented, weren’t immediately clear.

Still, investors took notice.

“After some 80% gain this year, the market was getting sensitive to any news that can trigger investor jitters,” said Kim Dojoon, chief investment officer at Zian Investment Management.

“Policy chief Kim’s post was easy to draw misunderstanding from the market at such a moment.”

The benchmark KOSPI initially plunged as much as 5.1% (more than $300 billion in market cap)...

The weakness spread into Europe and is dragging down Nasdaq futures in the pre-market...

But, as the impact of his statement spread across markets, damage control quickly hit with the influential policy adviser clarifying he wanted to tap "excess tax revenue" generated from the AI boom, rather than roll out a new windfall levy on corporate profits.

An official at the president’s office told Bloomberg News that Kim’s remarks represented his personal opinion and weren’t the subject of formal discussions.

However, the episode is the latest example of politicians calling attention to how the advent of AI risks widening the gap between the haves and have-nots.

In South Korea, that concern has surfaced in public calls for industry leaders to share more of the spoils of the global AI infrastructure rollout.

While Kim’s ideas are preliminary, if they were to be rolled out it would mark one of the first concerted government efforts to share the proceeds of the boom.

As Goldman's One-Delta desk-head, Rich Privorotsky, noted this morning, this feels like a theme that could resonate globally given the extreme concentration of AI earnings and the fact that the benefits skew so disproportionately to mega cap winners. 

The  speed of fast money/retail chasing semis, plus the proliferation of 2x/3x levered structures in Korea and the US, gives me pause about the fragility building into this rally but obviously the core of thesis, 'we need more tokens' remains unshaken.

 

Tyler Durden Tue, 05/12/2026 - 11:30

Global Coal Demand Surges As Middle East Energy Crisis Deepens

Authored by Tsvetana Paraskova via Oilprice.com,

Global coal shipments and imports surged in March and April as buyers scrambled for fuel amid massively disrupted oil and gas supply from the Middle East.

The trend has been accelerating in recent weeks, and global coal imports are on track to reach their third-highest monthly level on record, according to estimates by analytics platform Kpler cited by the Financial Times.

In the wake of the worst oil and gas supply disruption in history, coal is back in demand, so much so that even countries and regions that believed coal use was in an irreversible terminal decline have boosted imports.

For example, last month coal shipments to South Korea, Japan, and the European Union surged by 27% from a year earlier, data from BIMCO, the world’s biggest shipowners’ association, said last week.  

The Asian importers and the European bloc are scrambling for alternatives to gas supply from the Middle East, currently trapped behind the Strait of Hormuz or not produced at all in Qatar, which halted LNG production as early as on March 2 and two weeks later sustained damages to the world’s largest LNG complex, Ras Laffan, from Iranian missile strikes.

“The closure of the Strait of Hormuz has disrupted LNG shipments out of the Persian Gulf and has contributed to an 8% y/y drop in global seaborne LNG shipments in April,” BIMCO said.

South Korea has pushed back the retirement of coal-fired power generation capacity amid the oil and gas shock caused by the Middle East war.

Europe, for its part, is currently losing the competition with Asia for spot LNG supply, at a time when it needs to fill gas storage sites ahead of the next winter.

Energy security concerns are shifting policy responses, accelerating coal usage across key Asian and European markets, and delaying coal plant retirements, analysts at Wood Mackenzie say.

Tyler Durden Tue, 05/12/2026 - 11:05

As Hantavirus Cases Rise, US Officials Say Risk To Public "Very, Very Low"

A total of 11 hantavirus cases have been confirmed as of Tuesday morning, with global health officials warning that the number could rise.

The risk to the public from an illness called the hantavirus is low, a U.S. official said on May 11.

“Let me be crystal clear: the risk of hantavirus to the general public remains very, very low,” Dr. Brian Christine, assistant secretary for health and head of the U.S. Public Health Service, told reporters during a briefing in Omaha, Nebraska.

The Centers for Disease Control and Prevention had said in a May 8 health alert to doctors and health departments that doctors should be aware that imported hantavirus cases were possible but that “the risk of broad spread to the United States is considered extremely unlikely at this time.”

As Zachary Stieber reports for The Epoch Times, multiple people on board the M.V. Hondius, which departed from Argentina on April 1 and traveled to remote locations, including Antarctica, contracted a variant of the hantavirus called the Andes variant.

Three have died.

Christine said on Monday that “the Andes variant of this virus does not spread easily, and it requires prolonged close contact with someone who is already symptomatic.”

An American cruise ship passenger who tested positive on one test and negative on another was transported early Monday to the biocontainment unit at the University of Nebraska Medical Center, officials said. That individual is doing well and has no symptoms, Dr. Angela Hewlett, director of the unit, said at the briefing. That person will be tested again at some point.

Fifteen other Americans, including a British American, who were on the Hondius were admitted around the same time into a separate area called the quarantine unit. They have not displayed symptoms. They may be tested, based on conversations between physicians and those individuals, officials said.

Two additional Americans who were aboard the ship were transported to a biocontainment unit at Emory University in Atlanta. One of those Americans has shown symptoms of hantavirus; the other is that person’s partner.

The people being cared for at the facilities in Nebraska and Georgia can leave after they have been symptom-free for at least a few days, according to Dr. Brendan Jackson, acting director of the CDC’s Division of High-Consequence Pathogens and Pathology.

Other Americans who previously left the Hondius are in contact with state officials and have been told that if they develop symptoms, they should alert their doctors and those officials, Jackson said.

Symptoms of the hantavirus include fever, fatigue, and shortness of breath.

The virus typically spreads from contact with infected rodents, but officials say it may have been transmitted from person-to-person on the cruise ship.

Dr. Jay Bhattacharya, acting CDC director, said over the weekend that hantavirus is “not COVID” because it does not transmit as easily.

“I can assure you that the CDC has been absolutely on top of this outbreak,” he said.

“There’s not a great wealth of information,” said WHO epidemiologist Olivier le Polain during a public briefing Monday.

“We don’t know how much it might spread just before people develop symptoms.”

Decades of experience in South America have shown the virus to be associated with “rare human-to-human transmission after close and prolonged contact with a sick, infected person,” Erica Pan, California’s public health officer, told reporters Monday.

But the available evidence is limited.

No indications of a larger outbreak of the deadly hantavirus have appeared so far, a World Health Organization official said on May 12.

“At the moment, there is no sign that we are seeing the start of a larger outbreak,” Tedros Adhanom Ghebreyesus, the organization’s director-general, told reporters in Madrid, Spain, during a press conference with Spain’s prime minister.

“But, of course, the situation could change, and given the long incubation period of the virus, it’s possible we might see more cases in the coming weeks.”

The incubation period for the Andes variant of the virus is up to 42 days.

Tyler Durden Tue, 05/12/2026 - 10:45

Massive Life Support

By Benjamin Picton, Senior Markets Strategist At Rabobank

Massive Live Support

“On massive life support” was Donald Trump’s characterization of the US-Iran ceasefire yesterday. This followed Sunday’s rejection of Iranian terms for peace that Trump described as “totally unacceptable”. In a boy-who-cried-wolf-style sign of growing market insensitivity to Presidential prognostications, Brent was only up 2.88% to $104.21/bbl and WTI crude remains below $100/bbl. Dated Brent rose by 0.6% yesterday to $105.62. This even as the Wall Street Journal reports that the UAE has been “secretly” carrying out attacks on Iran, including on refining infrastructure. 

US equities closed broadly higher but European stocks were mixed. The FTSE100 eked out gains despite (because of?) fresh signs that Keir Starmer’s premiership is also on “massive life support” as more than 70 of his own MPs have now publicly voiced opinions that the Prime Minister should go following last week’s shellacking at the hands of the Reform party in local government elections. The French CAC40 fell by 0.69% and the German DAX was virtually unchanged. Asian stocks also had a mixed session earlier in the day with losses for Japanese and Australian indices, but gains for chip-heavy markets in China, South Korea and Taiwan.

Bond markets have been more unified in their gloom over the last 24 hours. Yields on US 10s were unchanged at 4.41%, but virtually everywhere else saw chunky rises in benchmark borrowing costs. Yields on 10-year OATs were up 3.9bps, 3.5bps for Bunds, while Gilts saw yields spike 8.6bps in a sign that bond traders might be thinking it’s a case of “better the devil you know” when it comes left-of-centre Prime Ministers in the UK.

With the prime ministerial instability gauge now well and truly pointed towards “embattled”, Starmer gave a speech yesterday that was intended to strike a tone of defiance and send the message that he wouldn’t be going anywhere. In that speech he suggested that he had not been sufficiently radical in forcing the pace of change, that the UK needed to forge closer military and economic ties with the EU, and that “if we don’t get this right, our country will go down a very dark path” - by which he presumably means it would elect Nigel Farage as his replacement.

This might sound like a curious response to the rising appeal of a Eurosceptic party channelling popular sentiment that the country has already changed too much, too fast, while the incumbent government’s revealed lack of electoral appeal suggests that many voters think the country is already headed down a very dark path under Starmer’s leadership. The implication here is that Starmer isn’t really fighting Reform, but the rise of the left-wing Green party who are siphoning off erstwhile Labour votes. Clearly, the center cannot hold and we should expect even more intense polarisation ahead, and probably more damage to the budget. Whither the Gilt market?

Speaking of budgets, Starmer isn’t the only Anglosphere Labour leader saying that things aren’t changing fast enough. Australian PM Albanese made the same comment in relation to his country’s poisonously expensive housing market this week as his Treasurer prepares to deliver the Commonwealth budget later today.

As is now the norm for budgets, most of the major initiatives have been strategically leaked well in advance and a wind-back of investor tax concessions has been telegraphed as a social cohesion measure to placate Gen Zs angry about their effect on house prices (for our detailed thoughts on this, see here). The budget is also expected to introduce new rules for discretionary trust distributions to be taxed at the company rate (to reduce their appeal as a tax-minimisation device) alongside measures to boost defence spending and cut the pace of growth in the welfare state – something that Starmer was unable to secure support for among his own MPs.

Treasurer Chalmers has said there will be a focus on resilience with “more than the usual amount of savings, and more than the usual amount of [tax] reform”. Overall, the vibe seems to be a tightening of fiscal settings – which ought to be welcomed by the RBA – coupled with tax nudges to direct a greater volume of capital toward the productive sectors of the economy rather than allowing it to congeal in the housing market. Whither Aussie bonds?

