Zero Rss

WTI Holds Rebound Gains As US Fuel Exports Hit Record High, Production Dips, Huge SPR Drain

Oil prices are lower overnight (but dramatically off their lows) amid on-again, off-again optimism of an imminent US-Iran peace deal.

Benchmark Brent fell as much as 12% to $96.75 a barrel in London, while West Texas Intermediate dropped up to 13%. European natural gas plunged as much as 14%.

Oil and gas later pared about half of those losses after Trump said in a Truth Social post on Wednesday that if Iran doesn’t agree, “the bombing starts.”

Overnight we saw huge across the board drawdowns in US energy inventories reported by API (and a huge SPR drain). All eyes on the official data this morning...

API

• Crude -8.1mm (-2.8mm exp)

• Cushing -1mm

• Gasoline -6.1mm

• Distillates -4.6mm

DOE

• Crude -2.313mm (-2.8mm exp)

• Cushing -648k

• Gasoline -2.504mm

• Distillates -1.294mm

For the second week in a row, US inventories saw significant declines across the board with products seeing the biggest draws. Crude's drawdown was a modest disappointment (especially after API's big report)...

Source: Bloomberg

Overall, crude stockpiles remain elevated (but are drawing down)...

Source: Bloomberg

Perhaps most notably, the Strategic Petroleum Reserve (SPR) is seeing massive drawdowns to support the global loss of supply from Hormuz.

Source: Bloomberg

On the back of that draw, Bloomberg's energy guru, Javier Blas, dropped this stunning chart showing that, on a 7-day moving average, global oil liftings (into tankers) have recovered to their pre-war level due to a surge in liftings in the Americas. Of course, that's helped by massive stock drawdowns / SPR drain, but still...

Additionally, last week saw US crude exports actually decline (after nearing the unprecedented level of 100 million barrels in 7 days). The decline in crude cargoes headed overseas pulled down overall US oil and fuels exports from record high levels also set the week earlier, even as fuel exports rose to the highest weekly level ever.

Source: Bloomberg

The US has sent out at least 1.5 million barrels of diesel a day since the week of April 3.

US crude production continued to trend lower...

Source: Bloomberg

WTI fell dramatically below $100 overnight but amid Trump's 'bombastic' comments and Iranian denials, pries are well off their lows

“The oil price is reacting on shift in sentiment instead of market balances, driven by news of a potential deal between the US and Iran,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich.

“It remains unclear when flow through the strait would resume.”

Still, any breakthrough in peace talks will take much longer to filter through to energy markets.

“When the Strait opens we do believe it will take half a year for oil to get back to normal,” Equinor Chief Financial Officer Torgrim Reitan said on the company’s quarterly earnings conference call.

“For gas, it will take much longer.”

And that's important for the Midterms...

The 4-week moving average for US gasoline implied demand ticked higher week-on-week, but the more volatile weekly data showed a weekly decline and dipped below the 5-year average.

It is too early to tell, but elevated gasoline prices could be finally eating into demand.

Trump has repeatedly claimed prices will come down rapidly once the Strait is reopened - we shall see.

Tyler Durden Wed, 05/06/2026 - 10:40

UBS Says Transport Stock Rout Is "Overdone" After Amazon News

UBS senior analyst Tom Wadewitz, who covers freight transportation, told clients that Amazon's latest push to open its supply chain network to businesses beyond its own marketplace triggered an "overdone" sell-off in transport names, including UPS, FedEx, and C.H. Robinson.

Wadewitz said the risk is not new, noting that Amazon's supply chain service has been around since 2023. He said the pullback has created attractive entry points in select transport stocks, particularly UPS, FedEx, and C.H. Robinson.

"While we view AMZN's strategy of selling transportation services as a negative for transports generally, it is not a new risk and the supply chain service is also not new. We believe the significant sell-off in transport names was overdone," Wadewitz said.

The main risk is in B2B parcel, Wadewitz said, adding that Amazon's growing third-party shipping ambitions could pressure UPS and FedEx over the medium term.

However, he said the threat is not a surprise, since Amazon has been active in parcel delivery for years. He also noted that there is limited near-term risk in international express because Amazon's air fleet is mostly domestic narrow-body aircraft.

The immediate market reaction in transport stocks, including UPS, FedEx, and C.H. Robinson, to Amazon's news was a roughly 10% drop at the start of the week. Some of those losses had been recovered by mid-week.

Wadewitz explained to clients why the "pullback creates attractive entry points for UPS, FDX, and CHRW" ...

We believe the cost reduction and network efficiency initiatives of UPS and FDX support margin improvement and EPS growth on a multi-year basis. While AMZN's focus on growing in transport markets is a risk, we also don't view it as a new risk.

In our view, investors already assume that the addressable domestic parcel market for UPS and FDX is a slow growth market (eg in part due to impact of AMZN).

We view the ~10% pullbacks in UPS and FDX as providing attractive entry points.

With respect to CHRW, we do not expect AMZN's supply chain initiative to have a noticeable impact on the brokerage market which is already a highly competitive market. We expect the combination of an upcycle in truckload pricing and acceleration in labor productivity for CHRW in 2H26 to support attractive EPS growth and support upside for the stock. We would also recommend buying CHRW on the pullback in the stock.

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

Tyler Durden Wed, 05/06/2026 - 10:30

Israel Says Preparing For Escalation With Iran, Didn't Know Deal Was Close: 'Series Of Targets Ready'

Wednesday saw yet another early morning Axios 'scoop' that within hours of being issued proved premature and too out front, given talk of Iran and the US being 'close' to a deal was quickly denied by Tehran and even President Trump quickly acknowledged it's "too soon" to plan peace talks with Iran.

But the headline of "US and Iran closing in on one-page memo to end war" was enough to raise alarm bells in Israel, which has insisted that the conflict must end with a nuclear-free Iran.

Maj. Gen. Eyal Zamir, via IDF/TOI

"Israel was unaware that US President Donald Trump was close to reaching an agreement with Iran to end the fighting and open the Strait of Hormuz," an Israeli official told Army Radio soon after the optimistic peace deal headlines went international.

"We were preparing for an escalation," the official said. Indeed the last couple weeks of stalled Pakistan-mediated talks have seen several reports out of Israel saying the Netanyahu government is waiting for the 'green light' from Washington to renew the aerial bombing campaign, which took place over prior 38 days as part of Operation Epic Fury.

But as of Tuesday Secretary of State Marco Rubio announced that Epic Fury was ending, and that Project Freedom - to open the Strait of Hormuz - is the new focus. But even after that President Trump in the evening announced a 'pause' to allow negotiations to proceed.

So there has been much confusion and contradictory signaling out of Washington to say the least. Tehran has meanwhile made clear its "finger is on the trigger" - but Israel is also saying the same thing.

For example, IDF Chief of Staff Lt. Gen. Eyal Zamir on Wednesday made it known that military has a "series of targets" ready to strike in Iran at the moment the war resumes.

"Cooperation with the United States military and coordination continue at all times, and we are monitoring the situation," he stated during a visit to southern Lebanon, where Israel ground forces are occupying territory.

"In Iran, we have a further series of targets ready for attack. We are on high alert to return to an intense and broad campaign that will allow us to deepen our achievements and further weaken the Iranian regime," Zamir said further.

Kind of wild that Barak Ravid has predicted seven of the last zero peace deals between the US and Iran.

— Justin Logan (@JustinTLogan) May 6, 2026

As for anti-Hezbollah operations, and despite the Lebanon ceasefire officially in effect, the top military general said: "We will seize every opportunity to deepen the blow to Hezbollah and its continued weakening."

None of this bodes well for a lasting ceasefire in Lebanon, also as the broader Iran ceasefire is certainly on shaky ground, given this week's cross-Gulf attacks on UAE out of the Islamic Republic.

Tyler Durden Wed, 05/06/2026 - 10:15

U.S. Gasoline Tops $4.50 As "Shock & Awe" Level Approaches

WTI futures plunged more than 11% to the $90-a-barrel level after Axios reported earlier this morning that the U.S. is nearing a preliminary agreement with Iran to end the war. The sharp decline suggests traders are beginning to price in a potential geopolitical de-escalation and the potential reopening of the Hormuz chokepoint.

At the pump, however, the latest AAA data as of Wednesday morning show that the national average for regular 87-octane gasoline has climbed to $4.50 a gallon, the highest level since July 2022.

There will be a lag. Even if the Trump administration and Tehran formalize a deal in the near term, the immediate result will not be a collapse in gas and diesel pump prices, but rather an approaching peak.

Lower crude prices typically take a few weeks to work through wholesale markets, inventories, distribution networks, and retail outlets before meaningful declines in gas and diesel are visible at pump stations to consumers.

During a Monday press conference, Trump said he expects the price of gasoline to drop "substantially" following the end of the US-Iran war.

"I see it going down very substantially when this is over, I think very rapidly too, at levels that you've never seen because there's a lot of energy out there, ships all over the world that are loaded up with it," Trump said.

"They can't do much with it because they got kidnapped by a pretty evil place. But we're taking care of it."

Last week, Trump said pump prices would "come crashing down as soon as this war is over."

GasBuddy analyst Patrick De Haan warned that the $5-a-gallon threshold is typically the "shock and awe" level that triggers demand destruction.

With the national average for gas already near $4.50 a gallon, and California prices above $6, the political and consumer pressure backdrop for the Trump administration has intensified in recent weeks.

The administration now appears to be pushing hard for a near-term Iran resolution ahead of Memorial Day weekend, one of the largest U.S. driving periods of the year after Thanksgiving.

Tyler Durden Wed, 05/06/2026 - 09:40

Treasury Refunding: No Changes To Auction Sizes; Bessent Keeps "At Least" In Forward Guidance

In our preview to this morning's Quarterly Refunding Statement, we said that we do not expect major changes and that, at most, the treasury might adjust its statement language to soften the forward guidance on possibly futures increase in coupon auction sizes with one likely change would be dropping “at least” while retaining the expectation for unchanged coupon sizes over “the next several quarters” (recall Deutsche Bank said it expects nominal coupon increases beginning in February 2027). 

Overnight, JPMorgan agreed, writing that while the current auction calendar will leave Treasury well financed through FY27, "we do not think it will be adequate to meet the widening funding gap from FY27 and onward, and we continue to project a series of coupon auction increases beginning in February 2027." Accordingly, like DB, JPM also expected the Treasury to remove “at least” from the statement that “Treasury anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters." The bank said that If its expectations are realized, "we think this could push intermediate yields higher."

Well, moments ago the Treasury published its latest Quarterly Refunding Announcement, and contrary to prevailing expectations, it refused to make even a gentle hint at rising coupon sizes by keeping the "at least" language from the abovementioned statement, instead keeping it as is, or rather as was: 

Based on current projected borrowing needs, Treasury anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters

In other words, the US Treasury signaled again that it’s still comfortable using Yellen's Activist Treasury Issuance playbook to issue Bills, and not increase coupon issuance, to meet escalating government borrowing needs, even as warnings emerge about the strategy’s risks.

Ahead of the QRA, dealers were divided heading into the so-called quarterly refunding release on whether it might alter its guidance. Outsize US fiscal deficits make an expansion in longer-dated auctions practically inevitable at some stage. The department on Monday boosted its estimate for net borrowing this quarter amid lower net cash flows.

US debt managers have been using the same forward guidance since early 2024, in a policy that’s steadily boosted the share of bills of total debt outstanding (to roughly 22% from 14% before covid). The International Monetary Fund cautioned last month that this leaves federal debt costs more vulnerable to sudden swings in rates and shifts in sentiment, because auctions are more frequent.

And sure enough, with no changes to the forward guidance:

• *TREASURY YIELDS EDGE LOWER AFTER UNCHANGED GUIDANCE ON AUCTIONS

The rest of the statement was also in line with expectations, with the Treasury stating "it believes its current auction sizes leave it well positioned to address potential changes to the fiscal outlook and to the size and composition of the SOMA portfolio." It added that it was monitoring SOMA purchases of Treasury bills and growing demand for Treasury bills from the private sector.  And, as before, looking ahead the treasury continues to evaluate potential future increases to nominal coupon and FRN auction sizes, with a focus on trends in structural demand and potential costs and risks of various issuance profiles. 

Looking at the actual refunding auctions next, the Treasury’s refunding debt sales will total $125 billion, unchanged from the sum unveiled in February and in line with the expectations of Wall Street bond dealers.

Treasury also maintained guidance on coupon sizes for the coming quarters. Refunding issuance to raise new cash of approximately $41.7BN (offering $125BN to refund $83.3BN).

• Treasury to sell $58bn of 3-year notes on May 11
• Treasury to sell $42bn of 10-year notes on May 12
• Treasury to sell $25bn of 30-year bonds on May 13

The table below presents the actual auction sizes for the February to April 2026 quarter and the anticipated auction sizes for the May to July 2026 quarter: 

The total compares to a peak of $126BN first reached in Feb. 2021; auction sizes across the curve began rising in 2018 to finance tax cuts and surged in 2020 to finance the federal pandemic response, and to give the Fed's QE X securities to buy.

