"Why China is betting on big nuclear reactors"

From MIT Technology Review, June 11:

While companies in the US chase smaller footprints, there are a lot of new large reactors going up in China. 

It’s a tale of two nuclear industries.

In China, large reactors are coming together at a stunning pace. The country has nearly doubled its nuclear fleet since 2016, reaching nearly 60 gigawatts of total power capacity. The new facilities are nearly all gigawatt-scale pressurized-water reactors.

Meanwhile, the US has built just two reactors in that time—Unit 3 and Unit 4 at Plant Vogtle in Georgia. Smaller reactors are attracting a lot of excitement and investment, though. A microreactor developer just saw its reactor reach criticality in a new Department of Energy pilot program.

The world is racing to meet rising electricity demand, and many countries are interested in energy sources, like nuclear power, that don’t come with greenhouse-gas emissions. The key question: Which of these strategies will really pay off in terms of getting electrons on the grid quickly?  

Today, the US and France are known as leaders in the nuclear industry. The US has the world’s largest fleet, with France coming in second. France is heavily dependent on nuclear for its grid—about two-thirds of the country’s power comes from nuclear reactors.

But they have hardly added any new reactors to their fleets in recent years. The US can point only to Vogtle, and France connected its latest reactor to the grid in December 2024—the first in over 20 years. 

It’s incredibly difficult to build the massive projects that dominate the nuclear industry today. Up-front investment can run well into the billions, so investors need to wait decades to break even. Designs are complex and can often change during the regulatory process, tacking on cost and time. 

Many are hoping that the key to turning things around in these countries could be smaller reactors.

The idea is that shrinking the footprint of a reactor cuts down the initial investment needed to prove out the new technology. The reactors could even be put together in a factory rather than being built on-site, allowing for a lower price over time.

These smaller reactors are the target of tons of interest and investment in the US, including a new Department of Energy pilot program. The department set a goal last year of having three test reactors reach criticality by July 4, 2026, the nation’s 250th anniversary. (Criticality is the point at which a reactor achieves a self-sustaining chain reaction that can release energy.)

Last week, California-based Antares hit the milestone with its Mark-0 reactor. 

The company plans to eventually build microreactors, designed to produce between 100 kilowatts and 1 megawatt of electricity (large reactors on the grid today are at least 1,000 times that size). The core design is a sodium-cooled reactor, and it uses TRISO fuel, self-contained graphite-coated spheres of a more concentrated fuel than what most reactors use today. 

But there is still a long way to go before it can actually produce power—the Mark-0 doesn’t have any power conversion or heat removal systems. The company plans to produce electricity in late 2027 and deploy in the field by 2028, CEO Jordan Bramble told the Associated Press....

....MUCH MORE 

Also at Technology Review: 

Why the grid relies on nuclear reactors in the winter 

"Iranian foreign minister says deal with U.S. 'never been closer'"

From Axios, June 12: 

Iranian Foreign Minister Abbas Araghchi said Friday that an agreement with the U.S. to extend the ceasefire, reopen the Strait of Hormuz and launch negotiations on Iran's nuclear program "has never been closer."

Why it matters: Araghchi's comments on X were the most positive yet from Tehran about the prospects for a deal in the coming days, and appeared designed to prevent the deal from collapsing amid a battle to shape the narrative around it.

• Pakistani prime minister Shehbaz Sharif, one of the key mediators between the U.S. and Iran, wrote on X that "an agreed upon text of the peace deal has been reached" and Pakistan was working with the parties on next steps.
• A senior U.S. official told reporters in a briefing on Friday that "we're not quite at the finish line yet, but we are very close." The official added: "We do expect to be signing this agreement over the next few days...I maybe would have said 75% this morning. It's probably more like 80- 85% now, but it's not 100%."
• Aragchi later told state TV that if a deal is agreed, it will be signed remotely rather than in a joint ceremony.

Driving the news: President Trump, who lashed out earlier on Friday over reports in Iranian state media about the contents of the deal, told Axios in a short call that he considered Araghchi's post "very positive."

• Trump said he'd demanded a public clarification over the state media reports, which claimed Iran stood to receive billions of dollars in frozen assets immediately after signing the agreement.
• Trump also claimed Iran had privately "apologized for putting out false information." It's unclear how any such message was conveyed.
• The president said he still thinks a deal could be signed over the weekend or on Monday.

What they're saying: "The Islamabad Memorandum of Understanding has never been closer. Pending its finalization, the media should refrain from entering speculation about its content. In line with our responsible and transparent approach, all details will be shared with the public in due course," Araghchi wrote....

....MUCH MORE 

Silicon Dreams: That One Day, Should All Humanity Die In A Plague, That AI Will Be Able To Harness The Energy And Extract The Physical Resources To Go On Forever

That's not my dream but I, and everyone else, would be gone so who cares what I dream?

(literally, there would be no one left to care.)

 

From Asterisk Magazine, Issue 14, April 2026: 

 

How Long Until AI Doesn’t Need Humans?

Ajeya Cotra Timothy B. Lee

She thinks it’s nearly imminent. He doesn’t.

How long until AI systems can sustain their own existence — such that, if every human died, they could keep growing their own population? 

METR’s Ajeya Cotra and Understanding AI’s Timothy B. Lee discuss the path toward this “self-sufficient AI.” She thinks it’s nearly imminent; he believes it might never happen. The two talk through the skills and shortcomings of today’s humanoid robots, profit incentives, tacit knowledge and how these affect the timeline, non-robot paths to self-sufficiency, and the benchmarks to watch for in the next few years. 

This interview has been edited for length and clarity.

Clara Collier: This conversation is happening because you two got into a debate on Twitter about when you expect us to have fully autonomous AI systems. Ajeya, this is your concept. Do you want to talk about what you mean by that?

Ajeya Cotra: I wrote a blog post about self-sufficient AI, which is AI systems integrated with physical infrastructure — factories, mines, fabs, robots to operate all of those — such that they don’t need any cognitive or physical inputs from human labor to keep growing their own population. 

If all humans died of the plague one day, the AI systems would be able to maintain themselves, repair things that might be breaking down in their physical environment, and keep up the power plants that run them. They’d also have to expand themselves, which would require eventually consuming more physical resources — going out and mining the quartz and turning it into silicon sheets and then etching those into chips and so on.

This is an interesting forecasting point in my mind because, one, it’s relatively concrete and easy to imagine, and two, because a number of people are concerned about the possibility that AI systems might literally drive humanity extinct because they’re pursuing goals at odds with humanity’s goals. Self-sufficiency seems like a requirement for carrying out full extinction of humanity on the part of the AIs. 