Of course, while all this is going on the Strait of Hormuz remains functionally closed and world fertilizer and energy markets are treading air like Wile-e-Coyote run off the cliff. Donald Trump will be traveling to Beijing tomorrow to meet with Xi Jinping. Finding a resolution to the war is sure to be at the top of the agenda, with Trump likely to press Xi to lean on his Iranian and Russian allies to seek peace in their respective theatres. Russia has made conciliatory noises in recent days, while Iran has indicated a willingness to hand over some highly enriched uranium to an unspecified third party (Russia?). Is there a grand bargain to be made?

In a case of curious timing, the US just imposed fresh sanctions on individuals and firms involved in facilitating Iranian oil sales to China, and Acting Secretary of the Navy Hung Cao yesterday released a new 30-year shipbuilding plan. That plan anticipates the acquisition of 11 nuclear-powered Trump class battleships, new underwater drones, and an ongoing review to the Ford class aircraft carrier design to increase lethality and reliability while reducing unit costs and production lead times. The planned expansion of the US fleet and shipbuilding industrial base is undoubtedly a reaction to China’s growing naval strength and substantial advantage in production capacity. The message to Xi is an unsubtle one.

The FT’s Gideon Rachman characterises Trump as arriving at Xi’s court in a state of supplication, having effectively lost the trade war vs China and the shooting war vs Iran. This perhaps overstates the weakness of Trump’s position by ignoring the fact that the US has tightened its grip on global energy supply chains and has shown that is has the power to put its foot on the hosepipe of Chinese energy imports whenever it likes. In the flurry of commentary over China’s bumper trade surplus in April, it seems to have been missed that import volumes for crude oil were down sharply, but values were higher. Yesterday’s April PPI figures for China also underscored the uncomfortable effects that the Iran war is having on the Chinese industrial economy.

Xi will be acutely aware of this, and he will also be aware that the US holds similar power to disrupt Chinese food imports if it was of a mind to do so. Seapower IS power, as the shipbuilding plan should remind us all. In this respect, Trump holds better cards than the FT is giving him credit for. Perhaps it is no coincidence that China bought more soybeans in April than it had done for months.

Tyler Durden Tue, 05/12/2026 - 10:25

The post AI Won’t Necessarily Lead to Mass Unemployment: The Case of the Financial Industry appeared first on CEPR.

Anthropic Voids Unauthorized Share Transfers, Triggering Bloodbath In Tokenized Markets

Anthropic warned investors that any unapproved sale or transfer of its private shares, including those packaged through tokenized products, is void and will not be recognized on the company’s books, escalating tensions over how restricted pre-IPO equity can be repackaged for retail traders. 

The AI company behind Claude quietly updated its investor-warning page Monday, stating that both preferred and common stock are subject to transfer restrictions contained in its bylaws. The notice, first published in February and revised this week, explicitly bans special purpose vehicles from acquiring its stock and casts doubt on structures claiming economic exposure to Anthropic shares.

“Any sale or transfer of Anthropic stock, or any interest in Anthropic stock, that has not been approved by our Board of Directors is void and will not be recognized on our books and records,” the company said. “This means that if someone purports to sell Anthropic shares without proper board approval, that transaction is invalid.”

Anthropic added that it does not permit special purpose vehicles to acquire its stock and that any such transfers are void. It also warned that third parties offering Anthropic shares to the public through direct sales, forward contracts, tokenized securities, or similar mechanisms are likely engaged in fraud or offering investments that may have no value.

"We do not permit special purpose vehicles (SPVs) to acquire Anthropic stock and any transfer of shares to an SPV are void under our transfer restrictions. Offers to invest in Anthropic’s past or future financing rounds through an SPV are prohibited." 

The company listed several firms as unauthorized, including Open Door Partners, Unicorns Exchange, Pachamama, Lionheart Ventures, Sydecar, Upmarket, and new offerings on Hiive and Forge Global.

Tokenized Markets in the Crosshairs

The update directly addresses the growing market for tokenized pre-IPO exposure. Over the past year, crypto platforms have created offerings tied to high-profile private companies such as Anthropic, SpaceX, and others. Some products are synthetic perpetuals that track implied valuations without holding underlying shares. Others, including certain tokenized offerings on PreStocks, aim to provide economic exposure through SPVs or secondary holdings.

Anthropic just published a statement that should terrify anyone buying private AI shares on secondary markets.

>>>>“Any sale or transfer of Anthropic stock… that has not been approved by our Board of Directors is void.”

Not restricted.
Not disputed.
Not under review.

Void.… pic.twitter.com/HjILRsdBku

— Swati Gupta (@hrswatigupta) May 12, 2026

PreStocks’ terms state that buyers receive no equity or shareholder rights in the underlying company, only economic exposure tied to reserve backing. However, the platform does not specify whether its Anthropic-linked tokens are structured through an SPV, leaving uncertainty around compliance with Anthropic’s restrictions.

PreStocks’ terms of service state that buyers receive no equity or shareholder rights in the underlying company, only economic exposure tied to reserve backing, However, it does not specify whether this exposure is delivered through a special purpose vehicle, leaving uncertainty around the exact structure behind its Anthropic-linked tokens, which the company says may be invalid.

That model may be more intuitive to investors, but it also runs more directly into the restrictions private companies place on who can buy, sell or hold interests in their stock. -Coindesk

Tokenized markets can generate eye-popping implied valuations even with limited underlying assets. PreStocks’ dashboard recently showed an implied valuation for Anthropic above $1.5 trillion and a market valuation around $1.37 trillion, despite the platform holding roughly $23 million in total assets, according to CoinDesk. Such prices create narrative and valuation risks that private companies cannot fully control. 

Florida-based crypto lawyer John Montague told the outlet last year "I think private companies may also initiate lawsuits alleging that this violates their governance documents, shareholders' agreements, investor rights agreements, or bylaws," adding "I view it as the issuer’s right to control the terms of transfer."

The Anthropic-linked token on PreStocks fell nearly 25% in a single day following the announcement, dropping to $1,023.90.

crypto.com

No public responses from the named platforms or firms had been issued as of Tuesday. The move follows a similar policy clarification by OpenAI and is expected to increase scrutiny of secondary and tokenized markets for private technology companies.

Anthropic, valued at $380 billion following its February funding round, directed equity-related inquiries to a dedicated email address and urged investors to verify offerings through regulatory channels and seek independent advice.

The frenzy around Anthropic equity has reached unusual levels. Last month, Bay Area investment banker Storm Duncan offered his $4.8 million Mill Valley estate in exchange for Anthropic shares rather than cash, highlighting how illiquid and highly sought-after the company’s pre-IPO stock has become.

The company has not issued further public comment beyond the updated notice.

Tyler Durden Tue, 05/12/2026 - 10:05

CIA Document Sparks Wild Theories Of Ancient Knowledge Hidden Under Egypt's Sphinx

Authored by Steve Watson via Modernity.news,

A declassified CIA document that references a “Temple under Sphinx” in a 76 year old photographic inventory, has reignited interest in a mythical Hall of Records said to lie beneath Egypt’s Great Sphinx.

The document in question is a CIA inventory cataloging black-and-white photo negatives from July 1950. Among routine entries such as “Sphinx,” “Tourist at Pyramids,” and “Ruins near Sphinx” appears the line: “Temple under Sphinx; July ’50.”

This phrasing has prompted renewed discussion about possible hidden structures beneath the Sphinx, a topic long associated with Edgar Cayce’s prophecies of an underground Hall of Records containing ancient knowledge.

Read more ⬇️ https://t.co/XKVD737uhC

— Daily Mail US (@Daily_MailUS) May 11, 2026

The Hall of Records legend describes a repository of Atlantean or pre-dynastic wisdom hidden near the right paw of the Sphinx. 

While mainstream archaeology has not confirmed any such chamber, the CIA reference has added a new layer to existing theories.

This development ties directly into earlier reports of potential subterranean features at the Giza plateau. 

Last year we highlighted claims by Italian and Scottish researchers using synthetic aperture radar (SAR) scans that purported to reveal a vast underground complex beneath the pyramids.

The researchers detailed eight vertical cylindrical shafts extending over 2,100 feet deep, connected chambers, and structures potentially linking the three main pyramids and the Sphinx area.

Spokesperson Nicole Ciccolo claimed the findings suggest “The existence of vast chambers beneath the earth’s surface, comparable in size to the pyramids themselves, which have a remarkably strong correlation between the legendary Halls of Amenti.”

She added: “These new archaeological findings could redefine our understanding of the sacred topography of ancient Egypt, providing spatial coordinates for previously unknown and unexplored subterranean structures.”

The project, headed by Corrado Malanga and Filippo Biondi, has faced scientific scrutiny. Critics have noted that the non-peer-reviewed study relied on satellite radar data whose depth penetration and interpretation remain debated. Some experts called for ground verification through excavation, while others questioned whether the anomalies represented natural geological features or man-made constructions.

The Sphinx and Giza pyramids have long been subjects of both rigorous archaeological study and alternative theories. Official excavations around the Sphinx have revealed known temples and passages at surface level, including the Sphinx Temple itself. 

No verified underground “Hall of Records” has been located despite extensive modern scanning projects such as the ScanPyramids initiative, which has identified smaller voids in other pyramids.

The CIA file itself is publicly available through the agency’s reading room and forms part of routine declassified photographic records rather than any classified intelligence operation.

Nevertheless, the combination of the 1952 reference and the 2025 radar claims has fueled online discussion and calls for further non-invasive investigation at Giza. 

Egypt’s antiquities authorities have not issued immediate comment on the latest document reference, consistent with their general stance on unverified subterranean claims.

Researchers continue to debate the limits of remote-sensing technology for deep subsurface mapping at Giza. While ground-penetrating radar and electrical resistivity tomography have yielded results in shallower contexts, claims of multi-thousand-foot structures remain unconfirmed without physical access.

The story highlights the enduring fascination with Egypt’s ancient monuments and the way archival documents can intersect with modern scientific assertions. 

Whether the “Temple under Sphinx” notation points to a now-lost surface feature, a mislabeled photograph, or something more significant continues to be examined by enthusiasts and scholars alike.