Here are some other highlights from the Refunding report: 

Bills

• Treasury expects to further increase offering sizes of shorter-dated benchmark bills over the coming weeks and, in late-May, anticipates issuing a short-dated CMB to meet the peak liquidity needs at the end of May due to maturing coupon securities.
• Given projections for receipts associated with the mid-month corporate and non-withheld tax date, Treasury expects to implement modest reductions to short-dated bill auction sizes during the month of June. 
• Thereafter, in July, Treasury anticipates incrementally increasing bill auction sizes across the curve.  As always, Treasury will continue to evaluate near-term borrowing needs and assess additional adjustments to bill auction sizes as appropriate

TIPS

• Treasury plans to maintain the 10-year TIPS reopening this May at $19 billion; the five-year TIPS reopening in June at $24 billion; and the 10-year TIPS new issue at $21 billion in July

20-year

• Treasury is modifying settlement timing for 20-year bond reopening auctions.
• From the reopening auction scheduled for June 16th, 20-year reopening auctions will settle on the Friday of the auction week, while new issues will continue to settle at month end.

Buybacks (lowers cash management buybacks in 1mth-2-year, maintains liquidity support buybacks)

• Expects to purchase up to USD 38bln in off-the-run securities across buckets for liquidity support (unchanged) and up to USD 25bln in the 1-month to 2-year maturity bucket for cash management purposes (prev. USD 75bln in Q1).

Cash Balance

• Treasury is assuming a $900 billion cash balance at the end of June.
• Treasury estimates that the size of the Treasury General Account (TGA) could peak at $1 trillion (plus or minus $50 billion) in late July.  This figure is consistent with Treasury’s long-standing cash balance policy and is driven by the large outflows expected to occur at that time. 

TBAC Minutes

• Director Pietrangeli says while current issuance sizes are adequate to cover expected borrowing needs for the remainder of FY2026 (prev. Treasury is slightly overfunded in FY2026)
• The median primary dealer forecast for privately-held net marketable borrowing implies a USD 1.3tln funding shortfall in FY2027-28 based on current coupon auction sizes and bill supply (prev. saw USD 1.1trln).
• Debt Manager Jensen says dealers generally anticipate that nominal coupon auction sizes might next increase in early CY2027 (prev. late CY 2026 or CY early 2027), and expect Treasury to modify its forward guidance several quarters ahead of such a change.
• The TBACCommittee unanimously recommended that Treasury maintain nominal coupon, FRN, and TIPS auction sizes at current levels
• TBAC continues to believe that increases in coupon issuance could be warranted in FY2027 and discussed potential changes to the forward guidance for Treasury to consider
• Committee had a "healthy debate" whether Treasury should consider investing excess cash in the overnight Treasury repo market to generate investment returns while “maintaining prudent risk management and avoiding market disruptions”
  • Key design choices mentioned by Committee members include the time of day that Treasury deploys cash into the repo market, the specific market segment that Treasury would invest in (e.g., triparty, centrally cleared), and Treasury’s required return
  • Presenter stressed that the economic viability of investing in the repo market is dependent on the spread between the rate Treasury earns on repo investments and the Federal Reserve’s interest on reserve balances rate (IORB)
  • Committee agreed that while there are potential economic returns from such investments, their size and economic viability depend on the market environment and monetary policy, and that additional study is warranted regarding operational and implementation considerations
• Committee discussed the expansion of central clearing in Treasury securities market and the presenter reviewed key areas of progress by both the industry and regulators since the extension of the implementation deadlines, noting the recent increase in central clearing activity
• Presenter highlighted recent requests for exemptions related to certain inter-affiliate and extraterritorial transactions as key outstanding issues to resolve
• Presenter concluded that, although the industry has made steady progress, some operational and implementation challenges remain as the market transitions to expanded central clearing

Tyler Durden Wed, 05/06/2026 - 09:24

NANO Nuclear Soars On Strategic MOU With Supermicro For Powering AI Data Centers 

NANO Nuclear and Supermicro have agreed to explore the integration of NANO’s KRONOS microreactor system with Supermicro’s AI server and data center platforms for scalable nuclear-powered solutions. The news of the strategic collaboration - a critical moment in the integration of alternative energy source within the AI rollout - sent the stock soaring in pre-market

We anticipate the shorts are also taking notice with over 22% of shares loaned out…

“The AI revolution is fundamentally an energy challenge,” said Jay Yu, Chairman and President of NANO Nuclear, “and we believe nuclear power is the only scalable solution capable of meeting that demand.”

Through this MOU, NANO Nuclear and Supermicro will explore opportunities to:

• Deploy NANO Nuclear's microreactors to provide dedicated, on-site nuclear power for data centers.
• Integrate Supermicro's AI server racks, cooling systems, and infrastructure with nuclear-powered energy solutions.
• Develop joint go-to-market strategies for hyperscale, enterprise, and edge data center customers.
• Enable a new class of self-powered, grid-independent AI infrastructure.

"This is exactly where the future is heading compute and power becoming a unified solution," said James Walker, Chief Executive Officer of NANO Nuclear. "By aligning with Supermicro, NANO Nuclear is stepping directly into the center of one of the fastest growing and most capital-intensive markets in the world."

By partnering with Supermicro, NANO Nuclear gains direct alignment with a company at the forefront of the AI infrastructure buildout, providing:

• Access to global data center customers and hyperscale operators.
• Integration pathways with state-of-the-art AI hardware ecosystems.
• A channel into one of the fastest-growing sectors of the global economy.

NANO is able to lean into their significant progress of deploying a KRONOS microreactor at the University of Illinois. The company recently submitted their construction permit application for the project and is well into the site preparation phase.

The company has also made strides with new partnerships in the Asian market, and has an agreement with BaRupOn for up to 1 GW of KRONOS microreactors for a data center campus in Texas. 

Tyler Durden Wed, 05/06/2026 - 09:00

OpenAI Co-Founder Greg Brockman Defends Company's For-Profit Pivot... And His Own $30 Billion Payday

Authored by Beige Luciano-Adams via The Epoch Times,

In the second week of a high-profile jury trial that could have profound impact on the race for artificial intelligence, OpenAI president Greg Brockman rejected allegations that he and other co-founders betrayed the company’s philanthropic mission and illegally enriched themselves by flipping the non-profit lab into a for-profit corporation.

Tesla CEO Elon Musk in 2024 sued Brockman and CEO Sam Altman, alleging they bilked him of $38 million in donations then restructured as a for-profit corporation by exclusively licensing their flagship product to Microsoft—betraying a founding mission to operate as an open-source charity that would counter the risks of profit-driven AI.

OpenAI and Microsoft deny the allegations, arguing that Musk abandoned the company in 2018 to start his own for-profit competitor, xAI, when other founders rejected his bid to take full control of the operation.

“I think we’ve been very consistent on the mission,” Brockman told a federal court in Oakland.

“If you look at what we’ve accomplished—currently the foundation has $150 billion worth of OpenAI equity value. That’s something we’ve built through hard blood, sweat, and tears through all this time since Elon left.”

The company’s nonprofit foundation has a 27 percent stake in OpenAI’s for-profit corporation; Microsoft, which has invested more than $13 billion since 2019, owns 26 percent.

Called as an adverse witness for the plaintiff, Brockman over two days May 4–5 offered testimony outlining an alternate narrative and timeframe than the one Musk presented the week prior.

Brockman also attempted to add context to what he has claimed were “cherrypicked” segments of his personal diary, unsealed during the discovery process.

He often spoke in incomplete sentences, punctuated by stock phrases like, “We were solving for the mission.”

Arguably, this had less zing to it than, “You can’t just steal a charity”—a phrase Musk favored in his own testimony.

‘Morally Bankrupt’

Musk’s attorney Steven Molo grilled Brockman on a series of diary entries from 2017 and 2018, a time of intense negotiations with Musk over the future structure of the company.

In one from 2017, Brockman muses, “It’d be wrong to steal the nonprofit from [Musk] and turn it into a B-Corp without him—doing so would be pretty morally bankrupt.”

Brockman denied this contradicted his commitment to OpenAI’s mission. “I think I meant it would actually serve the mission, but it would be hard to look at yourself in the mirror,” he told the court.

Under cross-examination, he explained he was referring to the idea of voting Musk off the board of directors, which he had considered at the time.

“It had been made clear to us,” he said, “that if we didn’t come to [Musk’s] terms, he was going to start an AGI competitor.”

Artificial General Intelligence (AGI) is the hypothetical point at which digital intelligence reaches or surpasses human cognitive abilities and can operate autonomously.

Some, including Musk, believe we have already achieved an early version of it, and that AGI advancement in the wrong hands poses the greatest existential threat to humanity. Musk testified that this threat was the express motivation for creating OpenAI as an open-source, nonprofit lab.

From late 2017 to early 2018, Musk, Altman, Brockman, and Ilya Sutskever, another OpenAI co-founder and its former chief scientist, floated various ideas as they debated how to fund the project at a competitive level.

Musk, the main donor, rejected an even equity split among the four co-founders, instead proposing a deal that would give him majority stake, to be diluted as more investors joined.

Brockman said he and Sutskever were willing to accept Musk being CEO and having a majority stake. “But the one thing we could not accept was to hand him unilateral total control over the AGI.”

Musk was the wrong man for the job, according to Brockman.

“Look, he knows rockets, he knows electric cars, he did not and I believe does not know AI,” Brockman said of the Tesla and SpaceX CEO.

“And Ilya and I did not think he was going to spend the time required to actually get good at it.”

Brockman alleged Musk “didn’t recognize that spark” in early language models underlying the GPT technology. “It was there, a working version, we could see the promise. … We really needed someone running the company that had that effect.”

Molo pressed the witness, pointing to emails from Musk proposing a 16-person board for the new corporation, in which Musk would have a 25 percent influence.

“This is the man you’re saying wanted to be the AI tyrant and have absolute and total control?” Molo probed.

“He wanted a board, and conducted in a way you were not familiar with because you didn’t have the experience of corporate governance, did you?”

Brockman acknowledged, “Definitely, this is something I was new to,” but maintained that there was never a real plan for Musk to relinquish control.

In a January 2018 email to Musk and others, Brockman stressed that a moral high ground was “our best tool,” and to maintain it, the company should endeavor to remain a nonprofit. “AI is going to shake up the fabric of society, and our fiduciary duty should be to humanity.”

But back in November 2017, Molo pointed out that Brockman’s diary entries show he was worried about how it would look if the founders continued to say they were committed to a nonprofit while planning to convert to a for-profit.

“Cannot say that we are committed to the nonprofit. Don’t wanna say that we’re committed. If three months later we’re doing b-corp then it was a lie,” Brockman wrote. “Can’t see us turning this into a for-profit without a very nasty fight.”

When Musk issued an ultimatum in 2018 to “either go do something on your own or continue with OpenAI as a nonprofit,” Brockman said he was “devastated.”

“It felt like we were so close to something that could actually succeed at the mission … and it was all blown up.”

$30 Billion Question

Molo accused Brockman of plotting to use OpenAI to become a billionaire, this time referencing journal entries made six days after he’d told Musk he wanted to continue to fundraise for the nonprofit, in which he asks, “What will take me to $1 billion?”

“There’s a lot of context here,” Brockman said. “It was expression of a frustration, not a plan.”

He described it as a “fork in the road,” where he would either accept Musk’s terms or part ways with him.

The road without Musk led Brockman to a $30-billion equity stake in OpenAI’s for-profit corporation. But Brockman said it was not about the money: “I think I’d be happy with either of those routes,” he said in court.

Molo pounced. Why then, if he was “good with a billion,” would Brockman not donate the extra $29 billion to the nonprofit to which he had a fiduciary duty?

“That was really about picking between these two roads … which one will I actually be happy with? ... Feel enthusiastic getting out of bed, and do [sic] the work every day?” Brockman said.

“It takes $30 billion to get you out of bed in the morning, but $1 billion doesn’t get you out of bed?” Molo asked. “You had a fiduciary duty. … You took the assets from the nonprofit, you moved them into the for-profit to create this money-making machine that resulted in you having $30 billion.”

Implying that he raided the charity to enrich himself was “a deep mischaracterization,” Brockman said.

Molo also grilled Brockman on a commitment he made to donate $100,000 to the nonprofit but never delivered—and on billions in deals that OpenAI has secured with at least three other companies in which Brockman has an ownership stake.

The plaintiff’s attorney also highlighted a 2017 “side deal” in which Altman gave Brockman around $10 million of equity in the company holding assets of his personal family office.

When pressed, Brockman said he didn’t conceal this from Musk.

“Elon’s time was relatively hard to get, there were a lot of decisions to make that we weren’t able to broadcast to him,” he told the jury.

Sam Altman listens as OpenAI President Greg Brockman testifies during Elon Musk's lawsuit trial over OpenAI's for-profit conversion before U.S. District Judge Yvonne Gonzalez Rogers at a federal courthouse in Oakland, Calif., on May 4, 2026, in a courtroom sketch. Vicki Behringer/Reuters

Origins

Under cross-examination, Brockman told a story about the beginnings of OpenAI—from which Musk was conspicuously absent.

