Mr. Lee is only the second analyst we've seen mention lock-up periods. In the case of SpaceX the current shareholders will have to sell stock just to get the free-float high enough to meet S&P's criteria for inclusion into the 500 sometime next year.
Additionally Lee's crossing the valley of the shadow of death to the broad sunlit uplands (boy, there's a pair of mixed allusions/metaphors) is interesting for its eventual bullishness.
From The Motley Fool, June 5:
Tom Lee of Fundstrat is undeniably one of Wall Street's most bullish market strategists.
In fact, it's unusual for Lee not to be bullish. To his credit, Lee
has nailed most of his bull market calls over the past several years.
Interestingly, however, Lee recently appeared on CNBC to discuss what he
called an upcoming three-phased market. Lee expects a bumpy ride in the
near term, including a correction or bear market that could begin shortly. Let's take a look.
The market is about to run into a host of challenges At recent prices, the benchmark S&P 500 (^GSPC 1.53%) index has risen nearly 11% this year. That's impressive, considering all the challenges it's had to overcome, including doubts about artificial intelligence (AI) at the beginning of the year and then the Iran war, which has led to higher oil and gas prices that are likely contributing to elevated inflation.
However, Lee said the market has been bolstered by incredibly strong
first-quarter earnings. According to Lee, most market forecasters had
penciled in $70 of collective earnings per share (EPS)
for the S&P 500. First-quarter EPS actually came in at about $80, a
big beat on expectations for what had already been expected to be a
strong quarter of growth.
If the market stays on this trajectory, that's $40 in additional EPS on an annualized basis, which could lift the S&P 500
by 800 to 1,000 points, according to Lee. However, Lee's base case,
based on what he and the team at Fundstrat had expected to be a
"challenging year," is a three-phased market.
The first phase, currently underway, is largely bullish. With the
S&P 500 now slightly above 7,560 (as of June 3), Lee thinks the
rally could last a little bit longer, potentially taking the market to
around 7,700.
The second phase, which will shortly follow, will be a challenging period for the market.
"Then we are going to digest a lot of things until October," Lee told
CNBC. "And that's a new Fed chair; it's the energy shock ... especially
shortages of petroleum products and lubricants. ... And the third is
the IPOs of SpaceX, OpenAI, and Anthropic that when the unlocks happen,
that's a lot of extra supply.
By "unlocks," Lee refers to the expiration of lock-up provisions that
allow insiders and employees with company shares to sell those shares
in the public market.
"I think that could pressure stocks in a way that feels like a bear market," Lee added.
However, Lee sees this more difficult period settling after the
midterm elections, at which point he expects stocks to rally strongly,
with 2027 yielding "some of the best we've ever seen in our lifetime."....
Mystery customers. Missing permits. Inaccurate customs declarations. Investigations in the U.S. and Mexico. Documents shed light on an alleged fuel smuggling racket.
Ikon Midstream, a Houston-based petroleum trader whose offices were raided last month by U.S. authorities,
is under investigation in Mexico in connection with fuel smuggling,
according to three Mexican security sources with direct knowledge of the
matter and four Mexican government security documents viewed by
Reuters.
The
probe is part of ongoing investigations into maritime shipments of
petroleum products that were brought to Mexico from the U.S. and Canada
in an alleged scheme to evade a hefty tax due on these imports, the
documents and sources said.
Ikon
Midstream is among the “central pieces” in a suspected scheme linked to
one of Mexico’s most powerful crime groups, the Jalisco New Generation
Cartel (CJNG), and Mexico’s attorney general’s office has opened an
investigation into the company “based on testimonies, documents and
surveillance,” according to one of the documents.
Mexico’s attorney general’s office did not respond to requests for comment.
The
Texas trader’s export of diesel aboard the tanker Torm Agnes is being
scrutinized for potential cartel links, as is Ikon Midstream’s purported
relationship with a suspected CJNG-related trucking company that helped
offload the vessel’s cargo in the ports of Ensenada and Guaymas,
according to the security sources and the document.
Smuggled
fuel and stolen crude oil have become the second-largest source of
revenue for Mexico’s cartels behind narcotics, according to the U.S.
government.
Two
of the documents laid out the operations and players in the alleged
racket. Among them, Ikon Midstream was allegedly a supplier of petroleum
products that moved through a complex web of importers, transporters,
distributors and facilitators in Mexico. The other two documents
contained summaries of the probes. The four documents were created in
March and April and their authenticity was confirmed by the security
sources.
Asked
to comment about the investigations, Ikon Midstream Executive Director
Rhett Kenagy said in a May 12 email to Reuters that there was “not a
single shred of documentation to back any of it up” and that the company
was “not going to respond to accusations grounded in hearsay.”
Homeland
Security Investigations, the primary transnational investigative agency
within the U.S. Department of Homeland Security, executed a criminal
search warrant at Ikon Midstream’s Houston offices on April 14, a DHS
spokesperson told Reuters in an April 17 statement. “This is related to
an ongoing investigation into criminal activity,” the statement said.
DHS did not elaborate, and it did not comment on whether it was
coordinating with Mexican authorities.
Excerpt
from an April 17, 2026, statement to Reuters from the U.S. Department
of Homeland Security
about a raid made earlier that week by its
investigative unit at the Houston offices of Ikon Midstream.
Ikon
Midstream has repeatedly denied wrongdoing. In an April 24 statement to
Reuters, the fuel trader said it “has never knowingly provided, and
does not knowingly provide, material support or resources to CJNG.”
Regarding the raid by Homeland Security Investigations, Ikon Midstream
said in its statement that “an investigative action by law enforcement
is not itself a finding of wrongdoing.”
Mexican
authorities have announced the arrests of at least 16 people since
September in connection with fuel smuggling. While officials have said
they’ve uncovered a “criminal structure” behind the alleged illicit
activity, they haven’t publicly named the detainees or said anything
about their possible connections to CJNG.
In an October report,
Reuters chronicled how diesel exported by Ikon Midstream aboard the
tanker Torm Agnes made its way into the hands of Intanza, a Mexican
company that authorities there suspect is a front for CJNG. Intanza has
no listed phone number, website, social media presence or physical
location that Reuters could find.