As new scanning techniques evolve and historical records surface, the Giza plateau may yet reveal additional layers of its complex history—above or below ground.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Tue, 05/12/2026 - 09:45

Stocks Fall, Oil And Rates Rise As Inflation "Roars Back"

US equity futures and bonds were lower as oil climbed, with a key inflation report showing the impacts of higher energy and supply disruptions stemming from the war in Iran. Stocks are poised to fall from all-time highs after the core CPI rose more than expected in April. As of 9:15am S&P futures ewere down 0.2% and Nasdaq futures dropped 0.7% as a slide in chipmakers and big tech names dragged down the market in early US hours. In premarket trading, all Mag 7 stocks were lower. Treasury two-year yields hovered near the highest since March. Tech’s underperformance followers a weaker APAC session with KOSPI’s biggest loss since early April after the govt hintedf at a potential tax on AI profits dubbed a ‘Citizen Dividend’; the index finished off its lows pointing to the dip buying potential of Semis as the market takes advantage of any price discount. US crude rose to around $101. Gold weaker and sitting just below $4,700/oz. Economic data slate includes weekly ADP employment change (8:15am), April CPI (8:30am) and federal budget balance (2pm). Fed speaker slate includes Chicago Fed’s Goolsbee (9:10am, 1pm), and NY Fed releases quarterly report on household debt and credit at 11am

 

In premarket trading, Mag 7 names are all lower (Tesla -1.5%, Alphabet -0.9%, Amazon -0.8%, Nvidia -0.8%, Microsoft -0.6%, Meta -0.5%, Apple -0.4%)

• AST SpaceMobile (ASTS) falls 11% after the satellite internet company reported revenue for the first quarter that missed the average analyst estimate. The firm also had a wider loss than forecast.
• GameStop (GME) slips 3% after eBay Inc. rejected a $56 billion takeover offer from the company.
• GitLab (GTLB) is down 11% after the software company announced plans to cut jobs and make operational changes. Raymond James says efforts to retool the business while cutting staff may be challenging, while RBC says guidance for in-line 1Q results suggests no upside versus prior beats.
• Harmonic (HLIT) rises 15% after the communications equipment company reported first-quarter results that beat expectations and gave an outlook that is seen as strong, underlining positive momentum.
• Harrow (HROW) slumps 10% after the eyecare pharmaceutical firm posted an adjusted Ebitda loss for the quarter, disappointing analysts who’d forecasted a profit. The company also reported revenue for the first quarter that fell short of the average analyst estimate.
• Hims & Hers Health (HIMS) slides 15% after the telehealth firm projected 2Q Ebitda that missed consensus estimate, a result of higher costs as it transitions to branded products.
• IHeartMedia (IHRT) slips 4% after the media entertainment and radio broadcasting firm provided a disappointing forecast adjusted Ebitda for the second quarter.
• Microvast Holdings Inc. (MVST) sinks 40% after the battery firm reported first-quarter revenue that fell short of the average analyst estimate.
• PACS Group (PACS) soars 22% after the nursing home operator boosted its adjusted Ebitda guidance for the full year, following better-than-expected results for the first quarter. Truist views the quarter results as a strong start to the year.
• Plug Power (PLUG) is up 7% after the hydrogen producer’s first-quarter net revenue beat the average analyst estimate, with analysts attributing the growth to large customers such as Amazon and Walmart.
• Power Solutions International (PSIX) drops 31% after the engine and power systems manufacturer reported first-quarter revenue and income that fell short of analyst estimates and declined to give full-year guidance, citing variability in order timing and market conditions.
• Quantum Computing Inc. (QUBT) jumps 24% after the application software developer reported revenue for the first quarter that beat the average analyst estimate.
• Venture Global (VG) rises 8% after the liquefied natural gas company reported first-quarter earnings per share that beat the average analyst estimate and announced new deals with TotalEnergies and Vitol.
• Webtoon (WBTN) slumps 10% after the storytelling technology platform gave a revenue forecast for the second quarter that missed the average analyst estimate.
• Wendy’s (WEN) shares jump 23% as the Financial Times reports that Nelson Peltz’s Trian Fund Management is seeking investor backing for a bid to take the burger chain operator private.
• ZoomInfo Technologies (GTM) slides 36% after the software company reduced its full-year forecast for adjusted operating income. The company also announced a restructuring program that will cut about 600 jobs.

In other corporate news, JPMorgan has seen balances within its prime-brokerage business soar to a record as clients look to seize on recent market volatility. Amazon.com has begun the sale of its first Swiss franc bonds as it looks to raise a record six-part deal in the currency.

Wall Street traders left stocks and bonds lower as oil climbed, with today's CPI report showing the impacts of higher energy and supply disruptions stemming from the war in Iran, resulting in hoter than expected core CPI prices: CPI rose 3.8% from a year earlier, marking the fastest pace since 2023. From a month earlier, prices were up 0.6%, while core prices rose 2.8%, higher than the 2.7% expected.

“Inflation is roaring back largely driven by stubbornly high oil prices,” said Skyler Weinand at Regan Capital. “As a result, we expect the Federal Reserve to be on hold through the summer on interest rates.”

Given that inflation is heading in the wrong direction and the labor market is holding up, it’s very unlikely that the Fed will be able to lower interest rates any time soon, according to Chris Zaccarelli at Northlight Asset Management.

“We don’t believe the market needs rate cuts to keep climbing, but earnings will need to keep doing a lot of the heavy lifting as multiple expansion isn’t in the cards right now,” he said. “The Fed has been clear that it is willing to look through any temporary inflation spike tied to the Iran conflict, and that remains the key consideration for investors in the near term,” according to Tim Urbanowicz at Innovator ETFs from Goldman Sachs Asset Management.

“Markets had already priced out rate cuts for 2026 heading into the report,” he said. “As long as the 10-year Treasury yield remains contained below 4.5%, we do not see these levels as a meaningful headwind for equities.”

The energy crisis’s impact on the global economy is showing up in gauges of supply-chain stress that soared during Covid. The US Strategic Petroleum Reserve released another wave of emergency oil to help tame surging prices stemming from the Iran war. A federal gasoline tax holiday proposed by Trump would result in billions of dollars in lost tax revenue each month.

Inflation isn't just in the broader market: AI also has an an inflation problem as highlighted by a Bloomberg article discussing how “chipflation” is crowding out supplies of more conventional semiconductors. Meanwhile, a top South Korean policymaker said the nation should pay citizens a “dividend” using taxes on AI profits, underscoring growing pressure to redistribute gains from a boom that’s enriched chipmakers like Samsung Electronics and SK Hynix. 

Tech stocks are taking a breather under the weight of growing warnings that their unprecedented rally has run too far, while a suggestion to target AI profits in South Korea hasn’t helped sentiment either.

In politics, the Trump administration asked the US trade court to pause a ruling that declared the president’s latest 10% global tariffs unlawful while the government appeals. Japan’s Finance Minister confirmed that her team is coordinating closely with US Treasury Secretary Scott Bessent on currency policy, signaling tacit US approval of Japan’s recent suspected market intervention.

Investors are still holding onto short S&P 500 futures positions despite accumulating losses, with the average short entry ~6680 on the index, which raises short-covering risks and in turn could fuel a further melt-up in equities, according to Citigroup strategists. 
Options markets are pricing in limited expectations ahead of the Trump-Xi meeting, leaving room for an outsized reaction, according to JPMorgan equity-derivatives strategists. 

Global corporate earnings surged in the first quarter, according to Deutsche Bank strategists, marking the strongest growth in more than four years as demand tied to AI fueled a broad-based expansion.

European bourses are entirely in the red, with UK Banks hit on political turmoil; US equity futures pull back from ATHs. Energy is among the few rising sectors while retail, banks and technology are the worst performers. Stoxx 600 falls 0.8% to 607.95 with 440 members down, 149 up and 11 unchanged. Here are some of the biggest movers on Tuesday:

• SES shares rallied as much as 9.7% to the highest since July 2022 after the satellite operator’s adjusted Ebitda for the first quarter came in well above expectations.
• Greggs shares rise as much as 7.2%, the most in six months, after the UK high street baker revealed like-for-like growth has accelerated in recent weeks, partly thanks to new additions to the menu including its chicken roll, according to analysts.
• SoftwareOne shares jump as much as 15% after the Swiss IT services firm posted a first-quarter earnings beat and raised its full-year revenue guidance.
• Jenoptik surges as much as 16%, to a record high, after the optoelectronics group delivers what MP Capital Markets describes as a “blow-out” quarter.
• Tecan shares rise as much as 6.2% after the maker of laboratory automation components reported growth in local currency sales during the first quarter and maintained its full year guidance.
• Siemens Energy shares fall as much as 4.3% after the German renewable energy firm reported second-quarter results. While expanded share buybacks were seen as a positive, Bernstein highlighted weakening margins at the company’s gas unit.
• Prosus shares slide as much as 7.6% after the tech investor released a trading update that Jefferies said shows the turnaround of Just Eat Takeaway.com is a longer-duration project than some will have expected.
• Vodafone shares fall as much as 5.8%, the most since February, after the British telecommunications group reported its latest earnings, with analysts flagging a miss on Ebitda after leases.
• KBC shares drop as much as 4.4% after the banking and insurance services provider reported profits that fell short of expectations after it raised provisions to their highest level since 2020.
• Munich Re shares declined as much as 5.1% as the reinsurer reported weak P&C Re revenues, similar to peers.
• Thyssenkrupp shares fall as much as 4.2%, before recouping most of those losses, after the German industrial technology firm flagged a potential hit to sales but maintained its key profit and cash flow targets.

Earlier in the session, Asian stocks fell, as South Korean equities lead a decline after a policymaker said the nation should pay citizens a “dividend” using tax on profits from artificial intelligence. The MSCI Asia Pacific Index fell 0.4%, with Samsung and MediaTek among biggest drags. Korea’s benchmark slumped as much as 5.1% before paring loss to about 2% after a clarification. Stocks traded higher in Hong Kong and Taiwan. The fast growth in earnings for AI companies are starting to prompt calls for redistribution of some of those benefits. Korea’s knee-jerk reaction shows the extent in which some of Asia’s key technology-led markets are reliant on profits from AI buildout. Stocks also declined in India, mainland China and New Zealand.

In FX, the pound is one of the weakest major currencies against a broadly stronger dollar, with greenback and oil rising on doubts about US-Iran ceasefire.

In rates, treasuries hold losses in early US session amid bigger selloff in gilts and latest increase in oil prices after US President Donald Trump cast doubt on the Iran ceasefire. US yields are 1.5bp-2bp higher on the day — lifting 30-year back above 5% for first time since May 5 — with curve spreads little changed; UK 10-year rose as much as 14bp and remains 9bp higher vs Monday’s close  Gilts slump as UK MPs pressure Prime Minister Keir Starmer to set out a timetable to stand down. UK 10-year yields advanced to the highest since 2008 and 30-year yields to the highest since 1998.Treasury refunding auctions continue with $42 billion 10-year new issue at 1pm New York time; demand was soft for 3-year notes Monday. Cycle concludes Wednesday with $25 billion 30-year new issue. WI 10-year yield near 4.44% is ~12bp cheaper than last month’s auction, which tailed by 0.2bp. IG dollar issuance slate includes a couple of items so far. Twelve borrowers raised a combined $18 billion Monday, with issuers paying about 3bps in new issue concessions on deals that were 4.5 times covered. Focal points of US session include April CPI data and 10-year note auction.