I do want to flag that I think this would be  a pretty late milestone, and you could degrade this milestone in interesting ways and forecast weaker endpoints as well. For example, how many physical humans are needed to sustain a certain population of AIs? To what extent do they need to have specialized expertise versus “the AI can just direct them around because the AI has all the knowledge”? I ultimately think one or more of those weaker milestones will be more directly relevant for policymaking, but you can generate them starting from the concept of self-sufficient AI.

Clara: So when do you think we’re going to have this self-sufficient AI?

Ajeya: More likely than not within 10 years. And it very well could happen sooner.

Clara: Tim?

Timothy B. Lee: I think that timeline is pretty unlikely. Hard to put a number on it, but 20 years is the earliest it sounds plausible to me. I’d say less than 10% chance that it happens within 20 years. I’d say there’s a 10 or 20% chance it’s never, and my median would be 50 years. 

It’s hard to reason about what will happen in the future, but I have a strong intuition based on writing about robotics, particularly self-driving cars and sidewalk robots, that these things always take longer than you think they will. Practical barriers mean stuff in the physical world takes a lot longer than software stuff. It’s capital-intensive. There’s just a lot of stuff you have to do.

Let me give you a specific example. Six years ago, I went out to George Mason University and looked at Starship, which has these sidewalk delivery robots. The robot is simple — it’s a box on wheels, drives four miles an hour, and delivers lunch to people. I wrote an article saying it seems like we’re on the verge of these things being everywhere because they seem to work great and seem useful. Six years later, that company is far bigger than before, but they’re not everywhere

I couldn’t tell you exactly why they haven’t grown faster. I don’t think there were any major technological breakthroughs needed, at least on the hardware side. This was something that worked totally fine. I think it’s some combination of engineering work to make the robots more reliable and easy to repair and some amount of human labor needed to maintain them, and the margins aren’t that high, so it actually wasn’t that profitable a business.

And I think you could tell a similar story about self-driving cars, which is more of a software progress story. Waymo basically now has working self-driving technology, and it’s still going to take them years to just scale that up from the scale they’re at now to where most taxis are driverless. It takes time to build factories, it takes time to get regulatory approval, and so on....

....MUCH MORE 

Goldman Sachs: "The AI Investment Boom: When Will It Pay Off?"

Podcast and transcript from Goldman Sachs, June 2:

The economics of artificial intelligence are more questionable today than two years ago, says Goldman Sachs Research's Jim Covello, as enterprise buyers, model companies, and hyperscalers have yet to show returns on their spend. In a conversation with Alison Nathan and George Lee on Goldman Sachs Exchanges, Covello discusses where we've seen economic value accrue to date and why semiconductor companies can't continue to be the sole beneficiaries of the AI buildout. 

Transcript: 

Jim Covello: Look, at some point you got to make money. You make investments in a business so that you can generate returns and make money. And we've gotten further away from that over the last couple years instead of closer to it. That doesn't mean it's never going to happen. It just means the stakes are higher. 

Allison Nathan: Welcome to another episode of Goldman Sachs Exchanges. I'm Allison Nathan and I'm here with George Lee, co-head of the Goldman Sachs Global Institute. Together we're co-hosting a series of episodes exploring the rise of AI and everything it could mean for companies, investors, and economies.

[MUSIC INTRO] 

George, great to see you again.

George Lee: Great to be here.

Allison Nathan: And this should be fun, George, because today we are talking to someone who at least in the past several years has really disagreed a fair amount, I think, or taken a different view than you on AI. Our guest is Jim Covello, head of global equity research here at Goldman Sachs. And again, you've had many debates with Jim about this topic. 

George Lee: Well, first of all, it's great to have Jim here. He is both a great friend and a great thinker. And while we differ on some matters related to AI, actually there's much we agree on. And it's been very fun to have this dialogue over multiple years. 

Jim Covello: Yeah, for sure. 

George Lee: So, welcome Jim. 

Jim Covello: Yeah, no, it's great to be here. Thank you. And I agree. Geroge is everything that makes Goldman Sachs great to me. And it's been incredible going on this journey with you. And here we are again. 

George Lee: Here we are again. Exactly.

Allison Nathan: So, Jim, as we mentioned, a couple of years ago you came out with what I would characterize as a pretty skeptical, somewhat out of consensus view of generative AI. And you've particularly questioned the economics of the technology. You had a lot of doubts about whether the returns the technology would generate would ever really justify all of this capex we have seen pouring into the technology over the last couple of years. 

So, two years on, where do you think you've been right? 

Jim Covello: Yeah. 

Allison Nathan: And where have you been wrong?

Jim Covello: Yeah. So, I like to start off with where we've been wrong. And so, we just published another report most recently where we started off with where we've been wrong. And we called it "The Mark to Market - Two Years Later" versus the report that you and I worked on together.

So, firstly, consumer adoption of AI has been magnificent. Much greater than I expected. George accurately predicted that spot on. So, we've been wrong about that.

One of the things that we talked a lot about in the original report and we talk about in this report is most consumers are still using a free version of AI. So, really to get to the heart of the economic issue, we still really need to focus on the enterprise. But I do really think it's important to acknowledge how great consumer adoption has been and just how accurate George has been about that. 

The second thing we talk about in the most recent report where we've been wrong was, we predicted two years ago that if the hyperscaler stocks underperformed for a significant period of time, we would expect that they would scale back on the capex. And they have underperformed because of the significant investment in capex and the negative impact on their free cash flow. But instead of cutting the capex, they've actually raised the capex. So, I think that calls into question the economics even more going forward. But the reality of it is that they've massively increased the capex despite the stocks underperforming, which is not what we expected.

And then I would add that I think the technology itself has made incredible progress, very consistent with George's predictions. And I think any conversation has to really emphasize that and acknowledge that.

All of that said, I think the economics are still very much in question. And if anything, I'm probably as or more skeptical on the economics today than I was before, despite how incredible the technology is.

Allison Nathan: Before George weighs in, let me just ask you, why do you think we have continued to see all of this capex? 

Jim Covello: Yeah. I think there's a tremendous amount of FOMO at every level of the supply chain. And it doesn't mean that it's not justified. I just think that we're spending well in advance of where the economics are right now. And I think it's because everybody is afraid of what happens if the technology really takes off and finds significant positive economic use cases. And your competitors have that figured out and you don't. And I think that's everything from the enterprise level to the model layer to the hyperscaler layer.

And one of the things that we talk a lot about in our report is all of the value, all of the economic value has continued to accrue to the semiconductor companies. It's been incredible economic value that's accrued to the semiconductor companies. And we do talk a lot in the report that we've really never seen anything like that. Right? I covered semiconductor stocks directly for 16 years. And in every cycle, the semiconductor stocks thrive when their customers thrive. Here in this cycle, the semiconductor companies are thriving at the economic expense of everybody above them in the chain.

And so, at some point that has to rectify itself. Either everybody above them in the chain needs to start to generate a profit as well. Or they're going to have to eventually scale back on the semiconductor spending. And that's where we make the focus of this report.