The spark, he said, began at a small dinner party in Menlo Park, where attendees considered whether it was too late to create an AI lab that could compete with Google’s Deep Mind project—at the time, the world leader in AI. That was in July 2015.

Musk was there, Brockman said, but the real catalyst was an agreement between himself and Altman, the same night, that “this was the most important thing we could imagine doing.”

He got to work, acting along with Altman as “the main drivers” of the project.

By November, they had assembled a list of 10 names for an “offsite” event in Napa Valley, nine of whom ended up joining OpenAI’s team. “It was an amazing day of creative energy, people really clicked,” Brockman said. So much so that, as their van remained stalled in traffic for 1.5 hours, “no one noticed because the conversation was so good.”

Brockman said he had no contact with Musk between the dinner and the offsite. “I expected he would donate,” he said of the Tesla founder, suggesting his role was relegated to little more than closing calls and occasional advice.

Under re-direct, Molo challenged this characterization.

“I know he wasn’t in the van with you guys on the highway, but he was instrumental in founding and kickstarting OpenAI, was he not?” Molo said, noting that Musk provided the dominant funding, vision, and leveraged his formidable relationships to recruit talent and resources.

Mission Creep

Brockman also denied that Musk was concerned with open-sourcing the company’s technology, or keeping it as a non-profit forever.

By the time the company made its public launch in December 2015, Brockman said, Musk was already considering they might need to add a for-profit corporation in order to be competitive. But the Tesla CEO’s concurrent pledge to donate $1 billion never materialized.

Musk donated an estimated $38 million to OpenAI from 2015 through 2020.

OpenAI’s mission statement, posted in 2015, notes a goal of advancing digital intelligence “in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return.”

Brockman edited the original, in which Musk had used the word “unencumbered.”

“I understood this as a lack of constraint, we had a lot of freedom. We had not made commitments,” Brockman said Monday.

In 2023, the year Microsoft invested $10 billion in OpenAI’s for-profit subsidiary (the company restructured in 2025 to its current form, a public benefit corporation), Brockman wrote the board with a proposed change to the OpenAI charter, indicating he had been “wrong at times” about the original set up, and that “we’ve grown to regard capitalism not as a constraint, but instead, as a positive force,” according to evidence presented by Musk’s attorneys.

The Board never approved the updated charter, but Musk’s team argues it articulates a marked shift—away from OpenAI’s mission.

“No way Microsoft is giving that as a donation in any kind of charitable way,“ Musk testified last week, recalling his thoughts at the time. ”This is a bait and switch.”

Realizing that the non-profit would be “subservient” to the for-profit, he said, “This is when I thought there had been a breach of charitable trust.”

Brockman testified he never made any commitments to Musk that OpenAI would remain a nonprofit, nor that it would continue to open source its technology.

Musk is asking that OpenAI be reverted to a nonprofit, that more than $100 billion in damages be returned to it, and that Altman and Brockman be removed from their leadership roles.

U.S. District Judge Yvonne Gonzalez Rogers Judge Yvonne Gonzalez Rogers told the jury on May 5 that she expects all evidence to be presented by early next week, at which point they may begin their deliberation.

Tyler Durden Wed, 05/06/2026 - 08:45

Corning Shares Erupt On Nvidia Deal To Supercharge Fiber Optics Output By 10x

U.S.-based glass company Corning soared in premarket trading in New York after announcing a new mega deal with Nvidia to expand manufacturing capacity for fiber optic production used in AI data centers.

"Corning will increase its U.S.-based optical connectivity manufacturing capacity by 10x and expand its U.S. fiber production capacity by more than 50% to meet the accelerating demand driven by AI factory buildouts," Nvidia wrote in a press release. 

The expansion includes three new manufacturing plants in North Carolina and Texas and is expected to create more than 3,000 high-paying U.S. jobs.

In a filing, Corning disclosed that Nvidia is making a $500 million equity-linked investment.

Under the deal, Corning issued Nvidia two warrants:

• Traditional warrant: Nvidia can buy up to 15 million Corning shares at $180 per share.

• Pre-funded warrant: Nvidia can buy up to 3 million Corning shares at a nominal exercise price of $0.0001 per share.

Both warrants are exercisable immediately and expire within three years, unless earlier triggered by the termination of the partnership agreement or a major M&A transaction.

Nvidia noted, "Corning's expanded capacity will supply the optical connectivity hyperscale data centers use to deploy NVIDIA-accelerated computing at scale." 

In premarket trading, Nvidia shares are up 2.4%, while Corning shares are ripping higher, up 20%.

The Corning-Nvidia deal to expand fiber-optic production to supply data centers comes as hyperscalers are set to spend $700 billion this year alone on data center buildouts.

UBS trader Robert Ruple told clients last week that "there was a mixed bag of hyperscaler prints that leaned generally constructive and nothing he would call out that really shifts the narrative. Most critical was that Microsoft, Alphabet, and META all lifted capex forecasts, which should be enough to keep the AI thesis in play." Read the full note here.

However, we must point out: "Banks Are Choking": The AI Debt Bubble Has Started To Burst ... 

Tyler Durden Wed, 05/06/2026 - 08:30

Deja Vu All Over Again: Futures Surge, Oil Tumbles On Iran Deal Optimism, Tech Rally

US equity futures are up big this morning and making fresh all time highs, led by tech companies, while oil prices and bond yields fell sharply on optimism that the US and Iran are nearing a peace deal. As of 8:00am Nasdaq 100 futures jumped 1.7% while those for the S&P 500 gained 1%, with both gauges set to build on record highs. Iran is evaluating a new proposal from the US to end their near 10-week war, according to an Axios report. If Tehran accepts the terms, it will lead to a gradual reopening of Hormuz and lifting of the American blockade on Iranian ports. Brent tanked 11% to below $98 a barrel. That comes as US gasoline prices topped $4.50 a gallon for the first time since July 2022. The yield on 10-year Treasuries dropped eight basis points to 4.35%. In the UK, the rate on two-year UK gilts tumbled 17 basis points. The dollar hit the lowest level since February, while gold topped $4,700 an ounce. Bitcoin rose for a seventh straight day. US economic data calendar slate includes April ADP employment change at 8:15am. Fed speaker slate includes Musalem (9:30am) and Goolsbee (1pm)

In premarket, most Mag 7 names are higher: Alphabet (GOOGL) climbs 1.6% after the Information reported that AI startup Anthropic plans to spend about $200 billion with Google over five years (Amazon +1%, Apple -0.5%, Nvidia +2.5%, Meta +0.5%, Microsoft +0.1, Tesla +0.6%)

• Miners, cruise operators and airline companies gain, while energy and fertilizer stocks fall, after a report on the US and Iran nearing a one-page memorandum of understanding to end the war.
• Semiconductor, power equipment and data center stocks rally after solid results from Advanced Micro Devices and Super Micro — in a sign of robust end-to-end artificial intelligence-related demand.
• Advanced Micro Devices (AMD) rallies 19% after the chipmaker gave an outlook that is stronger than expected, a sign of robust AI-related demand.
• Alphatec Holdings (ATEC) sinks 16% after the medical device company posted sales for the first quarter that disappointed Wall Street. TD Cowen calls the report a “tough start to 2026.”
• Apollo Global (APO) rises 3% after the alternative asset manager eclipsed $1 trillion of assets under management on record first-quarter inflows and reported earnings that beat Wall Street estimates.
• Compass Inc. (COMP) gains 31% after the real estate brokerage platform reported first-quarter revenue that beat average analyst estimates. The firm’s second-quarter revenue forecast is ahead of consensus.
• CVS Health (CVS) rises 5% after the health insurer boosted its adjusted earnings per share guidance for the full year. The firm also posted adjusted profit and comparable sales for the first quarter that topped the average analyst estimate.
• Geo Group (GEO) gains 11% after the private correctional facilities company boosted its adjusted Ebitda guidance for the full year, with the guidance beating the average analyst estimate.
• Klaviyo (KVYO) falls 18% after announcing Amanda Whalen will step down from her role as CFO. The application software company reported first-quarter results that beat expectations and the outlook was raised on key metrics.
• Kraft Heinz Co. (KHC) rises 2% after reporting quarterly sales that beat Wall Street expectations, as higher prices and the company’s investments in its lagging brands helped boost North American sales.
• Primoris Services (PRIM) slumps 31% after the construction and engineering services company cut its adjusted earnings per share guidance for the full year.
• Super Micro Computer Inc. (SMCI) leaps 13% after the company reported improved margins and gave a profit forecast that suggested it’s controlling the costs of getting powerful AI servers into customers’ hands.
• TransMedics (TMDX) falls 21% after the medical equipment firm reported adjusted earnings per share that fell short of Wall Street’s expectations. It also reaffirmed its revenue forecast for the full year.
• Uber Technologies (UBER) gains 9% after providing a better-than-expected forecast for bookings, signaling that robust demand from US commuters and travelers will offset impact from geopolitical tensions in the Middle East.
• Veracyte (VCYT) rises 14% after the diagnostics firm reported revenue for the first quarter that beat the average Wall Street analyst estimate.

In other corporate news, Novo Nordisk’s new Wegovy obesity pill fueled sales in the first quarter and the drugmaker said this year’s proft and sales declines won’t be as bad as previously expected. BMW expects profitability to remain broadly stable this year as the automaker offsets a downturn in China with robust sales in Europe. Samsung reached a $1 trillion market valuation after shares more than quadrupled over the past year on booming demand for AI chips. And the FT reported that China’s main chip-sector investment fund is in discussions to lead a fundraising round for DeepSeek at a valuation of about $45 billion. 

Risk assets soared and oil tumbled, as geopolitical and micro tailwinds fueled risk-on sentiment broadly across the market. On Geopolitics, Brent tanked 11% to below $98 a barrel following an Axios report that US & Iran are working on a memorandum that would set a framework for more nuclear talks (and said US expects Iranian responses on key points in the next 48 hours). Here are the details from the Axios report:

• A Pakistani source has confirmed that the US and Iran are closing in on a one-page memorandum to end their conflict, Reuters reports.
• US and Iran are reportedly closing in on one-page memo to end war, Axios reported citing officials; White House believes it is close to an agreement to end the war and establish a framework for detailed nuclear negotiations.
• MoU details, as it stands: Declare an end to the war in the region and the start of a 30-day period of negotiations, which could occur in Geneva or Islamabad. Iran committing to a moratorium on nuclear enrichment (at least 12-15 years). US agreeing to lift sanctions and release billions in frozen Iranian funds. Both sides lifting restrictions through the Strait of Hormuz, to occur gradually during the 30-day negotiation.
• If talks collapsed, US forces could restore the blockade or resume military action.
• Uranium Component: The duration of the moratorium is being actively negotiated. Sources suggest at least 12yrs and one suggesting 15yrs is likely; Iran sought five, the US wanted 20. Suggested that Iran would agree to its highly enriched uranium being removed from Iran, potentially to the US.
• Timeline: Iran is expected to respond within 48 hours. While nothing has been agreed upon, sources indicate this is the closest the parties have been to a deal since the war began.
• Issues: Some US officials remain sceptical that even an initial deal will be reached. Fractures within the Iranian leadership.

Separately, last night Trump paused “Project Freedom” in the Strait citing “great progress” towards an agreement. 

“The market continues to price in de-escalation and an easing in supply constraints,” said Geoff Yu, senior macro strategist at BNY. “The road ahead is bumpy, but the direction of travel seems clear.”

AI euphoria is also helping the rally. Alphabet is up in premarket trading after the Information reported Anthropic plans to spend about $200 billion with Google over five years. AMD was priced for perfection ahead of results, but managed to deliver, with shares soaring after the chipmaker gave robust predictions for longer-term growth. That’s adding to nerves about how Nvidia will retain its grip on the AI processor market in the face of intense competition.  

Meanwhile, looking under the hood, while both US stock benchmarks are set to extend Tuesday’s record highs, the S&P 500 Equal-Weight Index hasn’t posted a new high since February. This thin leadership is raising “yellow flags” for Goldman Sachs strategist Ben Snider, while Barclays’ Emmanuel Cau also noted earlier that stocks seem “increasingly disconnected from signals coming from the rates and oil markets.”

In politics, voters in Ohio handily backed Trump ally Vivek Ramaswamy’s bid to be the Republican nominee for governor, while Democrat Sherrod Brown will get another shot at returning to the Senate after being defeated in 2024. Ken Griffin said he plans to make Citadel’s Miami tower even bigger after New York Mayor Zohran Mamdani name-checked the billionaire in his pledge to charge more taxes on second homes.

In private credit, Oaktree Capital cut the value of one of its funds by almost 4% as the firm marked down its software assets. A New Mountain Capital private credit fund that sold almost half-a-billion-dollars of assets at a discount earlier this year and used some of the cash to scoop up beaten-down loans says the strategy is already paying off.