Yields rising across Europe as Brent hits $107/barrel, and as investors add to bets on ECB and BOE rate hikes in 2026. The pound is one of the weakest major currencies against a broadly stronger dollar, with greenback and oil rising on doubts about US-Iran ceasefire. Stoxx 600 down 0.6%, dragged down by banks and retail stocks. S&P 500 futures down by 0.3% with weakness in chipmakers and big tech names in premarket trading. Gold weaker and sitting around $4,700/oz.

In commodities, WTI crude oil futures are up more than 3% near $101 a barrel, while global benchmark Brent crude traded near $107. The precious metals complex opened higher in Asia but there's been broad USD support through the London morning with a sharp correction back to lower in gold, moving from $4,774 down to $4,686. In Asia, the desk saw some light physical demand but gold was consistently offered. The white metals have followed lower with silver down around 3% after it led the sharp rally on Monday. Gold ETF holdings rose by 0.06moz, silver ETF holdings rose by 1.40moz. Oil is climbing as Brent is trading near $107.50 after hitting a daily high above £$108. Rising energy prices are in the spotlight ahead of today's US CPI data

Economic data slate includes weekly ADP employment change (8:15am), April CPI (8:30am) and federal budget balance (2pm). Fed speaker slate includes Chicago Fed’s Goolsbee (9:10am, 1pm), and NY Fed releases quarterly report on household debt and credit at 11am

Market Snapshot

• S&P 500 mini -0.2%
• Nasdaq 100 mini -0.7%
• Russell 2000 mini -0.3%
• Stoxx Europe 600 -0.8%
• DAX -0.8%, CAC 40 -0.6%
• 10-year Treasury yield +2 basis points at 4.43%
• VIX +0.5 points at 18.87
• Bloomberg Dollar Index +0.3% at 1193.03
• euro -0.3% at $1.1747
• WTI crude +3.3% at $101.33/barrel

Top Overnight News

• Trump has grown increasingly frustrated with how the Iranians are handling negotiations to end the war, and some Trump aides say that he is now more seriously considering a resumption of major combat operations than he has in recent weeks. CNN
• US President Trump to confront Chinese President Xi at the upcoming summit over China's backing of Iran and Russia. Officials said the leaders are also expected to discuss Taiwan, cybersecurity, artificial intelligence and rare earth supply chains during the summit. Fox News reported
• The White House said Trump will meet Xi Jinping in Beijing on Thursday. Boeing CEO Kelly Ortberg is expected to join the US delegation and has hinted at a major deal. BBG
• Some BoJ policymakers argued in April for raising rates soon, with one flagging the chance of a June move, highlighting a ‌growing hawkish shift on the board as an oil shock from the Iran war sharpened pressure for near-term tightening. RTRS
• The Kospi swung after a top South Korean policymaker said the country should pay citizens a dividend using taxes on AI profits. The adviser later clarified it would be funded by excess profits. BBG
• Keir Starmer pushed back against calls for him to quit and vowed to his cabinet to stay on as PM. More than 80 Labor lawmakers have called on Starmer to step aside in the wake of last week’s local elections. UK bonds slumped and 30-year yields rose to the highest level since 1998. BBG
• Plastics prices are surging as a result of the Middle East war, creating significant margin pressure for a slew of companies. Many of these companies may push through price increases that will eventually be felt by consumers. Barron’s
• The US is delaying a plan to suspend beef import tariffs, according to the WSJ. Trump had been set to sign executive orders yesterday aimed at lowering prices. BBG
• Technology has never been more dominant in the stock market, and Nvidia now has a larger market value than the entire healthcare sector of the S&P500. Barron’s
• Musk’s AI model, Grok, lags far behind its fast-growing competitors—and an agreement by parent company SpaceX to rent massive computing power to Anthropic raises questions about whether it can still catch up. WSJ

Iran War

• IRGC Navy official Akbarzadeh said Iran has significantly expanded its definition of the Strait of Hormuz strategic zone to include the coasts of Jask and Siri beyond the main islands, Al Mayadeen reported.
• Iran Parliament Speaker Ghalibaf said "There is no alternative but to accept the rights of the Iranian people as laid out in the 14-point proposal. Any other approach will be completely inconclusive; nothing but one failure after another."
• Iranian Parliamentary spokesperson said "One of Iran's options in the event of another attack could be 90 percent enrichment. We will review it in the parliament.".
• Deputy Foreign Minister for Legal and International Affairs of Iran Gharibabadi said US draft plan about Strait of Hormuz shows an attempt to change the face of the issue. Considered this action to be an attempt to change the face of the issue, and said that while Iran is the target of threats, pressure and attacks, some are trying to turn the consequences of a military aggression and illegal blockade into a case against Iran.
• IRGC Navy deputy said in a recent case, Iranian forces fired warning shots after an American frigate showed “provocative behaviour” in the Strait of Hormuz, prompting it to change course, Fars reported.
• Iran’s ambassador to China said Tehran views its strategic partnership with China as key to countering US pressure and advancing demands for a lasting ceasefire, IRNA reported.
• CNN White House Correspondent Treene posted "Many in Trump’s orbit want Pakistani mediators to be far more direct in their communications with the Iranians", adds "some Trump aides say that he is now more seriously considering a resumption of major combat".
• Washington was on the verge of making a decision a week ago to resume attacks on Iran, Al Hadath reported. Those close to Trump convinced him last week at the last minute to freeze the decision to return to war. Israel assesses that Khamenei is still preventing any progress in the negotiations as the Supreme Leader.
• Pakistan's ambassador to Russia is convinced that the US will not resort to a new military operation against Iran, according to TASS citing an interview.
• Israeli Navy shells Khan Yunis coast, according to Noor News, while Israel also conducts airstrikes on multiple towns in southern Lebanon, according to Al Jazeera.
• UAE has carried out military strikes on Iran, according to WSJ citing sources; UAE strikes have included attack on a refinery on Iran's Lavan Island back in early April. The strikes, which the UAE hasn’t publicly acknowledged, have included an attack on a refinery on Iran’s Lavan Island which took place in early April around the time Trump was announcing a cease-fire.
• Israeli strikes in southern Lebanon killed six and fighting continues despite April 17th ceasefire, according to AFP.
• Hezbollah said it targeted a Merkava tank in the town of Bayada with a guided missile and it was seen burning.
• Secretary General of Lebanon's Hezbollah said "We are ready to cooperate with the authorities to achieve the sovereignty of Lebanon by stopping Israeli aggression by land, sea and air", ISNA reported.
• Qatar orders ships at its LNG port to “go dark” under new safety measures.

UK Politics

• UK PM Starmer said he will not be setting out a timetable for departure. He reiterated that he takes full responsibility for the election results.
• Plenty of Cabinet Ministers spoke following the meeting with McFadden saying no one directly challenged PM Starmer during the cabinet meeting, Kendall stating Starmer has her "full support" and Kyle saying Starmer provides "steadfast leadership."
• "[UK PM] Starmer did not give his critics any chance to speak against him in this morning's meeting", Telegraph's Diver reported.
• UK PM Starmer is, according to a 'very senior minister', going to fight, ITV's Peston reported. Further reporting by Mail on Sunday's Hodges stated that UK PM Starmer "is reportedly is looking for a dignified way of ending all this. But he doesn't want to be seen to be forced out."
• Over 81 Labour MPs have now called for UK PM Starmer to resign, Politics UK reported; "This is officially enough to launch a leadership challenge if they unite behind a single candidate".
• UK Junior Minister Fahnbulleh resigns (the first Ministeral level resignation) and called on PM Starmer to set a timetable for a transition.
• UK Chief Secretary to the PM, Jones, indicates that PM Starmer could be about to announce a timetable for his resignation, according to Times' Swinford. Jones said "I'm not going to get ahead of the PM's decision."
• Four UK cabinet ministers, led by the Home Secretary, have gone into Number 10 to tell the prime minister to set out a timetable for him to resign, according to ITV News. UK Deputy PM Lammy urges PM Starmer to set out a timetable to quit.
• Four people with knowledge of conversations involving the UK Cabinet believe some ministers will move today, Politico Playbook reported. As many as six ministers could ask for the PM to outline his exit plans at the Cabinet meeting.
• "Senior Labour figures are very nervous about the market reaction this morning, hence some in the Cabinet pushing the PM to go in a way that doesn't destabilise the party", Eurasia journalist Rahman posted.
• UK Foreign Minister Cooper told UK PM Starmer he should see an orderly transition of power.
• UK Greater Manchester Mayor "Burnham's allies say a seat has been lined up for him to stand - with an announcement aimed possibly today", The Times' Kendix reported.
• Allies of UK Greater Manchester Mayor Burnham state that a timetable of a new Labour leader/PM by end-September would provide Burnham with enough time to return to the House of Commons, Sky's Rigby reported.
• UK Chancellor Reeves has pulled out of her speech at the Global Risks Summit, according to Daily Express' Spyro.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed following the mild gains on Wall St, where the S&P 500 and NDX extended record highs, but with the upside capped by higher oil prices and geopolitical uncertainty after US President Trump said the ceasefire is unbelievably weak and is on life support, but added that a diplomatic solution with Iran is still possible. Furthermore, Trump was said to be now more seriously considering a resumption of major combat operations than he has in recent weeks, although sources also stated that a major decision on how to proceed is unlikely to be made prior to the president’s departure to China. ASX 200 was dragged lower as weakness in the tech, healthcare, financials and consumer sectors offset the commodity-related gains, while sentiment was also not helped by a soft NAB Business Survey. Nikkei 225 ultimately gained, but with price action choppy amid a softer currency, disappointing Household Spending data and hawkish undertones from the BoJ Summary of Opinions, while participants also reflected on the record earnings from SoftBank.
Hang Seng and Shanghai Comp were mixed with the Hong Kong benchmark led higher by Kuaishou Technology after it was reported that the Co. plans to spin off its Kling AI video unit at a USD 20bln valuation, while the mainland lacks conviction as participants await the looming Trump-Xi summit in Beijing.

