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Warm-Up
- Happy Memorial Day
- A WARM DHU welcome to Kevin Warsh - good luck fella, you are going to need it
- The new transient inflation
- Another BOARD? These guys like to make exclusive clubs...

Markets
- Starting to come in a bit.....
- Yield curve steepening - potential for a hike over cuts
- YIELDS!
- Fuels running low - we have the list

OH MY...
- The 30-year U.S. Treasury yield has surged to around 5.14%, putting it at its highest level since the run-up to the 2008 financial crisis
- Bets are pricing in the increasingly possibility of it reaching 5.5% to 6%, which would mark the highest levels since late 1999
- 30-Year mortgage near 6.35% (average) - DOWN from 6.91% at start of 2026

30-Year Yield

Bored of Boards
- The Board of Peace - remember that one? That was established in 2025 with 15+ countries that pitched in $1 billion for permanent seat
- Indefinitely chaired by President Trump, the governing board is a mix of U.S. officials and prominent American businessmen.
- So much for the peace part of that....
- Now we hear about the Board of Investment
---The US and China are discussing a mechanism for fast-tracking some Chinese investment deals and a reduction in tariffs on non-critical goods.
- Treasury Secretary Scott Bessent mentioned a "Board of Investment" that will be responsible for investment in non-sensitive areas.
- The idea of the "Board of Investment" is to have a mechanism that could allow deals that wouldn’t need to be referred to the Committee on Foreign Investment in the United States.
- In other words - working outside of the established channels that primary function is to determine whether these transactions pose risks to U.S. national security.

IRAN
- On and off as usual
- Cancelled a scheduled bombing?
- President Trump speaking with reporters says he will know "soon" if U.S. needs to give Iran another big hit; says Gulf states are helping with negotiations; says Iran keeps agreeing to things and changing their mind; says Iran has 2-3 days to make a deal
- This is the parental attempt to manupluate a child - I am going to count to THREE.... 1-2-3-4-5-6

China Trip
- Chinese President Xi Jinping warned U.S. President Donald Trump on Thursday that the U.S. and China “will have clashes and even conflicts” if the long-standing issue of Taiwan’s independence is mishandled.
- Speaking just ahead of Trump, Xi noted the global attention on the meeting, and said a major question for the two countries was whether they could avoid the “Thucydides Trap,” according to an official English translation of his remarks broadcast by CCTV.
- The Thucydides Trap refers to how tensions historically between a rising and ruling power have often resulted in a war.

Some Observations
- Veggie Prices are off the charts
--- Cauliflower $9, Carrots $6 small bag (not organic)
- - Favorite produce store noticed things going bad.... Realized that people are not buying stuff

PPI Inflation - HOTTTTTTTT
- Headline MoM: +1.4%
- YoY: +6.0%
- Core PPI (ex food & energy): about +1.0% MoM
- Energy was a big part, but services also saw a large move
- Highest monthly increase since march 2022
--- In reaction bonds are selling off - highest on 10 and 30 year since March 2024 (10 YR Broke above 4.65)

Outbreak
- An Ebola outbreak in the Democratic Republic of Congo and Uganda has been declared a public health emergency of international concern by the World Health Organization
- 80 deaths were attributed to the disease.
- Outbreak does not meet pandemic criteria, WHO says
- Eight laboratory-confirmed cases and 246 suspected cases
- At least six Americans in the DRC have been exposed to the Ebola virus, with three exposures deemed high risk

WHAT?
- One of the highest margin foods, pizza and pasta
- Domino's Pizza, is among the pizza giants whose franchisees have filed for bankruptcy
- Papa Johns: We have identified approximately 300 underperforming restaurants across North America that are not meeting brand expectations or lack a clear path to sustainable financial improvement, as well as locations where we can effectively transfer sales to a nearby restaurant
- Pizza Hut, which also hasn't filed for bankruptcy (YET) , won't be left out of closings as the company's parent Yum! Brands in February said that it would close 250 underperforming locations as part of its Hut Forward plan in the first half of 2026.
- PZZA down 65% over the past 5 years
- The Papa John's board formally ousted founder and former CEO John "Papa" John" Schnatter in a series of steps culminating in July 2018 and March 2019

