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The K-Shaped Economy: Why The Middle Class Moved Up

Authored by Lance Roberts via RealInvestmentAdvice.com,

The K-shaped economy has become shorthand for a tidy story. The rich pull away while everyone else falls behind. It fits the mood, and it makes for a sharp headline. The problem is that it’s mostly wrong. When you pull the actual Census data, the dominant move of the last half-century isn’t down. It’s up. Yes, the middle class is shrinking. But it’s shrinking because millions of households climbed into higher brackets, not because they slid into poverty. The real divide lies elsewhere, and most of the coverage walks right past it.

Let’s start with what the term “K-shaped” means, because the label gets stretched to cover almost everything. A K-shaped economy is one where different parts move in opposite directions at the same time. One arm rises with high incomes, corporate profits, and asset values. The other arm stalls with low-wage work, thin savings, and shuttered small businesses. The phrase caught fire after the 2020 shutdown, when high-skill workers shifted to remote work while service jobs vanished overnight.

As a description of that moment, it was accurate. The shutdown hit restaurants, travel, and personal services hardest, and those jobs are inherently lower-wage. Meanwhile, technology, finance, and professional services barely missed a beat. So far, so good. The trouble starts when the K gets applied to the entire arc of American incomes over the last five decades. That’s where the story breaks down.

The Middle Class Didn’t Collapse. It Climbed.

Notice the chart above. In 1967, about 54.6% of U.S. households sat in the middle-income band, earning between $35,000 and $100,000 in 2022 dollars. By 2022, that share had fallen to 39.1%. On its face, that looks exactly like the disappearing middle class everyone talks about. But follow where they went. Over the same stretch, the share of households earning $100,000 or more nearly tripled, climbing from 13.1% to 37.5%.

Here’s the part the headlines skip. The low-income share fell too, from 32.3% to 23.3%. Both the middle and the bottom shrank, while the top exploded. That’s not a population sliding into hardship. That’s a population moving up the ladder. The American Enterprise Institute’s work on this is blunt about it. By their definition, the upper-middle class is now the largest single income group in the country, roughly three times its size in 1979.

So what drove the climb? Two main things: more dual-earner households and rising educational attainment, especially among women. In 1970, about 11% of women held a college degree. Today, the figure is closer to 40%. More households with two paychecks and higher credentials simply earn more money.

Of course, someone will object that a fixed $100,000 line just reflects inflation nudging households over the threshold. It doesn’t. These figures are stated in constant 2022 dollars, so the bar is held flat in real terms. Households cleared it anyway, in far greater numbers. The upward migration is real, not a measurement trick.

Where the K-shape Is Real, It’s About Ownership

So is the K-shaped economy a myth? No. It’s just pointed at the wrong variable. The genuine divide isn’t income mobility. It’s wealth.

This is where the common framing of these numbers goes off the rails, and it’s worth correcting directly. You’ll often read that the top 10% own “two-thirds of the economy.” That’s not right. They don’t own the economy. They own the assets. According to the Federal Reserve’s Distributional Financial Accounts, as of the fourth quarter of 2024, the top 10% of households by wealth held about 67% of total household net worth, averaging $8.1 million each. The bottom 50% held roughly 2.5% of the total, averaging about $60,000. Net worth and GDP are not the same thing, and the difference matters.

Why is wealth so concentrated when income mobility looks so healthy? Because the two run on different engines. A decade and a half of near-zero interest rates, asset purchases, and pandemic-era stimulus inflated the price of stocks and homes. If you owned those assets, your balance sheet soared. If you rented and lived paycheck to paycheck, you got the inflation without the gains. That’s the real lower arm of the K. It’s not that the middle isn’t earning. It’s that a large slice of the country doesn’t own the things that compound.

But Everyone Says They Feel Broke

Here’s the strongest counter to everything I’ve laid out. Walk into almost any room, including rooms full of high earners, and you’ll hear the same complaint. People feel broke. Surveys back it up, with financial anxiety running high even among households pulling in six figures. So if the data say people are moving up, why does almost no one feel like they’re winning?

The answer is mostly psychological, and behavioral finance has a name for it: relative deprivation. Satisfaction isn’t set by your absolute position. It’s set by comparison, and the comparison is almost always upward and local. Live near Greenwich, Connecticut, and your reference point becomes hedge fund billionaires, which makes a $5 million net worth feel like loose change.

Step back, though, and the absurdity is obvious. A $1 million net worth puts you in the top 1.6% of adults on the planet. UBS counts roughly 60 million people in that group, and together they hold nearly half of all the wealth in the world. The United States now mints more than a thousand new millionaires a day. Yet plenty of those same millionaires go to bed feeling like they’re falling behind, because they’re measuring against the 0.001%, not the other 98.4%.

Make no mistake, real hardship exists at the bottom of the distribution, and I’m not waving it away. But a large share of the “everyone feels broke” sentiment isn’t a balance-sheet problem. It’s a scoreboard problem. People have climbed the ladder and kept their eyes locked on the rungs above them. As Tony Isola recently put it, millionaires aren’t losing the game; they’re just looking at the wrong scoreboard.

Will AI Widen the K or Narrow It?

That brings us to the question hanging over all of this. Does artificial intelligence make the divide better or worse?

The honest answer is that it could go either way, and anyone who tells you they’re certain is selling something. Start with the risk case. Goldman Sachs estimates that around 300 million jobs globally are exposed to AI automation, and that the technology could handle tasks making up roughly a quarter of U.S. work hours. Notice the word exposed. It does not mean eliminated. Goldman’s own baseline is that AI displaces about 6% to 7% of jobs over a decade, with a wide range around that figure. The roles most exposed, administrative support, basic accounting, and routine office work, sit disproportionately in the middle of the income distribution. That’s a threat aimed squarely at the households that just climbed.

Now the upside. That same Goldman research projects AI could lift global GDP by about 7% and add 1.5 points to annual productivity growth over ten years. The buildout itself creates demand. Goldman estimates the U.S. alone needs roughly 500,000 net new workers to power data centers and the grid by 2030. If AI raises broad productivity and wages follow, it could lift the bottom arm of the K rather than crush it.

So which is it? In my view, the technology itself is neutral. The outcome depends on policy and adoption, and here is where I get cautious. Policymakers are almost always reactive rather than proactive. Left to run on its own, AI tends to reward capital and high skills first, which widens the gap before it ever narrows. I’d genuinely love to be wrong on this. The setup just doesn’t favor it.

What This Means for Investors

Strip away the politics, and the K-shaped economy leaves investors with a clear instruction. Own the top arm, but respect the bottom one.

The top arm is productive capital. Companies building and deploying AI, chips, cloud platforms, and data centers are at the forefront of a structural shift, not a passing cycle. Demand for automation and analytics doesn’t ebb the way casual dining demand does. Skills-driven sectors belong here, too. Biotech, advanced manufacturing, and specialized services reward expertise and intellectual property, and the firms with real competitive moats tend to compound over long horizons. Asset-rich real estate tied to growth hubs and digital infrastructure fits the same logic, which is why logistics and data-linked facilities look better positioned than legacy retail or half-empty suburban office.

The bottom arm calls for caution, not blanket avoidance. Labor-intensive, low-margin businesses exposed to automation face real headwinds, so I’d be careful owning traditional retail or hospitality without a clear technology story. Even so, defensives still earn their keep. Staples, healthcare, and utilities provide ballast and income when the tape turns, and in an uneven economy, steady cash flow matters more, not less. Add policy to the watch list as well. Inequality is a political flashpoint, which keeps capital gains rates, corporate taxes, and labor rules in play as live risks.

One last point, and it’s the one most investors ignore. Benchmark your progress against your own plan, not against the richest person you know. The investor who measures himself against the 0.001% will always feel behind, and that feeling drives the worst decisions. Chasing the hot trade, abandoning a sound allocation, and taking on risks you don’t need always leads to poor outcomes. The data say you’re very likely doing better than you think. So continue to focus on your personal goals, rather than worrying about what others have.

The K-shaped economy is real, but it’s been badly misread. The middle class isn’t falling into poverty. It’s thinning because it’s climbing, even as a genuine gap opens between those who own assets and those who don’t. AI is about to test which side of that line you’re on. The investors who come out ahead won’t be the ones who panic over the headlines. They’ll be the ones who put capital where the productivity is, protect against the part of the economy that’s truly under pressure, and refuse to let comparison run their decisions.

Tyler Durden Fri, 06/12/2026 - 13:00

Banks Curb FOMO-Chasing Levered Bets On Korean Tech Firms

SK Hynix has been THE poster-child for 'Vol Up, Spot Up' FOMO-chasing over the past few months of exuberant semi-shortage panic-buying...

And volumes in levered Semi trades has been astronomical...

With SK Hynix standing out among the most-levered bets...

Driven by massive speculative momentum (margin loans at record highs)...

...which faced huge forced liquidations amid the recent volatility...

So it really should not be a surprise that Bloomberg reports that global banks are curbing hedge funds’ leveraged bets on Asia’s top chipmakers including SK Hynix and Samsung.

According to people familiar with the matter, brokers including Citigroup, JPMorgan, and Goldman Sachs have raised the financing cost for hedge funds to take bullish wagers on SK Hynix and Samsung Electronics shares via swaps

Banks have also tightened the size of new trades and which firms they will give them to.

Swaps are a popular way for hedge funds to bet on assets without actually owning them and with the aid of leverage. In markets like South Korea, where few hedge funds have their own trading IDs with the exchange, swaps with brokers are the default way to bet on stocks.

Swap financing rates quoted by the banks on SK Hynix and Samsung were increased to a range from 300 basis points to as much as 11% over the secured overnight financing rate (SOFR), the people added. With SOFR standing at 3.6%, the new rates translate into nearly 15% at the top end of the range.

They have taken similar steps for Taiwan Semiconductor Manufacturing.

Morgan Stanley is turning away clients seeking new swap trades in the two Korean stocks while some second-tier banks have also stopped accepting additional orders in the past two weeks, the people said.

Some large global banks that are still willing to take new orders are assessing requests on a case-by-case basis, they added.

Bank of America, BNP Paribas and UBS are also lifting financing costs and restricting the size of swap trades in the two stocks.

One reason for the banks' pushback: banks were burned dramatically back in 2021, hedge fund Archegos used total return swaps (TRSs) to build highly leveraged, concentrated positions in a handful of stocks — most notably ViacomCBS and Discovery — without putting much capital up front, while evading regulatory disclosure limits and traditional margin. Once the stocks reversed their gains, the fund faced catastrophic margin calls and the banks that had funded these positions ended up nursing massive losses, most notably Credit Suisse which lost $5.5 billion and which was the precursor to the bank's eventual failure and acqusition by UBS a little over a year later. 

Archegos managed about $10 billion of its own money but leveraged it into an estimated $50 to $100 billion in stock exposure using total return swaps across several banks; a similar trade is taking place now with the two Korean memory stocks. The only question is why funds are involved, and stand to suffer catastrophic losses once the memory trade reverses. 

Banks are concerned that a major correction would affect the value of their clients’ holdings, leading to potential defaults on margin calls and ultimately threatening losses for banks, the people said.

Tyler Durden Fri, 06/12/2026 - 12:40

Kuwait Joins "Dark-Mode" Tanker Traffic Through Hormuz

By Tsvetana Paraskova of OilPrice.com

Kuwait appears to have joined a growing bunch of Middle Eastern oil and gas producers that have moved to ship energy cargoes in dark mode through the Strait of Hormuz.