Top Asian News

• AUSTRALIAN BUDGET: Australia sees 2025/26 budget deficit at AUD 28.3bln (vs AUD 36.8bln projected); sees 2026/27 budget deficit at AUD 31.5bln, 2027/28 deficit AUD 31.0bln; Treasurer says budget helps, rather than harms, the fight against inflation.
• US Treasury Secretary Bessent said he made no request to PM Takaichi regarding monetary policy; in very close contact with Japan's finance ministry and the relationship with it is working well; both believe FX volatility is undesirable. Japan's economic fundamentals are strong and resilient, and that will be reflected in exchange rates. Expects inflation to be a short-term and transient blip. Has great confidence BoJ Governor Ueda will guide the Bank to a very successful monetary policy. PM Takaichi did not make requests about China.
• Japanese Finance Minister Katayama said had meeting with US Treasury Secretary Bessent and discussed financial market situation, including forex, while she reaffirmed close cooperation based on joint statement last year.
• Japanese Finance Minister Katayama said the Bessent-Takaichi talks were very positive, in which they discussed Mythos and critical minerals.
• Japan's Finance Ministry declines to comment on market speculation about rate checks.
• South Korean policy chief Kim said AI citizen dividend will be from excess tax and that AI dividend does not mean a windfall tax.

European bourses (STOXX 600 -0.7%) trade with losses across the board, driven by multiple factors: 1) Iran-US war seemingly not having an end in sight, 2) UK political turmoil, and 3) mixed earnings. Overnight, US President Trump said that the ceasefire is unbelievably weak and reiterated that Iran’s proposal is unacceptable. Further reporting by Axios stated that Trump held a meeting with his national security team to discuss a way forward, which included the possible resumption of military action. This drove energy prices higher and, in turn, weighed on equities globally. European sectors are broadly in the red, with Energy outperforming as WTI and Brent regain the USD 100/bbl and USD 106/bbl respectively. Outside of Banks, Retail sits at the bottom of the pile.

Top European News

• EU ZEW Economic Sentiment Index (May) -9.1 vs. Exp. -20 (Prev. -20.4).
• German ZEW Economic Sentiment Index (May) -10.2 vs. Exp. -20.5 (Prev. -17.2, Low. -35.0, High. -10).
• German ZEW Current Conditions (May) -77.8 vs. Exp. -77.5 (Prev. -73.7, Low. -80.0, High. -68.0).
• German Inflation Rate MoM Final (Apr) M/M 0.6% vs. Exp. 0.6% (Prev. 1.1%, Low. 0.6%, High. 0.6%).
• German Inflation Rate YoY Final (Apr) Y/Y 2.9% vs. Exp. 2.9% (Prev. 2.7%, Low. 2.9%, High. 2.9%).
• Italian Industrial Production YoY (Mar) Y/Y 1.5% (Prev. 0.5%).

FX

• Snapshot: DXY is firmer this morning, benefiting from continued geopolitical uncertainty. The JPY is mildly lower, but performing a bit better vs peers after an aggressive bout of strength seen in early morning trade – potentially intervention. GBP is the clear underperformer this morning, as markets eye turmoil in the Labour Party. EUR was little moved to better-than-feared ZEW sentiment metrics.
• DXY is firmer by around +0.4%, and currently at the upper end of a 97.95-98.28 range; holding just shy of its 21-DMA at 98.31. Strength today has been facilitated by ongoing geopolitical uncertainty, with President Trump suggesting the US-Iran ceasefire is “on life support”, and repeated that Iran’s proposal was unacceptable. (Detailed analysis piece on the Newsquawk feed). Domestically, focus will shift to the US CPI report this afternoon. Headline M/M is expected to rise 0.6% (prev. 0.9%); the core metrics are expected to rise modestly from the prior.
• GBP is underperforming this morning and trades at the bottom end of a 1.3502-1.3614 range. This morning has seen Cable slip below its 21-DMA (1.3542). Next level to the downside includes the round 1.3500 mark, and a dip below that level could see a test of its 100-DMA at 1.3482.
• As it stands, PM Starmer reportedly announced that he will remain as PM, adding that he will not be setting out a timetable for departure. A move which essentially invites a leadership challenge; as it stands, the only real imminent challenge would be via Wes Streeting, though Rayner is an outside possibility. This, however, could bring further division into the Labour party, as an early challenge might split Labour between Starmer, Streeting and Burnham supporters. In the near-term, we look for a formal challenge and/or more ministerial-level resignations in a bid to pressure Starmer into changing his mind.
• JPY is mildly lower, with focus on a) potential intervention and b) Bessent-Takaichi meeting. On the point of intervention, an aggressive move lower was seen in USD/JPY from around 157.71 to 156.72 (today’s range 156.72-157.75). A move which lacked a clear driver, raising speculation of further intervention. Overnight, Treasury Sec. Bessent and PM Takaichi met where the pair discussed the financial market situation, including forex, while she reaffirmed close cooperation based on the prior accord but refrained from any significant currency jawboning. Commentary post-meeting lacked any real surprises, with the USD/JPY ultimately little moved following the details of the discussions.

Central Banks

• Fed Chair nominee Warsh clears Senate procedural hurdle and a Senate confirmation vote is expected as early as Wednesday.
• BoJ Summary of Opinions from the April meeting noted a member said that given real interest rates are at a significantly low levels, it is appropriate for the BoJ to continue raising policy rates. Member said Japan’s real policy interest rate is by far at the lowest level globally, BoJ must to continue to adjust the negative real interest rate in preparation for the second-round effects of price rise.
• ECB's Nagel said ECB mandate requires to act if inflation expectations de-anchor; "we'll see in June"; baseline includes two rate hikes.
• ECB’s Patsalides said there are scenarios in which the ECB may avoid raising interest rates.

Fixed Income

• A bearish start for fixed income as energy benchmarks climb after overnight rhetoric (see the feed for more), and with the intensifying scrutiny around UK PM Starmer weighing on Gilts and dragging peers lower as well.
• Bunds and USTs began the morning with modest losses, of a handful and around 20 ticks, respectively. While USTs haven't dipped much further, they are down to a 110-06+ low ahead of US supply and CPI. If the pressure continues, we look to 110-00+ from last week before the 109-24 contact low from March.
• Bunds saw a bout of pressure in the European morning, before the Gilt open, seemingly as the press reporting around UK PM Starmer intensified further early doors. Enough to send Bunds below the 125.00 mark.
• Gilts opened lower by 73 ticks and hit an 85.82 trough. Thereafter, UK paper trundled lower to make a contract low at 85.45 ahead of leaked comments from the PM, where Starmer reportedly announced his intention to remain as the PM. Gilts moved from 85.52 to 85.81 in the moments after his comments, as it potentially signals that Chancellor Reeves will remain at her post in the near-term. In brief, his comment essentially invites a leadership challenge; as it stands, the only real imminent challenge would be via Wes Streeting, though Rayner is an outside possibility. This, however, could bring further division into the Labour party, as an early challenge might split Labour between Starmer, Streeting and Burnham supporters. In the near-term, we look for a formal challenge and/or more ministerial-level resignations in a bid to pressure Starmer into changing his mind.
• Germany sells EUR 4.630bln vs exp. EUR 6bln 2.50% 2028 Schatz: b/c 1.4x (prev. 1.7x), average yield 2.70% (prev. 2.47%), retention 22.8%.
• UK sells GBP 4bln 4.125% 2031 Gilt: b/c 3.36x (prev. 3.33x), average yield 4.651% (prev. 4.228%), tail 0.2bps (prev. 0.3bps).
• The Netherlands sold EUR 2.745bln vs exp. EUR 2-3bln 2.75% 2036 DSL: average yield 3.209% (prev. 2.955%).
• Japan sold JPY 1.95tln 10yr JGBs, b/c 3.90x (prev. 2.57x), average yield 2.540% (prev. 2.350%).

Commodities

• In geopolitics, US President Trump said he has a plan on Iran and repeated that Tehran’s proposal is unacceptable. He added that the ceasefire is unbelievably weak and “on life support”, although a diplomatic solution is still possible. Meanwhile, Axios reported Trump met with his national security team to discuss options, including possible renewed military action against Iran. US officials said Trump still wants a deal, but Iran’s refusal to make major nuclear concessions has put the military option back on the table. Two US officials said Trump is leaning toward some form of military action to increase pressure on Iran. That being said, it was also reported that US officials said Trump is unlikely to authorise military action before returning from China later this week.
• From an Iranian perspective, Iran reiterated that enrichment is not negotiable and rejected transferring enriched uranium outside the country. An Iranian parliamentary spokesperson said one option in the event of another attack could be 90% uranium enrichment.
• In reaction, WTI and Brent futures are firmer by 3.1% and 2.6% respectively, with the former towards the upper end of USD 98-101.47/bbl range and the latter just shy of session highs (USD 104.23-107.29/bbl band). Dutch TTF is firmer by some 2.5% above EUR 47/MWh.
• Spot gold is softer amid the energy-induced rise in the USD, with the bullion hovering on either side of USD 4,700/oz (in a USD 4,686-4,773/oz band) as traders look ahead to US CPI later today, alongside further headlines risk on the US-Iran front, in which a macro update will likely ultimately dictate price action.
• Base metals are mixed/mostly lower given the cautious risk sentiment and firmer USD. Copper overnight edged higher in choppy trade amid the mixed overnight risk appetite. 3M LME copper currently resides between USD 13,831.70- 13,980.38/t.
• US released another 53.3mln barrels from Strategic Petroleum Reserve to companies including Trafigura, Marathon Petroleum (MPC), and Exxon Mobil (XOM) in an effort to ease soaring fuel prices caused by the Iran war and disruptions in the Strait of Hormuz.
• US House could vote on a gas-tax holiday as early as next week, according to multiple sources familiar with the planning cited by Punchbowl.

Trade/Tariffs

• US President Trump said need more tariffs.
• White House said US President Trump will meet with Chinese President Xi on Thursday at 10:15 AM in Beijing (03:15BST/22:15EDT) and banquet will be held at 18:00 on Thursday (11:00BST/06:00EDT). Working lunch on Friday will take place at 12:15 (05:15BST/00:15EDT).
• France presses EU to crack down on platforms like Shein and Temu, according to FT.
• US Treasury Secretary Bessent posted that he held talks with Japanese Economy Minister Akazawa; "I highlighted the continued positive collaboration between the United States and Japan on issues pertaining to critical minerals and supply chains".

