Baltic
Dry Index. 3226 +102 Brent Crude 92.64
Spot Gold 4540 Spot Silver 76.09
US 2 Year Yield 4.00 -0.01
US Federal Debt. 39.282 trillion
US GDP 32.16 trillion.
“Why, sometimes I’ve believed as many as six impossible things
before breakfast.”
NASDAQ Lewis Carroll, Alice in Nasdaqland
Wonderland.
Little
need for my input today, except to say pay attention to that warning from
Exxon.
Bad
things in the global economy happen fast when diesel inventories fall to
critical levels.
There’s
a lot of speculation that if Trump’s going to invade Cuba, it has to happen in
the next few weeks. Possibly after an Iran deal?
Asia
markets rise as investors weigh Iran military activity against signs of
temporary U.S.-Iran deal
Published
Thu, May 28 2026 7:45 PM EDT
Asia-Pacific
markets traded higher on Friday as investors weighed fresh military activity
involving Iran against signs that Washington and Tehran were moving closer to a
temporary agreement to halt their three-month conflict.
Japan’s Nikkei 225 rose 0.88%, while
the Topix added 0.53%. South Korea’s Kospi jumped 2.68%, while the small-cap
Kosdaq was up 0.25%. Shares of Samsung Electronics surged as
much as 6.51% after the company said it had begun shipping samples of
its latest high-bandwidth memory chip to its customers globally.
In
Australia, the S&P/ASX
200 rose 0.72%.
Hong
Kong’s Hang Seng index added
0.68%, while the CSI 300 rose 0.38%.
Iran’s
armed forces reportedly
fired missiles at unspecified targets late Thursday, according to
state media outlet Fars.
The
latest military activity in southern Iran came just hours after the Pentagon
said Tehran had fired a ballistic missile toward Kuwait and deployed attack
drones in and around the Strait of Hormuz.
Earlier
on Thursday, a White House official confirmed an Axios report saying the U.S. and Iran had “mostly
agreed” on the terms of a deal aimed at temporarily halting the three-month
conflict.
U.S.
futures traded near flat after all three major averages finished at new closing
records on Thursday, boosted by a rally in the technology sector.
S&P 500 futures and Nasdaq 100 futures were
trading near the flatline. Futures
tied to the Dow Jones Industrial Average rose 7 points, or less than
0.1%.
The S&P 500 gained 0.58% to
7,563.63, while the Nasdaq
Composite rose 0.91% to 26,917.47. Both indexes also hit intraday
all-time highs. The Dow Jones
Industrial Average was higher by 0.05% at 50,668.97.
Tech
stocks rallied Thursday, after a strong earnings outlook from Snowflake revived enthusiasm
around the AI trade. Shares soared 36.5%, posting
their best day ever after the cloud-based data platform provider
issued rosy
fiscal second-quarter guidance, as well as a beat on the top and bottom
lines in its latest quarter. The company also inked a plan to spend $6 billion
on Amazon Web Services over five years.
Asia
markets: Nikkei 225, Hang Seng Index, Kospi, Nifty 50, CSI 300
Exxon
warns oil inventories will hit dangerously low levels in weeks, forcing prices
to shoot higher
Published
Thu, May 28 2026 5:03 PM EDT Updated Thu, May 28 2026 6:25 PM EDT
Exxon Mobil warned Thursday
that oil inventories will fall to record low levels in coming weeks, forcing
prices to spike and curbing demand.
“We’re
approaching unheard of inventory levels,” said Exxon Senior Vice President Neil
Chapman at a conference hosted by Bernstein in New York.
“I
mean really, really low levels,” Chapman warned. “You can debate whether that’s
going to hit, those really low levels, in two weeks or three weeks. Once you
get to that point, then you’ll see price shoot up.”
The
price of physical Brent oil cargoes will spike to $150 to $160 per barrel when
inventories hit all-time lows in coming weeks, the executive said. “When the
price gets to a certain level, demand destruction brings it back into balance,”
he said.