The liquefied petroleum gas (LPG) carrier Gas Umm Al Rowaisat, which is owned by the national Kuwait Petroleum Corporation, has passed through the Strait in recent days, then transferred the cargo onto another ship which is currently en route to an Indian port, vessel-tracking data compiled by Bloomberg showed on Thursday.

The Gas Umm Al Rowaisat loaded LPG in May in the Gulf, and then switched off its AIS positioning, before reappearing close to the Indian coast this weekend, according to the data.

This is the latest instance of a tanker going dark as it moves through the Strait of Hormuz. The UAE, Iraq, and other Gulf producers have increased shipments of oil, LNG, and LPG on tankers in dark mode in recent weeks.

Since the war began on February 28, tanker traffic through the Strait of Hormuz has collapsed by 90% to 95% compared to pre-war levels, leaving the market about 13 million barrels per day (bpd) short of crude and fuel supply that was previously freely flowing to buyers.

Some oil cargoes continue to trickle through the critical chokepoint, but under increasingly opaque operating conditions, complicating the tracking of oil and gas flows and obscuring the visibility of how much energy supply actually reaches buyers these days.

More vessels are leaving the region after passing the Strait of Hormuz in a dark mode with transponders switched off, and those entering the Persian Gulf to load cargoes are increasingly doing the same.

The dark-mode tactics, once the feature of Iran-linked vessels aiming to skirt sanctions, are now the norm for the majority of commercial traffic at the Strait of Hormuz, energy flow-tracking firms say.

Tyler Durden Fri, 06/12/2026 - 12:20

Blackrock's Private Credit Fund Gates Investors Again After Redemption Requests Surge

The market may be in full-blown face-ripping bubble mode, and software stocks are now gripped in by a category 5 gamma squeeze hurricane, but not even that is helping the ongoing debacle that is private credit.

One week after Cliffwater's Private Credit fund gated investors for a second straight quarter, and days after Blackstone also gated investors in its private credit fund for the first time (recall during Q1, the fund allowed investors to redeem a record 7.9% after tapping senior executives to help finance the withdrawals with hundreds of millions of their own cash, but when faced with an even bigger flood of redemptions in Q2 it gave up and decided to join the gate parade), BlackRock capped redemptions from its flagship private credit fund for the second straight quarter after investors sought to pull about 13%, a sign that shareholders remain extremely nervous about the health of the $1.8 trillion private credit market.

Blackrock's HPS Corporate Lending Fund, known as HLEND, said it would allow only 5% redemptions, according to a filing Friday. The request for 13.3% was about 50% higher than the prior quarter when shareholders asked to redeem 9.3% of their shares. 

So far this quarter we have seen an acceleration in redemption requests as private credit investors clearly are concerned about their liquidity despite the raging bull market in all other asset classes.

“This liquidity feature is critical to HLEND’s ability to provide its investors with a premium return to public credit markets,” the firm said in a letter to investors. “This profile is further bolstered by continued subscriptions and distribution reinvestment, which together are expected to more than fully offset repurchases during the first six months of 2026.”

As Bloomberg reminds us, HLEND’s decision to cap redemptions in the previous quarter was the first major instance of a private credit manager taking action to enforce the limit and manage liquidity since concerns over underwriting standards and exposure to software businesses vulnerable to AI disruption bubbled to the surface early in the year.

The move was a contrast to its top rivals including Blackstone, which had gone to great lengths to satisfy investor demands for cash. But this quarter, Blackstone also enforced the 5% limit on its flagship private credit fund after investors asked to redeem even more money than in the prior period. 

Indeed, redemption requests are set to increase across the industry as investors redouble efforts to claw back money after being restricted. And there’s persistent concerns about the credit cycle turning, with industry leaders warning of a rise in defaults as artificial intelligence continues to disrupt businesses and borrowings from the era of ultra-low rates comes due.

HLEND has produced a 10.2% annualized total return since it was formed, the letter said, which is cold comfort to those investors who are hoping to redeem their profits and instead receive a gating notification. 

Tyler Durden Fri, 06/12/2026 - 12:00

US Pulling Large Chunk Of Jets, Refueling Tankers From NATO Defense, Realigning Further East

In a move that surprises absolutely no one paying attention, the United States is planning to significantly slash the number of fighter jets and warships it feeds into the NATO machine in Europe, the New York Times reported Thursday.

The reported cutbacks hit right as panicked European nations scramble to patch up their own defense capacities. Though long expected given President Trump's somewhat adverse relationship with the NATO alliance, and fiercely critical rhetoric continuously directed at Brussels, European capitals are deeply concerned given they are under the shadow of the Russia-Ukraine war, now in its fifth year.

via USAF

Washington is officially out of patience while Trump has openly mocked the alliance as a "paper tiger" and labeled its members "cowards" - earlier venting his frustration over Europe's refusal to jump into the US-Israeli war against Iran.

According to two unidentified senior European officials cited by the NYT, Washington's upcoming retreat from the continent includes drawing down the number of US fighter jets supplied to Europe by one-third, as well as cutting all eight aerial refueling tankers conventionally provided (as most of the Pentagon's refueling tanker planes are currently in Tel Aviv anyway), and drastically reducing maritime reconnaissance aircraft.

Other prime military assets slated to be reallocated include a missile-launching submarine, an aircraft carrier, a group of bomber aircraft, and a handful of jets and warships. All of this was already previewed and leaked, but the fresh Times reporting provides further confirmation.

The writing has been on the wall for weeks, given that US European Command explicitly stated this month that it would reassess Washington's contributions to NATO to "ensure Europe takes primary responsibility for its own conventional defense."

We featured previous reporting which outlined a new US framework for defense of Europe based on the US mainly 'just' providing nuclear deterrent rather than the broad military support it has historically guaranteed.

The primary driver for this withdrawal is the US military's pivot toward the Asia-Pacific, though officials also cited the need for flexibility to commit assets to military campaigns in the Middle East and the Western Hemisphere. 

While NATO leadership officially portrays the move as a way to reduce "over-dependence" on the US, European diplomats find the requirements far more severe than anticipated, with European leaders reportedly stunned by the scale and speed of the requirements.

Reportedly in secret meetings some representatives even interpreted the US insistence on rapid compliance as an "indirect threat" toward those who fail to act quickly.

Tyler Durden Fri, 06/12/2026 - 11:20

Gas Prices Fall For 3rd Straight Week

Authored by Naveen Athrappully via The Epoch Times,

The national average price for a gallon of regular gasoline declined for three consecutive weeks, dropping from $4.56 per gallon on May 21 to $4.12 per gallon on Thursday.

Lower gasoline prices are “delivering some relief to drivers during the busy summer travel season,” the American Automobile Association (AAA) said in a June 11 statement.

“Gas prices typically peak around this time of year, but uncertainty surrounding the Strait of Hormuz makes this year more unpredictable. Pump prices remain at four-year highs, but the national average is currently far from the record set on June 11, 2022, of $5 per gallon.”

On Friday, prices declined marginally to $4.1 per gallon, which is lower by roughly 40 cents from a month back, according to AAA data. In five states, prices exceeded $5 per gallon—California, Hawaii, Washington, Alaska, and Oregon.

In its statement, AAA attributed the three-week decline to crude oil prices remaining below the $100 per barrel level.

Brent crude oil futures prices shot up after the war began, hitting a high of over $126 per barrel on April 30. Oil was trading at $87.44 per barrel as of 6:50 a.m. EDT on Friday, up from around $72 per barrel on Feb. 27, the day prior to the breakout of the war. Prices have remained below the $100 level every trading day this month.

Iran has repeatedly attacked and threatened commercial ships transiting via the Strait of Hormuz since the war started. The strait is a crucial shipping waterway located south of Iran through which over 20 percent of global seaborne oil trade transits. The disruption of shipments via the Strait has pushed up oil prices.

The conflict between the United States and Iran has intensified in recent days. On June 10, the U.S. military launched new strikes on Iran after it struck an American helicopter in a violation of the ceasefire. Iran then launched attacks against U.S. air and naval assets across Jordan, Kuwait, and Bahrain.

On Thursday, the U.S. Central Command said American forces disabled a third oil tanker that was attempting to carry Iranian oil as part of a maritime blockade imposed on Iran’s ports. Since the blockade came into effect on April 13, U.S. forces have disabled nine vessels in total and redirected 135 ships.

Oil Price Forecast

In a June 11 post, ING Bank said there is “little tangible evidence” of any imminent deal between Washington and Tehran to get energy supplies flowing normally via the Strait of Hormuz.

As such, the oil market is expected to continue tightening, eventually reaching a level where it becomes highly vulnerable to “significant upside.”

“From an inventory perspective, we believe that the end of July could be an inflection point for the market if there is no improvement in energy flows from the Persian Gulf. This could see ICE Brent spike to $120-130/bbl, prompting increased pressure to come to a deal,” the bank said.

“And failing a deal, one can’t rule out the possibility that we get to a point where energy-starved buyers are more willing to pay Iran tolls for safe passage through the Strait of Hormuz.”

The Energy Information Administration (EIA) forecasted in its June 9 Energy Outlook report that oil shipments via the strait may only resume in the third quarter of 2026.

However, even with the resumption of transit, it will likely take several months for the traffic to hit pre-conflict levels, which is not expected to happen until early 2027, the EIA said, adding that Brent crude oil spot prices are predicted to average $105 per barrel in June and July.

Meanwhile, President Donald Trump said on Thursday that a U.S.–Iran deal is close.

“We just made a great settlement of the war with Iran,” Trump said in the Oval Office. “And we’re going to be, subject to finalization of documents, which should get done over the next few days, probably have a signing, maybe in Europe.”

Trump said the deal has been approved by Iranian leader Mojtaba Khamenei.

In a June 11 Truth Social post, the U.S. president said the final points of the deal have been discussed and approved by other parties involved in the conflict, including Saudi Arabia, Israel, the United Arab Emirates, and Qatar.

“The Naval Blockade will remain in full force and effect until this Transaction is finalized,” Trump said.

Tyler Durden Fri, 06/12/2026 - 11:00

National Mall Vandalized With '8647' Markings Ahead Of Independence Celebrations

Authored by Kimberley Hayek via The Epoch Times,

U.S. Park Police and federal officials opened an investigation Thursday after a sizable marking resembling “8647” was etched into the lawn of the National Mall.

The incident occurred amid preparations for major events celebrating the nation’s 250th anniversary of independence.

A Reuters photographer witnessed the marking from atop the Washington Monument before authorities, including members of the National Guard, arrived on scene near the World War II Memorial. The numbers, formed by discolored or browned grass against the surrounding grass, appeared to be massive.

The phrase “8647” comes from the restaurant slang “86,” which means to remove or get rid of, combined with 47 to reference President Donald Trump, currently sitting as the 47th president. Trump allies and the Department of Justice have interpreted the prevalence of the phrase as potential calls to violence as opposed to mere political expression.

An Interior Department spokesperson said in a statement that the act was “deranged vandalism.”

“Any threat against the president is taken very seriously by the Department, and our U.S. Park Police will investigate this incident and hold those responsible accountable,” the spokesperson said.

The U.S. Park Police said the cause of the grass discoloration has yet to be determined, though samples have been taken for testing as part of the continuing investigation.

This latest episode follows a previous high-profile case: the indictment of former FBI Director James Comey on charges related to a social media post in 2025 featuring seashells arranged as “8647.”

“Threatening the life of the president of the United States will never be tolerated by the Department of Justice,” acting Attorney General Todd Blanche said in April this year.

“Over the past year, this department has charged dozens of cases involving threats against all sorts of individuals. We take these seriously, every single one of them.”