US Event Calendar

• 6:00 am: United States Apr NFIB Small Business Optimism, est. 96.1, prior 95.8
• 8:30 am: United States Apr CPI MoM, est. 0.6%, prior 0.9%
• 8:30 am: United States Apr Core CPI MoM, est. 0.3%, prior 0.2%
• 8:30 am: United States Apr CPI YoY, est. 3.7%, prior 3.3%
• 8:30 am: United States Apr Core CPI YoY, est. 2.7%, prior 2.6%
• 2:00 pm: United States Apr Federal Budget Balance, est. 220b, prior -164.1b
• 9:10 am: United States Fed’s Goolsbee Radio Appearance on NPR
• 11:00 am: United States NY Fed Quarterly Report on Household Debt and Credit
• 1:00 pm: United States Fed’s Goolsbee Speaks at Greater Rockford Chamber of Commerce

DB's Jim Reid concludes the overnight wrap

Speaking of the AI race, some big overnight market moves came with a sharp drop in the KOSPI as a senior official floated the idea of a “citizen dividend” on AI profits, which has also weighed on tech sentiment overnight. Before that, chips stocks had led the S&P 500 (+0.19%) to another record high even as a renewed uptick in oil prices amid the deadlock between the US and Iran pushed yields higher. Meanwhile, UK politics are set for more headlines today, with reports of a fracturing in support for Prime Minister Starmer ahead of a potentially crucial Cabinet meeting this morning.

Starting with Iran, President Trump sowed doubts over the US-Iran ceasefire, saying that it was on “massive life support” as he called Iran’s latest offer “a piece of garbage”. Those comments came as Iran’s response to last week’s US proposal reportedly demanded a lifting of the US blockade and sanctions relief, as well as Iran maintaining a degree of control over the Strait of Hormuz. Iran’s Parliamentary Speaker Ghalibaf posted that “there is no alternative but to accept the rights of the Iranian people” as laid out in Tehran’s proposal. Meanwhile, Trump also told Fox News yesterday that he was considering reviving Project Freedom, the short-lived operation to escort ships through the Strait of Hormuz, and said he was supportive of a gasoline tax holiday, something that would require Congressional action. With the sides appearing no closer to resolving their negotiation deadlock, Brent crude prices are +0.70% higher at $104.94/bbl this morning after a +2.88% gain yesterday. Markets are also pricing rising chances of lasting disruption, with 6-month Brent futures up +2.54% to $89.50/bbl yesterday.

As mentioned at the top, the major story out of Asia this morning were comments from South Korea's presidential policy chief Kim Yong-beom proposing a "national dividend" to share in excess AI industry profits. This sent the KOSPI as much as -5.1% lower this morning, though it partially pared back this loss to-2.90% as I type, with Kim clarifying that he was suggesting tapping into “excess tax revenue” rather than introducing a new windfall corporate tax. The index heavyweight Samsung is down -3.4%. The news has also led NASDAQ futures (-0.34%) to lag those on the S&P 500 (-0.14%), while STOXX 50 futures (-0.61%) are losing more ground in Europe. But the mood is less negative elsewhere in Asia, with S&P/ASX 200 (-0.24%) as well as the CSI (-0.31%) and Shanghai Composite (-0.40%) seeing moderate losses, while the Nikkei (+0.62%) and the Hang Seng (+0.30%) are advancing.

Before that, US equities continued to advance yesterday despite the Iran stalemate, with the S&P 500 (+0.19%) and the NASDAQ (+0.10%) posting new records. Chips stocks again led the way, with the Philly semiconductor index (+2.59%) extending its YTD gain to +70%, while energy companies also surged. That said, the broader market mood was a bit more cautious, with most S&P 500 constituents lower on the day and the Mag-7 (-0.26%) slipping. Across the Atlantic, European equities were also more mixed, with the Stoxx 600 (+0.11%), FTSE 100 (+0.36%) and Dax (+0.05%) posting modest gains, while France’s CAC 40 (-0.69%) underperformed amid a fall in luxury retail stocks.
It was a more negative story in the rates space, as yields moved higher amid the rise in oil prices. The 2yr Treasury yield (+6.9bps) rose to 6-week high of 3.96%, as Fed funds futures are now pricing 15bps of hikes by next April. 10yr Treasury yields rose +5.9bps to 4.41%, whilst in Europe yields on 10yr bunds (+3.5bps) as well as OATs (+3.9bps) and BTPs (+5.2bps) all moved higher as well.

JGBs are also losing ground this morning, with the 10yr yield up +1.6bps to a new post-1997 high of 2.54%. A summary of opinions from last month’s BoJ board meeting showed policymakers considering a rate hike at the next meeting, with the central bank having grown increasingly concerned about a potential rise in underlying inflation stemming from Iran-driven disruptions. A June BoJ hike is currently 75% priced. Separately, Japanese household spending declined by a larger-than-expected -2.9% yoy in March (-1.3% expected), highlighting the fragility of consumption even as wages continued to grow.

Looking ahead to today, UK politics are set to be in the headlines again with a Cabinet split over support for Prime Minister Keir Starmer emerging yesterday. The FT reported that three ministers had asked the PM to consider his position. Starmer had said on Monday that he would not resign after suffering major losses in the UK local elections last week. But with his speech yesterday delivering little of note, aside from plans to nationalise British Steel and introduce a new EU youth scheme, more Labour MPs called on the PM to step aside in its aftermath, with the total number rising above 70. With a Cabinet meeting expected this morning, today could be a big day in determining Starmer’s future. In response to the uncertainty, 10yr UK gilt yields rose +8.6bps to 5.00% yesterday, whilst the 30yr yield rose +9.3bps to 5.67%, given expectations that a new Labour leader may face pressure to ease the fiscal rules and raise gilt issuance.

Elsewhere the day ahead will see the release of the April US CPI print. Our economists expect headline inflation to rise by +0.58% m/m, moderating from March’s +0.9%, but still relatively firm. This would raise the annual rate to 3.8%, its highest since May 2023. And they project the core reading to accelerate to +0.39% m/m from +0.2%, suggesting underlying price pressures remain sticky even as the energy price jump moderates. You can read the US team's CPI preview and register for their post-release webinar here.

Meanwhile, the US Senate is due to vote today to confirm Kevin Warsh to the Fed Board, after clearing a procedural vote by a 49-44 margin last night. A further Senate vote to confirm him for the Fed Chair position is expected later in the week before Chair Powell’s term ends on Friday. As a reminder, Warsh will be taking over Governor Miran’s place on the Board, as Powell plans to stay on as a Governor.

Otherwise on the docket today is US NFIB small business optimism, Germany May Zew survey, Eurozone May Zew survey. The Fed’s Goolbee and ECB’s Dolenc will also speak today.

Tyler Durden Tue, 05/12/2026 - 09:21

First Houthi Drones Sent On Israel Since Iran Ceasefire Took Effect

In what appears to be the first Houthi attack out of Yemen since the broader Iran ceasefire came into place starting in early April, the Israel Defense Forces said a drone "launched from the east" was intercepted by the Israeli Air Force near the southernmost city of Eilat on Tuesday.

The IDF further indicated it is believed to have been launched from Yemen, although the IDF is still investigating its origin, according to Israeli media reports. Israel's Channel 12 is citing that at least two drones were sent.

EPA-EFE

However, no sirens sounded, "according to protocol," the military said further. The Iran-allied Houthi rebels had launched several missiles and drones at Israel during the war, in support of the Iranian side.

The Houthis also played a key role during the prior two-year Gaza war, during which time ballistic missiles targeted Israel on a weekly basis, and shipping and in the Red Sea was essentially halted due to the threat of Houthi attacks.

The Shia military group further has demonstrated its ability to reach and disrupt several of Israel's airports, including the key international bub of Ben Gurion airport.

Throughout Trump's Operation Epic Fury and Project Freedom the Houthis have surprisingly stayed relatively quiet and on the sidelines. But they hold a big card in alliance with Iran - the threat of again shuttering vital Red Sea shipping and seriously denting Suez Canal traffic.

In the meantime, the close cooperation between Iran and the Houthis continues to be on display when it comes to weapons manufacturing and transfers:

The Iranian-backed Houthis in Yemen continue to use Iranian components in drones, according to a new report. For instance, “external support remains a key factor in the Houthis’ ability to sustain operations,” notes Conflict Armament Research (CAR), which compiled the report.

This is important as it illustrates how the Houthis continue to assemble advanced weapons. Any future conflict with them will need to take this into account. The Houthis burst onto the scene in 2015, moving from the mountains of Yemen and trying to take the port city of Aden.

Going back to the start of the war with the Saudis and Emirates over a decade ago, it was well understood by Western intelligence that the Houthis were able to achieve impressive ballistic missile capabilities due to the close relationship with Tehran.

via Al Jazeera

At various times over the years, vessels bound for Yemen were intercepted by US military ships, and found to be transferring guns, ammo, or missile parts. Iranian parts continue to be frequently found in Houthis weapons systems.

Tyler Durden Tue, 05/12/2026 - 08:45

US Consumer Prices Are Rising At Their Fastest Pace In 3 Years

Bearing in mind the one-off impact of BLS correcting for shutdown-related distortions (in rent/shelter) from last October., this morning's CPI was expected to come in hot as the impact of the Iran war starts to spread (energy, airfares, transport) and the melt-up in memory costs (unrelated to war) as the token wars continue.

As a reminder, March saw headline CPI in line (energy) while Core CPI actually printed cooler than expected. and we suspect most attention will be on the Core side again today with investors 'looking through' short-term energy-driven cost pressures.

Headline CPI rose 0.6% MoM (as expected), pulling headline up 3.8% YoY (hotter than the 3.7% expected) and the hottest since May 2023...

Source: Bloomberg

Energy and Food costs dominated the rise in headline CPI along with Core Services...

Source: Bloomberg

CPI highlights:

MoM energy rose 3.8% in April, accounting for over forty percent of the monthly all items increase. The shelter index also increased in April, rising 0.6%. The index for food increased 0.5% over the month as the index for food at home rose 0.7% and the index for food away from home increased 0.2%. YoY CPI energy index increased 17.9% for the 12 months ending April. The food index increased 3.2% over the last year.

CPI Food:

• The index for food rose 0.5% in April after being unchanged in March. The food at home index increased 0.7% over the month.
• Five of the six major grocery store food group indexes increased in April. The index for meats, poultry, fish, and eggs increased 1.3 percent over the month as the index for beef rose 2.7 percent.
• The fruits and vegetables index increased 1.8% in April and the nonalcoholic beverages index rose 1.1%.
• The index for dairy and related products increased 0.8% over the month and the index for cereals and bakery products rose 0.1% in April.
• In contrast, the index for other food at home fell 0.4% in April after being unchanged in March.
• The food away from home index rose 0.2% in April.
• The index for limited service meals rose 0.4% over the month and the index for full service meals rose 0.1 percent.