Allison Nathan: So, George, is Jim right to be concerned about these economics?

George Lee: Yeah, I think this is actually one of the areas where we agree. And we published a paper recently out of the Goldman Sachs Global Institute that talked about the scale of this investment, just how high the bar will be, how high the hill is that we have to climb to generate sufficient payback. And, you know, the nub of our analysis is pivoting off some of the work that Jim's done is that you have to move beyond the traditional notion of disruption of existing profit pools.

Jim and his team did a great piece about the advertising business and how much of that could be intervened by AI players, etcetera. And I think if you go profit pool by profit pool and sum up the opportunity, you'd still fall short of a significant enough payoff from what we think will be $7 to $8 trillion spent here.

Now, that to me is not the end game. I think the opportunity and in fact the imperative for this technology is to help create net new economic activity, breed new TAMs. Create new affordances that we can't imagine. And this has been the history of major technological waves, whether it's agricultural revolution, industrial revolution, computer revolution, etcetera.

But I certainly would stipulate, to Jim's point, that there's a big hill to climb for this payoff.

The second thing I think we agree on, though I think we differ in terms of time scale on this, is enterprise adoption is really important to this. It has been slower than we might have hoped or expected. And yet, I try to anchor back to the fact that we are three and a half years into this. And this is a technology that is both novel, it's paradigmatically different than old technologies because it's probabilistic versus deterministic. There's a brand-new stack of technologies required to deploy it in the enterprise. And there's an entirely new set of control planes necessary to use it responsibly, effectively, and compliantly.

And so, all of that just takes time. I continue to be very optimistic about the potential for this technology to reshape the way businesses work. It's just going to take a little bit longer than the avid consumer adoption that Jim referenced....

....MUCH MORE 

We've said previously, as with nanotechnology, there won't be a line item on the income statement labeled "AI profits" for existing companies. The payoff will be incremental, though some increments will be large, and appear as both top-line revenue gains and costs contained before getting to the bottom-line.

Along the way you'll have AI-assisted drug development in pharma and biotech, material sciences breakthroughs in companies that make physical stuff, reduced labor costs as human beings are made redundant or more efficient at the tasks they are paid to do and thousands of other ways the technology will infiltrate society and the economy.

"The US Economy Needs Two Revolutions, Not Just One"

From James  Pethokoukis at AEI, June 11:

To fully exploit the potential of an emerging AI revolution, America is also going to need an energy revolution to power digital infrastructure, especially data centers. A new Goldman Sachs note on AI capital expenditures helps explain why. The bank notes that the consensus expects the big hyperscalers—Amazon, Google, Meta, Microsoft, and Oracle—to spend $757 billion on capex in 2026 and $920 billion in 2027.

But the bank thinks that buoyant take may actually be too conservative. If the AI buildout starts to resemble earlier infrastructure booms such as railroads, autos, or the 1990s digital expansion, spending could exceed $1 trillion. Yet money may not be the binding constraint here. The hyperscalers have the deep balance sheets and broad capital market access to keep building, Goldman argues. The harder limits may be physical: delayed data-center projects, scarce memory, labor shortages, and, crucially, power. The AI buildout is an electricity-and-grid story as much as a chips story.

One difference between these two revolutions is the role of technological innovation. Yes, it would be helpful if we could add new energy sources—including small nuclear, advanced geothermal, and even nuclear fusion—to the mix. (And I think we will.) But more important right now is enacting regulatory reform to take better advantage of the energy technologies we already have, such as solar, natural gas, and large-reactor nuclear.

A look at what’s happening inside the House of Representatives gives confidence that at least some folks in Washington understand the seriousness of the need for reform. This session, the House has passed bills meant to help an energy buildout through various changes to the current permitting system:

• Give energy projects more certainty by putting a 150-day clock on NEPA lawsuits after final agency approval, rather than letting projects remain vulnerable to late-stage legal challenges (SPEED Act).
• Let nuclear and other power plants keep Clean Water Act discharge permits for up to ten years instead of forcing renewal every five years (PERMIT Act).
• Replace fragmented permitting paperwork with a single digital dashboard that lets agencies share data, coordinate reviews, and track approvals in real time (ePermit Act).
• Give geothermal developers access to the same streamlined NEPA review process that oil and gas projects can use for certain drilling activities, helping speed up exploration for a round-the-clock clean-energy source that could serve those power-hungry data centers (Geothermal Energy Advancement Act).
• Stop holding states, and the factories and power plants inside them, responsible under the Clean Air Act for air pollution that drifts in from beyond America’s borders (FENCES Act).
• End EPA’s Clean Air Act review of major federal projects and agency actions already undergoing NEPA environmental-impact review, as well as its review of proposed federal regulations (RED Tape Act).

The next steps are unclear, unfortunately. A recent Politico piece suggests that, if the Senate does move, a broader permitting package could absorb all, or at least some, of those House-passed bills. In other words, the House bills are less likely to become law one by one than to serve as bits, bargaining chips, or starting points for a larger Senate-negotiated deal.

Of course, the Senate might not move. As Politico also explains...

....MUCH MORE 

A few others from Mr. P.:

Puny Human, I Scoff At Your AI, Soon You Will Know The Power Of Artificial 'Super' Intelligence. Tremble and Weep
[insert 'Bwa Ha Ha' here, if desired]

Pethokoukis: "My chat (+transcript) with Google economist Guy Ben-Ishai on seizing the historic AI moment"

AI: AGI To Arrive During Trump's Presidency; Superintelligence and Singularity Also Possible

Pethokoukis: "Imagine a new economic architecture where growth feeds on itself"
Careful James, you're getting close to describing a cancer.

Pethokoukis: "Why the AI Dividend Isn’t Here Yet"

AI: "Are we just 18 months away from everything changing?"

And many more over the years 

"Commodities hedge fund Moreton Capital sets up prediction markets unit" (following AQR et al)

From Financial News, London, June 10:

Institutional investors are launching dedicated prediction markets desks amid the rising popularity of platforms like Kalshi and Polymarket 

Commodities hedge fund Moreton Capital Partners is joining the prediction markets rush with the launch of a dedicated trading unit, Financial News has learned.

Moreton Capital has already hired five people for its prediction markets desk and the team has started trading with internal capital, according to people familiar with the matter.

Moreton Capital’s prediction markets desk will start trading with external capital in July, the people added. The hedge fund is actively hiring prediction markets experts including traders, quantitative analysts and portfolio managers....

....MUCH MORE 

“There is a real talent shortage in prediction markets,” Max Heppleston, founder of recruitment firm H-Squared, told FN last month. “The best people need to understand probability, statistics, execution, automation, market microstructure, domain expertise and contract resolution rules. That combination is rare.” 

I like that he included "contract resolution rules", it is good to understand the sandbox you're playing in. 