Federal prosecutors tied the term to alleged threats against the president. Comey contended that his actions were not intended as such, and he challenged the accusations on free speech grounds.

“A child knows what that meant,” Trump said in May 2025. “If you’re the FBI director and you don’t know what that meant, that meant assassination, and it says it loud and clear.”

The National Mall has hosted recent events such as the “Rededicate 250“ prayer celebration earlier this year, which attracted thousands to the grounds for a meditation on the nation’s founding principles.

Preparations are underway for Independence Day festivities, including military parades, museum exhibitions, and public programs honoring America’s heritage.

Trump has pledged to refurbish the Mall, encompassing efforts to restore features like the Lincoln Memorial Reflecting Pool and plans for the semiquincentennial celebrations, with a “Great American State Fair“ set to begin later this month.

Tyler Durden Fri, 06/12/2026 - 10:20

UMich Sentiment Bounces Off Record Low In June, Inflation Fears Fade

After reaching all-time record lows in May, analysts expected UMich's Sentiment index to rebound modestly in preliminary June data and it did, up from 44.8 to 48.9 (well above 46.0 exp), with consumers experiencing some relief due to the early-month easing in gasoline prices.

Source: Bloomberg

"This measured improvement in sentiment was widespread, seen across age, education, and political party," said Surveys of Consumers Director Joanne Hsu, adding that "lower-income consumers exhibited a particularly strong sentiment increase, consistent with the fact that gasoline comprises a larger share of their budgets."

Well that will wreck the Democrats narrative...

Inflation expectations dropped in this early June data...

Once again we are confused because while the headline UMich inflation expectation over the next year declined, all political parties saw higher expectations (and Independents now have a higher inflation expectation that Democrats while Republican expectations are rising)...

Are they just making this shit up?

Tyler Durden Fri, 06/12/2026 - 10:11

Kennedy Center Appeals Order Requiring Removal Of Trump's Name

Via American Greatness,

The Kennedy Center’s board of trustees voted Thursday to challenge a federal judge’s order requiring President Donald Trump’s name to be removed from the performing arts center.

According to court filings, the board formally appealed US District Judge Christopher Cooper’s ruling just before the court-imposed deadline for removing Trump’s name from the building and related materials.

Earlier Thursday, the board also voted to seek a stay of Cooper’s order, according to two individuals familiar with the meeting who spoke to The Washington Post.

To obtain a stay, attorneys for the center must demonstrate a likelihood of success on appeal and argue that removing Trump’s name would cause irreparable harm.

The dispute stems from Cooper’s earlier ruling against the Trump administration and the Kennedy Center board.

The judge ordered Trump’s name removed from the exterior of the building, the center’s website, merchandise and other materials associated with the institution. Cooper also blocked a planned two-year closure for renovations, finding the move unlawful.

The court had given the Kennedy Center until June 12 to comply with the order.

Cooper sided with Rep. Joyce Beatty, D-OH, an ex officio member of the board who challenged the decision to rename the center.

The judge concluded that Congress established the institution as a living memorial to President John F. Kennedy following his assassination and that the board lacked the authority to alter that designation.

Before filing its appeal, Kennedy Center officials indicated they would comply with the court’s order while weighing further legal action.

“We are complying with the court’s order while evaluating all legal options to preserve this revitalization and recognize President Trump’s leadership,” Roma Daravi, the center’s vice president of public relations, previously said.

The center has already removed Trump’s name from several official platforms, including its website, YouTube channel and invitations to its annual honors ceremony.

However, references to Trump remained visible Thursday on the Kennedy Center’s Instagram, Facebook and X social media accounts.

Tyler Durden Fri, 06/12/2026 - 10:00

Fool Me Once? Shame On You. Fool Me 39 Times...?

By Molly Schwartz, cross-asset macro strategist at Rabobank

After several days of strikes against Iran, and several morning announcements that strikes were set to continue, Trump announced via Truth Social that the “scheduled strikes and bombings against Iran” have been cancelled as a peace deal has been agreed upon. Indeed, “discussions and final points have been, in both concept and great detail, approved by all parties involved…the Naval Blockade will remain in full force and effect until this transaction is finalized — time and place of the signing to be announced shortly.”

According to our recently published energy strategy report, 103 Days, 38 Peace Deals, yesterday’s announcement would constitute the 39th peace deal declared since the onset of the war. Speaking of, the report highlights the “massive drop in Chinese imports,” leading to a downward adjustment of Rabobank’s brent crude oil forecasts, now projecting $103/bbl in Q3 of this year.

WATCH: CNN montage of Trump saying he's close to a deal with Iran. He's made the claim 39 times since the war began.pic.twitter.com/o2j782A2jF

— Clash Report (@clashreport) June 12, 2026

But back to the peace deal, it should be noted that the provided list of “all parties involved” does not include one party who some would argue is pretty heavily involved…Iran. Perhaps Iran was counted in the “and others” part of the list, but this wouldn’t be the first time the US proposed a deal it thinks Iran can’t refuse, just for Iran to either outright refuse it, or announce that it never received such a peace deal in the first place. It should also be noted that some of the “involved parties” who were listed, like Israel and Pakistan, have confirmed that they had not been informed of any agreement at the time the peace deal was initially announced.

That doesn’t mean that this peace deal is for certain another empty announcement. Indeed, economists often assume things turn out similar to precedent, of course, until they don’t. But the market’s reaction to the deal coupled with the major IPO events today may add further credence to our view that defense-related rhetoric these days has just as much to do with financial markets as they do with geopolitics.

The S&P 500 had sunk around 4.4% from its recent high of $7,610 to $7,277. The peace deal announcement, however, sparked a sharp sell-off in brent crude oil of $3, breaking to its lowest level since April. The move in oil dragged interest rates down—with the 10 year down more than 8bp to trade below 4.45% again—and pulled stocks back up, fueling an almost 1.7% upwards jump in the S&P and a 3.5% jump in the NASDAQ. Coincidentally, SpaceX’s IPO, which has been said to “draw more than $100 billion in retail orders,” is also scheduled for today.

Early yesterday morning, Treasury Secretary Scott Bessent said on X that “any damage [Iran] inflicts on our allies in the Gulf will be paid for with funds extracted from Iranian accounts. Any tolls paid to the Persian Gulf Strait Authority will be offset by funds extracted from their accounts.” This draws attention to one of the key contentions between the US and Iran when it comes to striking a deal, in that Iran wants USD 12 billion of Iranian funds unfrozen if an interim deal is achieved, which the US is reluctant to accept, remembering when the Obama Administration unfroze around USD 100 billion as part of the JCPOA in 2015, the consequences of which the US may or may not be dealing with today.

But Axios reports that this peace deal is different from the others, with “sources” saying that “gaps have been narrowed” on key issues like unfreezing Iranian assets, the process for reopening the Strait of Hormuz, and how negotiations surrounding Iran’s nuclear program would be conducted.

Rates started the day yesterday bubbling higher after a hot PPI print, registering 1.1% m/m in the headline and 0.8% m/m when excluding food, energy, and trade. While the 1.1% headline print is hot enough to give anyone the sweats, the core print is particularly concerning, as it strips out the first order inflationary effects and reveals that second order inflation pressures may have already started to crawl out of the woodwork on the production side. There is only so much time before these costs are likely to be passed onto the consumer. After the PPI data release, the OIS curve had been pricing in around one Fed hike by year end. However, that number dropped to only 70% of a hike after the peace deal announcement.

In the Eurozone, meanwhile, the ECB is already full steam ahead. Yesterday, the ECB released its decision to raise the deposit facility rate by 25bp to 2.25%, making it the first major central bank to hike rates. The decision statement cites that “the war in the Middle East is generating inflation pressures, and the decision to raise rates is robust across a range of scenarios mapping out how the shock might evolve and affect the medium-term outlook for the euro area.” Our ECB whisperer, Bas van Geffen, is forecasting the next hike at the September meeting. 

Tyler Durden Fri, 06/12/2026 - 09:45

Clinton-Appointed Federal Judge Bars Texas AG Paxton's Lawsuit Against ActBlue

Authored by Kimberley Hayek via The Epoch Times,

A federal judge has barred Texas Attorney General Ken Paxton from pursuing his state court lawsuit against ActBlue, a major Democratic online fundraising platform.

President Clinton-appointed U.S. District Judge Richard Stearns ruled Thursday that the case represented no more than a retaliation campaign for ActBlue’s political activities supporting Paxton’s opponent in the 2026 U.S. Senate race.

Stearns issued a preliminary injunction preventing Paxton from pursuing the Texas case. The judge found the lawsuit attempted to undermine protected political speech and therefore violated the First Amendment.

“The truth is plain and captured in Paxton’s own declarations: The lawsuit was filed in retaliation for (and in an attempt to suppress) ActBlue’s efforts to fund Talarico’s campaign,” Stearns wrote in the ruling.

Neither Paxton’s office nor ActBlue immediately returned a request for comment.

Paxton filed the initial lawsuit in April in Texas state court as he campaigned as the Republican nominee for the U.S. Senate seat.

The suit singled out ActBlue, a Massachusetts-based fundraising platform that claims to have raised billions for Democratic candidates and causes since its founding in 2004. It sought civil penalties and an order blocking ActBlue from accepting certain gift card donations.

The Texas attorney general alleged that ActBlue employed deceptive practices after the fundraising platform resumed gift card and foreign prepaid debit card donations after informing Congress that it had ceased conducting the transactions. Paxton alleged the practices could empower foreign nationals to hide their identities while making political contributions, potentially in violation of state law.

The action mirrors wider Republican-led scrutiny of online fundraising platforms, which has included directives from the Trump administration to the Justice Department.

ActBlue responded with its own federal lawsuit filed in Boston in May. The platform contended that Paxton’s investigation and state court lawsuit amounted to unconstitutional retaliation designed to punish it for supporting Democratic candidates, namely Democrat James Talarico, Paxton’s opponent in the Texas Senate contest. ActBlue requested the court declare the actions violations of the First and Fourteenth Amendments and to block them.

Stearns ruled on behalf of ActBlue on the preliminary request, criticizing what he said was Paxton’s history of filing retaliatory lawsuits. The injunction bars Paxton from advancing the state case.

ActBlue’s operations have received increased scrutiny lately. The platform’s CEO, Regina Wallace-Jones, appeared before a House Administration Committee hearing as panel Republicans questioned the organization’s processes for screening foreign contributions and more. Wallace-Jones invoked her Fifth Amendment right during the session. She wrote in an opinion article published in The Washington Post on the same day that she would do so “against self-incrimination.”

ActBlue has long been the primary vehicle for small-dollar donations to Democratic candidates and progressive organizations.

Thursday’s ruling allows ActBlue to continue operations while the related claims work their way through the legal system.

Tyler Durden Fri, 06/12/2026 - 09:10

DOJ Probes Big Banks For Alleged "Debanking" Of Clients

The US Dept of Justice is intensifying scrutiny of some of the country’s largest financial institutions over allegations that customers were denied banking services, or "debanked" for political or ideological reasons, according to the Wall Street Journal.

The US Attorney’s Office for the District of Columbia, led by Jeanine Pirro, has reportedly issued subpoenas to several major banks, including JPMorgan Chase, Bank of America, and Wells Fargo. Investigators are seeking information on account closures, customer offboarding decisions, and internal records explaining why certain individuals or businesses were denied access to banking services.