Elsewhere in geopolitics, China’s Foreign Minister Wang Yi urged Iran to keep negotiating in pursuit of a lasting truce with the US, as he hosted Tehran’s top diplomat just days before Trump is scheduled to arrive in Beijing. The clash between Trump and Pope Leo XIV has flared up again, complicating a delicate diplomatic mission by Marco Rubio to the Vatican this week.

Looking at earnings, of the 375 S&P 500 companies to have reported so far this earnings season, 84% have beaten analysts’ forecasts, while 11% have missed.

In Europe, the Stoxx 600 is up 2.3% with breadth strong. Mining and automobile shares are leading gains, while energy and utilities stocks are the biggest laggards. Here are the biggest movers Wednesday:

• The Stoxx 600 basic resources sector rallied as much as 4% as gold and copper edged higher after US President Donald Trump touted progress on a final agreement with Iran
• Novo Nordisk shares jump as much as 9.2%, the most since Dec. 23, after the Danish drugmaker raised its 2026 guidance ranges for adjusted sales and adjusted operating profit
• Demant surges as much as 17%, the most since October 2008, after the firm delivers sales ahead of consensus expectations in the first quarter
• Pandora shares rise as much as 11%, continuing a rally from March’s 3.5-year low, after the Danish jewelry maker’s first-quarter Ebit margins beat estimates, partly due to a change in the timing of certain costs
• Kongsberg shares rise as much as 11%, their steepest jump since February, after the Norwegian defense technology firm posted what Morgan Stanley called strong results across all metrics
• Diageo shares gain 6.6% after the British maker of Johnnie Walker and Guinness reported organic net sales for the third quarter that beat analyst estimates and maintained its full-year guidance
• Vestas shares rise as much as 2% as the Danish wind turbine maker reported 1Q Ebit before significant items that beat the average analyst estimate
• Equinor declined as much as 6.3%, its biggest drop since April 17 after the energy company reported total revenue for the first quarter that missed the average analyst estimate
• Wolters Kluwer falls as much as 14%, the most since 2003, after 1Q results that were broadly in line but did little to resolve the AI debate that has weighed heavily on the stock
• Orsted shares drop 4.4% after the Danish wind farm operator reported 1Q Ebitda that beat the average analyst estimate, while after-tax profit missed

Tech optimism saw the Kospi hit another record high in APAC trade as Samsung joined the $1 trillion valuation club.  Asian stocks jumped to a record, with technology shares leading gains after positive company forecasts reinforced confidence in continued growth tied to artificial intelligence. The MSCI Asia Pacific Index gained as much as 2.6% to a record high, with Samsung Electronics, SK Hynix and MediaTek providing the biggest boosts. Equities in South Korea, Thailand and China led the advances, while Japan’s market was closed for a holiday. Chinese stocks posted gains after the market reopened after a five-day holiday, with tech shares leading the rally. The government estimated more than 1.5 billion passenger trips took place during the break, while box office grew to 758 million yuan ($111 million). Sentiment was also lifted by improvement in a private gauge of services activities in April. Investors will also keep their eyes on the expected summit between Presidents Xi Jinping and Donald Trump next week for potential signs of easing tensions.

In FX, the Bloomberg Dollar Spot index is down 0.8% as expectations of a Fed hike by year-end have been fully unwound.  The yen surged after a 4th consecutive intervention by the BOJ/MOF but a large portion of the initial dip in USD/JPY has retraced.      

In rates, sovereign bonds are rallying around the world and treasuries hold a strong bid in early US session, with futures on session highs amid a slump in oil prices after Axios reported Washington and Tehran are working on a memorandum that would set a framework for further nuclear talks, with nothing agreed upon yet. Subsequent reports indicated Iran is evaluating a new US proposal to end the war. US front-end and intermediate yields dropped at least 10bp, long-end yields about 7bp, steepening 2s10s and 5s30s spreads by 3bp-4bp; 10-year fell 9bp to 4.33%. Fed-dated OIS contracts flipped back to pricing in chance of a rate cut this year, with around 6bp of easing priced in for September, and trimmed pricing for a rate hike in 2027. Treasury quarterly refunding announcement at 8:30am, with consensus expectation for unchanged coupon auction sizes, however some banks anticipate new forward guidance, shortening the time frame for stability from “at least the next several quarters” IG dollar issuance slate includes three deals so far. Six names priced $5.25 billion on Tuesday with issuers paying less than 2bps in new issue concessions on deals that were 7.2 times covered — nearly double the year-to-date average. At least two borrowers elected against moving forward

Measures of US corporate-credit risk improved in the opening minutes of trading, with the gauge for high-grade notes at its tightest in over two months. The environment coming into the US session was already positive for debt capital markets, with investment-grade spreads matching their tightest level since Feb. 20 on Tuesday and leveraged-loan prices at their highest level since then. Though there have been 15 high-grade bond sales to start the week, just $13.6 billion has been raised

In commodities, crude prices are sliding with Brent down over 9% and just below the $100/bbl mark. Spot gold and silver post respective gains of 3.4% and 6.5%. Bitcoin is higher by 0.7%.

US economic data calendar slate includes April ADP employment change at 8:15am. Fed speaker slate includes Musalem (9:30am) and Goolsbee (1pm)

Market Snapshot

• S&P 500 mini +0.9%,
• Nasdaq 100 mini +1.2%,
• Russell 2000 mini +1.5%
• Stoxx Europe 600 +2.2%,
• DAX +2.4%,
• CAC 40 +2.5%
• 10-year Treasury yield -7 basis points at 4.35%
• VIX -0.7 points at 16.72
• Bloomberg Dollar Index -0.7% at 1187.12,
• euro +0.7% at $1.1769
• WTI crude -6.6% at $95.52/barrel

Top Overnight News

• The White House believes it's getting close to an agreement with Iran on a one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations. Axios
• Trump posts: If Iran agrees to deal, the blockade of the Hormuz Strait will be lifted. "If they don’t agree, the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before. "
• Donald Trump earlier said he would pause US efforts to move ships through the Strait of Hormuz as he seeks an agreement with Iran, citing “great progress.” The blockade on Iranian ports remains. BBG
• Chinese Foreign Minister Wang Yi met w/his Iranian counterpart on Wed and called for a swift reopening of Hormuz. BBG
• China Is Still Supplying Drone Factories in Iran, Russia Despite U.S. Sanctions. Obscure Chinese companies are openly shipping dual-use goods such as engines and batteries, defying American controls. WSJ
• The US will implement its 25% tariffs on cars and trucks from the EU “relatively soon” if the bloc doesn’t swiftly ratify a long-delayed trade deal, the American ambassador to the bloc Andrew Puzder said. BBG
• China’s biggest state-backed semiconductor investment vehicle is in talks to lead the financing of DeepSeek’s first fundraising that could value the AI group at about $45bn. FT
• Novo shares jumped as its new Wegovy pill boosted sales, and the company guided to a smaller-than-expected revenue decline this year. The oral version had the best US launch of any GLP-1. BBG
• Alphabet outperformed its Magnificent Seven peers premarket after the Information reported that Anthropic plans to spend about $200 billion with Google over five years. BBG
• The yen hit a two-month high, spurring fresh intervention speculation. BBG
• While both US stock benchmarks are set to extend Tuesday’s records highs, the S&P500 Equal-Weight Index hasn’t posted a new high since February. BBG

Axios report on MOU between the US and Iran

• A Pakistani source has confirmed that the US and Iran are closing in on a one-page memorandum to end their conflict, Reuters reports.
• US and Iran are reportedly closing in on one-page memo to end war, Axios reported citing officials; White House believes it is close to an agreement to end the war and establish a framework for detailed nuclear negotiations.
• MoU details, as it stands: Declare an end to the war in the region and the start of a 30-day period of negotiations, which could occur in Geneva or Islamabad. Iran committing to a moratorium on nuclear enrichment (at least 12-15 years). US agreeing to lift sanctions and release billions in frozen Iranian funds. Both sides lifting restrictions through the Strait of Hormuz, to occur gradually during the 30-day negotiation.
• If talks collapsed, US forces could restore the blockade or resume military action.
• Uranium Component: The duration of the moratorium is being actively negotiated. Sources suggest at least 12yrs and one suggesting 15yrs is likely; Iran sought five, the US wanted 20. Suggested that Iran would agree to its highly enriched uranium being removed from Iran, potentially to the US.
• Timeline: Iran is expected to respond within 48 hours. While nothing has been agreed upon, sources indicate this is the closest the parties have been to a deal since the war began.
• Issues: Some US officials remain sceptical that even an initial deal will be reached. Fractures within the Iranian leadership.

Other Iran News

• US President Trump posted that Project Freedom will be paused for a short period to see whether or not the agreement with Iran can be finalised and signed, blockade will remain in full effect.
• Journalist Mallick posted "...i would not be surprised if there is an incoming Iranian proposal to Washington via Islamabad, soon.". Full post:"As what I understand, while the ball largely lies in Iranian court when it comes to US - Iran negotiations, i would not be surprised if there is an incoming Iranian proposal to Washington via Islamabad, soon.".
• Iranian and Saudi Arabian Foreign Ministers held a phone call; stressed continuing diplomacy and prevent escalation of tensions.
• Iranian President Pezeshkian said US demands from Iran are impossible and unattainable.
• US Secretary of State Rubio spoke with Russia's Foreign Minister Lavrov, in which the US-Russia relationship, Russia-Ukraine war and Iran was discussed.
• Iranian Foreign Ministry Spokesperson denies the UAE's accusation that Iran fired missiles and drones at it, stating that Iran's defensive actions were exclusively directed at the US, according to a statement. UAE is cooperating with the US and Israel against Iran.
• Israeli Ambassador said relations with the UAE are growing.
• IRGC denies any involvement with the attacks on the UAE earlier in the week.
• Pakistan's PM thanks the US President for pausing Project Freedom, in response to a request from Pakistan and Saudi Arabia, among others.
• "Iraqi Prime Minister-designate Ali al-Zaidi held a telephone conversation with US Secretary of War Hegseth about bilateral relations in various fields", Tasnim reported.
• The two US commercial ships that crossed the Strait of Hormuz on Monday had military security aboard, NBC reported citing sources.
• A French bulk carrier was hit by a cruise missile in the waters near the UAE, CBS reported citing officials.
• CMA CGM confirms a vessel was the target of an attack on Tuesday while it was crossing the Strait of Hormuz.

A more detailed look at global markets courtesy of Newsquawk

Asia-Pac stocks traded entirely in the green, following on from the gains stateside and the positive update from President Trump, stating that Project Freedom is to be paused for a short time to see whether or not the agreement with Iran can be finalised and signed. ASX 200 neared last week’s peak of 8787, rebounding after two consecutive days of losses. The bounce was supported by Financials and Industrials, while Energy lagged as oil prices fell. KOSPI surged at the open, breaking the 7000 handle, and even activated the buy-side sidecar within the first 5 minutes of trade. Tech giants helped the surge in the index, with Samsung Electronics (+15%) being the latest Co. to join the USD 1tln market cap group. Shanghai Comp. and Hang Seng followed the positive risk-on tone as Shanghai returned from holidays. CK Hutchison gained after the Co. agreed to sell its 49% stake in VodafoneThree, while Wuliangye Yibin underperformed after a double downgrade at Goldman Sachs. On the data front, RatingDog services PMI beat estimates, which further supported the indices.

Top Asian News

• China's Foreign Minister Wang Yi held talks with Iranian Foreign Minister Araghchi, Xinhua reported.
• BHP (BHP AT) CFO said new investors are buying into the Co. on copper exposure and AI demand.
• KOSPI sidecar activated after KOSPI 200 futures rise by 5%.

European bourses are stronger across the board, buoyed by optimism surrounding US-Iran peace. Opened higher as markets reacted to Trump’s decision to temporarily pause “Project Freedom”, and then took another leg higher to make fresh peaks on an Axios report which suggested that the US and Iran are closing in on an MoU to end the conflict. European sectors are entirely in the green, except for Energy and Utilities; the latter, unsurprisingly, is hampered by losses in underlying oil prices. The top of the pile consists of Basic Resources (lifted by strength in metals prices), Autos and Consumer Products. The Autos sector has been driven higher by post-earning strength in BMW (+5%, beat exp. but faced fierce price competition in China) and Continental (+5.5%, Q1 results topped exp. and confirmed guidance). The Consumer Products sector has benefited from gains in jewellery-name Pandora (+9%) after Q1 revenue beat estimates, but did experience weakness across North America and Europe.

Top European News

• EU PPI MoM (Mar) M/M 3.4% vs. Exp. 3.3% (Prev. -0.7%, Low. 0.8%, High. 3.7%).
• EU PPI YoY (Mar) Y/Y 2.1% vs. Exp. 1.8% (Prev. -3%, Low. -0.5%, High. 2.1%).
• EU S&P Global Composite PMI Final (Apr) 48.8 vs. Exp. 48.6 (Prev. 50.7).
• EU S&P Global Services PMI Final (Apr) 47.6 vs. Exp. 47.4 (Prev. 50.2).
• UK S&P Global Services PMI Final (Apr) 52.7 vs. Exp. 52 (Prev. 50.5).
• UK S&P Global Composite PMI Final (Apr) 52.6 vs. Exp. 52.0 (Prev. 50.3).

