Despite strong ISM Manufacturing data, US Industrial Production disappointed in May, rising just 0.1% MoM (vs +0.3% exp), but April's print was revised up to +0.9% MoM. Put together, that lifted the YoY rise in industrial production to +1.67% - its highest since Nov 2025...
Manufacturing excluding motor vehicles and parts was also flat in May, according to the Fed report.
Mining output, which includes energy extraction, increased 1.3%.
Utilities output fell.
US Manufacturing production was unchanged in May (below the 0.3% rise expected), but thanks to an upward revision, the YoY rise was +1.4%, the highest since Nov 2025...
May's flat-line comes after four months of gains to start the year.
The data showed a split between durable goods manufacturing, which continued to advance, and nondurable goods manufacturing, which declined.
That decrease reflected a pullback in output for petroleum and coal products, plastics and rubber, and textiles.
And finally, on the bright side, Capacity Utilization continues to rise, now at its highest in a year...
The report is somewhat at odds with signals from recent surveys, which have indicated a pickup in activity amid customer stockpiling induced by the war, rising defense-related orders and the ongoing data center buildout.
Monday’s figures may be a sign that surging costs are starting to bite after a separate report last week showed prices received by producers rose in May from a year earlier at the fastest pace since 2022.
Taken all the above, we see this as favoring the doves very modestly.
Tyler Durden Mon, 06/15/2026 - 09:20Submitted by QTR's Fringe Finance
One of my favorite contrarian analysts to read posted a great thread this week noting what he sees as one of the most overlooked risks facing U.S. equities in 2026.
Gordon Johnson argues that an unprecedented wave of equity issuance could overwhelm available investor capital. In a great thread on X, Johnson, of GLJ Research, argued that investors should not interpret the current IPO boom as a sign of market strength.
Instead, he contends that history suggests record issuance periods often occur near major market peaks, when companies and insiders are most eager to sell stock into highly favorable conditions.
“This chart should stop you cold in your tracks.”
— Gordon Johnson, GLJ Research
His argument begins with a striking statistic. According to Johnson, 2026 U.S. IPO proceeds for operating companies are on pace to reach roughly $200 billion, exceeding the combined totals of both 1999 and 2000 during the dot-com era and far surpassing the approximately $119 billion raised during the speculative peak of 2021.
Rather than viewing that figure as bullish, Johnson sees it as a warning signal. In his view, record levels of stock issuance have historically coincided with excessive optimism and have often preceded periods of poor market performance.
Johnson argues that the headline IPO figures actually understate the scale of what is occurring. IPOs represent only one category of equity issuance. He notes that companies are also raising capital through follow-on offerings, at-the-market programs (ATMs), and secondary share sales.
We all know about the large AI-related equity raises that have been announced over the last two weeks: Alphabet’s $84.75 billion offering, Meta’s proposed multi-tens-of-billions stock raise, Oracle’s roughly $20 billion equity component within its broader financing plan, and Super Micro Computer’s $7 billion equity and equity-linked financing.
He argues that when these are added to the IPO pipeline, the total amount of stock being sold to investors becomes significantly larger than the official IPO statistics suggest:
With SpaceX, then OpenAI, then Anthropic stacking up, the pipeline points to ~$100B/month hitting the tape over the next 3–4 months. Now the only question that matters: who absorbs it?
Here's the cash on the other side. US personal savings rate: 2.6% of ~$17.93T disposable income. That's ~$39B/month of new savings — for the ENTIRE country.
You cannot soak up ~$100B/month of stock with ~$39B/month of cash. The math doesn't math.
Put it in scale. ~$100B/month of issuance ≈ the entire US savings rate (~$1T/yr). SpaceX alone ~$80B. Then OpenAI. Then Anthropic. Then what? This doesn't "attract" capital. It DRAINS the market of cash — one mega-deal at a time.
The heart of Johnson’s thesis centers on a basic supply-and-demand question: where will the money come from?
His broader point is that equity issuance does not magically create demand. Instead, he argues that large offerings require investors to redirect existing capital. Every dollar committed to a new IPO or secondary offering is a dollar that cannot be deployed elsewhere in the market. Under this framework, mega-deals do not attract new money so much as compete for a limited pool of available capital, potentially draining liquidity from existing stocks.
Johnson believes many investors are currently positioned for a strong second half of 2026, expecting enthusiasm surrounding artificial intelligence and high-profile technology offerings to drive markets higher. He takes the opposite view. In his analysis, the sheer volume of stock supply could become a headwind for equity prices. When supply grows faster than demand, he argues, prices often become the mechanism that restores balance.
Johnson notes that, with regard to the SpaceX IPO, certain institutional barriers appear to have been lowered ahead of the offering. Specifically, he points to Fidelity’s reported reduction of account minimum requirements and Nasdaq’s decision to shorten the waiting period before index eligibility. Johnson sees these changes as evidence that market participants are attempting to broaden the pool of potential buyers ahead of what could become one of the largest IPOs in history.
Johnson argues that if SpaceX enters major indexes shortly after listing, passive investment vehicles could be forced to purchase large amounts of stock regardless of valuation. He estimates that index funds tracking the Nasdaq 100 may eventually need to buy tens of billions of dollars worth of shares. In his interpretation, sophisticated investors may seek to position themselves ahead of that demand by raising cash before the IPO and purchasing shares after index-related buying begins.
Johnson describes this as distribution rather than wealth creation.