According to the WSJ, the inquiry builds on a broader effort launched by the Trump administration to examine claims that banks used their market power to exclude politically disfavored customers or entire industries from the financial system. Supporters of the investigation argue that concerns about debanking have circulated for years, particularly among conservatives and businesses operating in controversial but legal sectors, yet have received limited attention from regulators and law enforcement.

According to reports, prosecutors are requesting lists of customers who may have been removed from banking relationships, as well as documentation supporting those decisions. The investigation appears to be running alongside a review by federal banking regulators, including the Office of the Comptroller of the Currency (OCC), which previously indicated it had found preliminary evidence suggesting certain industries may have faced heightened barriers to banking access.

Banks have consistently rejected accusations that political affiliation plays any role in their decisions. Industry representatives maintain that account closures are driven by compliance obligations, anti-money-laundering requirements, risk management concerns, and other regulatory expectations imposed on financial institutions.

A central issue for investigators will be whether any laws were violated when banks chose to terminate customer relationships or avoid particular sectors altogether. Prosecutors are reportedly evaluating potential claims under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), a statute that has historically been used in major financial misconduct cases.

The investigation represents one of the most significant federal efforts to date to examine allegations of politically motivated debanking. Whether it ultimately uncovers unlawful conduct remains to be seen, but for many observers, the fact that federal authorities are now formally examining these claims is a step that should have happened years ago.

Tyler Durden Fri, 06/12/2026 - 08:50

Futures Rally Amid Fresh Iran Peace Hopes, All Eyes On SpaceX

US stock futures and global markets are higher, extending their rally while oil hit the lowest level in months following fresh reports that the US and Iran are nearing a provisional agreement to end their war, even if top leadership has yet to sign off. Meanwhile, all eyes are on SpaceX - the world's biggest IPO- where shadow markets are pricing a spike of at least 35% for SpaceX on its debut, while online market see odds of a 30% close at roughly breakeven. As of 8:00am ET, S&P 500 futures rose 0.6% after the benchmark climbed 1.8% in the previous session. Pre-market, all Mag 7 are higher led by GOOGL and META. Treasuries held steady after Thursday's gain: 10Y yields are at 4.46%. The DXY dollar index fell 21bp to 99.639. Commodities are all lower: WTI fell $3.90 to $83.81 while Brent slid almost 4% to head for its first close below $88 a barrel since the first week of the war. Base/precious metals are unchanged; ags are all lower. Today's US economic data calendar includes June University of Michigan sentiment at 10am.

In premarket trading, Mag 7 stocks are all higher (Alphabet +1.3%, Meta +1%, Amazon +1%, Nvidia +0.6%, Microsoft +0.6%, Tesla +0.7%, Apple +0.4%)

• Rocket, satellite and space-linked companies gain after Elon Musk’s SpaceX raised $75 billion in its initial public offering. Movers include EchoStar +5% and Rocket Lab (RKLB) +4%.
• Adobe (ADBE) falls 6% after the company said its chief financial officer, Dan Durn, would depart, leaving the company without a top tier of veteran leadership after Chief Executive Officer Shantanu Narayen announced he would step aside.
• Advanced Micro Devices (AMD) gains 2% as Citi upgraded the chipmaker to buy, seeing the company as a key beneficiary of AI.
• Marvell Technology (MRVL) slips 1% after appointing Adobe’s Dan Durn as chief financial officer, succeeding Willem Meintjes.
• Travelers Cos. (TRV) slips 2% after Barclays cut its the recommendation on the property and casualty insurance company to underweight, saying that profit upside in the sector is getting more difficult to find.

In other corporate news, Adobe said its CFO would depart, leaving the company without a top tier of veteran leadership after the CEO announced in March that he would step aside. Flutter Entertainment, the owner of FanDuel, the largest player in US sports betting, plans to delist from trading in London

Sentiment was lifted overnight amid fresh expectations that the conflict with Iran is drawing to a close. In the latest developments on a draft deal, a Group of Seven official said an agreement could be signed as soon as Sunday. Iran’s foreign ministry told state-run media that a framework text was nearly finalized (full details here). The semi-official Mehr agency reported that the draft contained 14 provisions, including the reopening of the Strait of Hormuz and 60 days of negotiations on nuclear issues. Some have panned the MOU as one which concedes to Iran, giving the country monetary benefits upfront, while leaving the key negotiations for the back-end.

That said, traders are keen for an end to the more than 100-day war that has roiled global markets and caused the biggest oil-supply shock in history. While President Donald Trump signaled Thursday that a deal should get done shortly, traders have remained wary as previous bursts of optimism have ended in disappointment.

“Markets would believe the deal is reached when we have the actual agreement signed and the Strait of Hormuz can be opened,” said Mohit Kumar at Jefferies. “For now, markets are in relief mode that further escalation can be avoided.”

As for SpaceX, differences of opinion on the $75 billion IPO - the world's biggest - are easy to find on vision, valuation, opportunity and risks, but perhaps the most encouraging sign for traders may be the ability for the market to absorb record equity issuance. There’s been a record flood of equity issuance over the past two weeks, between SpaceX’s debut and Alphabet’s deal, with EPFR analysts saying it leaves “shrinking aggregate cash available to support broader equity valuations.” Meanwhile US equity funds had an 11th week of inflows, the longest streak since Dec., as tech funds had their biggest inflow ever, according to Bank of America.

On SpaceX valuation, “expensive” has never been a catalyst with Elon Musk, notes Amanda Lyons at Energy Group Capital, and “betting against his premium has been a losing trade for a decade.” Trading in the stock is likely to be a read for risk appetite while “the danger is that a genuine business and a quasi-religious premium are being sold in the same ticker, and most buyers aren’t separating the two,” Lyons adds. 

“There appears to be continued investor appetite for technology-related growth stories, particularly those with exposure to AI,” said Tomás García-Purriños at Santander Asset Management. “The pipeline of expected IPOs in 2026 suggests that investor interest in technology, digital infrastructure and AI-related themes remains healthy, extending well beyond a handful of high-profile names.”

Bloomberg-compiled data covering 66 of the biggest US tech IPOs and direct listings since 2012 shows that an initial pop is near-universal. Among the pure IPOs, 86% closed above their offer price on day one, with a median 36% gain. After that, dispersion kicks in.

Elsewhere, overnight Bloomberg reported that global banks including Citi, JPMorgan and Goldman are said to be curbing hedge funds’ leveraged bets on Asia’s top chipmakers including SK Hynix and Samsung Electronics after a blistering rally this year raised concerns of a potential pullback.

Also overnight, Goldman Sachs cut its forecasts for crude oil prices next year by $5 a barrel on higher supply and lower demand. The US declared a power emergency in the southeastern US as forecasters warned of dangerous heat that’s likely to stress power grids along the country’s east coast. 

Traders in Europe and Asia raced to catch up with Wall Street’s chipmaker-led gains from Thursday. The Stoxx 600 rose 1.5% on optimism about a deal between the US and Iran builds, prompted by President Trump scrapping strikes and extended by a report that a draft deal is under discussion, though one that still needs approval from authorities. Here are the biggest movers Friday: 

• Shares in European energy and fossil-fuel firms fall while airlines gain after President Donald Trump said a peace deal with Iran could be signed as soon as the weekend, comments that pushed down oil prices
• Homebuilders are among the best-performing stocks in the UK on Friday as money markets pare bets on BOE rate hikes and swap rates used to price mortgages decline. The move is driven by sliding oil prices on Middle East optimism
• FlatexDEGIRO shares jump as much as 7.5% after the online brokerage was awarded a new overweight rating at Barclays following the stock’s de-rating this year, while Avanza rises as much as 5.3% after being upgraded
• Getinge gains as much as 4.9%, the most since Oct. 21, after Kepler Cheuvreux upgraded the stock to buy from hold, citing an improving outlook for the Swedish health-care equipment firm
• Halma shares rise as much as 4.3%, rebounding from a two-month low following the record 15% drop in the share price on Thursday after the UK industrial group’s guidance for its Photonics business fell short of expectations
• Nokia gains as much as 6.7% after JPMorgan raised its PT on the company, saying its operating profit in 2028 can beat the company’s own guidance — issued during the capital markets day in November — by more than 50%
• Colruyt shares rise as much as 8.6% as Oddo BHF analyst Robert Jan Vos upgrades the retailer to outperform from neutral and lifts his price target ahead of full-year results on June 16 in anticipation of continued margin revival
• Exail shares fall as much as 21% as the company disagrees with financial partner ICG over the size of a payment for bonds and preferred shares as ICG exits its investment in the French defense firm
• Acciona Energía shares are 9.7% higher Friday in Madrid trading following a Cinco Días report that Brookfield, KKR are among investors that Acciona has reached out to gauge interest on its renewables unit
• Glanbia drops as much as 4.3% to €21.62 after biggest shareholder Tirlán Co-Operative Society sold down its stake in the Irish manufacturer of workout supplements and energy bars
• LPP slumps as much as 7.8%, the most in a month, after the Polish fashion retailer slowed its expansion in response to rising cannibalization risk within its key Sinsay brand

Asian stocks rallied as technology shares rebounded, helped by President Donald Trump’s claim that a deal with Iran was close.
The MSCI Asia Pacific Index climbed as much as 3.5%, the most in more than two months, before paring some gains. Chipmakers Samsung, SK Hynix and TSMC were among the biggest contributors. South Korea’s Kospi led gains among regional benchmarks, closing 4.6% higher after gaining as much as 8.6% earlier. Most other markets were also in the green. Here Are the Most Notable Movers

• Chow Tai Fook’s shares surge as much as 13%, the most since June 2019, after its full-year earnings and FY27 guidance both beat estimates. The gold retailer saw stronger growth in April–May, driven by a recovery in demand for weight-based gold jewelry amid a retreat in gold prices, according to analysts.

In FX, the Bloomberg Dollar Spot Index only seeing modest moves after a four-day run of losses and now little changed, having wiped out its gains on the Iran headlines. 

In rates, treasuries are marginally richer across the curve, broadly holding late gains seen on Thursday, following latest developments on a draft US-Iran peace deal which includes a G7 official saying an agreement could be signed as soon as Sunday. US yields richer by around 1bp across belly of the curve with 10-year trading at 4.455%, close to Thursday’s closing levels, as oil extended declines, continuing to underpin Treasuries and support stocks. Bunds and gilts outperform, catching up with Thursday’s late Treasuries gains after the European close. IG dollar issuance slate includes a couple of deals. Citibank’s $6.25b transaction led a three-deal $10.25b slate on Thursday. Issuers paid less than 1bp on deals that were 4.8 times covered. Weekly volume at $27b is just shy of the $30b dealers’ projections

In commodities, WTI futures lower by 3.4% on the day while Brent heads for its first close below $88 a barrel since the first week of the war. Gold was little changed and Bitcoin posted small gains.

Today's US economic data calendar includes June University of Michigan sentiment at 10am.