Brent futures for July
delivery, the nearest contract, closed under $94 per barrel Thursday as
investors once again held out hope
for a settlement between the U.S. and Iran that will reopen the Strait
of Hormuz.
Iran’s
closure of the strait has cost the market more than a billion barrels so far,
the largest oil supply disruption in history, according to the International
Energy Agency. Oil stockpiles have mitigated the impact so far, but that “can’t
last forever,” Chapman said.
The
IEA warned earlier this month that inventories are being depleted at a record
pace. The organization’s members agreed in March to release
a record 400 million barrels to lessen the impact of the supply
disruption.
Oil
industry executives have warned for two months that the crude futures
market is not reflecting the scale of the disruption triggered by the war in
the Middle East.
“I
don’t know, whether it’s two to three weeks or three to four weeks,” Chapman
said. “What I’m really saying is, once you get to the minimum inventory levels
and all-time low inventory levels, there’s only one way to go. That’s the
situation.”
Exxon
warns oil inventories will hit dangerously low levels due to Iran war
Axios
Markets 1 big thing: Leveraging up
May
28, 2026
Investors
are using a
record amount of borrowed money to bet on stocks.
Why
it matters: Trading
with borrowed money — known on Wall Street as "margin" — can amplify
both returns on the way up and losses if the market turns.
- Even
investors who do not trade on margin should watch it: Borrowed money has
played a key role in market crashes, from 1929 to the dot-com bust.
State
of play: Through
the end of April, net margin debt hit more than 1.25% of U.S. market cap, near
the highest level in records stretching back to 1997.
The
big picture: It's
just one of the metrics causing some to question the sustainability of the
market's AI-driven boom. Others include:
- Long-term
measures of market valuation like Yale professor — and Nobel
laureate — Robert Shiller's Cyclically Adjusted Price-to-Earnings ratio
(CAPE) are at
highs not
seen since just before the dot-com crash.
- The market's
valuation as
a share of U.S. GDP — sometimes known as the Buffett Indicator
because Warren Buffett often cited it — is the highest on record.
- As we
mentioned yesterday, the stock market seems to be offering skimpy
returns compared
with bonds,
a state of affairs that's
sometimes signaled poor returns to come.
- And
speculative trading activity seems to be picking up, with bullish
trading of options (as measured by put-call ratios) and leveraged
ETFs gathering
momentum.
What
they're saying: "Whether
we're in a bubble is a very common question from investors, and there are a
number of ways to address that," said Ben Snider, Goldman Sachs' chief
U.S. equity strategist.
- He added:
"I think it's fair to say the increase in leveraged retail trading
activity does point in the direction of signals that would warrant some
caution."
Yes,
but: As
compelling as these measures of market exuberance may seem, their record as
timing mechanisms — that is, as guides for when to buy and sell — is pretty
terrible.
- Shiller's
CAPE ratio, for example, has signaled market overvaluation for almost all
of the last decade.
- Anyone who
sold when it broke out of its previous range in late 2016 would have
missed out on an over 200% rise in the S&P 500.
Case
in point: Goldman
Sachs' Snider doesn't find the current levels of market enthusiasm off-putting.
- Yesterday, he
raised his year-end S&P 500 target to 8,000 (it was previously 7,600),
implying a gain of 16.9% in 2026. He cited the strength of corporate
earnings, wrinkles
and all,
as a reason for continued optimism.
The
bottom line: Stocks
are probably a bit frothy and could be due for a correction. But timing the
markets is incredibly hard.
Toyota's April exports to Middle East plummet 91.7
pct
Source: Xinhua| 2026-05-28 14:36:00
TOKYO, May 28 (Xinhua) -- Toyota Motor
Corp. said Thursday that its exports from Japan to the Middle East nosedived to
2,418 units in April, down 91.7 percent year on year, as the ongoing regional
conflict weighed on trade.
The automaker's global sales in April
declined 3.1 percent to 849,306 vehicles, extending a losing streak to a third
consecutive month. In contrast, global output ticked up 2 percent to 831,971
units, a record high for the month.