Previously:

June 1 - "Prediction market traders eye up to $260,000 salaries at hedge funds"

May 2008 - On Prediction Markets  

With a couple hundred posts in-between those two bookends, including such hits as:

2016's "Science Journal, Nature, Takes a Look At Prediction Markets"

2024's "Elite-Only Financial Markets"  

2026's "Are Prediction Markets Good for Anything?" 

MarK Zuckerberg's Yacht Has A Yacht (also there is some sort of stock flotation happening today)

Flipping between feedreaders and terminals I got bored just scanning headlines, much less reading any of the hundreds of stories that are on offer.

So here's Zuckerberg's yacht and the yacht's mini-me. From GeekWire, June 5:

Zuckerberg’s superyacht moves north out of Seattle, dwarfing ferries along the way 

 

The superyacht Launchpad, right, passes in front of the Walla Walla, a Washington State 

Ferries vessel making the run from Kingston to Edmonds across Puget Sound on Thursday. 

(Tim Davis Photo / timdavisimages)

Give way, Washington State Ferries, Mark Zuckerberg’s superyacht has a new port of call — it’s now north of Seattle off Everett, Wash.

Launchpad was spotted Thursday making the move from Elliott Bay in Seattle. According to MarineTraffic, the Meta CEO’s vessel anchored in Port Gardner Bay near Naval Station Everett around 5:30 p.m. on Thursday.

Tim Davis, a Kingston, Wash., photographer, shared images on Facebook — naturally! — as he saw the yacht pass President Point. His post is loaded with comments from others who saw the ship, from land or from ferries crisscrossing Puget Sound.

Davis said MarineTraffic has the yacht’s destination as “salmon country,” which some speculated could mean it’s headed to Alaska.

Since arriving in Seattle on May 27 and passing through the Ballard Locks before mooring on Lake Union for a couple days, the $300 million, 387-foot Launchpad has drawn gawkers and protesters. No indication has been given about why the vessel was in the Pacific Northwest or whether Zuckerberg would be joining it.

Wingman, a 262-foot support vessel that can carry tender boats, a helicopter and other toys, has been docked at Smith Cove in Seattle, where it remained on Friday morning.

The vessels arrived in Seattle the same day Meta disclosed plans to cut nearly 1,400 jobs in Washington state. That amounted to about 20% of its local workforce, part of a broader reduction of roughly 8,000 positions companywide....

....MUCH MORE 

And May 28:

Zuckerberg brought a ‘Wingman’: Meta CEO’s $100M yacht support vessel is also docked in Seattle 

Launchpad and Wingman? O can't get away from the space-y, fly-y stuff.

"Bezos’ AI startup Prometheus raises $12B at $41B valuation, and the CEOs explain what they’re doing"

From Seattle's own, GeekWire, June 11:

Jeff Bezos has bankrolled his Blue Origin space venture on his own, selling shares of Amazon stock to get the company to orbit and beyond, but others are chipping in for his next big endeavor.

Prometheus, the AI startup where Bezos is co-CEO, is announcing Thursday morning that it has raised $12 billion in Series B funding at a valuation of roughly $41 billion. Investors in the round include JPMorgan, BlackRock, Goldman Sachs, DST Global and Arch Venture Partners, according to Axios.

Bezos was the largest backer of the company’s $6.2 billion Series A, and he said in a CNBC interview at the company’s San Francisco headquarters that he participated in the new round as well. The interview, with CNBC’s David Faber, was the first time Bezos and co-CEO Vik Bajaj have spoken together publicly about the secretive venture.

“This is a capital-intensive startup, there’s no question about that,” Bezos said, citing the cost of compute and of building the specialized training data the company needs.

Asked about an eventual IPO, he said it’s “too early to think about that.”

Prometheus, which has dropped the “Project” from its name, is building what Bezos calls an “artificial general engineer,” AI tools meant to speed up the process from design to manufacturing for physical objects, from bridges to chips. Bezos first outlined the idea in a CNBC interview last month.

Speaking this morning, Bajaj cited the example of a jet engine, which takes teams of engineers a decade or more to design, prototype and manufacture — one of the most technically sophisticated and creative acts that humans accomplish, as he described it....

....MUCH MORE 

Previously: 

November 17, 2025 - "Jeff Bezos Creates A.I. Start-Up Where He Will Be Co-Chief Executive" 

March 19, 2026 - "Jeff Bezos aims to raise $100 billion to buy, revamp manufacturing firms with AI, WSJ reports"
The Journal says the big money is in the Middle East and Singapore. It reads as though the new venture is separate from Project Prometheus.

April 8 - "Jeff Bezos Is Quietly Building an A.I. Dream Team at Project Prometheus"

U.S. Drought Monitor: A Bit More Improvement

 From the University of Nevada-Lincoln, June 11:

 

 This Week's Drought Summary 

Summer thunderstorms, with their hit-or-miss nature, dominated precipitation patterns across the U.S. this week. The greatest departures from normal precipitation occurred across portions of the central and southern Plains, West Texas, New Mexico, and the Midwest. Areas of southern Louisiana, northern Alabama, and western Kentucky also recorded well-above-normal precipitation. The East Coast remained dry, with the exception of Florida’s Atlantic coast. Much of the West also remained dry, with only portions of the Pacific Northwest and southern California recording near- to above-normal precipitation.Temperatures for the week were below normal across the Southeast, with parts of Georgia, Florida, and South Carolina averaging 3–6 degrees below normal. Portions of West Texas, southeast New Mexico, and the Pacific Northwest were also below normal. The greatest temperature departures occurred in the central and northern Plains, where portions of Nebraska, South Dakota, North Dakota, and Minnesota experienced temperatures 9–12 degrees above normal.

Looking Ahead
During the next 5–7 days, the West is expected to remain quite dry, while the southern U.S. and portions of the Midwest have the greatest potential for above-normal precipitation. The northern Plains and Southwest are forecast to receive less than 1 inch of precipitation.

Temperatures are expected to remain warmer than normal across the West, with departures exceeding 10 degrees above normal in Nevada and portions of the Pacific Northwest. Most of the remainder of the country is expected to experience near- to slightly below-normal temperatures....

....MUCH MORE including side-by-side weekly comparisons and animations of developments this year. 

Inflation: Producer Price Index UP 1.1% Month-over-Month; UP 6.5% Y-o-Y (gasoline and wealth management to blame)

 From the Bureau of Labor Statistics, June 11: 

The Producer Price Index for final demand rose 1.1 percent in May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 1.1 percent in April and 0.7 percent in March. (See table A.) On an unadjusted basis, the index for final demand increased 6.5 percent for the 12 months ended in May, the largest 12-month rise since moving up 7.4 percent in November 2022.