That
story detailed how Mexican cartels earn billions of dollars annually by
smuggling fuel, mainly from the U.S. to Mexico, in what boils down to a
massive tax dodge: Diesel, gasoline and naphtha are claimed in trade
paperwork to be lubricants to avoid a steep import duty that Mexico
charges on these imported fuels.
Smuggled
fuel and stolen crude oil have become the second-largest source of
revenue for Mexico’s cartels behind narcotics, according to the U.S.
government, which has ramped up efforts to crack down on the illicit
trade. The Trump administration designated CJNG as a foreign terrorist
organization in February 2025.
Import-export
paperwork for these transactions is often incomplete or faked by
smugglers, who use front companies to facilitate these deals and enlist
established oil industry players to help, some actively colluding,
others acting unwittingly, trade experts, tax authorities and law
enforcement officials told Reuters.
Ikon
Midstream sued Reuters for defamation on November 14 in a district
court in Texas, contending the news agency made “categorically false”
statements about its business in the October article. Reuters stands by
its reporting and is contesting the suit.
Ikon
Midstream said it never did business with Intanza. Following
publication of Reuters’ October report, Ikon Midstream provided Reuters
with internal company documents that showed the Torm Agnes cargo plus
three other 2025 shipments of diesel and naphtha aboard the tanker Torm
Louise were sold to a Mexican customer named Azteca Cone.
Azteca
Cone, like Intanza, is part of the same alleged scheme and is likewise
under investigation for fuel smuggling and suspected links to CJNG,
according to the three Mexican security sources and two of the
government security documents.
Azteca
Cone cuts a mysterious figure in the fuel industry. Just like Intanza,
Azteca Cone has no listed phone number, website or physical location
that Reuters could find....
The low-intensity war in the Middle East continues. Crude oil looks set to close the week higher for the first time in three weeks. Meanwhile, some poor earnings have hit the tech sector this week and it is evident in both Asia and the US. A dramatic revision to Ireland’s Q1 growth spurred a downward revision in Q1 eurozone growth to show a 0.2% contraction rather than a 0.1% expansion. Nevertheless, the market remains confident that the ECB will hike rates next week.
The immediate attention turns to the US May employment report. It often elicits a dramatic reaction in the foreign exchange market. The median forecast in Bloomberg’s survey is for an 88k increase. The 150k average in March and April are subject to revisions. Still, given the new Fed chair, the impact on expectations for the June 16-17 FOMC will likely be minimal and this may dampen the reaction today’s report. That said, the intraday momentum indicators appear to favor a dollar recovery ahead of the weekend....
For
most of AI’s history, humans drove every step in its development cycle.
But at Anthropic, we are delegating a growing share of AI development
to AI systems themselves, which is speeding up our work.
Taken
far enough, and given enough compute, that trend points to an AI system
capable of fully autonomously designing and developing its own
successor. This is called recursive self-improvement. We are
not there yet, and recursive self-improvement is not inevitable. But it
could come sooner than most institutions are prepared for.
Using public benchmarks and previously unreported data from within Anthropic, The Anthropic Institute
is showing that AI is already accelerating the development of AI
systems. To take just one example: today, Anthropic engineers on average
ship 8x as much code per quarter as they did from 2021-2025.
The
technical trends discussed in this piece suggest that AI systems are
going to become much more capable in coming years. These trends have
huge implications. AI that can build itself would be a major development
in the history of technology—one that could bring enormous good for the world in science, healthcare, and beyond. But full recursive self-improvement also might increase the risks
of humans losing control over AI systems. If systems are capable of
fully building their own successors, the ways we secure them, monitor
them, and shape their behavior all grow much more important.
Evidence from the outside world
The rate at which AI models improve is accelerating. The length of tasks that they can reliably complete on their own has been doubling roughly every four months, up from an earlier trend of doubling
every seven months. In March 2024, Claude Opus 3 could complete
software tasks that take humans about four minutes to complete. A year
later, Claude Sonnet 3.7 managed tasks that took about an hour and a
half. A year after that, Claude Opus 4.6 managed 12-hour tasks.1
If this trend holds, tasks that take a skilled person days could come
into range this year. In 2027, AI systems could be capable of tasks that
take a person weeks.
The
same pattern appears on coding and research benchmarks. Benchmarks
measure the performance of models in a given domain, and they’re
“saturated” when models achieve close to 100% performance.2SWE-bench
is a standard test of real-world software engineering: it hands a model
an actual open-source codebase and a real bug report, and asks it to
write a code change that fixes the issue and passes the project’s own
tests. Models have gone from scoring in the low single digits to
saturating the benchmark in two years.
CORE-Bench
tests whether a model can reproduce existing research, a prerequisite
for them to conduct original research. It gives an AI model the code and
data behind a published paper, and asks it to rerun everything and
confirm it can replicate the paper’s results. AI systems went from
succeeding at reproducing the results roughly 20% of the time in 2024 to
saturating the benchmark fifteen months later. METR, which runs the
benchmark measuring how well models can complete long-duration tasks, found
that Claude Mythos Preview could work for “at least” 16 hours and was
“at the upper end of what [METR] can measure without new tasks.”
Public
benchmarks say a lot about the capabilities of these systems. But they
can’t reveal the impact AI systems are having on speeding up AI
development itself. For that, we need direct evidence from within AI
companies like Anthropic.
Evidence from within Anthropic
Building a frontier model takes two broad categories of work. There is engineering: writing the code, standing up the infrastructure, and overseeing the model training. And there is research: deciding what experiments to run, interpreting what comes back, and figuring out which ideas to try next.
Across
both engineering and research, the picture is consistent. In
engineering, Claude can be handed an underspecified problem and figure
out how to solve it; humans supply the goal, but they no longer need to
supply the method. In research, Claude can already match or outperform
skilled humans at executing a well-specified experiment. However, large
performance gaps persist when it comes to Claude exercising judgement in
choosing goals in both engineering and research. That’s the gap between
AI today and a future system that could autonomously design its own
successor.