Overseas sales by the world's largest
automaker by volume retreated 7.5 percent to 699,382 units, with sales in the
United States declining 4.6 percent to 222,378 vehicles, while those in the
Middle East tumbled 33.7 percent to 31,360 units.
Meanwhile, domestic sales in Japan surged
24.2 percent to 149,924 units, buoyed by demand from consumers who had delayed
purchases ahead of the abolition of the environmental performance tax at the
end of March.
On the production side, Toyota's overseas
output grew 3.8 percent to 567,578 cars, while domestic production edged down
1.7 percent to 264,393 units.
Toyota's April
exports to Middle East plummet 91.7 pct-Xinhua
US 'ready to invade Cuba immediately' as massive
military build-up unmasked
29 May 2026
The US is "ready to invade Cuba
immediately", according to an explosive new report which revealed a huge
military build-up next to the communist island.
The US Department of Defence has spent
months positioning troops and weapons needed for an American invasion of the
island territory - and just needs the green light from Donald Trump.
The President is said to have put forward
plans to takeover the island after Cuba's communist regime failed to be toppled
by economic and political pressure, according to Politico.
The US Navy's presence in the region -
which lies just 90 miles off the coast of Florida - is now the second largest
anywhere in the world, only behind its build-up in the Middle East.
Washington has significantly ramped up
pressure on Havana since the daring capture of Venezuelan dictator Nicolas
Maduro in January.
The US has intercepted oil deliveries
bound for Cuba from other countries and assumed control of Venezuela's
petroleum supplies, effectively severing the island nation's energy lifeline.
Shortly after Mr Maduro arrived in New
York, Mr Trump told reporters he believed he would "have the honour of
taking Cuba".
And on Wednesday, Secretary of State Marco
Rubio - himself the son of Cuban immigrants - warned the country was “in a lot
of trouble".
In a full Cabinet meeting, Mr Rubio said
that having a "failed state" on America's doorstep presented a
"threat to the national security".
The Pentagon's build-up in the region is
understood to be slightly smaller than the armada which massed around Venezuela
prior to the previous military operation.
In May, the USS Nimitz aircraft strike
carrier group arrived in the Caribbean, alongside a number of guided missile
destroyers capable to carrying out precision missile attacks on the island.
Flight tracking websites have shown a
number of US drones and surveillance aircraft surrounding Cuba over the past
few months.
More
US
'ready to invade Cuba immediately' as massive military build-up unmasked
In other news, expect higher coffee prices from
August.
China to grant market access to eligible coffee
beans from 53 African countries starting July 20
09:27, May 28, 2026
BEIJING, May 27 (Xinhua) -- China will
allow eligible coffee beans from all 53 African countries that have diplomatic
ties with China to enter its market starting July 20, 2026, the General
Administration of Customs (GAC) has announced.
Coffee beans, a signature agricultural
produce and pillar economic industry for many African countries, are the second
type of African agricultural products to obtain full quarantine access to the
Chinese market following dried chilies, according to the GAC.
African countries including Ethiopia and
Burundi have already secured access for their coffee bean exports to China,
while some other countries, including Mauritius, Angola, Togo, Guinea, Liberia
and Sao Tome and Principe, have filed export applications, official data
showed.
Following a holistic assessment of African
coffee bean production systems and pest risk control frameworks, the GAC has
rolled out unified phytosanitary requirements, eliminating the previous
practice of negotiating separate bilateral quarantine agreements with each
applicant country and substantially streamlining access procedures.
Industry insiders noted that full
quarantine access does not mean exemption from border checks, as all shipments
must comply with requirements stipulated in GAC Announcement No. 68 of 2026.
The GAC official added that it will
continue to implement upgraded "green channel" facilitation measures
to bring more high-quality, safe African agricultural and food products to the
Chinese market.
Temperatures likely to remain at record levels in
2026-2030: UN
Geneva (AFP) – Global average
temperatures are likely to continue at or near record levels this year and for
the next four years afterwards, the United Nations warned Thursday.
Issued on: 28/05/2026 - 06:09 Modified: 28/05/2026
- 07:04
The 11 hottest individual years ever
recorded all happened from 2015 onwards and the UN's weather and climate agency
said the trend was set to continue, with a new hottest-ever year
"likely" before 2031.