Nearly 80 percent of the May advance in final demand prices is attributable to a 2.8-percent increase in the index for final demand goods. Prices for final demand services moved up 0.3 
percent. 

The index for final demand less foods, energy, and trade services rose 0.8 percent in May, the largest advance since increasing 0.9 percent in March 2022. For the 12 months ended in May, prices for final demand less foods, energy, and trade services moved up 5.1 percent, the largest 12-month rise since jumping 5.5 percent in October 2022.

Final Demand

Final demand goods: The index for final demand goods moved up 2.8 percent in May, the largest increase since data were first calculated in December 2009. Eighty percent of the broad-based advance can be traced to a 10.7-percent jump in prices for final demand energy. The indexes for final demand goods less foods and energy and for final demand foods also rose, 0.8 percent and 0.6 percent, respectively. 

Product detail: Over half of the May advance in prices for final demand goods is attributable to a 23.4-percent increase in the index for gasoline. Prices for diesel fuel, jet fuel, plastic resins and materials, industrial chemicals, and natural gas liquids also rose. In contrast, the index for pork fell 10.1 percent. Prices for residential electric power and for sanitary paper products also declined. (See table 2.)

Final demand services: The index for final demand services moved up 0.3 percent in May following a 0.7-percent advance in April. Leading the May increase, prices for final demand services less trade, transportation, and warehousing rose 0.7 percent. The index for final demand transportation and warehousing services moved up 2.6 percent. Conversely, margins for final demand trade services decreased 1.1 percent. (Trade indexes measure changes in margins received by wholesalers and retailers). 

Product detail: Over 40 percent of the May advance in the index for final demand services can be traced to a 4.8-percent rise in prices for portfolio management. The indexes for truck transportation of freight; securities brokerage, dealing, investment advice, and related services; chemicals and allied products wholesaling; food wholesaling; and airline passenger services also increased. In contrast, margins for machinery and equipment wholesaling fell 1.9 percent. The indexes for fuels and lubricants retailing and for residential real estate loans (partial) also moved lower....

....MUCH MORE 

From Table 2:

Gasoline +23.4%(p) in May 2026 - largest gain among goods

Securities brokerage, dealing, investment, and related services +5.4%(p) in May 2026 -largest gain among services 

More From John Zito: "AI Is 'Hyper-Deflationary,' Making Risk Hard To Price, Says Apollo's Co-President"

Following on the post immediately below, "Apollo’s Zito Says Too Much AI Spending Is for ‘Low IQ’ Tasks" this time from Benzinga, June 10:

The latest inflation data offered fresh evidence that price pressures remain contained, even as investors continue to wrestle with concerns over interest rates, fiscal deficits and an increasingly fragmented geopolitical landscape.

Yet for some of Wall Street’s largest alternative asset managers, those macro debates are beginning to take a back seat.

Apollo Global Management co-President John Zito said the usual checklist of inflation, deficits, interest rates and political fragmentation matters far less than a single emerging force: artificial intelligence.

"I spend very little time thinking about most of the things you just brought up," Zito said, when asked about the macro environment during the Morgan Stanley Financial Services Conference on June 10.

"I think the only thing that matters is whether what's going on with Anthropic in the labs is real or not. It's so dwarfing with what's going on in the world."

How Will AI Transform Market Dynamics?
Traditional macro signals, such as the latest inflation reading and central bank policy trajectory, still shape financing conditions. But Zito argued they are increasingly secondary to technological disruption that is moving at a scale and speed that is difficult to price.

"If AI is real, it's so hyper deflationary to so many things over the long term that it's really hard to take risk," he said, adding that forecasting the next 12 to 24 months has become "as hard an environment to probability weight what the world looks like. It’s just a really difficult environment."

The implication is not just volatility, but uncertainty about the structure of future earnings itself....

....MUCH MORE 

Some smart people are using an 18-month timeframe* for the coming changes.

Fasten your seat belt. 
* Recently:

April 26 - U.S. Treasury Secretary Bessent On A.I.: "'a year, maybe 18 months,' before the new technology defines our lives across the board."

May 8 - AI: "Are we just 18 months away from everything changing?"

June 5 - Anthropic Warns Fully Recursive AI Is Coming Faster Than Expected, Humans May Lose Control

"Apollo’s Zito Says Too Much AI Spending Is for ‘Low IQ’ Tasks"

 From Bloomberg, June 10:

Apollo Global Management’s John Zito said too many companies are deploying artificial intelligence tools for relatively mundane tasks that don’t justify the significant costs and computing power.

“Our IQs are so low that we’re actually using” AI tools “to check out the recipe for, you know, French toast,” said Zito, co-president of Apollo Asset Management. “That’s where you’re seeing the prices go up.”

Only “a handful” of people have the ability — and the need — to use the most cutting-edge AI tools, he said. Referring to Anthropic PBC’s latest Claude AI model, he joked that his own IQ is “not high enough to be able to use what Mythos 2 will be powerful enough to do.”

The difference in the kinds of tasks being directed to various AI tools and agents will create a new economy for the sector, he said. “The AMD chip, the Nvidia chip, all these different chips will be used and optimized for a certain use-case to solve the spend problem,” he said, speaking at the Morgan Stanley Financial Services Conference.

For firms like Citadel Securities, Jane Street and other companies that have highly complex quantum computing needs, investing in the most sophisticated tools will be “really expensive, but the ROI is going to be massive.”....

....MORE  

"Elizabeth Warren asks the SEC to delay the SpaceX IPO"

At T minus 48 hours we have an anomaly, we have an anomaly. The countdown will resume shortly.

From Business Insider, June 10:

Sen. Elizabeth Warren said the Securities and Exchange Commission should delay SpaceX's IPO to ensure the Elon Musk-led company won't put investors at risk.

"The massive size of the SpaceX IPO alone, under normal circumstances, would justify careful SEC review and attention to investor needs," Warren wrote to SEC Chairman Paul Atkins in a letter that her office published on Wednesday.

"But these are not normal circumstances: a number of additional factors exacerbate concerns and require action by the SEC to meet its investor protection and market integrity mandates by delaying the IPO," the Senator wrote.

SpaceX is set to debut on the Nasdaq Friday morning, leaving Atkins and the SEC little time to address Warren's concerns. SpaceX is set to go public at a valuation of around $1.77 trillion, which would make it one of the most valuable companies in the world despite not being profitable.

The former presidential candidate and top Democrat on the powerful Senate Banking committee raised particular concerns about how major indexes have recently changed their rules or at least considered changes, which allow for SpaceX's inclusion on a faster timeline.

"The SpaceX IPO creates a new concern: that major stock market indexes are being rigged in a way that would force millions of investors in passive index funds — a generally lower cost investment option that can be attractive to retail investors — to invest in SpaceX and face exposure to SpaceX's significant risks with no choice in the matter," Warren wrote in the letter, which is dated June 9.