FX

• Snapshot: G10s are stronger against the USD this morning, to varying degrees. Antipodeans outperform, given the risk tone; JPY is also towards the top of the pile, following likely intervention overnight. SEK is a touch weaker vs EUR, after a cooler-than-expected inflation report, but is unlikely to shift the dial for the Riksbank on Thursday.
• DXY is weaker this morning, and currently trades at the lower end of a 97.79 to 98.34 range. Pressure facilitated by the risk-on mood, amidst optimism surrounding progress towards US-Iran peace. This stems from a post from the POTUS, who announced that the US would pause Project Freedom to allow time for negotiations to occur. The move lower was then exacerbated after an Axios report suggested that the US and Iran are closing in on an MoU to end the conflict. In its current form, it would declare and end to the war with Iran. Potential JPY intervention also facilitating the pressure this morning
• Focus overnight was on USD/JPY, where an aggressive move lower took the pair to a 155.00 handle, before bouncing back towards 156.00. There is currently no confirmation that the move was intervention, but markets should begin to get some details on recent moves late in the Japanese session. Time will tell whether these attempts of intervention proves effective, given the volatile nature of the Middle Eastern conflict. A near-term resolution will help the USD/JPY trundle lower, a factor which Japanese Officials would probably require to achieve any lasting strength in the JPY.

Central Banks

• ECB's Cipollone said the EZ inflation trend is moving towards adverse.
• ECB Wage Tracker: 2026 annual 2.282% (prev. 2.270%). Q1 1.847% (prev. 1.887%). Q2 2.131% (prev. 2.10%). Q3 2.553% (prev. 2.521%). Q4 2.597% (prev. 2.574%).
• BoE Governor Bailey said we must be mindful of risks of private credit.
• NAB sees the RBA hiking in June to take the cash rate to 4.60%.
• RBNZ Governor Breman said banks are resilient under stress tests.
• RBNZ Financial Stability Report: New Zealand's financial system is resilient and well positioned to support households and businesses even if economic conditions soften. The global risk environment has worsened over the past six months, as conflict in the Middle East threatens world energy supply.
• PBoC set USD/CNY mid-point at 6.8562 vs exp. 6.8160 (prev. 6.8628).
• BoK official said inflation is seen higher in May and are closely monitoring inflation trend as uncertainty is high over the Middle East situation.

Fixed Income

• Unsurprisingly, a bullish start for fixed income as the marked energy retreat has allowed yields to ease. Pressure in energy facilitated by a) Trump pausing Project Freedom to allow time for negotiations, b) Axios report suggested US-Iran are close to an MoU. (See geopols section for details).
• USTs to a 110-28+ peak, with gains of 15 ticks and breaching Monday's WTD 110-26+ best. For the US, aside from geopols, we are attentive to ADP ahead of NFP on Friday; ADP is seen at 79k from 62k, vs a 73k (prev. 178k) consensus for Friday's Payrolls. Additionally, we get the full Treasury Quarterly Refunding announcement after Monday's projections, before remarks from Fed's Musalem (2028) and Goolsbee (2027).
• Bunds post gains in excess of 80 ticks and currently hold just off a 125.88 peak. A high that printed in proximity to the above geopolitical updates this morning, and after a slew of Final PMIs, which were subject to modest revision. Of note for policymakers, the ECB's latest wage tracker showed upside across the year. Though, the ECB will at this stage likely welcome the relatively modest level of upside and particularly that the Q4-2026 figure remains shy of the 2.709% reported in February.
• Gilts gapped higher by 48 ticks before climbing another 30 ticks to an 87.32 peak, notching a new high for the week, but remain shy of last week's 87.03 closing price. Potentially capping a return to and test of that level is the ongoing scrutiny around PM Starmer, as UK press continues to brief that the challenge against Starmer is increasing, with the Welsh Labour leader seemingly primed to call for Starmer to step down on Friday and reports that the party is working to get Burnham back in the Commons.
• Germany sells EUR 2.662bln vs exp. EUR 3.5bln 2.50% 2032 Bund Auction: b/c 2.4x (prev. 1.1x), avg. yield 2.8% (prev. 2.78%), retention 23.94%.

Commodities

• Energy on the backfoot after US President Trump paused Project Freedom to allow time for talks and potential progress with Iran. An update that weighed on crude overnight, sending WTI below USD 100/bbl and Brent beneath USD 108/bbl. Thereafter, the complex took another hit after an Axios report which suggested that the US and Iran are closing in on an MoU to end the conflict (see geopols section for details).
• As it stands WTI Jun’26 and Brent Jul’26 are holding towards session lows at USD 93.96/bbl and USD 101.46/bbl, respectively. Brent now eyes USD 100/bbl to the downside, and a further leg lower could see a retest of the low from 27th April 2026, at USD 99.58/bbl.
• Gold is benefiting from the energy and USD downside, XAU as high as USD 4,708/oz, matching its 21 DMA. Base metals are also firmer, cheering the general risk tone and welcoming the return of Mainland China. 3M LME Copper above USD 13.2k, with gains in excess of USD 150 as things stand.
• China has ordered its oil refineries that purchase crude from Tehran not to comply with or enforce US sanctions on Iranian oil, CNN reported.
• Australia's PM Albanese said that they are to lift minimum stockpiles of every type of fuel by around 10 days, the fuel reserve is to be around 1 billion litres and the package is to cost more than AUD 10bln.
• Weekly private inventory data (bbls): Crude -8.1mln (exp. -2.8), Gasoline -6.1mln (exp. -1.7mln), Distillates -4.6mln (exp. -2mln), Cushing -1.1mln.

Trade/Tariffs

• Chinese Foreign Ministry Spokesperson Lin said China and the US are in communication on Trump's trip.
• US Ambassador Puzder wants the US-EU trade agreement to be agreed on before July, Bloomberg TV.
• US Envoy to India said Indian companies plan to invest over USD 20.5bln in the US tech, manufacturing and pharmaceuticals.

US Event Calendar

 

d

 

Tyler Durden Wed, 05/06/2026 - 08:28

ADP Employment Report Signals Biggest Job Additions In 15 Months In April

With non-farm payrolls looming, we get another glimpse at the labor market today from the ADP Employment Report which shows the US economy added 109k jobs in April (a slight disappointment relative to +120k exp). That is the tenth straight month of job additions and strongest monthly addition since January 2025...

Source: Bloomberg

Under the hood, Goods-producing jobs rose 15,000 while Service-providing jobs rose 94,000.

"Small and large employers are hiring, but we're seeing softness in the middle," said Dr. Nela Richardson Chief Economist, ADP.

"Large companies have resources to deploy, and small ones are the most nimble, both important advantages in a complex labor environment."

Health care's continued strength, along with a rebound in trade, transportation, and utilities, fueled last month's acceleration in hiring. 

Pay growth for job-stayers slowed slightly to 4.4 percent, but for job-changers, year-over-year pay gains were steady at 6.6 percent.

Is the economy transforming from 'no hire, no fire' to 'higher hire, still no fire' gains (see JOLTS' record hiring).

Tyler Durden Wed, 05/06/2026 - 08:23

New Disney CEO Delivers Earnings Beat As "Important Change" Underway

Disney reported better-than-expected second-quarter results, driven by momentum across entertainment, sports, and experiences, while reaffirming its positive outlook for the year.

"At an important moment of change for Disney, we remain focused on executing our long-term growth strategy," Disney wrote at the beginning of the earnings release.

The entertainment company continued, "Our creative and operational momentum drove strong quarterly results, and we continue to expect growth to accelerate in the second half of the fiscal year."

"We are strengthening streaming through continued investment in the creative storytelling that defines us and in product and technology innovation, while advancing ESPN's direct-to-consumer future and delivering on our bold growth plans at Disney Experience," the introduction to the earnings release concluded.

Here's a snapshot of the second quarter, courtesy of Bloomberg:

Adjusted EPS $1.57, estimate $1.51 (Bloomberg Consensus)

Revenue $25.17 billion, +6.5% y/y, estimate $24.87 billion

• Entertainment revenue $11.72 billion, estimate $11.39 billion
• Sports revenue $4.61 billion, estimate $4.59 billion
• Experiences revenue $9.49 billion, estimate $9.4 billion *

Total segment operating income $4.60 billion, +3.8% y/y, estimate $4.38 billion

• Entertainment operating income $1.34 billion
• Sports operating income $652 million
• Experiences operating income $2.62 billion

 Disney expects 2026 adjusted EPS growth of around 12%, excluding the impact of a 53rd week, or about 16% including it. It also plans to repurchase at least $8 billion in shares this year and continues to expect double-digit adjusted EPS growth in fiscal 2027.

Disney shares jumped as much as 8% in premarket trading in New York. The stock remains roughly 50% below its 2021 peak and is still locked in a narrow 3.5-year trading range, oscillating between about $80 and $120.

Disney shares need a clean break over $120 to attract the momentum crowd. 

The earnings results come as the company's turnaround plan under new CEO Josh D' Amaro, who succeeded Bob Iger in March, gets underway.

Tyler Durden Wed, 05/06/2026 - 07:45

Taxpayers Foot Staggering £629 Million Bill For Foreign Nationals In UK Prisons

Authored by Steve Watson via Modernity.news,

UK taxpayers are forking out £629 million a year to house 10,487 foreign national offenders in British prisons — a bill that could pay for 16,500 police officers or 15,000 NHS nurses.

While Labour claims it’s deporting record numbers, an ex-prison governor has torn into the “staggering” cost and the “incredibly slow process” that leaves dangerous foreign criminals draining public resources instead of being sent home. 

This is the direct result of years of open-borders policies that prioritise criminals’ “rights” over British safety.

'We've got to persuade countries to take these individuals back.'

Reform UK's Prisons Advisor Vanessa Frake reacts as GB News finds 10,487 foreign offenders in Britain are costing taxpayers £629 million a year. pic.twitter.com/VRyPpaOlXf

— GB News (@GBNEWS) May 5, 2026

Reform UK’s Prisons Adviser and former prison governor Vanessa Frake laid it out clearly on GB News. “The cost to this country for foreign national prisoners is staggering,” she said. “It’s a very long, drawn-out process, which kind of goes from three main areas.”

Frake detailed the excuses that keep foreign offenders here: “The problem is a lack of identity documents for these people. Quite often they get rid of their passports, so the Home Office then has to write to the country that they originate from, and that process is very slow.”

“Sometimes the country refuses. And there are of course the ECHR claims. Those under Article 8, right to life, right to family for those who have family in this country and of course, there is administration errors as well,” Frake further explained.

She added that even recent deals fall short. “They’ve just done a deal with Albania to send 200 prisoners back, but that comes with certain conditions, like improving their prison service, giving them electric Volkswagens, etcetera.” 

Britain's 'staggering' cost of foreign nationals in UK prisons torn apart by ex-prison governorhttps://t.co/9k4F9JwdOT

— GB News (@GBNEWS) May 5, 2026

Frake noted the daily cost disparity: “It costs something like £109 a day in this country to keep a foreign national in prison, and we’re going to give the Albanians £32 a day, so it’s still not quick.”

Albania tops the list of foreign national prisoners, followed by Ireland and Poland. Yet Frake’s blunt conclusion was that Britain can’t simply load them onto planes. “We’re not going to get away with it by just putting them on a plane, we’ve got to persuade these countries to take these individuals back.”

This isn’t an isolated failure. It’s the pattern. Britain has repeatedly let violent offenders and known extremists stay or walk free despite clear red flags.

Take the most recent case of a Somali terrorist in London who previously stabbed police officers, and was a known extremist.

Essa Suleiman, who arrived as a child and holds British citizenship, was convicted in 2008 for stabbing two officers and a police dog. Referred to Prevent in 2020 as an extremist, he was still free to attempt to murder two Jewish people in Golders Green last month. 

Leftists seem more concerned with how police roughly handled the terrorist, however.

In another case, Al-Qaeda-inspired plotter Shah Rahman, was convicted for planning to bomb the London Stock Exchange, but can’t be sent back to Bangladesh because an immigration judge ruled it would breach his Article 3 human rights against “torture or inhuman treatment.” 

He even married a woman banned from Britain for life over ISIS material. 

In Edinburgh a reported Somali migrant went on a knife rampage, smashing a shop and stabbing victims near a school. 

Council leader Cllr Jane Meagher responded by praising Edinburgh’s “diversity” as its “biggest strength” and calling for more “tolerance.” 

In another example, Zahid Iqbal, who plotted to bomb an Army base using an Al-Qaeda manual and a toy-car IED, was freed three years early despite warnings and prior recall for breaching conditions. 

How many more are there like this — released from prison or previously charged with serious crimes — now roaming around free?

The Ministry of Justice claims more than 8,700 foreign offenders have been removed since July 2024. Yet the prisons remain full of them, the costs keep climbing, and the public keeps paying the price for a system rigged against its own people.