It’s
common for employees at Anthropic to receive more open-ended and
important tasks as they gain more experience. Early on, they execute a
task someone else specified, like, “The export button isn’t working, please fix it.” With experience, they’re handed a goal and design the approach themselves, such as, “Investigate why the network slows down under heavy load.” At the most senior levels, they are deciding which problems are worth working on at all: “What should the team build next quarter?” We can use internal Anthropic data to see how far Claude has come in being able to handle these different kinds of tasks.
Claude writes a significant proportion of Anthropic’s code. As of May 2026, more than 80% of the code we merge into Anthropic’s codebase was authored by Claude.3
Before Claude Code launched in research preview in February 2025, this
number was in the low single digits. That shift also shows up in the
amount of output per engineer. Lines of code merged per engineer per day
stayed constant through Anthropic’s first four years (2021-2024), then
began to climb upward in 2025 when Claude began to run code rather than
just suggesting it for an engineer to copy and paste. The slope
steepened again in 2026 when models began to work autonomously over
longer time horizons. These two inflection points are shown in the chart
below. In the second quarter of 2026, the typical engineer was merging
8× as much code per day as they were in 2024.4
This is because much of the code is written by Claude, with the
engineer directing and reviewing, rather than typing it themselves....
From the Food and Agriculture Organization of the United Nations, June 5:
» The FAO Food Price Index* (FFPI) averaged 130.8
points in May 2026, down 0.2 points (0.2 percent) from its revised April
level, remaining broadly stable. Increases in the price indices for
cereals and sugar were offset by declines in vegetable oils and dairy
products, while the index for meat products remained almost unchanged.
Compared to historical levels, the FFPI in May stood 3.7 points (2.9
percent) higher than a year ago but remained as much as 29.4 points
(18.4 percent) below its peak reached in March 2022.
» The FAO Cereal Price Index
averaged 114.3 points in May, up 2.9 points (2.6 percent) from April
and 5.3 points (4.9 percent) from its level a year earlier. The
continued increase reflected higher prices across all major cereals.
World wheat prices rose for the fourth consecutive month in May,
supported by smaller expected harvests in major exporters, including the
United States of America, where winter wheat crop conditions are among
the least favourable in decades, while higher fuel and fertilizer costs
added further upward pressure globally. Maize prices continued to be
supported by stronger import demand in key markets, tighter availability
in Brazil and the United States of America, and firmer energy prices
boosting ethanol-related demand. International prices of sorghum and
barley increased mainly due to spillover effects from tighter global
maize and wheat markets. The FAO All Rice Price Index increased by 2.7
percent in May 2026, as weather concerns and higher prices of crude oil
and its derivatives underpinned quotations in some leading Asian
exporting countries.
» The FAO Vegetable Oil Price Index
averaged 185.0 points in May, down 9.0 points (4.6 percent) from April,
marking the first monthly decline since the beginning of 2026. The
decrease was mainly driven by lower prices of palm and soy oils, which
more than offset increases in rapeseed oil and sunflower oil prices.
After rising for five consecutive months, international palm oil prices
declined, reflecting expectations of weaker global import demand and
uncertainty in crude oil markets. World soyoil prices showed mixed
trends, with seasonal increases in exportable supplies weighing on
prices in South America, while firm biofuel demand supported values in
the United States of America. Meantime, rapeseed oil prices rose on
seasonally tightening supplies in the European Union, while sunflower
oil quotations continued to increase, underpinned by persistent supply
tightness, particularly in Ukraine.
» The FAO Meat Price Index
averaged 130.5 points in May, almost unchanged (up 0.1 percent) from
its revised April value and 7.7 points (6.3 percent) above its level a
year earlier. Higher quotations for bovine and ovine meat, alongside a
modest increase in poultry meat prices, were almost entirely offset by a
decline in pig meat prices. International bovine meat prices rose
further in May, supported by robust import demand, particularly from
China, where import quota allocations continued to be rapidly utilized,
and from the United States of America amid persistently tight domestic
supplies. At the same time, ongoing herd rebuilding in several major
producing countries continued to constrain exportable availabilities.
World ovine meat prices increased, as higher quotations in New Zealand,
underpinned by limited supplies, were only partially offset by a
temporary easing in Australian export prices, where dry weather
forecasts prompted increased slaughtering, expanding exportable
supplies. Poultry meat prices edged up, as higher prices in Brazil,
supported by firm global import demand, were partly offset by slightly
lower quotations in the United States of America, reflecting ample
supplies. By contrast, pig meat prices declined, mainly due to lower
prices in the European Union amid abundant supplies and subdued import
demand.
» The FAO Dairy Price Index averaged
119.2 points in May, down 0.5 points (0.5 percent) from April and 34.5
points (22.4 percent) below its level a year earlier. International
butter prices continued to decline in both Europe and Oceania, as
improved milkfat availability and heightened competition among major
exporters weighed on quotations. Cheese prices eased only marginally as
ample export availability and intensified competition on international
markets were partly offset by continued support from whey and dairy
protein markets, which helped sustain values in major exporting regions.
By contrast, skim milk powder prices increased further, particularly in
Europe, supported by firm import demand from the Near East, North
Africa, and parts of Asia. Whole milk powder prices showed mixed
developments, with modest increases in Oceania, supported by seasonally
tightening export availability following the production peak and
continued demand from Southeast Asia and the Near East, largely offset
by lower European quotations reflecting subdued demand from China and
generally comfortable global supplies....
From Dunstan Ramsay's Omnibudsman substack, September 4, 2022:
The world needs to use a lot more energy
A recent article in The New Yorker
discusses the importance of refrigeration to the development of Rwanda,
where cold storage is necessary to reduce rates of foodborne illness and
secure more stable income for farmers. The piece demonstrates an
inescapable fact about the future of the world: we need to use more
energy — a lot more.
There's probably about 3 million households in Rwanda, and a vanishingly small number
have a fridge. A refrigerator uses about 2 kilowatt-hours (kWh) of
energy per day, so if we were able to get one into every household, that
would add about 2 billion kWh (2 terawatt-hours, or tWh) to Rwanda's
annual energy usage. That's about as much energy as there is contained in 1 million barrels of oil — and fully one-third of Rwanda's current primary energy consumption.