It's unlikely that Warren's request will result in a halting the IPO. The Massachusetts Democrat has frequently used her perch to frequently pressure leading CEOs. Nvidia CEO Jensen Huang recently declined her invitation to testify before the Senate about the company's business in China. While Warren can request information, she would need at least some Republican support to enforce compliance with her requests or in this case the help of Atkins, a Trump appointee....

....MUCH MORE 

"The AI trade's biggest winners take a hit"

From Yahoo Finance, June 9:

Semiconductor stocks cracked again on Tuesday, extending Friday's rout as sellers went back to dumping the market's biggest winners from the spring rally.

Then came a blistering late-day rally. The Philadelphia Semiconductor Index (^SOX) had been down nearly 9% at the lows before roaring back to finish down just 1.9%.

That rebound softened the close, but it did not erase the damage underneath the surface. By 1:00 p.m. ET, the chip index had suffered its steepest drop from the open since July 2002.

That made Tuesday less of a broad-market washout than another hit to the AI trade's leadership. In fact, the S&P 500 (^GSPC) had more advancers than decliners by early afternoon, with 356 stocks higher and 146 lower.

The pain was concentrated in the area where the rally had been strongest.

The 50 worst S&P 500 stocks since June 2 had posted a median gain of 36% from March 30 to June 2, according to Yahoo Finance analysis. The rest of the index had gained just 3% over the same two-month stretch.

 

The 50 worst S&P 500 names had a median gain of 44% from March 30 to June 2 versus 3% for the rest.

Since June 2, that former leadership bucket has been down a median 9.3%, while the rest of the S&P 500 is still up 2.0%....

....MUCH MORE 

Inflation: CPI Headline UP 0.5% Month-over-Month; UP 4.2% Year-over-Year

 From the Bureau of Labor Statistics, June 10:

CONSUMER PRICE INDEX - MAY 2026

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent on a seasonally adjusted basis in May, after rising 0.6 percent in April, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 4.2 percent before seasonal adjustment.

The index for energy rose 3.9 percent in May, after rising 3.8 percent in April and 10.9 percent in March. The energy index accounted for over sixty percent of the monthly all items increase. The index for shelter also increased in May, rising 0.3 percent. The food index increased 0.2 percent over the month as the food at home index rose 0.1 percent and the food away from home index increased 0.3 percent. 

The index for all items less food and energy rose 0.2 percent in May. Indexes that increased over the month include communication, airline fares, medical care, personal care, and recreation. Conversely, the indexes for motor vehicle insurance, household furnishings and operations, and new vehicles were among the major indexes that decreased in May.

The all items index rose 4.2 percent for the 12 months ending May, after rising 3.8 percent for the 12 months ending April. The all items less food and energy index rose 2.9 percent over the year, following a 2.8-percent increase over the 12 months ending April. The energy index increased 23.5 percent for the 12 months ending May. The food index increased 3.1 percent over the last year....

....MUCH MORE including the always interesting Tables A and  2.

"Mira Murati Unveils Her Startup’s A.I. Model in First Interview Since OpenAI"

Following on May 28's AI: "The $2B Mira Murati Mystery".

From Observer, June 9:

With $2 billion in funding and a bench of former OpenAI, Meta and Anthropic talent, Murati is building a new lab around more collaborative, multimodal A.I. 

Mira Murati, the former CTO of OpenAI, left the A.I. giant in late 2024 to found her own startup, Thinking Machines Lab, and raised a staggering $2 billion in less than a year. In her first media interview since founding the startup, Murati revealed what she has been building: “interaction models,” or multimodal A.I. systems that process audio, text and video simultaneously and collaborate with humans in near real time, without waiting for prompts. “I have very high conviction that the way to continue building frontier A.I. systems is to [create] systems that are not just autonomously advancing and leaving civilization behind, but are more like a tandem bike,” she said onstage at Bloomberg Tech Summit last week.

“They’re continuously taking in audio, text, video, and continuously providing output,” Murati added, describing the model, called TML-Interaction-Small, which she plans to release publicly later this year.

Unlike many A.I. founders who climbed traditional computer science or venture capital ranks, Murati’s path is rooted in product management. She studied mechanical engineering at Dartmouth College, where she worked on building a hybrid race car. After graduating, she joined Tesla in 2013 as a product manager for the Model X. She later led product and engineering at augmented reality startup Leap Motion (now UltraLeap), focusing on motion-based human-computer interaction.

In 2018, Murati joined OpenAI as head of applied A.I. and partnerships, rising quickly to become chief technology officer. Over six years, she helped steer the deployment of some of the most influential A.I. products, including ChatGPT, DALL-E, and GPT-4....

....MUCH MORE

Other than all that, what's she ever done? 

If interested see also:

November 2023 - More On Q* and Q-Learning 

October 2024 - "OpenAI Executives Say AI Will Be Able to Do Any Job Within 10 Years" 

July 2025 -  Former OpenAI Chief Technology Officer Mira Murati Raises $2 Billion At $12 Billion Valuation From Jane Street, A16Z, Nvidia 

August 2025 - "Thanks for Your $1 Billion Job Offer, Mark Zuckerberg. I’m Gonna Pass." (META)

She is one of the reasons we note re: SoftBank's all-in wager on OpenAI:

...Should SoftBank be unable to repay or refinance the debts it is taking on, the risk goes from theoretical to kaboom pretty fast and all the other daisy-chain financings get stress-tested in a real-world cascade. 

And unfortunately chatbots in general and OpenAI/Sam Altman in particular may not be the future that Mr. Son seems to think.... 

And: 

...Throw in the fact that OpenAI and their ChatGPT may not be the ultimate winner of this unprecedented build-out and there are reasons to be hyper-aware. Stay tuned. 

Ahead of the U.S. CPI: "China May wholesale inflation hits near 4-year high on Iran war-led higher input costs, AI boom"

From CNBC, June 9/10:

• The producer price index jumped 3.9% from a year ago, the highest since July 2022.
• Consumer prices rose 1.2% in May from a year earlier, missing economists’ estimates of 1.3% growth.
• Core CPI, excluding volatile food and energy prices, grew 1.1%, edging down from the 1.2% rise in the prior month. 

China’s wholesale prices rose at the fastest pace in nearly four years in May, driven by surging raw material costs due to the Iran war and an artificial intelligence investment boom, while consumer inflation came in below estimates.

The producer price index jumped 3.9% from a year ago, the highest since July 2022, topping economists’ forecast of 3.8%, and outpacing 2.8% in April, according to data released by the National Bureau of Statistics on Wednesday.

Wholesale prices returned to growth in March as the input cost surge stemming from the Middle East conflict lifted the economy out of its longest deflationary streak in decades. The Iran war has throttled traffic through the Strait of Hormuz, disrupting energy and raw material flows.