This growing insecurity is now reflected in public sentiment. According to a major survey, four in five parents (80%) fear their daughters will grow up feeling unsafe in public in Britain, with 40% believing this will happen at an earlier age than it did for them. 

Most parents fear daughters will grow up unsafe in public

Read more 🔗 https://t.co/S6DhQspyoQ

— Sky News (@SkyNews) May 5, 2026

The solution offered?

In Dumfries, Scotland, schoolgirls were handed rape alarms after repeated reports of asylum seekers stalking and photographing them — the authorities’ answer to the problem instead of stopping the influx. 

This is what unchecked mass immigration and weak deportation rules deliver: British taxpayers funding foreign criminals while violent threats walk the streets. Real border control means ending the excuses, scrapping the ECHR vetoes, and putting British safety first — before the bill gets any bigger.

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

Tyler Durden Wed, 05/06/2026 - 07:20

Novo Nordisk Soars After New Obesity Pill Momentum Lifts Guidance

Novo Nordisk shares jumped as much as 9% in Copenhagen, suggesting the stock may finally be bottoming out after a vicious multi-year bear market. The move followed the Danish drugmaker's decision to raise its 2026 guidance ranges for adjusted sales and adjusted operating profit, citing solid momentum in Wegovy sales.

Novo now expects full-year sales and profit declines of around 12%, down from a previous forecast of around 13%. The upgraded outlook was "driven by increased expectations for GLP-1 product sales," according to the company.

Here's a snapshot of the new full-year forecast, courtesy of Bloomberg:

• Sees adjusted change in sales at constant exchange rates -4% to -12%, saw -5% to -13%, estimate -7.63% (Bloomberg Consensus)

• Sees adjusted change in operating profit at constant FX -4% to -12%, saw -5% to -13%, estimate -8.26%

The key bright spot was momentum in the Wegovy pill:

• Wegovy pill was launched in the US on 5 January 2026, and for the week ending 17 April, total weekly prescriptions exceeded 200,000. Coupled with total prescriptions for Q1 2026 of around 1.3 million and now more than 2 million since launch, it marks the strongest-ever GLP-1 volume launch in the US. Q1 2026 sales for the Wegovy pill reached DKK 2,256 million, impacted by pre-launch pipeline fill with wholesalers and telehealth partners.

• Pending regulatory decisions, the first Wegovy pill launches outside the US are expected during the second half of 2026.

"We have seen more than 1 million people using the Wegovy pill," CEO Mike Doustdar told analysts on an earnings call earlier. He noted that patients are switching from competing products, with "limited cannibalization" of Novo's other drugs.

Still, Novo's overall business remains under pressure. First-quarter sales fell 10% to 70.1 billion Danish kroner, while adjusted operating profit dropped 15%. Diabetes drug sales fell 18%, with Ozempic hitting its lowest level in two years.

Novo is trying to regain momentum after losing market share to Eli Lilly's Zepbound injection.

Novo shares in Copenhagen jumped as much as 9%. Shares have been locked in a vicious, nearly two-year bear market, down 70% from their peak.

Analyst commentary, courtesy of Bloomberg:

Barclays (equal weight)

• Oral Wegovy was "off to a strong start," analyst James Gordon writes in a note.

• Sees questions on supply capacity when the pill launches in other countries, expected in 2H

• Sees FY consensus expectations being increased by low single- digits

BMO Capital Markets (market perform)

• The Wegovy pill "makes a splash" in its debut, analyst Evan Seigerman writes in a note.

• It's encouraging that roughly 15%-16% of pill patients are filling scripts for the highest dosages.

• This "could be a leading indicator for improved revenue going forward, given their higher price."

• Wegovy and Ozempic injectables also beat expectations, "showing more resilience in the face of competition within class"

Jefferies (hold)

• Although the 2026 guidance was nudged higher, it still leaves consensus expectations at the upper end of the range, analyst Michael Leuchten writes in a note.

• The change in guidance probably won't have a positive impact on consensus estimates.

• It could actually drag pretax profit and EPS expectations down a couple of percent.

Intron Health (sell)

• Sales beat expectations by 1%, driven by Wegovy pill stocking of ~$125m, analyst Naresh Chouhan writes in a note

• Meanwhile, gross margin was 30 bps worse than expected

Morgan Stanley (equal weight)

• 1Q sales were a "small" beat, driven by the Wegovy pill — helped by stocking — and international operations, analyst Thibault Boutherin writes in a note

• Lower operating costs helped the adjusted EBIT beat

• Still sees the bottom end of the guidance as "conservative" and expects the company to finish the year "in the upper half of the guidance."

Did Novo finally bottom?

Tyler Durden Wed, 05/06/2026 - 06:55

There Needs To Be A Stronger European Element In NATO, Says Starmer

Authored by Victoria Friedman via The Epoch Times (emphasis ours),

British Prime Minister Sir Keir Starmer said on May 4 that there needs to be a stronger European element in NATO, as the United States reconsiders its relationship with the defense alliance and pivots toward other security priorities domestically and globally.

British Prime Minister Keir Starmer at the Elysee Palace in Paris on Jan 6, 2026. Ludovic Marin/AP

Starmer acknowledged during a panel discussion at the European Political Community summit in Yerevan, Armenia, that, in terms of defense and security, Europe has “got behind over many years, now.”

“We’re not where we need to be,” he said.

The British prime minister alluded to the impact of the Ukraine–Russia war and, more recently, the Iran conflict on global security and economic stability, saying that Europe, especially, had to come together around these issues.

“There needs to be a stronger European element in NATO. I have no doubt about that,” he said.

Starmer said that while there needed to be a stronger European element in defense and security, “we’ve been behind the curve for too long: over dependencies, over reliance, and assumptions about the world that we live in—they’ve gone.”

“We now need to lead out of this, and we need to do it at pace because these impacts are real,” Starmer said.

“The alliances that are under tension are real, and how we, as a group of leaders, respond now will likely define what goes on for many years—arguably for a generation.”

US Reorients Defense Priorities

U.S. President Donald Trump has long maintained that Europe should rely less on the United States for its security and that European NATO allies should increase their defense spending. This approach was formally accepted by NATO when, in June 2025, allies agreed to raise defense spending targets from 2 percent of gross domestic product to 5 percent by 2035.

The United States has also reoriented its defense and security priorities.

The Pentagon on Jan. 23 released its National Defense Strategy, which outlines the U.S. plan to prioritize homeland defense, including by “defending America’s interests throughout the Western Hemisphere,” according to the document.

It also said the United States would encourage partners in other parts of the world, including Europe, to take primary responsibility for their own defense “with critical but limited support from U.S. forces.”

Tension Over Support in Iran Conflict

In recent weeks, Trump has expressed frustration with the lack of support from NATO allies during the Iran war, prompting him to consider pulling out of the alliance.

Trump told British newspaper The Telegraph in an interview published on April 1 that his request for assistance in the Strait of Hormuz was a test that allies did not pass.

The president’s remarks followed similar comments from Secretary of State Marco Rubio.

Rubio said on March 30 that one of the benefits of U.S. membership in the alliance is that it gives Washington access to station troops, aircraft, and arms in other parts of the world—including much of Europe.

However, during Operation Epic Fury, “we have countries like Spain, a NATO member that we are pledged to defend, denying us the use of their airspace and bragging about it, denying us the use of our—of their bases,” Rubio said, adding that “there are other countries that have done that as well.”

Rubio said that while he supported NATO, his backing of the alliance was based on the assumption that there are reciprocal arrangements.

“But if NATO is just about us defending Europe if they’re attacked, but then denying us basing rights when we need them, that’s not a very good arrangement,” he said.

NATO Secretary-General Mark Rutte delivers a speech at Aselsan Defence company as part of his official visit to Turkey, in Ankara on April 22, 2026. Adem Altan/AFP via Getty Images

This week, NATO Secretary-General Mark Rutte said that NATO members had received Trump’s message about agreements allowing the United States to access European bases.

“Yes, ​there has been some disappointment from the U.S. side, but Europeans have listened,” Rutte told reporters at the same European Political Community summit in ​Armenia on May 4.

“They are now making sure that all the bilateral ​basing agreements are being implemented.”

Tyler Durden Wed, 05/06/2026 - 06:30

Trump Pauses Project Freedom Amid "Great Progress" Towards 'Complete & Final' Agreement With Iran Summary

• Trump announce 'pause' to Project Freedom amid optimism of a "complete and final" deal with Iran; French ship confirmed hit in cruise missile attack, crew members injured

• Rubio declares 'offensive' actions of Operation Epic Fury are over, and now Project Freedom is in swing. Another vessel comes under attack in Hormuz.

• UAE under attack again, confirmed in state sources - however which Iran denies doing - instead saying its actions were directed at the United States. White House still hasn't declared end of ceasefire.

• Pentagon addresses whether ceasefire over or violated: Caine says Iran's Monday operations were "all below the threshold of restarting major combat operations at this point."

• Contradictory statements out of Tehran on UAE attack, amid reports of division between IRGC & civilian leaders.

• Two US Navy destroyers transited the Strait of Hormuz and entered the Persian Gulf.

• Iranian Foreign Minister Abbas Araghchi travels to Beijing to discuss crisis with Chinese counterpart.

The odds of a peace deal being completed just jumped...

*  *  *

Trump Pauses Project Freedom

There is a knee-jerk wave of optimism across assets with WTI crude futures lower, US equity contracts and Treasury futures higher after President Trump said Project Freedom will be paused.

Trump also said there is progress toward a final agreement with Iran which is what investors really want to see as it could potentially mean a reopening of Hormuz. 

Trump statement on his TruthSocial feed (emphasis and spacing ours):

Based on the request of Pakistan and other Countries, the tremendous Military Success that we have had during the Campaign against the Country of Iran and, additionally...

...the fact that Great Progress has been made toward a Complete and Final Agreement with Representatives of Iran...

...we have mutually agreed that, while the Blockade will remain in full force and effect, Project Freedom (The Movement of Ships through the Strait of Hormuz) will be paused for a short period of time to see whether or not the Agreement can be finalized and signed. 

WTI crude futures are testing back below $100...

Polymarket odds of Hormuz traffic returning to normal has jumped to better than a coin-flip...

Don't hold your breath though as there have been several false starts of this kind before, and traders will soon lose faith unless there are more details from the Iranian side.

Additionally late Tuesday, a French cargo ship was confirmed hit in a missile attack, injuring crew members:

A cargo ship in the Gulf region was hit by a possible land-attack cruise missile, causing several injuries among the ship's Filipino crew, two U.S. officials told CBS News.

The hit on the CGM San Antonio — which is owned by a French firm — took place late Tuesday evening local time, the officials said. The ship was near Dubai as of midday on Tuesday, but it is not clear whether the vessel has moved since then, according to public ship tracking data.

Rubio Declares Conflict in New Stage

Secretary of State Marco Rubio has announced Tuesday afternoon that offensive stage of Iran war is 'over'. He further said that ships stranded in the Strait of Hormuz are facing a humanitarian crisis and accused Iran of holding the world hostage by closing the Strait of Hormuz. Iran is denying that it attacked the United Arab Emirates, with the foreign ministry saying its 'defensive actions' were 'exclusively directed at the U.S.'

Operation Epic Fury is over, now Project Freedom.

The remarks were issued just as a new attack is unfolding on a foreign cargo ship in the strategic waterway:

UKMTO WARNING 055-26

Click here to read the full warning⤵️https://t.co/J5B2EilFQE#MaritimeSecurity #MarSec pic.twitter.com/EGcKTpsHtN

— UKMTO Operations Centre (@UK_MTO) May 5, 2026

Reaction in oil...

...as the goalposts keep shifting:

BREAKING: REPORTER: But 10 weeks in, are we any closer to get rid of Iran's nuclear materials?

RUBIO: They no longer have a conventional shield. They have no Navy left. They don't have an Air Force. That's a very substantial achievement. That was the purpose of this. pic.twitter.com/bD33XPARVH

— Sulaiman Ahmed (@ShaykhSulaiman) May 5, 2026 Trump Asked Whether Ceasefire is Dead

A revealing exchange in the Oval Office strongly suggests that even amid a second Iranian attack wave on the UAE Tuesday, the White House is unwilling to say that the ceasefire has collapsed - also given there's yet been no direct exchange of fire between US and Iranian forces: 

President Trump, taking questions from reporters in the Oval Office on Tuesday, would not specify what Iran would need to do to violate the cease-fire. Asked by a reporter what would constitute a violation, considering that the country has fired on U.S. ships several times, Trump said: “Well, you’ll find out, because I’ll let you know.”

He added that “they know what to do,” and “they know what not to do, more importantly.”

Earlier the Pentagon clearly indicated that the ceasefire is still active, from Washington's point of view. 

The Iranian government is meanwhile trying to bat down rumors of a division between the presidency and the IRGC/military apparatus.