Primary energy
describes the amount of energy not just in a barrel of oil but in a
lump of coal, a gust of wind, a ray of sunshine, or a uranium fuel rod.
Energy, in general, is a measurement that describes the capacity of any
system—a cigar, a soccer player, a lightbulb—to perform work
on its surroundings. A cigar converts chemical energy into heat via
combustion; a soccer player transfers kinetic energy to a ball by
kicking it; a lightbulb converts electricity into heat and light. The
fundamental unit of energy is the joule:
roughly, this is the amount of energy required to lift a pencil one
foot into the air. Kilowatt-hours are just another measure of energy, in
this case about the amount that a medium-sized person might use in
running a 10k at an 8-minute pace.
Energy, put slightly more simply, is just a measure of how much stuff is done in the world. Access to more energy means the ability to do more stuff.
And the world needs to do a lot more stuff. Ten percent of people live in extreme poverty, and 85% live on less than $30 per day. In places like Somalia, Nigeria, and Chad, more than one in every ten children die
before the age of five. In those countries, pneumonia, which is caused
primarily by malnutrition, is among the top causes of death.
What does it take to end malnutrition? One thing that would help is, as the New Yorker
notes, refrigeration: massive amounts of fresh food spoil in the
developing world. Refrigerators are part of the solution: to fix
malnutrition, you need to get food from where it's grown to where it's
needed while it's still edible. And in order to get food between
refrigerators, you also need refrigerated trucks, which are extremely
energy intensive and of which Nigeria, a country of 200 million people,
has fewer than 1000 (it needs 25 times as many).
Those trucks will be more useful (and longer-lived) with better roads to drive them on: only about 16% of Nigerian roads are paved. You need energy equivalent to 240 tons of coal to pave 1 kilometer of asphalt, and with the need to do so for 135,000 km
of roadway, you're looking at an energy cost of roughly 2GwH — about as
much as a full square kilometer of solar panels produces each day.
Suppose now that the world has done what it takes to address pneumonia as a cause of infant mortality. What next?
Well,
then there's everything else. Just for starters, we need to set up and
run the systems that distribute clean water in order to prevent
diarrhea, the next-most-common cause of infant mortality across much of
the world. This takes energy.
It also takes energy to run dialysis machines, school buses, and
incubators for preterm babies. It takes energy to boil a pot of water on
the stove, to pasteurize milk, and to manufacture antibiotics. It takes
energy to build universities, preschools, old folks' homes, affordable
housing, bookstores and art museums, and yet more energy to provide the
air conditioning that allows students to focus and the elderly to
survive on hot days in a warming world. It takes energy just to grow
food: most of the billions of people alive today — and, with any luck,
the billions to come — owe their lives to the Haber-Bosch process,
which quite literally turns energy into artificial fertilizer for the
purposes of growing more food. That process is responsible for about 1%
of global energy consumption.
It takes energy to do all this — and we haven't even gotten to Netflix.
This reminded me that I should note First Solar surpassed its $317.00 May 2008 all-time-high* yesterday, June 3, by trading up to $320.95 and closing at $318.25. The stock also had a $320 handle this morning ($320.64) before reversing to close down $3.30 at $314.95. Fingers, toes and other body parts crossed that we didn't just see a double top.
From Reuters, June 4/5:
Storage gets bigger display at world's largest solar exhibition
Solar majors make battery foray, lean on supply chain networks
Jinko to nearly triple battery-making capacity this year
China's major solar panel manufacturers are ramping
up higher-margin battery exports to boost revenue as growth in
photovoltaic (PV) sales slows, betting on rising global demand for
renewable energy storage to cut reliance on fossil fuels.
The sector has been hit by weaker domestic installations, slowing exports and record-low prices, with executives expecting global demand to decline in 2026.
That has pushed players including JinkoSolar (688223.SS), JA Solar (002459.SZ), LONGi Green Energy (601012.SS), and Trina Solar (688599.SS), to accelerate expansion into battery storage, company executives told Reuters.
JinkoSolar
plans to nearly triple its battery manufacturing capacity from 5
gigawatt-hours (GWh) to 13-14 GWh by the end of this year, as developers
seek to address the intermittency of renewables, a company official
said at SNEC - a solar industry gathering attended by over half a
million people.
"We
are seeing some goodwill from our company's directors' point of view,
in that we are having massive investments," Titus Koech, a regional
technical head for energy storage systems, told Reuters.
Countries
with high renewable penetration - including Japan, Vietnam and India,
as well as Germany, the Netherlands, the U.S. and Australia - were
among the largest importers of batteries from China in 2025, according
to energy think tank Ember.
At
JA Solar's booth, energy storage products took centre stage, marking a
shift from PV-focused displays in previous conferences, said Gloria Gao,
marketing director of its storage unit.
"If
you only own a solar business, it's not helping your business grow
because the margins are really small. That's why we started our energy
storage business, because we foresee the future," Gao told Reuters.
Solar
panels exports, which typically carry better margins than domestic
sales, grew 4.7% in 2025 - the slowest pace since 2018, Ember data
showed. Growth from May to December is expected to lag that seen in
the first four months of the year, Rystad Energy analyst Fei Chen said.
By contrast, battery exports for energy storage are forecast to jump 30% to 150 GWh in 2026, Rystad said.
ONE-STOP-SHOP VERSUS BATTERY MANUFACTURING GIANTS
China's solar manufacturers are entering a market dominated by battery giants such as CATL and BYD, but are betting on their supply-chain expertise and ability to offer integrated solar-plus-storage solutions....
I'm not sure that's a good idea but I haven't had much luck with companies run by attorneys either. With the lawyers they either remain in the "Thou shalt not" groove of the wise counselor or they go a bit nuts because they think they're no longer an officer of the court.
With the analysts you, somewhat surprisingly, run into the same problems you do with economists: "Sure, it works in practice but will it work in theory." And the "On the other hand..." stuff. Don't even get me started on Elliot Wave practitioners with their alternative wave counts introducing a third and a a fourth hand.