Factories’ purchasing prices for fuel and power climbed 10% year on year in May, widening from 4.4% in April. Costs for non-ferrous metal materials and wires surged 22%.

Aside from higher commodity costs, wholesale prices were also lifted by a growing demand for artificial intelligence computing power, pushing up prices for tech equipment and semiconductors.

“The accelerating shift to electrification, deepening AI adoption and surging computing demand pushed up prices across non-ferrous metals, electrical machinery and computer hardware,” Dong Lijuan, chief statistician at NBS, said in a statement Wednesday. Non-ferrous metal mining led gains at 36.5% year on year, with smelting up 24%....

....MUCH MORE 

World’s largest: Construction of 1,129-feet-long LNG ship begins in China

From Interesting Engineering, June 9:

The new QC-Max LNG vessel will offer 57 percent more cargo capacity while meeting strict global emissions standards. 

China’s shipbuilding industry reached another major milestone on Monday as Hudong-Zhonghua Shipbuilding, a subsidiary of China State Shipbuilding Corporation (CSSC), officially began construction of what it says will be the world’s first and largest 271,000-cubic-meter (9.6 million-cubic-foot) QC-Max liquefied natural gas (LNG) carrier.

This project marks a big step for China’s role in high-end shipbuilding. Experts say building this vessel comes at a time when global energy markets and trade are uncertain, so reliable LNG transport is more important than ever. The ship should boost confidence in the LNG supply chain and help move cleaner energy around the world. 

Massive jump in LNG transport capacity

The new carrier can carry much more cargo than today’s standard LNG ships. It is 1,129 feet (344 meters) long and uses the latest NO96 Super+ membrane system to store and transport liquefied natural gas at very low temperatures....

....MUCH MORE 

"The Colorado River’s largest reservoirs are heading toward a ‘system crash,’ experts warn"

 From the Salt Lake Tribune, June  5:

The warning comes as seven Western states and the federal government struggle to agree on new rules for managing the shrinking river. 

Boulder, Colo. • Colorado River experts and decision makers gathered in Boulder, Colorado, this week to discuss the future of the water supply for 40 million people across the Southwest. At the registration table, a new white paper set the tone for the conference at the Colorado Law School: “Colorado River Basin Storage Continues Slide Toward System Crash.”

If the Colorado River Basin has another dry year, even if water consumption is at or near historic lows, Lake Powell and Lake Mead will likely drop to levels that could threaten dam infrastructure and downstream deliveries to major southwest cities and agriculture hubs at the start of the 2028 water year, according to the paper co-authored by Colorado River experts.

If next year is more similar to a heavy snow year like 2023, then the nation’s two largest reservoirs would recover to an extent, but that cushion would likely only last for about two years, the paper says. 

“We’re going to have to work harder to save water than we have ever worked before in the 21st century,” said Jack Schmidt, one of the paper’s co-authors, in an interview before the conference.

The researchers intentionally didn’t use the “most extreme” years in their study, Schmidt added. For the dry scenario, they used historic flow data from 2025, the fifth driest year in the 21st century. The wet scenario used 2023 flows, which were the third highest in the past 26 years.

“We’re trying to lay out, in the starkest terms, where we’re at so that everybody understands the significance of the cuts that lie ahead,” Schmidt said. “We cannot go over the cliff.”

That “cliff” is dropping below “reasonably accessible storage,” which the paper defines as the water above 3,500 feet at Lake Powell and 975 feet at Lake Mead. The Bureau of Reclamation has identified these as critical elevations to protect hydropower production and infrastructure at the dams....

....MUCH MORE 

21st Century Headlines: "AH-64 Apache Crew Rescued By Drone Boat After Going Down Near Strait Of Hormuz"

From The War Zone, June 9:

This is the first known use of an uncrewed surface vessel to recover downed aircrew and is major sign of what's to come. 

A U.S. Navy uncrewed surface vessel (USV) found and rescued the crew of a U.S. Army Apache that went down overnight near the Strait of Hormuz, in the Gulf of Oman. This is the first known use of a drone boat executing a personnel recovery action as part of a military search and rescue operation, and it’s likely a glimpse of what’s to come. The cause of the incident is otherwise under investigation.

Navy Capt. Tim Hawkins, a U.S. Central Command (CENTCOM) spokesman, has confirmed the use of the Navy USV in the rescue effort to TWZ. This had already been hinted at by the mention of Task Force 59, the Navy’s main drone force in the Middle East, in an official CENTCOM statement. What specific type of drone boat was utilized in this case is not yet known. Task Force 59 operates a variety of USVs, including speedboat-like types. The Task Force has been experimenting with all types of new uncrewed naval technologies and this rescue is clearly a major win for the forward-looking unit....

....MUCH MORE 

"SoftBank’s Attempt to Get $6 Billion OpenAI Margin Loan Stalls"

Good. I'm not kidding when I say Mr. Son's penchant for leveraged beta could be a threat not just to the AI players but to the world economy. If the largest domino starts dropping it's hard to see it stopping short of a coordinated international bailout.

Keep an eye on 9984 - Tokyo Stock Exchange. Here's the last year of price action via TradingView:

 

6,400 Yen, last, down 648 (-9.19%) 

From Bloomberg, June 9: 

SoftBank Group Corp.’s talks with potential creditors to raise at least $6 billion from a margin loan backed by its OpenAI stake have stalled, people familiar with the matter said, just weeks after the Japanese conglomerate cut its initial target from $10 billion.

The company is considering various fundraising options, according to the people, who asked not to be identified discussing private matters. It could still move forward with the margin loan at a later stage, they added.

It’s unclear why the margin loan discussions stalled. Borrowers and creditors can pause and revisit fundraising discussions for various reasons, and SoftBank hasn’t elaborated on its plans, the people said. SoftBank had secured some $5 billion for the loan before the development, people familiar with the matter said, though it was unclear if those were verbal or written commitments.

SoftBank declined to comment.

The current inaction on the margin loan comes even after some of the potential lenders who had been pitched on it said that they’d started to consider it in a more favorable light, after news last month that the ChatGPT creator was preparing to file for an initial public offering. OpenAI said on Monday that it has filed confidentially for an IPO in the US, joining artificial intelligence rivals in tapping public markets to fund ambitious growth plans. The firm is working with Goldman Sachs Group Inc. and Morgan Stanley on a potential listing as soon as in the fall.

Markets have witnessed a broader debate in recent months about SoftBank’s commitments of more than $60 billion to OpenAI at a time when recent breakthroughs by rival Anthropic PBC have raised doubts for some investors about the business. Within SoftBank itself, some officials had grown anxious about that commitment.

Previously some of the potential creditors pitched on the margin loan had expressed concerns about the difficulty of reaching a valuation for an unlisted company like OpenAI. SoftBank had downsized the loan’s initial target size by 40% after facing hesitation from some of the potential lenders, people familiar with the matter said in May.