Market Snapshot

Top Overnight News

• The US and Iran moved closer to an agreement that would reopen the Strait of Hormuz, potentially around next week’s G-7 meeting, according to senior officials. The US is to withdraw forces from the area surrounding Iran under a potential deal, Iran’s semi-official news agency Mehr reported. BBG
• The United States plans to significantly reduce the aircraft and warships that it makes available for NATO operations in Europe, according to two senior European officials, accelerating America’s effort to scale down the protection it has offered to European allies for eight decades. NYT
• Global banks are curbing hedge funds’ leveraged bets on Asia’s top chipmakers including SK Hynix Inc. and Samsung Electronics Co. after a blistering rally this year raised concerns of a potential pullback. BBG
• Nvidia has told Chinese clients that its new "Vera" central processors for AI data centers could be available as soon as August and that they can begin placing orders, three sources familiar with the matter said. BBG
• China told big state-owned banks to reduce their lending in the interbank market, according to people familiar with the matter, in an effort to prevent borrowing costs from drifting too far below the policy interest rate. BBG
• Chinese investors are rushing to Hong Kong to open bank accounts and buy investment products, as Beijing cracks down on cross-border capital flows in a shift that shareholders fear may dent returns. FT
• The ECB is prepared to raise rates again next month if the shock from the war requires it, Governing Council member Joachim Nagel said. BBG
• The US insurance industry’s standard setter has begun to examine credit risks linked to data center projects, which are increasingly showing up in insurers’ investment portfolios. FT
• Big companies and startups, chafing at rapidly escalating artificial intelligence costs, are increasingly turning to tools that tap in to cheaper AI models, including some from China. That’s raising pressure on industry leaders OpenAI and Anthropic to lower their prices, a prospect that could hurt their ability to grow into profitable enterprises. WSJ
• US Senate Banking Committee is weighing a markup of export control legislation. It could tee up the bills for inclusion in the next annual defense policy package, no final decision has been made yet: Punchbowl 
• US President Trump said regarding fertilizer prices, that they might look into federal aid, and are looking at doing some form of help.
• BofA weekly flow data shows USD 20.8bln into bonds (59th straight week of inflows), USD 2.5bln out of cash, USD 31.5bln into stocks, USD 0.7bln out of crypto (record inflows over 5 weeks), USD 2.3bln out of gold (4th straight week of outflows).

Iran News

• Iranian media Mehr News reported that the US-Iran 14-point MoU includes a US commitment to lift sanctions, withdraw its forces from around Iran, lift the naval blockade, reopen the Strait of Hormuz, lift oil sanctions, and release frozen Iranian funds; nuclear issue pushed back by 60 days for final agreement. Additionally, the US is required to present a plan to rebuild Iran’s economy, while the final negotiations between the two countries should focus on nuclear and economic issues, without discussing Iran’s missile program. This text still needs to be reviewed and finalized by the relevant institutions in Iran. 
• The US-Iran MoU is likely to be signed next week, according to CBS citing sources, with Bloomberg later reporting that it could happen at the G7 meeting in Geneva next week. First steps include ensuring "freedom of trade" by demining and opening the Strait of Hormuz. The signing would kick off 60 days of talks to negotiate details. In principle, Iran would commit to a lockout of 15-20 years during which it would not enrich uranium and would dismantle its nuclear sites. In exchange for taking these steps, Iran would receive financial relief staggered over time and sequenced to correspond with compliance.
• US President Trump said he understands that Iran’s Supreme Leader has approved the deal and that lifting the blockade is part of the Iran deal, while he added that Iran will not have a nuclear weapon and that they want to make a deal a lot more than he does. Trump added it's a very strong MOU, they found Iran to be rational, and they will make a deal. Furthermore, he said the Strait will open immediately upon MOU signing, maybe Saturday or Monday, but doesn't want to set a deadline for the deal, and stated a Kharg Island deal would be off the table now.
• US President Trump said at a virtual campaign rally that they settled up with Iran and it is pretty much completed, while they got everything they wanted and claimed they ended the war with Iran.
• Israeli PM Netanyahu held a call with US President Trump on Thursday night regarding the possibility of a pending peace deal between the US and Iran, according to CBS News.
• Airplanes associated with US VP Vance's advance team are moving ahead of potential Iran MoU signing, according to New York Post reporter.
• Iran state media said Tehran would not cede control of Hormuz under draft US deal, AFP reported.
• Iranian Foreign Ministry spokesperson said the issues raised about the agreement are speculation and the issue has not been finalised, while it added that the situation in the Strait of Hormuz is less secure due to US actions and that what is being said about the time and place of signing the agreement is media speculation. Furthermore, the spokesperson said that Iran has so far not reached a final conclusion about the agreement, but stated that the text of the agreement is almost ready.
• Sources cited by Al Hadath said Iran has given final approval, which Qatar conveyed to the US.
• Iranian state media reported that explosions heard in Sirik was related to a confrontation with a vessel that violated regulations whilst attempting to pass through the Strait of Hormuz.
• Israeli airstrike reported in Jebchit, southern Lebanon, according to Al Araby.

A more detailed look at global markets courtesy of Newsquawk

• APAC stocks rallied following on from the gains on Wall St, after President Trump cancelled planned strikes on Iran and touted a US-Iran deal, which could be signed as soon as the weekend and would open the Strait of Hormuz, while Trump claimed the US ended the war with Iran and he understood that Iran’s Supreme Leader has approved the deal. However, Iran pushed back on this as a Foreign Ministry spokesperson stated the issues raised about the agreement are speculation and that Iran has so far not reached a final conclusion about the agreement, but acknowledged that the text of the deal was almost ready.
• ASX 200 climbed higher as outperformance in mining, materials and resources led the advances, while energy was pressured due to the drop in oil prices, and defensives also lagged amid the risk-on environment.
• Nikkei 225 surged at the open and briefly tested the 67,000 level, with the index helped by lower oil prices and with tech and mining stocks sitting comfortably among the list of biggest gainers.
• Hang Seng and Shanghai Comp joined in on the euphoria with mining stocks among the notable gainers, while Chow Tai Fook was front-running the advances after it reported record full-year profit.

Top Asian News

• China tells big banks to curb interbank loans to ease cash glut.
• Japanese Finance Minister Katayama said they are aiming to broaden retail JGB offerings and that retail Japanese government bonds remain unappreciated by households, while she stated that no impact is expected on the central bank policy meeting after BoJ Governor Ueda was hospitalised.
• India is willing to let fiscal gap widen to as much as 4.8% of GDP from a previous 4.3%, according to Bloomberg

European bourses (STOXX 600 +1.8%) start the last trading day of the week on a firmer footing and have completely reversed the losses seen at the start of the week. This comes on hopes of a US-Iran deal, with US President Trump stating that it could be signed as early as this weekend in Europe. Further upside was spurred after Mehr News reported that the MoU with the US includes reopening the Strait of Hormuz, lifting oil sanctions, and releasing frozen Iranian funds. European sectors are entirely in the green bar Energy (-3.1%). Travel & Leisure (+5.2%) is the clear outperformer, followed by Banks (+4.2%) and Consumer Products & Services (+3.7%). Cyclicals have been affected the most since the start of the Iran war, so hopes of an end would benefit these sectors the most.

Top European News

• Bundesbank sees German GDP growth at 0.5% in 2026, 0.8% in 2027; German inflation seen at 2.9% in 2026, 2.7% in 2027.

FX

• Snapshot: DXY is incrementally firmer, whilst G10s mixed vs the USD this morning. The tentative action comes after US President Trump claimed that he had a deal with Iran, and that the signing of the MoU would probably happen in Europe. However, the Iranians pushed back on this claim. This morning, a Mehr report revealing the details of the 14-point plan garnered some attention, which helped boost global sentiment - though action was fairly muted in the FX space.
• DXY is slightly firmer today despite significantly lower oil prices after a number of geopolitical updates in the last 24 hours. (See commodities for more details). In recent trade, USD was hit as details of the 14-point US-Iran MoU accelerated the risk-on bias. On this reporting, DXY moved towards Thursday's lows of 99.58, currently 99.72 at the time of writing. Focus for the remainder of the day shifts to the UoM Sentiment survey, but market participants will likely be more attentive of the geopolitical environment and potentially some early positioning heading into a weekend which could see a deal between US-Iran be signed.
• EUR and GBP trade has chopped on either side of the unchanged mark this morning. The single currency has had a number of ECB speak to contend with, but by in-large has been largely in-fitting with President Lagarde’s comments on Thursday. A notable Bloomberg sources piece suggested that some policymakers could see a hike as soon as July. Elsewhere, the GBP had a weak growth report to digest – overall it does little to shift the mood heading into the next week’s meeting, but will exacerbate the growth woes had the Bank.
• NOK is the worst G10 performer on account of lower oil prices as participants assess implications for Terms of Trade and the Norges Bank. Popular carry trade NOK/SEK has seen downside in excess of a percent today due to the above. NOK/SEK slipped below par, to mark a session low of 0.9882.

Central Banks

• ECB's Nagel said all policy options remain on the table for July while adding that the ECB is prepared to respond if required.
• ECB's Makhlouf said we need to get ahead of inflation and are seeing more broad-based inflation impact. It would be a mistake for us to do nothing.
• ECB's Kocher said the war's impact on price trends are increasingly clear and he does not expect inflation to match 2022 or 2023 levels. Will act decisively to ensure 2% mid-term target.
• ECB's Dolenc said the rate hike is just enough for now to follow the baseline, and they had a robust set of data to make a decision. Dolenc also stated that it is pretty obvious inflation will be higher and growth lower, while services inflation is stubborn and hard to fight.

Fixed Income

• Global fixed benchmarks are entirely in the green and currently hold towards highs. Strength, which has been facilitated by lower energy prices after US President Trump claimed that he had a deal with Iran, and that the signing of the MoU would probably happen in Europe. However, the Iranians pushed back on this claim. The bullish bias then extended after Iran-affiliated, Mehr News, reported the details of the US-Iran 14-point MoU. This spurred another bout of pressure in the energy complex, which in-turn weighed on global yields.
• USTs (+4+ ticks) gain, and hold at the upper end of a 109-19 to 109-29 range. Action which has been facilitated by the positive geopolitical mood music, but still remains the underperformer vs peers. That can potentially be explained by the ongoing hawkish repricing at the Fed, heading to the Bank’s policy announcement next week. Elsewhere, yields are lower across the curve with underperformance in the short-end/belly; the 10yr currently holds at 4.43%, marking the WTD low. Should the geopolitical environment materially improve in the coming days, and the Strait entirely opens up, the 10yr could dip its head back towards support levels at 4.33% and then 4.25%. Do note that the 10yr resided below the 4.00% mark before the Iran conflict started.
• Bunds (+43 ticks) and Gilts (+87 ticks) both follow the bullish bias, with the latter outperforming given its relatively high dependence on external energy and poor domestic growth data. For EGBs, there have been a number of ECB speakers this morning following the Bank’s decision to hike rates on Thursday. Most have echoed the comments made by President Lagarde at her presser; focus has been on a Bloomberg report, which suggested that some ECB members see another hike as soon as July.
• For UK paper, the GDP release this morning indicated that the UK economy shrank by 0.1% in April, amidst the Iranian war. This will only exacerbate growth woes for some policymakers at the BoE, where policymakers are set to meet next week, expected to keep rates on hold.