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He argues that history offers several examples in which insiders used periods of intense investor enthusiasm to sell stock at elevated valuations. He specifically references the dot-com boom of 2000 and the SPAC-driven speculation of 2021 as periods when large amounts of equity were sold to public investors shortly before significant market declines.
Underlying the entire thread is Johnson’s central historical claim: large-scale equity issuance has consistently been a bearish signal for stocks. He points to the record issuance environment of 2021, which was followed by weakness later that year and a severe bear market in 2022. While he acknowledges that today’s circumstances are different in many respects, he believes the relationship between supply and demand remains unchanged.
For Johnson, the key question facing investors is not whether high-profile companies such as SpaceX, OpenAI, or Anthropic are exciting businesses. Rather, it is whether the market has sufficient capital to absorb an extraordinary amount of new stock issuance without putting pressure on existing asset prices.
His conclusion is straightforward: investors should approach the coming wave of offerings with caution. Record issuance, in his view, is not evidence of unlimited demand. It may instead be a sign that companies and insiders believe current market conditions are an attractive time to sell.
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Tyler Durden Mon, 06/15/2026 - 09:05Update (0810ET): France's President Emmanuel Macron said Monday he wanted to have a "respectful but firm discussion" with Trump.
"We will have a respectful but firm discussion," Macron told TF1 as he prepared to host Trump and other leaders at a G7 summit.
"Tariffs don't do anyone any good, especially tariffs between G7 countries," Macron said.
As Tom Ozimek reported earlier via The Epoch Times, U.S. President Donald Trump on June 15 threatened to impose a 100 percent tariff on French wines and champagne unless France eliminates its digital services tax on large American technology companies.
Trump said he delivered the warning directly to French President Emmanuel Macron, demanding that Paris scrap its 3 percent levy on major U.S. tech firms or face steep duties on some of France’s best-known exports.
“I asked him not to charge American companies, and if they do, I have no choice but to charge a 100% tariff on all champagnes and all wines coming out of France,” Trump told the New York Post in an interview. “All [Macron] has to do is get rid of the sales tax, and he wouldn’t have that kind of pressure.”
Trump’s threat prompted concern from French exporters, who warned of further strain on an industry that depends heavily on overseas markets.
“This new threat is bad news for our industry, which relies heavily on exports,” French wine and spirits exporters association FEVS said.
The group called for “responsible behavior” and urged France and the United States to maintain balanced and constructive trade relations “in the interest of both economies.”
France’s digital services tax, introduced in 2019, imposes a 3 percent levy on revenue generated in France by large digital companies. The tax applies to firms with more than about $29 million in French revenue and roughly $870 million in global revenue.
The measure has long drawn criticism from Washington, with the United States saying that it disproportionately targets American technology companies.
Experts say that even a relatively low digital services tax (DST) rate can lead to high effective tax burdens because revenues, rather than profits, are taxed.
“Because DSTs tax revenues, not profits, a company with a 10 percent profit margin would face a 60 percent effective tax rate on digital services provided in France,” economist Cristina Enache of the Tax Foundation Europe wrote in an October 2025 note.
Harvesters fill a press with Chardonnay grapes at the Mailly-Champagne cooperative during the 2025 Champagne harvest on August 26, 2025. Francois Nascimbeni/AFP via Getty Images
Enache described the French tax as discriminatory and cited research noting that France’s DST is ill-conceived because, while it purports to target big digital platforms, the cost mostly falls on consumers.
“The French DST, which functions like a tariff on certain services, is designed to be discriminatory,” Enache wrote. “It targets industries largely dominated by US companies, and the discrimination would be even greater if the revenue threshold is increased.”
Digital Tax DisputeThe United States has repeatedly challenged digital services taxes adopted by France and other countries. During Trump’s first term, the Office of the U.S. Trade Representative launched a series of Section 301 investigations into digital taxes that Washington viewed as discriminatory toward American companies.
“President Trump is concerned that many of our trading partners are adopting tax schemes designed to unfairly target our companies,” then-U.S. Trade Representative Robert Lighthizer said in a June 2020 statement. “We are prepared to take all appropriate action to defend our businesses and workers against any such discrimination.”
Trump has previously threatened tariffs on French alcohol imports. In January, he said he would impose a 200 percent levy on French wines and champagne if France declined to participate in the U.S.-led Board of Peace initiative for Gaza. In March 2025, he threatened a 200 percent tariff on alcohol imports from France and other European Union countries after Brussels announced plans to impose a 50 percent tariff on American whiskey.
The stakes are significant for France’s wine industry. Exports of French wines and spirits to the United States account for roughly one-quarter of the sector’s global sales, valued at about $4.4 billion annually, per FEVS data for 2024.
Wine and spirits imported from the European Union currently face a 15 percent U.S. tariff, a rate French officials have been lobbying to reduce since Trump and European Commission President Ursula von der Leyen reached a U.S.–EU trade agreement in Scotland last summer.
Last spring, amid an intensifying trade dispute between the United States and the EU, Commerce Secretary Howard Lutnick said that Trump’s tariff threats were intended to restore balance and fairness between trading partners.
“The EU has just so many years treated us so harshly, they just can’t stop,” Lutnick told Bloomberg TV in a March 2025 interview. “Their tariffs are way up here, and our tariffs are down here. How about: Relax. Let us balance it. We are your largest and most important trading partner. Treat us with respect and let’s get a little balance. Trump is out there saying: balance, balance, balance.”
Tyler Durden Mon, 06/15/2026 - 08:50