The Japanese company has been ramping up its broader AI plans. Late last month, it said that it plans to invest as much as €75 billion ($86.6 billion) to build artificial intelligence data center capacity in France, saying the country is poised to become a top European hub for AI infrastructure.

Looming in the background is a $40 billion bridge financing that supported the conglomerate’s investments in OpenAI, and which SoftBank must repay in March 2027. SoftBank has said that borrowing would likely be repaid “through the utilization of existing assets and other financing measures.”....

....MUCH MORE 

Recently:

June 2 - "AI revolution is ‘50x bigger’ than the dot-com boom: SoftBank’s Masayoshi Son to CNBC"
I assume Mr. Son is aware the term "dot.com" does not have the best connotations.

May 31 - SoftBank Says It Will Invest Up To €75 Billion To Build Data Centers In France

May 13 -"SoftBank profit more than triples to $12 billion on OpenAI stake gains"

As noted introducing April 22's "SoftBank Seeks $10 Billion Margin Loan Backed by OpenAI Shares": 

This is where the risk to the AI juggernaut and possibly the world economy is lurking.

Should SoftBank be unable to repay or refinance the debts it is taking on, the risk goes from theoretical to kaboom pretty fast and all the other daisy-chain financings get stress-tested in a real-world cascade. 

And unfortunately chatbots in general and OpenAI/Sam Altman in particular may not be the future that Mr. Son seems to think. 

Before that it was February 12's "Where Will SoftBank Get The Money To Fund Their Commitment To OpenAI?":

By writing-up their stake in OpenAI, naturellement.

And March 27:

"SoftBank Obtains $40B Bridge Facility for Additional OpenAI Investment"

Of all the possible weak links in the daisy-chain, and there are a few, SoftBank's increasingly central role is the most concerning.

Mr. Son's history, going back to the time he briefly held the title of world's richest person, is leveraged beta. No great technological insight (largest investor in WeWork) no fancy risk mitigation, just leverage in all its forms and like Sam Insull, at every level of the organization.

Throw in the fact that OpenAI and their ChatGPT may not be the ultimate winner of this unprecedented build-out and there are reasons to be hyper-aware. Stay tuned. 

That said, this loan should be okay (barring a depression where it can't be re-financed, à la Insull) it's all the other borrowings and what Mr. Son will do in the next couple years, that could cause worldwide problems.

And last year:

November 2025's - "SoftBank shares slide as Nvidia stake sale highlights AI funding needs"

That was a rookie fund manager's move, using your most liquid asset to fund your least liquid.

In the olden days proprietary traders/stock jobbers/proto-market makers would keep their share and bond certificates in a box—hence short against the box etc. And in that box the most speculative, least-liquid-in-a-crash certificates were on top ready to be tossed into the maw of a descending market, with the highest quality, most liquid shares at the bottom of the box.

It was a tell as to either the individual trader's finances or to the depth of a downturn to see certs from the bottom of the box coming onto the market.

As a side note, you can still get your stock in certificate form but it will cost you at least $500 per cert. The powers that be, Depository Trust, the brokers et al. really prefer you don't ask for the paper.

And dozens more. 

Possibly also of interest: 

April 28 - WSJ Exclusive: "OpenAI Misses Key Revenue, User Targets in High-Stakes Sprint Toward IPO"

April 28 -  "OpenAI-Linked Stocks Slump on Report of Startup Missing Targets"

Deutsche Bank: "Will the IPO wave derail equities?"

From Deutsche Bank Research, June 9:

Chart of the Day 

One of the most common questions we are hearing from clients right now is whether the mega wave of equity issuance hitting the US market could trigger a broader sell-off. With headlines dominated by blockbuster IPOs and issuance volumes accelerating, it is a natural concern — but history suggests the fear may be misplaced.

Our equity strategists Binky Chadha and Parag Thatte have looked closely at prior issuance cycles (see here), combining academic literature with empirical evidence from past waves. The conclusion is clear: equity issuance waves typically coincide with strong equity market returns, not market stress. The reason is that companies tend to issue when equity demand is strong, earnings momentum is healthy and investor risk appetite is elevated. In other words, causality usually runs from strong markets to issuance, rather than issuance causing markets to fall. This is very similar to my experiences in my former life as a credit strategist.

So how large is the current IPO wave? As our strategists note, US equity issuance has been rising steadily since early 2023, climbing from a quarterly run-rate low of around $30bn to roughly $120bn today. The coming months should mark a meaningful step-up, with a flurry of high-profile mega-IPOs expected to raise tens of billions of dollars each. Put into perspective, however, even the very largest expected IPOs amount to just over 0.1% of the S&P 500’s market capitalisation. See their piece for some great graphs....

Figure 1: Equity market returns are typically very strong before and during an issuance wave

Source: Bloomberg Finance LP, Dealogic, Deutsche Bank Asset Allocation

.... MUCH MORE

Also at Deutsche Bank June 9: "Geopolitics beyond Iran"

If interested see also:

February 10 - "OpenAI, SpaceX and other IPOs could break the S&P 500, Jeremy Grantham says"
Ummm, yes.* 

*** 

*Subjects near and dear: supply, demand, liquidity etc.

October 2008 - IPOs Produce Smallest Gains Since 1995 as Offerings Increase

Supply and demand. The one effect I can guarantee is the sopping up of billions of dollars and yuan* that would otherwise go into currently trading issues. IPO exits are not only a sign of a top but actually help bring them on by removing some liquidity....

December 2018 - "Nasdaq, 'Tech,' & IPOs are in for Gut-Wrencher"

The Fed's interest rate moves are not that big a deal.
I know that runs counter to a lot of commentary but the upticks are not a problem. Yet.
The bigger headwind facing the market is the Fed's balance sheet unwind sucking up liquidity.
And next year's planned mega-IPOs threatening to do the same....

September 2025 - "US IPO Activity On Track For Best Quarter Since Q1 2022"

This is what we were referring to introducing August 6's "Blackstone prepares portfolio companies for IPOs":

One of the reasons markets trend higher is a lack of new shares coming on to the market.

Over the last few months the IPO window has been opening and the offerings absorb buying power that would otherwise go into issues already trading.

See also: supply/demand.

The Wall Street marketeers are nothing if not opportunistic.

And depending on how much stuff they are primping, packaging, and pushing, this is why stock offerings tend to mark the short/intermediate-term tops in markets.

Just something to be aware of, not a hard and fast rule.

Regarding Mr. Grantham, though he is historically early—keeping in mind that if you are too early, you're not early, you're wrong, I think he is right about the market direction later this year, if not the exact trigger we will point back to.... 

June 1 -  Who Will Buy These Giant IPOs After They Begin Trading? You Will (SpaceX; OpenAI; Anthropic et al.)