Anyhoo, the equity analysts are going to need to do something after AI takes their jobs so maybe give them a shot at the C-suite. But watch those hands.
From Financial News London, May 25:
It might seem an unlikely move, but capital markets experience is increasingly valuable in the C-suite
Standard Chartered had some compelling reasons to promote Manus Costello -
As
a former equity analyst who covered the bank for many years, Costello
is very familiar with the bank’s strengths and weaknesses, and those of
its rivals. He knows its investors well, understands what they are
looking for and speaks their language.
Since
joining Standard Chartered as head of investor relations two years ago,
Costello has built a good rapport with chief executive Bill Winters,
who says he has made a “significant contribution to the group’s
strategic positioning and engagement of stakeholders”.
While
very familiar with the business he also brings an outsider perspective
that many management experts would say is an ideal combination.
Yet
this raises a question: if it is such an obvious move why don’t more
analysts become senior executives in the sectors they have covered?
In
financial services, the numbers are strikingly small. One of the few
prominent examples is Sallie Krawcheck, who made her name as an
independent-minded analyst of Wall Street banks at Sanford Bernstein. In
2002, she was hired by Citigroup to rebuild trust in its research and
wealth management business after accusations of conflicts of interest.
Two years later she was appointed Citi’s chief financial officer.
In
the UK, Luke Ellis, former chief executive of hedge fund manager Man
Group, previously worked for JPMorgan, though in equity derivatives
rather than research.
Another former
analyst who is now a chief executive is Anthony Noto. A one-time
Goldman Sachs internet analyst, Noto was appointed head of financial
technology firm SoFi in 2018. But Noto shifted into banking at Goldman
before going into the industry, which makes him a slightly different
case.
There are plenty of bankers who move into the industry they covered. Current examples include Jonathan Sorrell, the former Goldman banker who now heads wealth management group Rathbones....
It looks like the drought intensities decreased a bit while the areas affected remained about the same.*
From the University of Nebraska-Lincoln, June 4:
This Week's Drought Summary The mid-level height anomaly pattern during the week exhibited an omega-block type pattern, with mean troughing over Alaska and both the West and East, with the western trough cutting off over California, and strong ridging between the troughs across the central contiguous US. This pattern promoted below-normal temperatures across the Southwest for much of the period, with colder air pushing eastward towards the end of the week followed by warming temperatures. Across the East, cooler air overspread New England and the mid-Atlantic, keeping evapotranspiration rates a bit lower than normal. In contrast, much above-normal temperatures were observed throughout the week across the northern Plains and upper-Midwest, though colder weather and storminess overspread the northern Rockies and adjacent High Plains at the end of the week.
An active pattern was noted across
the Plains, South, and Southeast as a mean frontal boundary provided a
focus for stormy weather. These rains, in conjunction with a wetter
pattern overall during May, prompted widespread additional drought
relief for the South and Southeast regions, as well as portions of the
High Plains. In contrast, hot, dry weather across the northern Plains
and upper-Midwest caused expansion of drought and abnormal dryness, with
widespread degradation occurring in western portions of the Midwest
region. Towards the end of the week, a storm system brought heavy
precipitation to western and central Montana, bringing some drought
relief following a period of hot, windy weather. Across the Northeast,
additional rainfall benefitted portions of New England, while drier
weather overspread the mid-Atlantic and southern New England following a
wet week previously.....
*****
....Looking Ahead
At the start
of the next 7 days, drier conditions are favored across much of the
East, with daily temperatures quickly warming to above-normal. A storm
system now over the Plains will progress slowly eastward, bringing a
potential for much needed rainfall across the upper Midwest and Great
Lakes region. Current QPF forecasts from the Weather Prediction Center
show amounts potentially exceeding 1.5 inches across much of Iowa and
far southwestern Wisconsin, but lighter amounts elsewhere will likely be
insufficient to overcome the high demands coming from much above-normal
temperatures and summer agriculture, especially across Illinois,
Indiana, and northern Minnesota. A gradual return to a summer convective
regime is favored across the Southeast during the week, but
accumulations are forecast to be less than what fell over the past few
weeks, especially across northern Florida and east of the Appalachians.
Seabreeze-driven convection is favored to remain active across South
Florida. Mostly dry conditions are favored across the West, with a storm
system bringing some precipitation to the Pacific Northwest. Meager
precipitation is forecast for the Northeast region, raising concerns for
a return of short term drought impacts....
“I could end the deficit in five minutes,” he said. “You just pass a law
that says that any time there’s a deficit of more than three percent of
GDP, all sitting members of Congress are ineligible for re-election.
Yeah, yeah, now you’ve got the incentives in the right place, right?”
—Warren E. Buffett, retired insurance salesman, Omaha Nebraska
To Boldly Go: The Case for Space Datacenters Space DC Total Cost of Ownership Explained. Unpacking constraints from Terrestrial DCs and Chip Production. Space-Earth Parity in the late 2030s, Space DCs could start to be viable even sooner.
Everyone has been talking about datacenters in space. Interviews
given by Elon Musk in the past few months have spent lots of time on
orbital compute:
“Five years from now, my prediction is
we will launch and be operating every year more AI in space than the
cumulative total on Earth... I would expect to be at least, sort of five
years from now, a few hundred gigawatts per year of AI in space and
rising.” - Elon Musk on Dwarkesh Podcast, February 2026
Furthering
space-based compute was also one of the stated motivations behind the
merger of xAI into SpaceX (as a ‘reorganization of entities under common
control’), and is a key part of SpaceX’s plans to go public, as stated
in their S-1 filing on 20 May 2026.
“Our
goal over time is to launch 100 gigawatts of compute to space each
year. If operated continuously, the generation resources used to support
100 gigawatts of compute could generate approximately one-fifth of the
annual power production in the United States, which was 4.4 thousand
terawatt hours in 2025… We expect space‑based compute to massively
increase AI compute scale, while also improving token economics.” - SpaceX, S-1 Filing, May 2026
As
expected, many part-time prognosticators in the Substack-verse have
emerged from the woodwork to weigh in on the concept. Some articles
bring up insightful points, but there are more than a few that are built
upon ideas that fly in the face of science.