Commodities

• On Thursday, US President Trump said a deal could be signed with Iran as soon as this weekend in Europe, following an earlier post on Truth Social that the US was going to strike Iran hard for the third straight day and then later pulling back the threat. Trump said VP Vance would attend if the deal materialises and added that the Iranian Supreme Leader had agreed to a deal. The deal was described as a very strong MoU which would restart shipping in the Strait and include commitments from Tehran to not pursue a nuclear weapon.
• Markets were awaiting any kind of confirmation from Iranian media that the MoU has been received. Mehr News reported the 14-point MoU includes the reopening of the Strait of Hormuz, lifting oil sanctions, and releasing frozen Iranian funds. (Full 14 points on the headline feed) Awaiting official commentary from the Iranian government on the MoU.
• Crude futures were already on the softer side before the Mehr news report, but it has given an additional catalyst for further downside. WTI Jul'26 slides below a key support range of USD 84.46-85.95/bbl, currently trading at the bottom of USD 83.20-86.98/bbl range. For Brent Aug'26, the benchmark trades slips below the USD 86/bbl handle (USD 85.80-89.72/bbl).
• Precious metals trade in narrow ranges after rebounding in excess of 3% in Thursday's session. Spot gold oscillates in a USD 4170-4247/oz range. Given the positive news of a potential US-Iran deal, worries of higher inflation/rates due to energy prices may temper and result in some unwinding of the hawkish rate bets by the Fed.
• 3M LME Copper bids higher, currently trading in a USD 13.6k-13.72k/t range, amid the positive tone. The red metal gapped higher alongside gains in Asia-Pac equities and held amid constructive reporting.
• Venezuela has signed five agreements with Shell (SHEL LN) to advance oil and gas projects, which includes the Co.'s participation in the 5tln cubic-feet Loran offshore gas field.
• JPMorgan still expects aluminium to reach USD 4k/t, now forecasting an average price of USD 3750/t in H2'26.

US Event calendar

• 10:00 am: Jun P U. of Mich. Sentiment, est. 46, prior 44.8

DB's Jim Reid concludes the overnight wrap

Happy birthday to me. I’m taking most of today off to catch up with an old close friend I now see far less than I should, largely due to work commitments and my ongoing role as an on-demand Uber driver for my children. The plan involves a long local hike and a long non boozy lunch. Yes, my wife and I are actually going to spend some time together. Hopefully we won't run out of things to talk about within the first few hundred yards.

There’s no shortage of topics to discuss in the financial world right now, as sentiment and newsflow around tech and the Iran war continue to swing 180 degrees at short notice. Indeed, the past 24 hours has seen a sharp reversal in the trajectory of the US–Iran conflict, as mounting hopes of a deal have seen Brent crude fall -1.62% overnight, leaving it on track for a 3-month low of $88.80/bbl. So that’s led to a huge rally across bonds and equities, as lower oil prices have eased fears about a prolonged stagflationary shock.

The picture had looked very different this time yesterday, as we woke up to a second day of US strikes on Iran. Moreover, Trump went onto say that that the US would continue to hit Iran for a third day, and take control of Kharg island and other oil infrastructure. But a few hours later, after European markets had closed, that was suddenly reversed. In a post Trump said that discussions with Iran “have been brought to the highest level of Iranian leadership and approved”, and that he was cancelling “the scheduled strikes and bombings against Iran this evening. The post also said that “final points have been, in both concept and great detail, approved by all parties involved”, and that a time and place for the signing would be “announced shortly”. Later on, Trump followed this up, saying the US had “made a great settlement of the war with Iran”, and that the deal could be signed over the weekend in Europe, and that the Strait of Hormuz would be reopened to shipping once an agreement is signed.

The market reaction to the news was swift, with Brent crude down -2.92% yesterday to $90.38/bbl, and that’s been followed up by an overnight decline of -1.75% to $88.80/bbl. Moreover, the entire oil futures curve moved lower, with the 6-month Brent future down to $83.28/bbl this morning, which would be its lowest closing level since April. And in turn, we’ve seen a huge wave of optimism in Asian equities this morning, with strong gains for the Nikkei (+3.37%), the KOSPI (+8.32%), the Hang Seng (+2.02%), the CSI 300 (+1.53%) and the Shanghai Comp (+1.56%).

With oil prices coming down sharply, alongside hopes that the Strait of Hormuz will reopen, that’s seen investors price out the chance of rapid rate hikes this year. Indeed, as we go to press, markets are now pricing in just a 77% chance of a Fed rate hike by December, having been fully priced in earlier this week. In fact, it’s not until the March 2027 meeting that a hike is fully priced in. So that dovish repricing helped US Treasuries to surge, with the 2yr yield (-8.1bps) down to 4.06% by the close, whilst the 10yr yield (-9.1bps) fell to 4.46%.

For equities there was also a huge surge, as the prospect of lower inflation and fewer rate hikes led to growing optimism on the near-term outlook. So the S&P 500 (+1.75%) posted its biggest jump in the last two months, whilst futures (+0.10%) are pointing to further gains today. And there was a huge surge for some of the recent laggards, with the Philly semiconductor index up +7.91%, the NASDAQ up +2.54%, and the small-cap Russell 2000 up +3.02%. Metals also rallied, with copper up +2.08%, gold up +3.48%, whilst silver (+6.23%) once again traded with a higher beta.

Aside from the Middle East news, the big story yesterday was the first ECB rate hike since 2023, with a 25bp move that lifted their deposit rate to 2.25%. They became the biggest central bank yet to hike after the Middle East energy shock, joining others like Australia and Norway who’d already hiked. Moreover, there were some hawkish undertones, as Lagarde described the hike as "completely warranted and justified”, even in the ECB’s milder scenario, and noted how the inflation shock was becoming broader in nature. Indeed, the ECB lifted their inflation projections, and now expect headline inflation to average 3.0% in 2026 (prev. +2.6%) with core inflation projected to stay above 2% all the way to 2028 (+2.2%).  

Interestingly, we had a little conflict in the usual sources stories that came out after, although that seemed to be more in the headline framing than the details. So Bloomberg’s headline suggested that ECB officials weren’t ruling out another hike as soon as the next meeting in July, but a Reuters story said that the ECB felt a material surge in oil prices was necessary to justify a July hike. Nevertheless, both suggested that both a hold and a hike were possible, and unsurprisingly, Lagarde avoided being drawn on the timing of further hikes. Our own European economists are sticking to their view of one more rate hike to 2.50% in September (see their reaction note here Focus Europe: ECB Reaction: A robust hike) with their economic forecasts being softer than the ECB's. Interestingly they say that another hike to 2.75% is more likely than stopping here at 2.25%.

Given that the hike was fully priced in already, European bonds still put in a decent performance with yields on 10yr bunds (-4.4bps), OATs (-4.8bps) and BTPs (-5.3bps) all retracing the previous day’s losses. Moreover, investors also priced in a more dovish path for the ECB over the months ahead. Equities put in a strong performance too, even before the news of a potential US-Iran deal, with the Stoxx 600 (+0.54%) ending a run of 4 consecutive declines, alongside gains for the FTSE 100 (+0.48%), CAC 40 (+0.48%) and the DAX (+0.06%).

Another big story, prior to the Iran news, was Oracle earnings. That was out after Wednesday’s close, but yesterday their share price fell -8.53% in response, as their quarterly capex spend was much higher than forecast. So that renewed investor concerns about the sustainability of AI infrastructure spending. For reference, Oracle has become the largest non-bank issuer in the Bloomberg USD Investment Grade index over the last year, and has now signaled another $20bn of debt issuance over the next 4 quarters. Meanwhile, Oracle is now down -26.4% since its intra-day peak on June 1st, after being up +31.0% in the 3 business days before it.

Otherwise, the main US story was that PPI inflation ran hotter than expected in May, with headline PPI up +1.1% on the month (vs. +0.7% expected). However, there was a downward revision of three-tenths to the April number, and the PPI measure excluding food and energy was only at +0.4% (vs. +0.5% expected). Taken together, this week's CPI and PPI have led our US economists to increase their May core PCE forecast to 0.37%, a few basis points higher than before the two releases due to the subcomponent breakdowns. But even though inflation was running hot, the labour market data actually came in on the weaker side, with the weekly initial jobless claims up to 229k in the week ending June 6 (vs. 220k expected), which is their highest in 4 months.

Finally, one interesting story bubbling under the surface is the fear of one of the strongest El Niño’s on record emerging around the Pacific equator. That’s where unusually warm sea surface temperatures in the eastern Pacific cause the Pacific jet stream to move south, which creates changes in weather patterns and ecosystems. But unfortunately, El Niño events are also correlated with a higher frequency of natural disasters, such as flooding, so usually lead to concern about things like food harvests and higher prices. Those concerns continued yesterday, as the US Climate Prediction Center published a report, saying that the probability of a strong El Niño is over 65% for the end of this year and a very strong one at nearly 40%.

Looking at the day ahead now, the main data releases will be the US University of Michigan survey for June, the UK’s monthly GDP for April, and Canada’s Q1 capacity utilisation rate. We’ll also hear the ECB’s Kocher and Nagel speak.

Tyler Durden Fri, 06/12/2026 - 08:23

"Resetting Business": Xbox Layoffs Loom As New CEO Supercharges Overhaul

Microsoft's Xbox gaming division is preparing for a major round of job cuts at the end of the month as new Xbox CEO Asha Sharma moves to "reset" the unit amid a confluence of negative and worsening pressures, including shrinking revenue, soft hardware sales, plateauing Game Pass momentum, and what management now describes as an ongoing "hardware component crisis."

Bloomberg first reported that Microsoft will announce an upcoming round of layoffs after the company's fiscal year ends on June 30. The report was based on sources familiar with the upcoming restructuring plan, though it did not mention whether AI adoption and efficiency gains are driving the cuts.

In a memo to staff, Xbox CEO Asha Sharma and Matt Booty said the gaming division's first 100 days under new leadership showed early signs of progress.

"Now we start the next 100 days. It is important to have both optimism and realism as we work to reset the business," the executives wrote in the memo titled "Next 100 Days: XBOX Reset."

They continued, "Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform and hardware subsidy, but our annual revenue has declined nearly half a billion during that time. Going forward, this cannot continue."

The memo outlined Xbox's harsh realities it must navigate to achieve a turnaround strategy:

1. Over 1 billion players choose to play XBOX and our games each year, for a total of 72 billion hours across Console, PC, Mobile, and Streaming (excluding much of China and a few other properties). Our franchises are also among the largest and most beloved globally and are now breaking records in TV and film. Going forward, our competition is attention. There are more great games, TV series, franchises, creators, content formats, apps, etc., than ever before

2. We will end this fiscal year at about a 3% accountability margin, down year-over-year. Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform, and hardware subsidy, but our annual revenue has declined nearly half a billion during that time. Going forward, this cannot continue.

3. We are in a hardware component crisis. When I joined as CEO in February, the price we paid for console storage components was over 2x as high as we paid last fall. These costs have since doubled again. And as we plan for the 2027 holiday season, we expect another significant increase, taking us over 5x the prices we paid only two years earlier. Memory costs have followed a broadly similar trajectory. While the entire industry is facing a components crisis, we believe we have been impacted more greatly than many of our peers due to the choices we made over the last half decade. We are currently unable to make as many consoles as players want to buy, and we need a new business model and partnerships for hardware as we remain committed to Helix.

4. We expanded our studio system when we needed a pipeline of content to meet multiple strategies across subscription, streaming, and devices. In the process, we have found ourselves over extended as we executed on changing strategies in a landscape of more readily available content. We are the fortunate stewards of industry-defining franchises that have enormous potential and player demand, but we have not adequately funded them to compete and win. At the same time, as we saw this past weekend at Showcase, a reliable pipeline of first- and third-party exclusives and new IP are critical to our success. We need to reassess the balance between these and our investment priorities for the next 5 years.

5. Our current platform infrastructure is not built for the battle ahead. Our systems are overly complex, spanning hundreds of dependencies, which hinders our ability to move fast. We've become too reliant on vendors to operate our systems and must become more self-reliant as an engineering culture to build for the future. We must increase the value we ship to players while decreasing the time it takes to do so. Going forward, we'll evolve and rebuild our stack and look at capabilities across all of XBOX and potential M&A to help us win in hardware, PC, mobile, and streaming.

In February, the CEO told the audience at the Bloomberg Tech conference that she planned on "resetting the business," which was "not in a healthy spot."