Second UAE Attack Wave Active

The country's Ministry of Defense has just released official statement of inbound projectiles out of Iran:

• The UAE's air defenses are currently dealing with missile and drone attacks originating from Iran.
• The Ministry of Defense confirms that the sounds heard in scattered areas of the country are the result of the UAE's air defense systems intercepting ballistic missiles, cruise missiles, and drones.
• UAE Air Defences system are actively engaging with missiles and UAV threats MOD asserts that the sounds heard across the country are the result of ongoing engaging operations of missiles and UAV's

Air defense systems are currently responding to a missile threat. Please remain in a safe location and follow official channels for warnings and updates. pic.twitter.com/1srVYlQgI0

— NCEMA UAE (@NCEMAUAE) May 5, 2026

There are meanwhile reports of explosions being heard on Iran's Qeshm Island, and questions raised about scenes like the following:

Fire at a commercial complex in Andisheh, #Iran, which is in Tehran Province. pic.twitter.com/JxSwgSoRng

— Jason Brodsky (@JasonMBrodsky) May 5, 2026 Is Ceasefire Over? Pentagon Answers Definitively 

In the Tuesday morning Pentagon presser led by War Secretary Pete Hegseth, Joint Chiefs Chair Gen. Dan Caine stated very clearly that the US views Monday's escalation (the attack on UAE and some vessels in the Strait of Hormuz) as actions which are "all below the threshold of restarting major combat operations at this point."

The Trump administration has argued that it doesn't have to seek congressional approval to continue military operations beyond a 60-day limit because there is a ceasefire in effect. But the question raised Monday is: does the fresh Iranian cross-Gulf mark the end of ceasefire? Clearly the Pentagon and Trump administration are saying no. "No adversary should mistake our current restraint for a lack of resolve," Caine then emphasized.

The ceasefire with Iran is not over, according to U.S. Secretary of War Hegseth.

Project Freedom is "separate and distinct” from Operation Epic Fury, Hegseth added.

The Iranian fire is recent days was described as "harassing" and "below the threshold of restarting major combat…

— Trey Yingst (@TreyYingst) May 5, 2026

Below are some of the latest top developments from various MSM sources:

—Trump’s desire to end the Iran war is being put to the test after Tehran fired at American warships on Monday and violently disrupted a U.S. effort to revive shipping in the Strait of Hormuz. Still, Trump wants to avoid a fresh bombing campaign, officials say, preferring a negotiated end to Tehran’s nuclear advancements and the weekslong war that has raised gas prices and hurt the global economy. (WSJ)

—U.S. intelligence assessments indicate that the time Iran would need to build a nuclear weapon has not changed since last summer, when analysts estimated that a U.S.-Israeli attack had pushed back the timeline to up to a year. The unchanged timeline suggests that significantly impeding Tehran's nuclear program may require destroying or removing Iran's remaining stockpile of highly enriched uranium. (RTRS)

—Trump says war could stretch 3 more weeks, claims US 'already won.’ (ABC)

Below: Pentagon slide in Tuesday's briefing showing Iranian attacks on Hormuz shipping: "Iran has fired at commercial vessels nine times and seized two container ships since the ceasefire was announced" (Gen. Caine).

And this puts things in perspective...

In a Pentagon briefing, top U.S. General
Dan Caine says Iranian attacks on shipping and U.S. vessels is currently below the threshold of restarting major combat operations. (This included 9 attacks on commercial vessels and 10 against U.S. forces) pic.twitter.com/CU0gQVSvzJ

— Idrees Ali (@idreesali114) May 5, 2026 Internal Iranian Schism Over Monday UAE Attacks(?)

There's a lot of chatter that Iran's civilian government and the IRGC are at direct odds over Monday's attack on UAE, which resulted in a large blaze at the Fujairah oil facility and the three injured Indian nationals. Al Jazeera for example observes:

By targeting the facility, Iran is sending a direct message to UAE saying: “We can target your most important economic points even if you think you can get around the Strait of Hormuz,” said Turak.

Iran’s government has not confirmed or denied responsibility for the attack. Turak noted there are "quite contradictory" statements coming out of Iran, however.

And Saudi-funded Iran International claims the following dramatic schism and internal rupture over the risky cross-Gulf operation, which could signal the end of the ceasefire (though curiously President Trump himself has not said it is broken):

Exclusive information obtained by Iran International points to a growing clash between Iran’s President Masoud Pezeshkian and its military leadership over Monday’s escalation in the Persian Gulf and attacks on the United Arab Emirates.

According to sources familiar with Tehran’s deliberations, Pezeshkian has expressed strong anger at actions by the Islamic Revolutionary Guard Corps, led by Ahmad Vahidi, describing missile and drone strikes on the UAE as “completely irresponsible” and carried out without the government’s knowledge or coordination.

Pezeshkian is said to have described the IRGC’s approach to escalating tensions with regional countries as “madness,” warning of potentially irreversible consequences.

This certainly isn't the first time that Iran International, a London-based publication seen as also 'close' to Israeli intelligence, has alleged severe internal division in Iran's wartime decision-making, but the viewpoint is beginning to be echoed and reported on more broadly.

Two US Navy Destroyers Successfully Transit Strait

To review of Monday's major escalation, US Central Command said its forces had intercepted missiles targeting US Navy and commercial vessels, and also said American helicopters sank six small Iranian boats that officials said were targeting civilian vessels under American protection.

And also came a big milestone in terms of Washington aims to enforce Trump's newly announced Project Freedom plan to provide military escort for ships through Hormuz. Two US Navy destroyers transited the Strait of Hormuz and entered the Persian Gulf on Monday and overnight after navigating an Iranian barrage, according to defense officials.

CBS reports, "The USS Truxtun and USS Mason, supported by Apache helicopters and other aircraft, faced a series of coordinated threats during the passage, the defense officials said. Iran launched small boats, missiles and drones against them in what officials described as a sustained barrage." The report underscores further that "Despite the intensity of the attacks, neither U.S. vessel was struck."

Apaches, Centcom handout 'No Military Solution'

Iranian Foreign Minister Abbas Araghchi has issued an interesting statement decrying Trump's attempt at escalation in Hormuz, warning that there's no “military solution” to the crisis, while warning the US, UAE, and other regional countries against being drawn into a “quagmire” in the region.

"Events in Hormuz make clear that there’s no military solution to a political crisis," Araghchi wrote on X. "As talks are making progress with Pakistan’s gracious effort, the US should be wary of being dragged back into quagmire by ill-wishers. So should the UAE. Project Freedom is Project Deadlock," to top Iranian diplomat asserted.

Also of note is that Araghchi will travel to Beijing on Tuesday for discussions with his Chinese counterpart. "During the visit he will meet his Chinese counterpart [Wang Yi] to discuss bilateral ties and regional and international developments," Iran’s Foreign Ministry said in a statement.

Below: Graham says you either pay now or you pay later. “They tried to get a nuclear weapon. If you don’t believe that, you shouldn’t be allowed to drive.”

Lindsey Graham says Americans deserve higher gas prices because many doubted Iran was going to get a nuclear weapon.

Graham says you either pay now or you pay later.

“They tried to get a nuclear weapon. If you don’t believe that, you shouldn’t be allowed to drive.” https://t.co/1dDx1PVACv pic.twitter.com/Uma2pETYt7

— Shadow of Ezra (@ShadowofEzra) May 5, 2026

Officially at least, Beijing has a policy of "noninterference" in other countries’ internal affairs, and has claimed to not be involved in the Iran conflict - while Washington has consistently accused China of providing intelligence to Tehran, and even possibly military hardware or weapons.

Elsewhere in the region, South Korea’s presidential secretary Choi Soung-ah says "the safety of international maritime routes and freedom of navigation should be protected under international law" and that Seoul is "watching President Trump’s remark related to this," according Reuters. This after ann explosion and fire on a South Korean-operated ship in the Strait of Hormuz on Monday, which Trump blamed on an Iranian attack.

More Geopolitical Developments

via Newsquawk...

•  US President Trump said Iran war could go on for another two to three weeks; time is not of the essence.
• IRGC military source told Tasnim that the US shot two small boats carrying civilians instead of shooting IRGC speedboats.
• "Iranian Defense Council member Ali Akbar Ahmadian: Our security does not accept negotiations, and Washington obstructed global navigation and energy security", Al Jazeera reported.
• Iranian President Pezeshkian has requested an immediate and emergency meeting with Supreme Leader Khamenei to ask him to stop IRGC attacks on Persian Gulf nations and prevent a recurrence, Iran International reported.
• Pezeshkian reportedly outlined that the IRGC attack on the UAE occurred without the knowledge of the government.
• US intelligence suggests strikes from the start of the war led to limited new damage to Iran's nuclear programme, Reuters sources say.
• US State Department official to Al Jazeera said the President is clear that direct communication between Israel and Lebanon is the best path toward peace; We are working to prepare the necessary conditions and political momentum to move forward with this
• Two US Navy destroyers transited the Strait of Hormuz and entered the Persian Gulf after navigating an Iranian barrage, according to defense officials who spoke to CBS News; "Iran launched small boats, missiles and drones against them".
• Maersk (MAERSKB DC) said its subsidiary's US-flagged vehicle carrier, Alliance Fairfax, exited the Gulf via Strait of Hormuz on May 4th.
• US Treasury Secretary Bessent had a "fierce row" with UK Chancellor Reeves last month over her outspoken criticism of the Iranian war, FT sources say.
• US CENTCOM posted "US warships and aircraft deployed to the Middle East are enforcing the naval blockade against Iran while executing Project Freedom to support the free flow of commerce through the Strait of Hormuz.".
• US officials say military closer to resuming combat operations than 24 hours ago, Fox reported.
• US President Trump reiterates he feels Europe has been "very disappointing".
• Iranian Foreign Minister Araghchi posted "As talks are making progress with Pakistan's gracious effort, the US should be wary of being dragged back into quagmire by ill-wishers. So should the UAE.".
• Full post:"Events in Hormuz make clear that there's no military solution to a political crisis. As talks are making progress with Pakistan's gracious effort, the U.S. should be wary of being dragged back into quagmire by ill-wishers. So should the UAE.Project Freedom is Project Deadlock.".
• Mehr News Agency said a fire broke out in two commercial ships and spread to two others in Dayyer port south of Iran; cause not clear.
• "Explosions were heard tonight in the port of Bandar Abbas (Iran) and on Qassem Island (Iran) in the Persian Gulf", N12 journalist reported citing sources in Iran.
• IRGC political deputy said traffic in the Strait of Hormuz will only be done with Iran's permission, ISNA reported; "Any kind of traffic in the Strait of Hormuz, if it is from the enemy, will be met with a decisive and crushing response".
• Iranian Parliamentary Speaker Ghalibaf said the new equation of the Strait of Hormuz is being solidified.
• Actions of the US and allies have threatened the security of shipping and energy.
• UNSC resolution prepared by the US, Saudi Arabia, Bahrain, Qatar, the UAE, and Kuwait opens the door for potential enforcement measures, AsharqNews reported citing the resolution "to be distributed tomorrow".

Tyler Durden Wed, 05/06/2026 - 06:00

Carbon Neutral, Speech Negative: Amsterdam Bans Ads Featuring Meat & Fossil Fuels

Authored by Jonathan Turley,

In “The Indispensable Right: Free Speech in an Age of Rage,” I write about how censorship often becomes an insatiable appetite once countries go down the road of speech regulation. There is no better example than the Dutch and their recent ban on public ads for meat and fossil fuels. Activists have imposed similar limitations on advertising for products in the United States, from alcohol to tobacco. However, the Dutch law reflects how this tendency can metastasize into shielding citizens from unhealthy choices or influences.

It appears that Dutch painters such as Pieter Aertsen (with his work A Meat Stall with the Holy Family Giving Alms, above) were promoting harmful imagery in their work. As for Rembrandt’s “Slaughtered Ox,” the Dutch master is now little more than a climate change denier.

Starting on May 1, the ban on such images became part of Amsterdam’s push to achieve carbon neutrality by 2050. While purportedly neutral on carbon, it is manifestly negative on free speech.

As with other anti-free speech measures in Europe, this push again came from the left. The GreenLeft Party’s Anneke Veenhoff explained “I mean, if you want to be leading in climate policies and you rent out your walls to exactly the opposite, then what are you doing?”

The answer is engaging in free speech.

This is, of course, commercial speech, which is often subject to a lower level of protection. However, this shows the danger of using the differential standard to target products or industries viewed as unhealthy or ill-advised for consumers.

In Amsterdam, the ban will cover industries such as airlines, including KLM Royal Dutch Airlines, one of the largest employers and revenue generators in the country.

Notably, activists compare this to cigarette advertising bans, confirming the very slippery slope danger that those companies raised when they were targeted.

Hannah Prins, a paralegal at Advocates for the Future, is quoted as saying, “I don’t think it’s normal to see murdered animals on billboards. So I think it’s very good that that’s going to change.”

Other Dutch cities are now following suit, including Haarlem, Utrecht, and Nijmegen.

Of course, prostitutes still advertise live in Amsterdam and marijuana is a major industry for tourists.

If you want drugs, there are ample choices.

However, if you want a steak, you will have to rely on word-of-mouth directions.

Tyler Durden Wed, 05/06/2026 - 05:00

No Kings? In Europe, Monarchs Are Far More Popular Than Politicians

In Europe, monarchs are far more popular than the politicians who govern.