A few casual arguments made in favor of space datacenters include the following:
Space can provide free solar energy 24 hours a day
Cooling is “free”. Some erroneously point to space being cold as a key positive
Communications latency in space is low as you’re just sending light through a vacuum
There is no need for permitting in space… so far…
Many
of these points sound like they hold merit on the surface, but a deeper
analysis of each apparent advantage reveals a far more complex story.
While
we think that it is possible that space datacenters could scale one
day, deploying orbital compute using today’s technology currently costs
several times more than deploying terrestrial compute. Achieving
Space-Earth cost parity will require significant engineering work,
material science breakthroughs and cost scaling progresses and will
still take years to achieve. There are also important reliability and
servicing obstacles to overcome - for instance - how GPU servers will
recover from faults that require human intervention, effectively
shielding accelerators from radiation, among many others.
When we deploy compute in space, it won’t be because of the four superficial reasons we have cherry-picked above. Rather, Space-based
datacenters make sense in the world where AI demand well exceeds all of
the four layers of terrestrial datacenter supply that we will introduce
below. For Space datacenters to step up to this call -
it is a necessary condition that major space datacenter cost items like
radiators, solar arrays and launch costs decline considerably, and that a
number of key operational obstacles are overcome.
Users of our AI Space Datacenter TCO Modelcan
see a first-principles, system-level framework for evaluating orbital
compute economics, engineering constraints, and supply-demand dynamics
across both terrestrial and space-based infrastructure.
The four layers of incremental power supply for terrestrial datacenters include:
Grid-connected supply,
Converted bitcoin miners and powered land,
Behind the meter generation, and finally,
Industrial capacity and manpower to build further power infrastructure.
A
necessary condition for AI related IT equipment demand to reach levels
exceeding terrestrial datacenter supply is for there to be enough chip
fabrication capacity to fulfill this demand in the first place, before
we even discuss datacenters! We wrote about this in great detail in our
recent article on the Great AI Silicon Shortage,
where we concluded that the industry has moved from a power-constrained
to an accelerator-constrained regime. Available datacenter capacity and
power now exceed AI compute demand, but TSMC’s N3 wafer capacity and
HBM supply cannot keep pace with the pace of accelerator deployments.
This means that today, and for the next few years, chip manufacturing
will be the global constraint before we even worry about supply for
these four layers.
The chip constraint forms a separate
fifth layer of supply - Semiconductor Production, and it is a
“universal” constraint on all chip deployment, whether deployed on Earth
or in Space. Users of our AI Space Datacenter TCO Model
can see how this constraint applies well into the future, and under what
scenarios regarding chip manufacturing capacity addition that
Semiconductor Production may not be the constraint.
Elon Musk is clearly well aware of this constraint, and it is the impetus behind his Terafab Initiative. The AI Space Datacenter TCO Model also includes knobs and sliders for users to tune to test out various Terafab scenarios.
Framing the Space Datacenter Debate Our various industry models such as the Accelerator Model, the Foundry Industry Model and WFE Models illustrate the aforementioned chip tightness. Meanwhile our AI Datacenter Model forecasts accelerating incremental datacenter additions in 2027 and 2028. Thus, datacenter capacity addition will run ahead of chip constraints in the next few years until fab capacity additions accelerate to catch up. Our suite of industry models will only forecast such wafer fab and datacenter capacity additions once such plans are confirmed.
However, the world in which AI demand is so
overwhelming as to exceed the already formidable datacenter capacity
additions is a world with no time for half measures. As such, our AI
Space Datacenter TCO Model base case departs from our industry models to
reflect this world, assuming accelerating incremental datacenter
capacity additions and a meaningful step up in the pace of chip fab
capacity addition. It is a world where all the stops are pulled out and
many obstacles from gas turbine availability to EUV tool production
constraints are overcome because clear long-term AI end use ROI
justifies enough capital investment to overcome them.
The below
chart illustrates what this world could look like - with incremental
datacenter capacity additions eventually in the hundreds of GW annually,
though adding chip capacity will still be more difficult than adding
datacenter capacity....
Israel and Lebanon raises hopes of a breakthrough in US-Iran talks where a low intensity conflict has been waged under the flag of a ceasefire. The Israel-Lebanon deal reportedly does not include Hezbollah, underscoring the fragility and limits of the ceasefire claims. July WTI is near the middle of the $94-$96 range. The market seems cautious.
The US dollar is mostly softer, with the Canadian dollar the weakest among the G10 currencies. The swaps market has a BOJ hike nearly fully discounted for later this month and the greenback continues to hover near but below JPY160. Japan’s finance minister continued to press with recent rhetoric that it stands ready to act. Poor earnings from Broadcom late yesterday weighed on the chip sector in Asia and has dragged the Nasdaq futures down over 1%. The market-sensitive US May jobs data are due tomorrow but the bar to a change in Fed policy this month, as Warsh chairs his first meeting is very high....
Global smartphone shipments are now forecast to fall 13.9% YoY in 2026, dropping to 1.08 billion units, the lowest annual volume since 2013, and a steeper contraction than our February forecast of 12.4%.
A memory supply crisis, driven by capacity reallocation toward AI-focused HBM and server DRAM, is the primary driver of the downturn, with LPDDR4/5 prices expected to treble in Q2 2026 relative to Q4 2025, per Counterpoint’s Memory Service.
Lower-end OEMs and Emerging Markets face the sharpest pressure, with LPDDR4 memory supply tracking to a decline of over 40% in 2026; the sub-$150 segment faces an effective permanent removal in some markets.
Apple and Samsung are the most insulated OEMs, while Huawei is the only Chinese brand expected to grow shipments in 2026.
The Iran conflict and the closure of the Strait of Hormuz add a geopolitical dimension to the downturn, though macroeconomic headwinds are expected to be materially less severe than the post-Ukraine inflationary shock.