How it started vs how it’s going | #XBOXShowcase pic.twitter.com/ntww9Pk0GN

— XBOX (@XBOX) June 7, 2026

Xbox and the entire gaming industry have faced mounting headwinds.

TD Securities analyst Doug Creutz pointed out Thursday that mobile gaming remains strong, but console gaming has lost momentum this year:

Industry View: Mobile Had a Really Strong Q1; Tempering Console Expectations

We believe U.S. mobile game spending grew +14% y/y in Q1, comfortably above our expectations, based on reported results at public companies. Note that our model does at least attempt to incorporate the impact of what are rapidly growing DTC businesses across the industry. We expect +10% y/y growth in U.S. mobile game spending for 2026. On the other hand, we previously reduced our 2026 console global software/services spending estimate from +7% y/y to +1% y/y based on (1) the impact of the recent price cut to Xbox Game Pass and (2) the apparent lack of a tentpole title in Nintendo's 2026 slate.

Xbox reaches more than 1 billion players annually across console, PC, mobile, and streaming, but can't generate profits? It may be time for AI and automation to streamline the gaming unit, which likely means layoffs are imminent.

The gaming industry is waiting for the launch of Grand Theft Auto VI later this year to rekindle demand.

Tyler Durden Fri, 06/12/2026 - 06:55

China Is Learning To Use Less Oil, And That's A Bigger Deal Than It Sounds

By Julianne Geiger of OilPrice.com

Three months into the biggest oil supply disruption in modern history, China appears to have discovered something that should make oil bulls at least a little uncomfortable.

It can get by on less fuel than anyone thought.

China's gasoline and diesel demand has been falling for years as electric vehicles gained market share and economic growth slowed. But the latest drop has surprised even seasoned observers.

According to Reuters, gasoline sales at Sinopec, China's largest refiner and fuel retailer, fell 8% year over year in April, while diesel sales dropped 6%. Goldman Sachs estimates that consumption of gasoline and related products may have fallen by as much as 20%.

China has slashed crude imports since the Iran war began, with May imports plunging 29% to 7.8 million barrels per day—the lowest level in eight years. Until recently, many analysts viewed those cuts primarily as a function of China's enormous oil stockpile and high crude prices.

Now another explanation is emerging: China may simply need less fuel.

Rail travel rose roughly 10% in March and April. Subway ridership continues to climb. Electric taxis are becoming increasingly common. Most notably, EV charging volumes surged 69% from a year earlier to a record high in April, according to the China Charging Alliance.

That shift comes as China's refiners are already grappling with weaker economics. Sinopec cut refining runs earlier this year as Middle Eastern supply disruptions squeezed crude availability, while Beijing has sharply reduced fuel exports to preserve domestic supplies.

The property downturn isn't helping either. Diesel demand from construction, long one of China's most reliable sources of consumption growth, continues to weaken as projects stall and budgets tighten.

The question now is whether the trend sticks.

China's refiners can only draw on inventories for so long. The country still maintains one of the world's largest crude stockpiles, but even a billion barrels eventually run out. At some point, imports will need to recover.

What remains unclear is whether gasoline demand will recover with them.

For decades, China's economic growth was one of the oil market's most dependable bullish arguments. Today’s reports may have some rethinking the strength of that argument.

Tyler Durden Fri, 06/12/2026 - 06:30

BofA Sees "Runaway Price Risk" In Spot Sulfur As Global Supply Chain Freezes

Sulfur is a critical industrial input produced as a byproduct of oil refining and natural gas processing. With roughly half of the world's seaborne sulfur trade trapped behind the Hormuz maritime chokepoint, another 15% stuck in Kazakhstan due to export-logistics blockades, and demand destruction still insufficient across global markets, Bank of America analysts warn that spot sulfur prices have further upside potential.

Matthew DeYoe, research analyst at BofA Securities, covering all things ag, materials, and chemicals, wrote in a note, "The market is working through unprecedented supply shortages, and prices are inflecting accordingly. Spot sulfur is now ~$1,200/mt, vs a more normal <$200/mt longer term price."

"The inflation is destroying demand across some industries, notably phosphates and pulp & paper, but we are not killing demand fast enough, and margins for metals like copper and lithium are strong enough to keep prices bid," DeYoe noted.

DeYoe said his team spoke earlier this week with Fiona Boyd of Acuity Commodities about global sulfur and sulfuric acid markets, coming away with a clear takeaway: the market is facing an unprecedented supply shock, yet demand destruction has not gone far enough. With supply trapped behind the Hormuz chokepoint, export logistics disrupted in Kazakhstan, and metals producers still able to absorb higher input prices, Boyd warned that spot sulfur prices likely have more upside from here.

DeYoe warned, "Hormuz + Kazakhstan + Russia = runaway price risk."  

He explained further:

Roughly 50% of the world's seaborn traded sulfur is caught behind the SOH and another 15% is trapped in Kazakhstan given export logistic blockades. In total this represents ~30% of the world's sulfur capacity, though it is compounded by sulfuric acid export bans from China and a 3-4mn tonne shortfall to annual Russian exports on account of attacks by Ukraine. Inventory liquidation is helping to buffer, notably in China, which is drawing down its stocks, and Canada, which has ample supply. However, the latter is expensive and slow to mobilize, while the former is running out (Boyd expects 2-4 weeks of safety stock left). Because sulfur is largely a processing byproduct, it is price inelastic, so don't expect more supply because economics are better. Alternatives, such as pyrite, are increasingly sought, but it can't fill the hole. This all puts upside risk to sulfur price.

The near-term fix for the energy crunch, which extends far beyond sulfur markets, is reopening the Hormuz chokepoint. Yet DeYoe warned that even if Hormuz were reopened soon, it would take months to rebalance the market and repair damaged assets. This suggests prices will remain elevated through the end of the year.

Related coverage on the sulfur market:

• Gulf Shock May Spark Shortage Of World's Most Critical Industrial Chemical, Used Heavily In Mining

DeYoe highlights that Mosaic is in focus. Sulfuric acid is a key input for phosphate fertilizer production, and Mosaic relies on sulfur from US Gulf Coast refineries. He noted that high sulfur costs could pressure Mosaic's second-half profits and cash flow, potentially requiring a debt raise. He also added that the odds of US government intervention to restrict sulfur exports to protect domestic DAP fertilizer production could increase.

Professional subscribers can find much more on Gulf energy shock here at our new Marketdesk.ai portal.

Tyler Durden Fri, 06/12/2026 - 05:45

Traders Are Shorting Oil As If The Hormuz Crisis Is Over

Authored by Tsvetana Paraskova via OilPrice.com,

• Oil traders are increasingly betting on lower prices, with short positions in Brent crude tripling since late March despite the loss of roughly 13 million bpd of supply from the Middle East.

• Physical market fundamentals are tightening rapidly, as global inventories have fallen by about 250 million barrels and key storage hubs like Cushing are approaching critically low levels.

• Analysts warn the market may be underestimating supply risks, with even a reopening of the Strait of Hormuz unlikely to provide immediate relief.

In yet another sign that the paper oil market may be too complacent about the magnitude of the supply disruption in the Middle East, trades have been boosting their short positions in oil futures for most of the past two months.

Since the beginning of April, portfolio managers have been increasingly betting that oil prices would fall, according to the latest available commitment of traders (COT) data from exchanges as of June 2.

Shorts on Brent Crude tripled between the end of March and the beginning of June, per the data compiled by energy analyst John Kemp.

As of June 2, the short positions in Brent Crude had jumped to their highest level since January, when the U.S. captured Venezuelan leader Nicolas Maduro and the market expected increased supply from Venezuela in the coming months.

The surge in short positions and the weeks-long selloff of longs in the past eight weeks suggest traders are betting that supply will be restored soon.

The paper market plays on hopes, expectations, sentiments, and fears, and the sum of all these right now appears to be that the hedge fund and portfolio manager community is reluctant to bet on a summer of actual physical supply shortages.

But the paper market may soon face the reality of crumbling global inventories, including in the United States, where stocks at Cushing, the delivery point for WTI Crude, are just a few weeks away from dropping to minimum operational levels.

Too much noise about the ceasefire, which is being tested almost daily with one strike or a retaliatory hit after another, doesn’t help the paper market that may have become too detached from the magnitude of the supply loss.

Traders react to every signal of ‘imminent deal’ with selloffs, only to start buying oil futures again when Israeli strikes in Lebanon, U.S. ‘self-defense’ strikes on Iran, or Iranian hits at regional infrastructure threaten to unravel the fragile ceasefire.

All the while, paper market participants continue to hope for an imminent resolution and a reopening of the Strait of Hormuz that would flood the market with oil. And that’s been their hope for three and a half months now.

The thing is, even a full reopening of the Strait would not lead to immediate relief for buyers. First, ship owners and operators will need to have guarantees that they wouldn’t be caught off-guard with stranded tankers again. Then, the oil cargoes will need weeks to reach buyers—weeks that the market may not have amid peak summer demand season.

The world has lost about 13 million barrels per day (bpd) of oil supply, the International Energy Agency (IEA) said in its market report for May.

“Mounting supply losses from the Strait of Hormuz are depleting global oil inventories at a record pace,” the IEA said, adding that observed global inventories, including oil on water, were drawn down by 250 million barrels over March and April, or by 4 million bpd.

Sooner rather than later, oil on water volumes and onshore inventories will be depleted, leaving demand destruction the only buffer to cap oil price spikes.

Moreover, the extreme price volatility and the noise about a deal coming any day now are sidelining part of the trader community.

“Participants continue to sit on the sidelines, given the market's fluidity, uncertainty, and headline-driven nature,” ING’s commodities strategists Warren Patterson and Ewa Manthey said in a note on Wednesday.

“This is reflected in the aggregate open interest in ICE Brent, which has continued to trend lower and stands at its lowest level since August 2025.”

Many traders have been shorting oil since April in the hope that the ceasefire and the negotiations would yield a peace deal before the world runs out of buffers to offset most of the supply disruption.

“The buffers and the shock absorbers are being steadily drawn down, and the ability for the market to absorb this imbalance is drastically diminished today versus where we started and over the next few weeks,” Chevron’s CEO Mike Wirth said at the Bernstein 42nd Annual Strategic Decisions Conference at the end of May.

“We're likely to see those pressures flow through more directly to physical prices, and there's more upward pressure that I would expect as we get into June and certainly into July.”

According to the Wednesday note of ING’s strategists, “With no imminent deal in sight and with the global oil market tightening significantly every day, we see upside to prices, particularly if these disruptions linger into the third quarter, a period of seasonally stronger oil demand.”

Tyler Durden Fri, 06/12/2026 - 05:00

SpaceX Prices Biggest Ever IPO At $135 Per Share

While there was little doubt as to SpaceX's actual IPO price, which due to its novel structure was always going to be $135, and unlike the proposed IPO price ranges as is customary for other initial offerings, moments ago SpaceX (SPCX) made it official when it filed a free writing prospectus (FWP) which confirmed the company sold 555.6 million shares at $135 each, for a total size of $75 billion (excluding the greenshoe), making history with the biggest-ever IPO, launching it into the top ranks of the largest public companies and putting founder Elon Musk on the verge of becoming the world’s first trillionaire. For context, SpaceX is more than double the size of the previous largest IPO - Saudi Aramco’s $29.4 billion listing in 2019. The SpaceX registration statement was declared effective June 11. The details of the pricing are shown below.