There is a 75 percent chance that the
2026-2030 five-year mean temperature will surpass the key threshold of 1.5C
above the 1850-1900 pre-industrial average, the World Meteorological
Organization said.
The WMO outlook comes as western Europe
swelters under a "heat dome" of warm air, breaking temperature
records for May in Britain and France.
"Global average temperatures are
likely to continue at or near record levels in the next five years," the
agency said.
“It is likely (86 percent chance) that one
year between 2026 and 2030 will surpass 2024 as the warmest year on
record."
El Nino effect on 2027
"There is an El Nino predicted for
the end of 2026, which increases the chances of the following year, 2027, being
the next record-breaking year," said Leon Hermanson, lead author of the
WMO's Global Annual-to-Decadal Update.
The last El Nino contributed to making
2023 the second-hottest year on record and 2024 the all-time high at around
1.55C above the pre-industrial average.
El Nino is a natural climate phenomenon
that warms surface temperatures in the central and eastern equatorial Pacific
Ocean, bringing worldwide changes in winds, pressure and rainfall patterns.
It typically takes place every two to
seven years and lasts around nine to 12 months.
More
Temperatures
likely to remain at record levels in 2026-2030: UN
Canada to buy Swedish surveillance plane over US
models
Prime Minister Mark Carney says the
Canadian Armed Forces need the plane to detect and deter threats across the
Arctic.
Jenipher Camino Gonzalez with
Reuters, AP 27 May 2026
Canadian Prime Minister Mark Carney
announced on Wednesday that his government would not
purchase early-warning-radar planes from the United States, opting instead
for a European model.
Canada will
purchase Swedish Saab's GlobalEye, which is based on the
Canadian-manufactured Bombardier Global 6500 jet.
"With a suite of advanced sensors and
mission systems, Saab's GlobalEye will be a key resource for the Canadian Armed
Forces to detect and deter threats across the Arctic," Carney told a
defense conference in Ottawa.
The decision comes after Carney linked
Canada to a major European Union defense fund
last year, and as the Canadian prime minister has made a point of diversifying his
country's military spending away from the United States.
Carney has also previously vowed to spend
no more than 70 cents of every dollar of Canadian military capital
spending to the United States.
The prime minister had pledged earlier
this year that Canada would take full
responsibility for protecting its vast Arctic territory, after decades of
relying on a partnership with the US to monitor over 4.4 million
square km (1.7 million square miles) of Canadian land and sea.
"Saab's GlobalEye will be a key
resource for the Canadian Armed Forces to detect and deter threats across the
Arctic," Carney said.
What is Saab's GlobalEye?
The Saab GlobalEye plane is equipped with
a powerful radar. It provides situational awareness of aircraft and missile
movements over hundreds of kilometers.
The plane can also detect hostile activity
in the air or from ships and can direct fighter jets to their
targets. Carney did not elaborate on the size of the fleet or the
cost of a potential contract.
Meanwhile, in a statement, Saab said it
planned to invest in research and development work in Canada as part of any
deal.
Tensions between the US and Canada have
been high since US President Donald Trump launched a trade war against the
US' northern neighbor and even suggested that Canada should become the
51st US state, which caused widespread outrage in Canada, just as
Carney was seeking the post of prime minister and succeeded in getting elected
to it.
Since then, the Canadian government has
also opted ot review the planned purchase of US F-35 fighter jets to
explore other options.
Canada to buy Swedish surveillance plane over US models
Global Inflation/Stagflation/Recession
Watch.
Given
our Magic Money Tree central banksters and our spendthrift politicians.
Core
inflation hit an annual rate of 3.3% in April, as expected, Fed’s preferred
gauge shows
Published
Thu, May 28 2026 8:32 AM EDT
Inflation
continued to hit consumer wallets in April, likely keeping the Federal Reserve
on the sidelines until the current wave subsides, fresh pricing data released
Thursday showed.