Seoul, Beijing, Berlin, Buenos Aires, Fort Collins, Hong Kong, London, New Delhi, Taipei, Tokyo – June 1, 2026
The global smartphone market has entered its deepest period of contraction on record, according to Counterpoint Research's latest Smartphone Market Outlook Tracker, with full-year 2026 shipments now forecast to decline 13.9% YoY to 1.08 billion units, a downward revision from the 12.4% decline projected in February. The trigger is a worsening memory supply crisis that has accelerated sharply in recent weeks, compounded by the outbreak of the Iran conflict.
Global Smartphone Forecast, May 2026 Edition
Source: Counterpoint Research Smartphone Market Monitor and Market Outlook, May 2026 Update
Memory crisis deepens the 2026–2027 downturn
The Q1 2026 smartphone market retreated 3.1% YoY, marking the first decline after nine consecutive quarters of growth. The performance was nonetheless better than expected, as OEMs moved to front-load shipments and clear pre-shock inventory ahead of expected price increases. However, the deterioration since has been sharp. Counterpoint Research's Memory Service indicates that mobile LPDDR4/5 prices in Q2 2026 are on track to treble relative to Q4 2025 levels, with the squeeze expected to persist through H2 2027 given the capital intensity and lead times inherent to semiconductor manufacturing.
The damage is falling disproportionately on lower-end devices. LPDDR4 supply is expected to decline more than 40% in 2026 as fabs reallocate capacity toward AI-driven HBM and server DRAM, making it increasingly uneconomical to supply entry-level products. Globally, smartphone wholesale prices rose 14% in Q1, and the pace will sustain as pre-shock inventory is exhausted. Certain sub-$150 price tiers face effective permanent ejection from the market.
Principal Analyst Yang Wang commented, “The memory crisis is the most disruptive supply-side event the smartphone industry has ever faced. Unlike demand-driven slowdowns, such as seen during COVID and 2022-23, the current contraction will not respond to pricing, channel and product planning adjustments. OEMs in the low- and mid-tier are caught between unabsorbable cost increases and consumers with hard affordability ceilings. The narrative around the smartphone market is no longer how to grow shipments or market share, but whether to remain in the market at all.”
Premium resilience, OEM divergence, and the road to recovery
So the question becomes: Will the increase in average selling price brought about by the shift to more expensive phones be large enough to offset the decline in unit volume?
Dent is a type of field corn. A long way for a not-very-good play on words
First up, from Xinhua via People's Daily, June 4:
Chinese scientists develop high protein maize in animal feed quest
Chinese scientists have identified two key genes for high protein
content in maize and have managed to develop high protein varieties,
offering a promising solution to China's animal feed protein shortage.
Maize is China's largest grain in terms of production volume,
however, its protein content is generally low, only about 8 percent,
leading to a heavy dependence on imported soybean meal as a protein
source for livestock, according to Wu Yongrui, deputy director of the
Center for Excellence in Molecular Plant Sciences (CEMPS) of the Chinese
Academy of Sciences (CAS).
In 2025, China's soybean imports exceeded 100 million tonnes. Raising
maize protein content by just one percentage point would be equivalent
to the protein contained in approximately 8 million tonnes of imported
soybeans, Wu said.
Therefore, developing high protein maize to replace imported soybean
meal in feed is a promising tactic in seeking to address the country's
feed protein shortfall. Yet, for a long time, breeding efforts had
lacked access to superior high protein genes, Wu noted.
Research has found that wild maize contains protein levels as high as
30 percent, but after over 9,000 years of domestication and modern
breeding, most of these genes have been "lost" in contemporary varieties
due to the absence of targeted selection for protein content, Wu
explained.
In 2022, a research team led by Wu identified the first high protein
gene, THP9-T, from wild maize, achieving a preliminary boost in protein
content for major domestic maize cultivars. However, further
breakthroughs in maize protein content remained a significant challenge.
Through persistent efforts, the team successfully identified a second
high protein gene, THP3-T. Multi-year, multi-location field trials
demonstrated that this gene can increase kernel protein content from 10
percent to over 13 percent in inbred lines without compromising yield,
while also enhancing whole-plant protein content and enabling the maize
to grow well and remain protein-rich with less fertilizer, Wu said.
Further research revealed that combining THP3-T and THP9-T produces
an unprecedented synergistic effect, raising kernel protein content in
inbred lines from 10 percent to 15 percent -- far exceeding the impact
of either gene alone.
"The research not only discovered the 'key puzzle piece' for high
protein maize breeding but also offers new possibilities for quality
improvement and precise genetic enhancement of modern maize," Wu said.
The team has employed marker-assisted breeding technology to
precisely improve over 80 parental lines of major maize cultivars in
China, raising their protein content to more than 14 percent.
The team also successfully increased the kernel protein content of
Zhengdan958, China's most widely cultivated maize hybrid, from 8.5
percent to over 12 percent.
Wu said that China produces approximately 300 million tonnes of maize
annually. If the protein content of maize used for feed nationwide were
raised by four percentage points to more than 12 percent, the total
added protein would be equivalent to over 30 million tonnes of imported
soybeans, which is roughly 30 percent of current soybean imports....
The
discovery of oil in Persia (modern-day Iran) in 1908 marked a
significant turning point in the region's economic and political
landscape. The process began when Moẓaffar od-Dīn Shāh, the Qājār
Dynasty's ruler, sold exploration rights to William Knox D'Arcy, a
wealthy Englishman. Despite initial challenges, including harsh weather
and a lack of skilled labor, D'Arcy's venture bore fruit when oil was
struck at Masjed Soleymān, leading to the establishment of the
Anglo-Persian Oil Company in 1909. This discovery attracted British
government interest, especially as the internal combustion engine gained
importance, further integrating Persian oil into global markets.
The
geopolitical implications of this find were profound, as both Russia
and Britain sought to protect their interests in Persia during World War
I. Subsequent developments included efforts by local leaders, such as
Reza Khan, to negotiate better terms for oil profits, reflecting a
growing nationalistic sentiment. This historical moment laid the
foundation for Iran’s complex relationship with foreign powers,
particularly regarding oil control, which continued to evolve through
the 20th century, culminating in significant political upheaval,
including the 1979 revolution. The discovery of oil thus not only
transformed Persia's economy but also its political dynamics and
international relations.