CPI Energy:

• The index for energy increased 3.8% in April, after rising 10.9% in March. The gasoline index increased 5.4% over the month. (Before seasonal adjustment, gasoline prices increased 11.1% in April.)
• The index for electricity rose 2.1% in April. The fuel oil index increased 5.8% over the month.
• Conversely, the index for natural gas decreased 0.1% over the same period.

New- and Used-Vehicle prices remain stable as Shelter jumped (as expected)...

On a short-term annualized basis, it's all about Energy...

But, the surge in the Energy subcomponent of CPI is perhaps peaking as oil has stabilized/eased. 

Source: Bloomberg

Core CPI rose more than expected in April (up 0.4% MoM vs +0.3% exp), pulling the YoY rise in prices up by 2.8% (also hotter than expected).

Source: Bloomberg

While that is the highest since Sept 2025, it is clear that whatever impact the war is having, it is not spreading wildly into the broad market... yet.

However, Core Services dominated the price rises (perhaps some energy cost impact pull-through)...

Closer look at Core CPI which rose 0.4% in April, after rising 0.2% in each of the 2 preceding months.

• The shelter index increased 0.6% over the month.

  • The index for owners’ equivalent rent and the index for rent both increased 0.5% in April.

  • The lodging away from home index rose 2.4% over the month.

• The index for household furnishings and operations increased 0.7% over the month, after rising 0.2% in March.

• The airline fares index rose 2.8% in April and the personal care index rose 0.7%.

• The index for apparel rose 0.6% over the month and the index for education rose 0.2% in April.

• The recreation index and the motor vehicle insurance index each increased 0.1% in April.

• The new vehicles index and the communication index each declined 0.2% in April.

• The index for used cars and trucks was unchanged over the month.

• The medical care index decreased 0.1% in April, after falling 0.2% in March.

  • The index for hospital services decreased 0.3 percent over the month.

  • Conversely, the physicians’ services index increased 0.6 percent over the month while the prescription drugs index was unchanged in April.

CPI Core rose 2.8% YoY: the shelter index increased 3.3% over the last year. Other indexes with notable increases over the last year include medical care (+2.5 percent), airline fares (+20.7 percent), household furnishings and operations (+3.9 percent), and recreation (+2.3 percent).

Here's the one time CPI adjustment in shelter:

Rent Inflation +0.49% in April after 0.16% in March; biggest monthly increase since Oct 2023; 
Rent inflation +2.79% YoY, up from 2.56% in March and highest since January 2026

Shelter inflation 0.61% in April after 0.40% in March, biggest monthly increase since Jan 2024;
Shelter inflation +3.30% in April, up from 3.02% in March and highest since Oct 2025.

Perhaps most notably, Real Wages are shrinking on a YoY basis (for the first time since April 2023)...

Finally, are we really ready for a 70s-style rebound in inflation?

Bonds may be hinting but stocks certainly are not, even as consumer sentiment hits rock bottom.

Tyler Durden Tue, 05/12/2026 - 08:39

HIMS Shares Plunge As Pivot To Branded GLP-1s Weighs On Outlook

Hims & Hers shares tumbled in premarket trading in New York, the most in three months, after the company posted a first-quarter loss and revenue that missed analyst estimates tracked by Bloomberg, as costs rose amid a massive pivot from selling copycat GLP-1 drugs toward branded obesity drugs from Novo Nordisk and Eli Lilly.

Revenue for the first quarter came in at $608 million versus the $617.5 million Bloomberg Consensus estimate, while the telehealth firm swung to a loss of 40 cents a share from a 20-cent profit a year earlier. 

HIMS recorded $33.5 million in restructuring charges, including inventory write-downs and transition costs. 

"This was an incredibly valuable transition," HIMS CEO Andrew Dudum told analysts on an earnings call. "We are seeing adoption and weight-loss near-record levels, even beyond the demand we saw following this year's New Year's and Super Bowl campaigns."

Here's a snapshot of the 1Q earnings (courtesy of Bloomberg):

Revenue $608.1 million, +3.8% y/y, estimate $617.5 million (Bloomberg Consensus)

Loss per share 40c vs. EPS 20c y/y

Adjusted Ebitda $44.3 million, -51% y/y, estimate $46.1 million

Gross margin 65% vs. 73% y/y, estimate 71.7%

Total subscribers 2.58 million, +9.2% y/y, estimate 2.58 million

Operating expense $475.1 million, +27% y/y, estimate $446.2 million

HIMS issued a mixed outlook: It raised its full-year revenue outlook to $2.8 billion to $3 billion, while slashing adjusted Ebitda guidance to $275 million to $350 million.

2Q Forecast:

Sees revenue $680 million to $700 million, estimate $644.5 million

Sees adjusted Ebitda $35 million to $55 million, estimate $70.1 million

Full Year Forecast:

Sees adjusted Ebitda $275 million to $350 million, saw $300 million to $375 million, estimate $319.3 million

Sees revenue $2.8 billion to $3.0 billion, estimate $2.75 billion

In premarket trading, HIMS shares fell 15%, the most since early February. The stock is down about 10% on the year, as of Monday's close.

Wall Street analysts described the first quarter as messy:

Citi (neutral/high risk)

• Hims is in a transition phase as it reduces reliance on compounded GLP-1s and refocuses its business on branded products, new offerings and international expansion, says analyst Daniel Grosslight

• While that has led to impressive revenue growth, near-term profitability will likely suffer

• With gross margin under pressure and limited ability to reduce operating expenses, much of the margin uplift must come from expanding monthly GLP-1 subscribers, which introduces incremental risks to financial models

Morgan Stanley (equal-weight)

• While management has an ambitious strategy on prioritizing growth, that will require some patience on margins, says analyst Craig Hettenbach

• On a brighter note, international sales appeared strong

• For more durable gains in the stock, positive Ebitda revisions are likely needed

Keybanc Capital Markets (sector weight)

• Hims' product transitions are creating near-term noise in financials, says analyst Justin Patterson

• Annual guidance suggests that cost headwinds should moderate in 2H, creating potential for revenue re-acceleration with better margins

• Given the historical volatility in the stock, preference is to revisit the equity when new products are showing more traction and margins are starting to improve

Evercore ISI (in-line)

• "At the margin, we are more cautious," says analyst Mark Mahaney

• Suggests investors to wait for a better entry point as Hims transitions to branded GLP-1 products, or proves out either leg of the bull case: international expansion or diversification of products beyond weight loss

• "We believe the right call here on HIMS shares is to stay on the sidelines and remain patient"

HIMS' pivot from copycat GLP-1 drugs to branded therapies follows its new partnership with Novo, which ended months of legal battles between the two companies. Under the agreement, HIMS said it would prioritize FDA-approved obesity drugs.

Tyler Durden Tue, 05/12/2026 - 07:45

Jet Fuel Shortage Deepens Pressure On Global Airlines

Via City AM,

• Heathrow’s April passenger numbers fell 5% to 6.7 million, with Middle East traffic down 50%.

• Transfer traffic rose 10% as travellers rerouted through Heathrow to Asia and Oceania.

• Airlines are facing mounting pressure from jet fuel shortages and higher oil prices.

Fewer passengers were heading to Heathrow Airport in April as the war in the Middle East keeps travellers grounded.

Passenger numbers at Europe’s biggest airport fell by five per cent in April to 6.7m with the blame being attributed to the “ongoing impact of the Middle East conflict”.

For those heading to that particular region, Heathrow saw a whopping 50 per cent drop in volumes.

Still, in the year-to-date (Jan–Apr) traffic maintained modest growth at 1.2 per cent.

Transfer demand grew ten per cent in April, as travellers rerouted through Heathrow to reach Asia and Oceania, helping offset losses in direct Middle Eastern travel.

Travel to Asia remained a major growth driver, with a 5.6 per cent increase in April and a 10.6 per cent increase year-to-date.

“We know passengers want certainty when planning their hard-earned summer holidays, so we are supporting Government and airlines as they work through their plans to get passengers on their journeys,” Thomas Woldbye, Heathrow’s top boss, said. 

Jet fuel crisis ‘worse’ than Covid

Growing anxieties around the jet fuel shortage caused by the Iran war have rocked the travel industry.

Tony Fernandes, chief executive of Air Asia, said last week: “I thought I’d seen it all with Covid […] but having seen jet fuel go up almost three times — this is much worse.”

It comes after supplies for jet fuel have tumbled to their lowest level since records began, as the war blocks crucial shipping lanes for fuel.

Spirit Airlines – a US-based low-cost airline – last week collapsed under mounting pressure caused by surging oil prices. The firm had failed to secure a $500m lifeline from the Trump administration, leaving it to go out of business and cancel all flights.

Researchers at Allianz Trade warned the UK is among the most “structurally exposed” to jet fuel shortages.

Meanwhile, transport secretary Heidi Alexander has loosened “use it or lose it” rules in a bid to soften the pressures facing airlines.

Woldbye said: “While we have seen some short-term disruption linked to the Middle East conflict, demand for travel remains strong with current fuel supplies stable.”

Tyler Durden Tue, 05/12/2026 - 07:20

My TACO-Tuesday morning train WFH reads:

• The Melt-Up: The Nasdaq 100 now has a higher return over the past 10 years than: Japan in the 1980s, the Dow in the Roaring 20s, the S&P in the 1950s. Still trails the 1990s tech run but it’s close Is this it? Is the melt-up here? How much crazier could it get? (Wealth of Common Sense)

• The Home Office meets the housing crisis: On the UK Home Office’s role in deepening the housing squeeze. The administrative state as housing policy by accident. (Chaminda Jayanetti)

• How AI mania is disguising big companies’ hit from Iran war — in charts: Biggest groups have gained $5.4tn in value since conflict began — but semiconductor sector accounts for most of the gains. The FT shows how AI-driven megacap returns are papering over Iran-war damage in the rest of the market. The headline index is lying to you. (Financial Times)

• The Factory Town Known as China’s Furniture Capital Is Fighting to Survive: A WSJ portrait of one Chinese export town getting flattened by tariffs and weak demand. The supply-chain map is being redrawn in real time. The U.S. lost much of its furniture industry to China years ago. Now, American tariffs and overseas competition are punishing manufacturers. (Wall Street Journal)

• The Slopification of Lunch: The fast-casual bowl as cultural artifact: cheap, beige, and aggressively undifferentiated. Esquire pokes at why lunch got worse. R.I.P. to the golden age of fast-casual dining. What the hell happened? (Esquire)

• The Emergent Self Loop: Kevin Kelly on how recursive systems develop apparent agency. A useful framework for thinking about AI, organisms, and your own habits. (KK)