The
personal consumption expenditures price index increased a seasonally adjusted
0.4% for the month, putting the 12-month inflation rate at 3.8%, the Commerce
Department reported. Economists surveyed by Dow Jones had been looking for
respective readings of 0.5% and 3.8%.
Excluding
food and energy, core prices rose 0.2% for the month and 3.3% for the year,
against estimates of 0.3% and 3.3%.
While
the annual rates were in line with forecasts, the soft monthly readings could
provide some hope that the burst in prices over the previous month had begun to
ease.
The
Fed takes in a wide dashboard of indicators, but uses the PCE measures as its
prime forecasting and policy tool. Officials generally consider core a better
indicators of long-term inflation trends as it excludes the volatile gas and
groceries components.
In
other economic news Thursday, gross domestic product growth in the first
quarter was less than expected. GDP accelerated at an annualized rate of just
1.6% for the period, according to a revised Commerce Department reading that
was below the initial estimate of 2%.
The
department said the initial reading was cut because of downward revisions to
consumer spending and investment. The consensus was for GDP to hold at the
earlier 2% estimate.
Despite
the soft Q1 reading for GDP, the department reported that consumer spending
increased 0.5% in April, meeting the forecast. Income, though, was flat,
against the estimate for a 0.4% increase.
Stock
market futures held negative after the data but were off their lows. Treasury
yields were slightly negative, primarily at the longer-duration end.
On
the inflation front, goods prices jumped 0.7% in April, pushed again by
gasoline, which surged 5.5%. Services prices rose 0.3%, which included a 0.6%
acceleration in the housing and utilities category and a 0.5% increase in food
services and accommodations.
Housing
prices broadly increased 0.5%, the biggest monthly gain going back at least
until January 2025. Services excluding food, energy and housing rose just 0.2%
for the month.
The
inflation readings could provide some encouragement that underlying pressures
are easing a bit, though they likely won’t change market expectations.
Traders
expect the Fed to stay on hold until at least late in 2026 and currently are
pricing the likelihood that the central bank’s next move will be a rate
increase, possibly in the early part of the next year.
Inflation
had been ticking closer to the central bank’s 2% goal, but the Iran war and the
impact from tariffs has derailed the Fed. Policymakers recently have been
placing a greater emphasis on the inflation danger as signs increase that the
labor market is stabilizing.
Core inflation hit
an annual rate of 3.3% in April, as expected, Fed’s preferred gauge shows
Germany:
No recovery in sight for the economy
The
war in Iran has dashed hopes for economic growth. Germany's pension and
healthcare systems are also feeling the strain.
27
May 2026
It
was certainly not a joyful meeting for Chancellor Friedrich Merz: On
Wednesday (May 27), the chancellor and several ministers from his cabinet met
with the five economics professors who make up the German Council of Economic
Experts — an independent advisory body to the federal government.
The
Council's latest report provides no cause for the German government to
celebrate. On the contrary, it underscores just how poor the state of the
German economy is.
Stagnation
rather than growth in Germany
"Unfortunately,
we've had to lower the growth forecast we gave in this year's report,"
said Chairperson Monika Schnitzer ahead of the meeting at the Chancellery.
"We now expect the gross domestic product (GDP) to grow by just 0.5% this
year and 0.8% next year."
The
GDP measures the total value of all goods and services produced, and serves as
the measure of a country's economic strength. Meanwhile, the inflation rate —
that is, the rise in prices — is expected to climb to 3% in 2026.
These
are disastrous figures. In fact, they are the exact opposite of what the
chancellor promised as his top priority in May 2025 when his government took
office: to quickly get the economy back on track.
Frustration
among German companies
Business
leaders are voicing their increasing discontent with the government. Leading
industry associations are expressing concern that since the end of World War II, Germany's
competitive position in the global economy has never been more precarious.
One
in four jobs in Germany is linked to the industrial sector. For decades, German
exports of cars, machinery, chemical and pharmaceutical products flourished,
and the country prospered as a result. Since the prolonged economic downturn
that began in 2019, however, German companies have been losing their global
competitive edge, and companies that export goods are openly questioning
whether it is possible to turn things around.