Full Article
DATE May 26, 1908
The discovery of oil in Persia by an Englishman who had purchased
oil concession rights gave Great Britain control of Persian oil, making
Persia of tremendous strategic importance during two world wars. The
discovery also initiated the opening of the Middle East to oil
exploration and development, making the region of vital importance to
the world economy. Initial Western control of oil production produced an
anti-imperialist reaction that remained for many decades.
LOCALE Masjed Soleymān, Persia (now Iran)
Key Figures
William Knox D’Arcy (1849-1917), British entrepreneur
Moẓaffar od-Dīn Shāh (1853-1907), Qājār shah, r. 1896-1907
Reza Khan (1878-1944), nationalist and secular reformist shah of Iran, 1925-1941
Mohammad Reza Shah Pahlavi (1919-1980), shah of Iran, 1941-1979
Mohammad Mosaddeq (1880-1967), nationalistic prime minister of Iran, 1951-1953
Sir Percy Sykes (1867-1945), British general in charge of protecting Persian oil fields during World War I
George B. Reynolds (fl. early twentieth century), leader of D’Arcy’s oil drilling team
Summary of Event
During the last half of the nineteenth century, Persia (modern-day
Iran) was of interest to Europeans mainly for its fine carpets and for
whatever monopolies could be gained from monetary gifts to the corrupt
shahs (emperors) of the Qājār Dynasty. By 1900, Russian interests
controlled the five northern Persian provinces, while the British sphere
was in the south and controlled monopolies for commodities such as
tobacco. It was business as usual when Moẓaffar od-Dīn Shāh sold a
concession to a wealthy Englishman, William Knox D’Arcy, who had made
his fortune mining gold in Queensland, Australia. For ten thousand
pounds, D’Arcy purchased the rights to explore, develop, and sell natural gas,
petroleum, and asphalt in all of Persia, except for the five northern
provinces controlled by Russia, for the next sixty years. After two
years, D’Arcy was required to form a company and give the shah twenty
thousand additional pounds and twenty thousand pounds in shares of the
company’s stock. The shah was also to receive 16 percent of any profits
from annual oil revenues.
The natural seepage of oil from the ground in Persia, which had been
used for centuries to caulk boats and bind bricks, attracted European
interest in the 1870’s as technology for oil drilling developed. Baron
Julius de Reuter (founder of Reuters News Agency)
made two unsuccessful efforts to locate oil, and in the early 1890’s a
French geologist surveyed western Persia and published a scientific
paper on the region’s oil-producing potential. These efforts sparked
D’Arcy’s interests and resulted in his 1901 purchase of the shah’s
concession. That year, D’Arcy hired George B. Reynolds, one of the few
Englishmen with experience in oil exploration, and sent him to find oil
fields in western Persia.
From 1901 to 1905, Reynolds drilled for oil without success. Harsh
weather conditions, difficult terrain, and the shortage of skilled labor
slowed progress. Running low on capital, D’Arcy signed an agreement
with the Burmah Oil Company, a British corporation, to gain the funding
necessary to continue exploration. Reynolds began drilling in southern
Iraq, but through 1906 and 1907 he continued to lose money. The venture
was close to collapse when, at 4:00 P.M. on May 26, 1908, oil began to
gush over the top of oil rig number one at Masjed Soleymān, rising to a
height of fifty feet above the rig. Two more wells were sunk, with
equally productive results. The first major oil strike in the Middle
East had been made. Today, a small outdoor museum preserves what is
known as Well Number One, which still retains its original rig, boiler,
and pump.
In 1909, the Anglo-Persian Oil Company was founded. D’Arcy led the
company, and by the time of his death in 1917 he had made a massive
fortune, despite the fact that he never set foot in Persia and operated
only through his agents. The company began construction in October,
1909, and by 1911 the number of employees had risen to twenty-five
hundred. The export of oil began in 1912, and by 1914, thirty oil wells
had been drilled at Masjed Soleymān....
Senior government officials have warned Russian President Vladimir Putin
that spending on the war in Ukraine is on an unaffordable path, the
most serious sign of internal division in Moscow since the full-scale
invasion began.
Officials
in Russia’s Finance Ministry and central bank have advised the Kremlin
that the current level of projected defense expenditure risks the
government’s budget deficit widening dangerously, according to people
familiar with the matter and documents reviewed by Bloomberg News.
The
officials, who have grown increasingly concerned about the state of
Russia’s economy and state budget in recent months, have proposed new
cuts to defense spending, the people said. It will be difficult to mend
the country’s stretched public finances without finding further
efficiencies, they have advised.
However,
a divide among policymakers has seen senior officials in the Defense
Ministry and some in the Kremlin, who are determined to pursue Putin’s
war aims, insist on protecting military expenditure. Reducing it would
badly damage the economy because so many businesses are reliant on
military-related contracts, they have argued.
Putin
has asked Finance Ministry officials to find spending reductions in
other budget areas before targeting defense, some of the people said.
They were all granted anonymity discussing the concerns, the extent of
which has not been made public.
Kremlin spokesman Dmitry Peskov didn’t immediately respond to a request for comment.
The
Defense Ministry is not only resisting cuts but is demanding additional
funding, according to two people close to the Russian government.
Military expenditure will have to increase to address a shortfall as
high as three trillion rubles ($36 billion) this year, they said.
The
president has been aware of the budgetary pressures both last year and
this year, so the challenges aren’t a surprise, the people said. The
scale of any spending cuts will depend solely on Putin, as no major
budget decisions are made without his approval and he acts as the
ultimate arbiter, they said, describing that as an iron rule.
When
the 2026 budget was drafted, officials understood that a funding gap of
roughly 1.2 trillion to 1.5 trillion rubles could emerge in the second
half of the year, money that might be needed for the defense sector.
At
the time, there were hopes the war in Ukraine would end following the
summit in Alaska last August between Putin and US President Donald Trump,
which would have made a reduction in defense spending in the second
half of 2026 a logical assumption, according to the people close to the
Russian government....