• The Culture Crutch: How lazy social scientists and commentators use “culture” as a catch-all explanation to avoid the harder analytical work. How lazy social scientists and commentators use the c-word to avoid doing their jobs (Laissez-Faire, Laissez-Passer)

• New Research: Cognitive dissonance helps explain why Trump supporters remain loyal: “The researchers found a positive association between feeling bothered by the news article and expressing disbelief in the allegations. Participants who experienced higher levels of mental discomfort were more likely to claim the accusations were fabricated. This suggests that the denial is not just a calm rejection of information, but rather a direct response to the psychological distress of cognitive dissonance.” (PsyPost) see also Hundreds of Fake Pro-Trump Avatars Emerge on Social Media: The artificial-intelligence-generated fake influencers have surged on TikTok, Instagram, Facebook and YouTube in an apparent bid to hook conservative voters. In the months leading up to the midterm elections, hundreds of A.I.-generated pro-Trump influencer accounts have emerged on social media, featuring avatars posting at a rapid pace about the “radical left” and “America First.” (New York Times)

• Science Has Found Even More Ways Coffee Is Good for You: More positive nutritional findings on the world’s most-consumed psychoactive beverage. Drink up — selectively. A new study shows the mechanisms of how coffee modifies the microbiome, reduces inflammation, and influences mood. Even decaf has its perks. (Wired)

• ‘Tony’ Gives Anthony Bourdain the Anti-Biopic Treatment: The new Bourdain film aims for something stranger than hagiography. Whether it lands is another question. Blackberry director Matt Johnson’s origin-story movie cuts down on the hero factor by showing us the future icon as a Provincetown line cook with a lot to learn. (GQ)

Video of the day: Psychology of “Generation Jones”

Be sure to check out our Master’s in Business interview with Howard Lindzon, known as “The Larry David of Finance.” He is General Partner at the seed fund, Social Leverage, he was one of the first seed investors in Robinhood, which IPOd at $30B in 2021, eToro, Manscaped, and Beehiiv. Previously, he founded Wallstrip, a daily online video show acquired by CBS (2007). He also co-founded Stocktwits, which pioneered the “cashtag.” Recognized by Institutional Investor as a “Super Angel;” his podcast is Panic with Friends.

 

Trump disapproval reaches new high via WashPost-ABC-Ipsos poll

Source: Washington Post

 

Sign up for our reads-only mailing list here.

The post 10 Tuesday AM Reads appeared first on The Big Picture.

UK Summons Chinese Ambassador Over Spying Allegation

Authored by Dorothy Li via The Epoch Times,

The British Foreign Ministry on May 9 stated that it had summoned the Chinese ambassador after a London court convicted two men, including a former British immigration officer, of spying for the Chinese communist regime.

Bill Yuen Chung Biu (L) and Peter Wai Chi Leung (R), both charged with assisting Hong Kong intelligence service, arrive separately ahead of their trial at the Old Bailey in central London, on March 2, 2026. Carlos Jasso/AFP via Getty Images

The Chinese ambassador, Zheng Zeguang, was called to the UK’s Foreign, Commonwealth, and Development Office on May 8 for an official reprimand, according to a British government statement.

The UK Foreign Office stated that it had made clear that “any attempts by foreign states to intimidate, harass or harm individuals or communities” on British soil will not be tolerated and that such activities constitute “a serious breach of the UK’s sovereignty.”

“We will continue to use the full range of tools available to protect our security and hold China to account for actions which undermine our safety and democratic values,” it stated.

The British government’s move came just a day after a jury found Wai Chi-leung and Yuen Chung-biu guilty under the National Security Act 2023 of assisting a foreign intelligence service, following a weeks-long trial at the Central Criminal Court in London.

Wai was also convicted of misconduct in a public office in relation to misusing the UK Interior Ministry’s systems to track targets while working for the British Border Force at London Heathrow airport. Prosecutors said Wai used his access to the UK government’s databases to conduct unauthorized searches while off duty and improperly shared the personal information obtained.

Helen Flanagan, head of counterterrorism policing in London, which led the investigation into the high-profile case, called the pair’s activists “both sinister and chilling.”

“Our investigation found they were spying for the Hong Kong authorities, targeting UK-based pro-democracy campaigners,” Flanagan said in a May 7 statement following the conviction.

The pair—both dual Chinese and British nationals—were described by local media as the first in UK history to be convicted of spying for Beijing. They face up to 14 years in prison.

The Hong Kong Economic and Trade Office in London on July 21, 2020. Luke Dray/Getty Images

Investigators found that Yuen was in contact with individuals linked to the Hong Kong government while working at the Hong Kong Economic and Trade Office (HKETO) in London. He then tasked Wai with conducting spying and surveillance of Hong Kong pro-democracy activists living in Britain.

Messages on Yuen’s phone indicated that their surveillance of Nathan Law, a former Hong Kong lawmaker and a prominent pro-democracy advocate, had begun as early as 2021, according to prosecutors.

The Chinese Embassy in the UK confirmed its ambassador met with a British Foreign Office official on May 8. According to a Chinese summary of the meeting, Zheng protested the London court’s ruling and called on the UK side to stop what he called “anti-China political manipulation.”

The case has cast a renewed spotlight on HKETO, a Hong Kong government overseas outpost that was designed to promote trade relations between the UK and the Asian financial hub. Critics have long argued that its resources and privileges were used for intelligence gathering and targeting overseas Hong Kong activists.

In response to the May 7 ruling, the London-based Hong Kong Labor Rights Monitor called on the UK government to urgently review the status and privileges granted to HKETO, including whether its current diplomatic privileges remain appropriate.

“We cannot allow the Hong Kong authorities to disguise political repression as trade promotion, nor permit authoritarian ‘long-arm repression’ to extend into free societies,” the group said in a May 7 statement.

Tyler Durden Tue, 05/12/2026 - 05:00

Media Spreads Hantavirus Hysteria In Attempt To Save Disgraced WHO

The establishment media has been drumming up fear after a recent outbreak of Hantavirus on a cruise liner traveling from Argentina to West Africa.  The Guardian has used the opportunity to assert that the US is currently ill equipped to deal with future pandemic threats, largely because of Donald Trump (of course) and the dramatic US exit from the now disgraced World Health Organization. 

Is Hantavirus a serious danger to the world, or, is it another hyped up virus like Covid being used to trigger public hysteria?  And if it is being hyped, who (or WHO) stands to benefit? 

For decades the WHO constructed its image as a global angel of benevolence; the primary line of defense against what they said was the inevitable invasion of a population rending plague.  However, when the time finally came in the form of a mutated Coronavirus (Covid), they dropped the ball, and evidence suggests they may have done it deliberately.

During the initial outbreak in China, the WHO echoed CCP propaganda suggesting that human-to-human contact was unlikely and, knowingly or unknowingly, aided China in hiding details behind the outbreak.  Details surrounding the involvement of the Wuhan Institute of Virology, the largest dangerous disease lab in Asia, were actively dismissed (or suppressed).  Director-General Tedros Adhanom Ghebreyesus even praised China's "transparency". 

The WHO then set up a joint task force to determine the origins of Covid, only to let the Chinese dominate the investigation and lead it away from the activities at the Level 4 lab in Wuhan.  The Chinese wanted to push the theory of animal-to-animal mutation instead of the gain of function research that was ongoing at the lab (partially funded by US interests in the Obama Administration). 

Today, evidence overwhelmingly suggests that Covid originated in the Wuhan Lab.  In January 2025, the CIA assessed that a lab-related origin is more likely than natural spillover.  This determination matched with similar FBI assessments. 

In 2025, German Intelligence also reported their findings, indicating a 90% likelihood that Covid was engineered and originated at the Wuhan Lab in China.   

Of course, anyone who made this claim online during the pandemic response was called a dangerous "conspiracy theorist" and was deplatformed (much like Zero Hedge).

The WHO would go on to exaggerate the death rate of the virus, claiming an initial Case Fatality Rate (CFR) of 3.4%.  This data was based on studies which ignored mild cases as well as asymptomatic cases, thus artificially pumping up the death rate.    

Dozens of studies as early as May 2020 showed that the median Infection Fatality Rate (a more accurate number) was only 0.27% (later adjusted to 0.23%).  The WHO continued to spread disinformation and hysteria surrounding covid while ignoring the true IFR data.  That is to say, all the lockdowns, the mandates, the social media censorship, the arrests, the push for vaccine passports, etc. - all of it was over a virus that 99.8% of the population would easily survive. 

The WHO has been exposed as a perpetrator of pandemic disinformation and is no longer trusted by the public.  The US under the Trump Administration has exited the organization on these grounds, and as a result the WHO has lost at least 20% of its total funding.  It is now facing dire financial conditions.  In response, the UN and the establishment media have been running a spin campaign to present the WHO as indispensable.  

It is therefore not surprising that the WHO and the media are suddenly jumping on the cruise line Hantavirus story as if it is significant, while at the same time arguing that Trump is putting the public at risk by not participating in the WHO's antics.  They need the money badly, and so they've decided to remind the public why we should be afraid. 

For those who are unaware, Hantavirus is a common virus around the world and in the US.  Estimates show around 100,000 cases of the disease occur annually.  In 2023, there were 40 cases in the US.  The virus is most often contracted when humans are exposed to dried rodent feces and urine, floating as particulates in the air which are then inhaled into the lungs. 

The spread from human to human is rare and only occurs with the South American strain.  Contraction is difficult, with the virus passing from one person to another through "prolonged contact with bodily fluids".  It makes you wonder what kind of pleasure cruise these people were on when the most recent outbreak started?  The point is, the story is being inflated from a normal event into a crisis event.  

This is probably why the Spanish Government set up an elaborate bus transfer of supposedly highly infectious cruise passengers, only to drop off a psychiatrist with the Ministry of Health down the road without protective gear like he's going home after school. 

Las imágenes que está dejando toda la "Operación Hantavirus" son de película de Berlanga.

Contagiados quitándose la mascarilla, personal bajando de los autobuses con el EPI en la mano, otros que ni lo llevan puesto, etc.

Menudo cachondeo.pic.twitter.com/bYo01wA2RN pic.twitter.com/kiBnBAiBp0

— Elyon (@ElyonMan) May 10, 2026

The bottom line?  Hantavirus is all over the world and it's not a threat to the vast majority of people.  The artificial media panic and the opportunism of the WHO may be an effort to test the waters for another fraudulent pandemic scare, but the majority of the propaganda seems to be aimed at restoring the WHO's reputation and saving it from financial ruin.       

Tyler Durden Tue, 05/12/2026 - 04:15