Energy
prices have risen dramatically
As
recently as last fall, there was at least some hope that the economy might
finally start to pick up again in 2026. But the war in Iran threw a wrench in
those plans. Heating oil prices have risen by 40% and gas and electricity
prices are also expected to continue climbing.
Before
the Iran war, 20% of global
oil and liquefied natural gas consumption was transported through the Strait of
Hormuz off the Iranian coast. Just like US President Donald Trump's tariff policy,
the blockade has been affecting the whole world. The US is by far the world's
largest importer.
"Tariffs
and the energy crisis are hitting the German economy particularly hard because
it is both an exporter of goods and an importer of fossil fuels,"
explained Austrian economist Gabriel Felbermayr, who was recently appointed to
the German Council of Economic Experts.
At
the same time, there is increasing competitive pressure on global markets,
especially from China. In 2025, China
increased the volume of goods it exports to Europe once again. Since Europe is
the most important market for German exports, Felbermayr said, "this puts
a huge strain on German industries both at home and in third-party markets."
More
Germany: No
recovery in sight for the economy
Technology
Update.
With events happening fast in the
development of solar power and graphene, among other things, I’ve added this
section Updates as they get reported.
Europe could get $8 back for every $1 spent on wind power as China
races ahead, study finds
27 May 2026
A new analysis suggests Europe may be
leaving a lot of money on the table by underfunding one of its biggest
clean-energy industries: wind power.
A study by Trinomics in collaboration with DTU Wind says each euro of public support for
wind innovation and industrial scale-up could produce €7 ($8) for every $1
spent each year in economic returns by 2040, while also boosting jobs, exports,
and energy security.
According to Wind Europe,
the study makes the case for a dedicated European "Fund for Wind Research
and Competitiveness," with €11.6 billion — $13.5 billion with current
exchange rates — in targeted support spread across the continent's wind supply
chain.
Of that total, around €9 billion ($10.5
billion) would go toward expanding manufacturing capacity, so European
companies can keep up with growing demand as the region pushes for greater
energy independence. Researchers argue that the funding should be specifically
earmarked within the European Competitiveness Fund instead of being scattered
across multiple programs.
The report says that by 2040, that
support could contribute €33 billion — $38.4 billion — a year to EU gross
value added, create 180,000 more jobs, and raise annual wind equipment exports
by €12.6 billion.
Right now, wind reportedly gets less
than 2% of the budgets in EU programs open to it. Funding is divided across 12
different programs, and approval times in major channels such as Horizon Europe
and the Innovation Fund run for more than nine months on average — a pace the
study says is too slow to keep up with global competition.
The findings come as China ramps up support for its wind industry. The study says public backing for Chinese
turbine makers in recent years was roughly two to five times higher than what
European manufacturers received, giving them a major advantage when it comes to
scaling up and competing globally.
The report estimates that targeted wind
support could help keep up to 89% of the industry's value within Europe,
compared with 47% without it. It could also displace 91.5 billion cubic yards
of imported gas each year, roughly equivalent to 700 liquefied natural gas shipments.
The report says that could mean more
stable energy systems, less exposure to imported fuel price shocks, and more
local manufacturing jobs.
They say the next EU budget should
reserve funding specifically for wind so the industry is not forced to compete
in broad, technology-neutral funding calls that can slow progress. A more
focused system could help Europe expand domestic manufacturing, accelerate
innovation, and defend market share in a sector it helped build.
As the report puts it: "The message
is clear. Europe needs a smarter way to use the tools it already has." It
adds that funding wind the right way means "more European manufacturing,
more innovation and more exports, with stronger supply chains and higher energy
security."
Europe could get $8 back for every $1 spent on wind power as China races
ahead, study finds
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt Clocks
(usdebtclock.org)
Another
weekend and peace with Iran and war with Cuba?
In Diesel land, how long before the great disruption hits? Have a great
weekend everyone.
In tomorrow's LIR YouTube section, how India got the atom bomb.
“It would be so nice if something made sense for a change.”
President Trump Lewis Carroll, Alice in Iran
Wonderland.