As Visual Capitalist details below, using data from Morning Consult, visualized by The European Correspondent, monarchs hold an approval advantage of nearly 30 points over national leaders. The gap appears in every country analyzed.

The pattern reveals a clear divide: leaders making policy decisions often face public backlash, while ceremonial figures largely avoid it.

Approval Ratings for Elected and Unelected Leaders

Below, we break down approval ratings across eight European countries.

From the UK to Luxembourg, monarchs outperform politicians across the board. Spain stands out with the largest gap, while even the narrowest differences still favor royalty.

Why Do Monarchs Poll Better?

One key explanation lies in the fundamentally different roles these figures play. Monarchs are typically nonpartisan, symbolic heads of state, largely removed from day-to-day political decision-making. This helps them avoid the scrutiny and backlash that elected leaders inevitably face.

By contrast, national leaders are directly responsible for policy decisions on issues like inflation, immigration, and public services. These decisions often divide public opinion, dragging down approval ratings.

Spain and the Netherlands: The Biggest Gaps

Spain has the widest popularity divide, with King Felipe VI outpacing Prime Minister Pedro Sánchez by nearly 40 points. This reflects broader dissatisfaction with political leadership, alongside relatively stable support for the monarchy.

The Netherlands also shows a notable gap, with King Willem-Alexander maintaining a significant lead despite historically low approval ratings for the monarchy itself. This highlights how unpopular political leadership can become by comparison.

Even Lower-Rated Monarchs Still Lead

Even in countries where monarchs have more modest approval ratings, such as the UK, their standing still surpasses that of elected leaders. This underscores a broader trend: monarchy as an institution retains a degree of public goodwill that politicians struggle to match.

As this data shows, in modern Europe, it’s often the figureheads, not the decision-makers, who win the popularity contest.

Tyler Durden Wed, 05/06/2026 - 04:15

UK Faces Summer Flight Disruptions As Jet Fuel Risks Mount

Via City AM,

• Ministers are expected to warn Britons that flight cancellations could disrupt summer holiday plans.

• Allianz Trade research says the UK is especially exposed to jet fuel shortages because of import dependence.

• Airlines are weighing cancellations, surcharges, and ticket price adjustments as fuel supply risks rise.

Ministers are set to warn the British public that flight cancellations will hit summer holiday plans as new research suggested that the UK is more exposed to jet fuel shortages than other European countries. 

Heidi Alexander, the transport secretary, is set to tell Brits that there could be flight cancellations this year as she will talk up staycations, according to The Times. 

Her warnings will follow a prompt by Sir Keir Starmer that people would have to consider changing “where they go on holiday”. 

Trade experts have warned that the supply of kerosene was set to be hit by disruptions across the Strait of Hormuz. 

Michael O’Leary, the boss of Ryanair, Europe’s biggest airline, said rivals were “desperately” searching for flights to cancel. 

Some airlines have reportedly said that the UK could escape some of the worst effects of jet fuel shortages due to obtaining supplies from other countries.  

UK is ‘particularly vulnerable’ to jet fuel shortages

But research by Allianz Trade found the UK had Europe’s “most structurally exposed markets to jet-fuel shortages”. 

It said its heavy reliance on imports, albeit from countries outside of the Middle East, would leave the UK “particularly vulnerable” to supply shocks. 

“The UK,  Germany, France, and Italy show the largest shortfalls, underscoring their reliance on external supply to meet aviation demand,” trade experts said. 

“European  aviation activity is indirectly exposed not only to global oil price dynamics but also to geopolitical and logistical risks along  key supply routes, reinforcing the region’s dependence on external refining hubs for a fuel that is essential to long-haul  connectivity.”

The worst effects of flight disruption could come in late June and July, near the peak of summer travel. 

Ministers may be looking to discourage Britons from taking long-haul flights in contingency plans being drawn up, according to reports. 

Lufthansa Group has announced it will cancel 20,000 flights over the next six months, while Virgin Atlantic added a fuel surcharge and British Airways has warned of “pricing adjustments” to tickets.

Airlines UK, the trade body, said: “UK airlines continue to operate normally and are not experiencing issues with jet fuel supply.”

Tyler Durden Wed, 05/06/2026 - 03:30

Moscow Targeted By Over 50 Drones, Country's 2nd Largest Refinery On Fire

We've been documenting that Ukraine has been demonstrating deeper targeting reach inside Russia, as several key oil sites have come under direct drone attack over several days and weeks, resulting in significant destruction.

Just in the last several days, Russian state media has recorded over 50 Ukrainian drone attacks targeting the country's capital of Moscow.

Moscow at night, via Medium

Moscow Mayor Sergey Sobyanin on Tuesday confirmed that since the start of this month, Ukrainian efforts to target the capital region have greatly increased. 

The distance of Moscow from the Ukrainian border is nearly 300 miles, but lately Ukraine has also demonstrated the ability of its long-range drones to target as far away as Perm and the Ural Mountains.

"The defense ministry’s air defense assets have downed yet another UAV. Emergency relief specialists are working at the scene, where the debris from the UAV landed," Mayor Sobyanin stated.

And he detailed, per TASS, that "from May 2 to 5, the capital was attacked by 51 drones. In the current 24-hour period, 19 UAVs have been shot down."

Also, one of Russia's largest refineries came under fresh attack on Tuesday, with Oil Price reviewing the following:

One of Russia's largest oil refineries, the 400,000 barrels-per-day Kirishi refinery southeast of St. Petersburg, was on fire early on Tuesday following drone attacks overnight, Bloomberg reports, citing satellite images from NASA.

According to satellite images taken on Tuesday by NASA's Fire Information for Resource Management System, the Kirishi refinery owned by oil producer Surgutneftegas and nearby areas were detected to emit heating anomalies which signal fires.

Alexander Drozdenko, the governor of the Leningrad region where the refinery is located, posted on Telegram early on Tuesday that the fire at the Kirishi industrial zone has been localized, while the Kirishi refinery was the main target of the drone attacks overnight. The post did not confirm a hit on the refinery, only stating that it was targeted.

Initial footage widely circulating of the overnight attack on Kirishi:

The VNIIR-Progress facility in Cheboksary, Russia, was reportedly hit. It produces secure Kometa navigation modules used in Russian drones, cruise missiles, and ballistic missiles.

The Kirishinefteorgsintez (KINEF) refinery in Kirishi, Russia’s Leningrad region, was also struck.… pic.twitter.com/6Jp31QQCWd

— Anton Gerashchenko (@Gerashchenko_en) May 5, 2026

Currently, the globe's attention is largely focused on the Iran war and the Hormuz Strait blockade, and with that efforts to reach a political and peace settlement in Ukraine have faded as well. Earlier in the Ukraine war, these major refinery attacks would dominate world headlines, but at the moment they have remained in the background given the constant Iran-related news flow.

President Putin has lately communicated to Trump that he's open to a 'Victory Day' ceasefire, a proposal the Kremlin said Washington has backed. Ukraine is meanwhile offering its own ceasefire, but on a different set of days, and the warring sides haven't reached agreement.

Tyler Durden Wed, 05/06/2026 - 02:45

How German Media Became The PR Arm Of The Expanding State

Submitted by Thomas Kolbe

How does economic growth emerge? Let us turn to Ludwig von Mises, one of the defining economists of the 20th century – and paraphrase his idea: growth arises where private capital is guided in a free market by an undistorted price system. Prices signal scarcity and direct scarce resources to where they generate real value. When this system is distorted by ideological intervention, capital is misallocated – potential growth simply evaporates.

That is the theory. And there is no doubt that the reality of emerging economies has repeatedly confirmed the teachings of the Austrian School. Take Argentina, for example: the economic policy shift under President Javier Milei is leading to a rollback of the state and new private investment impulses. That is how it should be: the state as a rule-setting referee, not a player in the economy.

This thesis meets maximum resistance in German editorial offices. There prevails a staunchly statist spirit, a vulgar Hegelianism that regularly loses itself in the labyrinth of economic causality. As a reminder: Milei is the libertarian whom Chancellor Friedrich Merz and German media denounced as a far-right eccentric, accusing him of trampling on his own people. As said: ideologically blinded, intellectually shallow.

On Thursday, Handelsblatt presented its readers with the result of the marriage between green-statist ideology and editorial missionary zeal. In its morning briefing, the author made clear how she interprets the world: at the top, the all-knowing state; far below, the misguided, dependent individual. The piece appeared under the title “When Father State must save German growth” and stands as a case study of the spirit dominating German media. The individual counts for nothing, the state for everything. A hint of Orwell runs through these lines. They are meant to remind us that our economic fate now lies in the hands of an all-knowing federal government. Listening closely, one can still hear the fading odes of the press to former vice chancellor and manager of green chaos Robert Habeck.

Many people find it helpful to embed their existence into the prevailing ideology, thereby relieving themselves of existential responsibility. When this happens on a mass scale, a state within the state emerges – what we call the welfare state. Yet this attitude carries a problem: in journalism it obscures the search for the causes of the current crisis. Editorial work blurs the overregulation of our economy, the destruction of nuclear energy, and clientelist climate policy – together forming the broad delta of deindustrialization.

We are facing a media-historical phenomenon. Magazines such as manager magazin, Handelsblatt, WirtschaftsWoche, and even once-bourgeois papers like FAZ now only vaguely suggest through their names that they were once committed to economic analysis. Condensing tone, imagery, and reporting style, one can hardly escape the impression of a media phalanx of the Green Deal.

The shift in perspective has succeeded. Economic rationality has been replaced by an iron belief in the net-zero cult. For the socialists in editorial offices, a fortunate development – since it is tied to the expansion of a vast state apparatus, conveniently justifying long-term funding of their own activities within the framework of so-called democracy promotion. The state orders – the media deliver: all from a single mold, always in the tone of climate apocalypse.

Manager Magazin confirmed this week the suspicion that even business-oriented outlets operate as a media arm of the green extraction economy. Economics Minister Katherina Reiche, after her cautious criticism of the green subsidy cult, is already depicted on the cover as an oil-soaked fossil-era lobbyist. The rest: a cheer for the energy transition.

The media climax of kneeling before Father State came last year with the presentation of the so-called Draghi Plan. Former Italian prime minister and ECB president Mario Draghi outlined a program intended to lift the eurozone out of stagnation through massive state investment. The plan envisioned around €800 billion annually. Over at least five years, roughly five percent of European GDP would be politically directed. Draghi describes nothing less than a future EU in which economic dynamism is increasingly eroded by state control.

Those who followed media coverage of Draghi’s megalomania rarely encountered dissent. After decades of successful indoctrination – beginning in schools and continuing through universities and media transformed into socialist re-education matrices – this is hardly surprising. Brussels has now largely integrated the plan into the new seven-year budget. Between 2028 and 2034, around €2 trillion will pass through the hands of the Brussels bureaucracy – a remarkable joint success of political elites and their compliant media narrators.

That Draghi, Merz, and von der Leyen are leading us into a new form of socialism under bright daylight is not even up for debate – it is actively reinforced by media work. They pave the ever-widening road into a command economy with rising subsidies and taxes, ultimately resulting in a state quota well above 50 percent – socialism in all but name. The disappearance of market economy is accompanied by massive public-sector expansion: 205,000 new government jobs in just one year – public job creation under state flag.

Meanwhile, the value-creating part of society is bleeding out, while the transformation project coldly smiles at the population. Declining productivity, industrial flight from Germany – a program of impoverishment for the private sector, which was openly mocked by Handelsblatt on Thursday. “Bloodless,” the author called it. Once again, the state must rescue it and pull the chestnuts from the fire – a remarkable worldview given fiscal, regulatory, and energy realities.

You may not notice it – neither at Handelsblatt, manager magazin, Die Zeit, Süddeutsche Zeitung, nor public broadcasting – but their persistent defensive effort, the immunization of the state against criticism, is freezing society in place.

The media form a phalanx shielding government representatives, administration, and the ideological party apparatus from reality. In doing so, they become complicit in enabling the ongoing destruction of the economy. The longer the green transformation unfolds its devastating effects, the more capital and resources are burned – resources needed for rebuilding after the green-statist catastrophe.

Yet nothing happens by chance. Chancellor Merz, like his predecessors Scholz and Merkel, together with the Brussels power cartel, is pursuing a scorched-earth policy. A return to market economy is to be prevented at all costs, despite being the only genuinely democratic and meritocratic form of economic organization. It stands in the way of building green socialism.

Over time, the state apparatus has succeeded in establishing an incentive structure that absorbs people through migration, public employment, or welfare systems into dependency. In such a climate, anyone who raises their voice against the paternal state inevitably stands against the majority – and must expect a storm of outrage.

And as long as Greta Thunberg’s cohorts at Fridays for Future dance in the streets and parts of the population celebrate economic decline as degrowth progress, this children’s party is far from over. A blurred hope remains in the darkest night of the emerging socialism.

* * * 

About the author: Thomas Kolbe has worked for over 25 years as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

Tyler Durden Wed, 05/06/2026 - 02:00