At $135, SpaceX will have a market value of $1.77 trillion. Accounting for employee stock options and restricted share units, the pricing gives it a fully diluted valuation of about $1.8 trillion. SpaceX’s market value will rank it among the top 10 public companies globally, and make it larger even than Musk’s own Tesla. According to Polymarket, there is a 84% chance the IPO closes above its offering price tomorrow, and a 46% chance it rises more than 20%.

Nearly 50% odds on Polymarket that SPCX rises 20% ($2.2TN market cap) on its first day of trading, and 84% odds it closes above its offering price. https://t.co/UfN4FOlP7T pic.twitter.com/6U0S0HDyt1

— zerohedge (@zerohedge) June 11, 2026

SpaceX, which made a net loss of $4.9bn in 2025, is made up of three businesses: space exploration, including its Falcon and Starship rockets; connectivity, such as its Starlink satellite constellation providing high-speed internet access; and artificial intelligence, though its xAI division.

Musk’s fan base in the retail trading community is a crucial component of the deal: they have placed more than $100 billion in orders for the stock, Bloomberg reported, far more than the 20% of shares that had been reserved for them.

Yet not everyone is so excited. Noted short-seller James Chanos on Wednesday called it “a hopes-and-dreams IPO” driven by enthusiasm for Musk and artificial intelligence rather than the fundamentals of a company that has yet to post a profit.

“The total addressable market for space is infinite,” Chanos, founder of Chanos & Co., said at the iConnections Global Alts conference in New York on Wednesday. “You can build whatever stories you want — colonies on Mars, factories on the moon, data centers in space — to justify the valuation.”

Investment research group Morningstar calculated that SpaceX is worth only $63 a share – half the IPO price – and warns there is “a major disconnect between market expectations and underlying fundamentals”.

Michael Field, the chief equity strategist at Morningstar, suggests investors should sit out the IPO and wait for “a more attractive entry point down the line”.

“We believe the business has real strengths, particularly in Starlink, but with so many unknown and untested technologies underpinning much of the valuation price, particularly within the AI business, we think the valuation is extremely speculative,” Field said.

Still, even among the skeptic about the company’s current valuation, many acknowledge Musk’s achievements building Tesla and SpaceX into giants - and making money for investors, thanks in part to his loyal retail investor fanbase.

Coupled with rule changes that could fast track the stock into benchmark gauges like the Nasdaq-100 Index (if not the S&P where there will be at least a one year delay), demand from passive funds and retail investors unable to buy at the IPO price should set the stage for a solid cohort of buyers for shares of the rocket, satellite and AI company once they start trading.   

“It’s probably the most hopeful IPO,” said Kim Forrest, chief investment officer at Bokeh Capital Partners, adding that she doesn’t buy IPOs. Buyers of SpaceX “want to be part of the future,” she said. “And I think that’s oddly hopeful in this time when we’re moving between the poles of greed and fear.” 

As Bloomberg notes, SpaceX is the first of three major IPOs expected to capitalize on stock investors’ appetite for the leading AI companies, a seemingly insatiable demand that has propelled benchmark US indexes to records this year despite the acceleration in inflation and economic disruption caused by the war in Iran. Anthropic PBC and OpenAI, two of the company’s AI competitors, are expected to go public as soon as this year and could seek valuations of more than $1 trillion each, so the performance of SpaceX’s stock will be as closely scrutinized by Silicon Valley venture capitalists as it is by Wall Street traders. The deluge of public equity, on top of an $85 billion equity offering from Alphabet Inc. and the potential for other big-tech firms to follow suit, is triggering a debate over whether there is enough investor demand to meet the incoming supply.

“It’s a big deal as a kind of precursor for Anthropic and OpenAI,” said Anthony Saglimbene, chief market strategist at Ameriprise. “When I look at all three of those and the amount of capital that these companies are raising, it tells me that the demand for AI is still very strong even though we’ve seen more volatility. And I think some of that volatility in the market has been positioning around the expectations for these IPOs.”

A successful showing in public markets would make Musk a trillionaire, and his wealth could boom even further if he meets performance-based conditions for awards of as many as 1.3 billion additional class B shares in aggregate, split into tranches. It would be no small feat to earn all those shares. The company’s market capitalization needs to reach $7.5 trillion, it will have to complete non-Earth-based data centers capable of delivering 100 terawatts of computing power per year, and establish a permanent human colony on Mars with at least 1 million inhabitants.

Musk, who won’t be able to sell any shares until a year after the start of trading, is expected to control 84% of the voting power after the IPO. His control over SpaceX’s governance includes effectively being able to choose the board members, which means only he can remove himself as CEO.

And now that the pricing is done, we wait for the actual stock to break for trading tomorrow - with the usual several hour delay - at which point we will see if it was wise for SpaceX to issue such a small float with such a large retail participation. Notably, according to Polymarket, the odds that the IPO closes with a market cap above $2.2 trillion 

 

Tyler Durden Fri, 06/12/2026 - 04:48

France Is Latest EU Country To Ban & Sanction Israel's Finance Minister

A growing list of Western countries have imposed individual sanctions and travel bans on two Israeli hardline ministers who advocate for Jewish supremacy over the Middle East, evidenced in their expansionist policies from the West Bank to Gaza to Syria.

The two in question are Minister of National Security Itamar Ben Gvir and Israeli Finance Minister Bezalel Smotrich. France is the latest country to ban Smotrich, after the United Kingdom, Australia, Canada, New Zealand and Norway already did the same.

via EPA

Spain, Slovenia and most recently Ireland have also banned both, citing that they call for violence against Palestinians on the basis of their ethnic identity. 

French Foreign Minister Jean-Noel Barrot this week explained that France is banning Smotrich because he "actively promotes the annexation of the West Bank, which he openly claims, the creation of new settlements in the West Bank, the re-colonization of Gaza, the economic collapse of the Palestinian Authority and its harmful consequences for the Palestinian population."

"This is a policy that the overwhelming majority of the international community, firmly committed to the two-state solution, cannot accept," Barrot wrote on X.

The legal action targets "those responsible for the escalation of settlement activity and violence in the West Bank," Barrot said.

As expected, Israel's foreign ministry in turn quickly condemned the sanctions as "disgraceful."

The Israeli "government has condemned some settler violence, but that rings hollow when there is scant accountability" - the UK had earlier said of similar measures it adopted.

Smotrich as national finance minister bluntly stated last year that the Gaza Strip is a "real estate bonanza." Further he claimed at the time that he was talks with the Americans on how to divide the enclave up once the Palestinians are kicked out.

There is "a real estate bonanza" in Gaza that "pays for itself" and he had "already started negotiations with the Americans," he said at a past conference in Tel Aviv, according to local media.

"We have poured a lot of money into this war. We have to see how we are dividing up the land in percentages," Smotrich said, explaining that "the demolition, the first stage in the city’s renewal, we have already done. Now we just need to build."

Tyler Durden Fri, 06/12/2026 - 04:15

CJ Hopkins: How I Learned To Stop Worrying And Love The New Normal Reich

Authored by CJ Hopkins via ConsentFactory.org,

So the German Supreme Court has ruled on my case. Their ruling is that they will not rule on my case. They sent my attorney a letter to that effect. It literally says:

“The constitutional complaint will not be accepted for a ruling. No explanation is provided. This ruling is incontestable.”

So I am now officially a “hate criminal” in Germany. I was already pretty much a “hate criminal” in Germany, but now it’s official. This is Germany’s supreme court. There is no higher court to appeal to.

OK, sure, there’s the European Court of Human Rights, the international court of the Council of Europe in Strasbourg, but it doesn’t have the power to enforce its rulings, and the German authorities and courts have made it clear that they couldn’t care less about anyone’s opinion of their paranoid and authoritarian behavior.

So I’ll be going back to Berlin District Court for sentencing.

I was originally acquitted by the Berlin District Court, but the district prosecutor wasn’t happy with that verdict, so the prosecutor appealed to the Berlin Appellate Court, which overturned my acquittal, which prompted me to appeal to the Federal Constitutional Court (i.e., the Bundesverfassungsgericht, Germany’s supreme court) which has now basically told me to go fuck myself, so now I have to go back to the court that acquitted me to be sentenced for the crime I didn’t commit.

I assume that most people reading this column are familiar with my case by now, but, if you’re not, here are a few of my previous columns and some press coverage that will bring you up to speed.

Press coverage:

What Happens Where Free Speech is Unprotected, The Atlantic
Where “hate speech” censorship is worse than on U.S. campuses, Washington Post
Satirist C.J. Hopkins Sentenced in German Speech Case, Racket News
Der Provokateur, Die Zeit
Meinungsfreiheit in Gefahr durch Strafjustiz in Deutschland, Neue Zürcher Zeitung
Autor C.J. Hopkins verurteilt, Berliner Zeitung
Der kafkaese Prozess gegen C.J. Hopkins, Multipolar
The American Author Living An Orwellian Nightmare, Discourse Magazine
Scandalous verdict: US author C.J. Hopkins found guilty, Aya Velázquez
„Das ist verrückt,“ Multipolar
The Thought Police Are Here, Crisis Magazine

My columns:

The Global Crackdown on Dissent
Modern Book Burning in New Normal Germany
A Visit by the German Thought Police
Fear and Loathing in New Normal Germany
The People’s Court of New Normal Germany
The Verdict
The Criminalization of Dissent (Revisited)

The short version is, back in 2022, I posted two tweets protesting the Covid mask mandates, and I put the cover art of my book, The Rise of the New Normal Reich, in those tweets. The German authorities didn’t appreciate that, so they censored the tweets, banned my book, and prosecuted me for “disseminating propaganda, the contents of which are intended to further the aims of a former National Socialist organization.” I would include an image of the cover of my book, but, if I did, the German police would probably raid my house again and steal my new computer.

However, here’s the cover of an issue of Der Spiegel …

My book cover art is more or less exactly like that, except the swastika on my book is behind a medical-looking mask, instead of a German flag, as on the Spiegel cover.

It goes without saying that the German authorities are not prosecuting Der Spiegel for “disseminating propaganda, the contents of which are intended to further the aims of a former National Socialist organization.”

If you’re wondering why the German supreme court decided not to rule on my case, and why the judges refused to provide any explanation for their decision … well, just imagine if they had been forced to explain, in writing, for the record, why the Spiegel cover is legal, but the cover of my book is a “hate crime.”

That might have been a bit embarrassing, professionally.

I don’t want to antagonize the supreme court, or the Berlin district prosecutor, or any other German authorities, or they’ll send the police to raid my home again, but, if you happen to be a journalist, and you want to ask them to explain the difference between the Spiegel cover and the cover of my book, the judge you want to talk to is Professor Doctor Stephan Harbarth, LL.M. (Yale). He’s the big honcho at the German supreme court, and is the one who was in charge of reviewing my appeal.

And you could also ask Stephan about my second appeal, or constitutional complaint, as they call it here in Germany. That one is regarding the police raid of my home, and the confiscation of my computer, and the German authorities’ attempt to force me to stop distributing my book worldwide. As I noted, they already banned it in Germany.

That appeal, or complaint, is still pending at the supreme court. I’m certain, after he reads this column, the professor will make sure that it receives proper consideration according to the German constitution, and the rule of law, and basic democratic principles, which the Federal Republic of Germany holds in the highest regard.

Oh, and, if you live in Germany, and want to read more about my prosecution, and other adventures with the New Normal authorities, you can buy my book, Fear and Loathing in the New Normal Reich, which was published by Skyhorse Publishing last year. The Germans haven’t banned that one yet.

I imagine they’ll get around to it eventually.

Tyler Durden Fri, 06/12/2026 - 03:30