BONDS - Yields Spiking
- U.S. Treasury yields spiked on Friday following a week of messy inflation data and as traders looked to price interest rate policy under new Federal Reserve Chair Kevin Warsh.
- The yield on the 30-year bond jumped nearly 11 basis points to yield 5.121%, the highest since May 22, 2025, and nearing the highest since October 2023.
- Japanese long-term bond yields have surged to multi-decade highs, with the 10-year Japanese Government Bond (JGB) hitting 2.8%—its highest level since October 1996

M&A Utilities
- U.S. power companies NextEra Energy and Dominion Energy announced a plan to merge on Monday in a $66.8 billion deal that ?will form one of the world's largest electric utilities during an expansion of energy-intensive data centers to support artificial intelligence.
- The all-stock transaction, which is pending ?regulatory approvals, is one of the largest-ever energy mergers.
- Industry consolidation -
-- This year, AES Corp agreed to be acquired by a consortium led by Global Infrastructure Partners and Swedish ?private-equity firm EQT AB for $33.4 billion.
---- That followed Constellation Energy's $16 billion deal with Calpine and Blackstone's $11.5 billion deal for TXNM Energy last year.

SOYBEANS
- Trump's visit to China yielded little in the way of anything
- The United States expects China to sign up to buy "double-digit billions" worth of U.S. farm goods following a summit between Presidents Donald ?Trump and Xi Jinping in Beijing, U.S. Trade Representative Jamieson Greer said on ?Friday.
- Greer noted the 25 million metric ton per year soybean deal agreed last October and said the U.S. also expects to "see an agreement for double-digit billion purchases of ags over the next three years per year ?coming out of this visit."
- Soybeans and other commodity prices moved higher on Monday as the news was disseminated.

CHYNA Deals?
- Looks like Boeing got an order of 200 more planes from China.
---- The problem is that was much less that was expected
-- Boeing was down on the news.
- Some murmurs about China buying more energy (oil, gas) from US
- - - There was also something said about President Xi asking about the US intentions of Taiwan

Bessent - Transitory
- Even with recent inflation news universally bad, Treasury Secretary Scott Bessent expects price pressures to ease soon, just in time for new Fed Chair Kevin Warsh to take over.
-- Why are we listening to this crew? They have been wrong about everything - but say it with such confidence.
- WAIT FOR IT......
- “I firmly believe that nothing is more transient than a supply shock, and we can, we can look through that, because before the Iranian conflict began, core inflation was coming down.
- He noted that he sees substantial disinflation ahead
----- IF there is substantial disinflation that would be bad news as the economy will be slowing precipitously - could be problematic - so it is not clear what he is so excited about

Earnings
- NVDA is going to be position earnings Wednesday after the close
- So far Semiconductor companies and storage companies have been saying that the orders keep flowing in and
-  Wall Street analysts project EPS of $1.78 on revenue of $79.2 billion, representing a year-over-year revenue increase of roughly 80%.

Open AI - Musk
- R0und 1- Musk looses on what looks to be a technicality
- Perhaps jurors were miffed that he skipped closing arguments and went to China instead (to be the the Trump Posse)
- Naturally he is already discussing appeal

Even more Create Financing
- Google (GOOG/GOOGL) and Blackstone (BX) are drawing significant investor attention following the announcement of TPU Cloud, a new U.S.-based joint venture designed to commercialize GOOG's Tensor Processing Unit infrastructure at greater scale.
- The partnership underscores the accelerating arms race in AI infrastructure, while also highlighting how hyperscalers are increasingly turning to alternative financing structures to fund the enormous capital requirements tied to next-generation AI compute expansion.

Fuel Shortages
- In case anyone thought otherwise - the Straight is till closed.

Fuel Running Low
- India: Severe LPG (cooking gas) shortages, rationing in many areas
- Pakistan & Bangladesh: Critical LPG and diesel shortages
- Southeast Asia (Thailand, Vietnam, Philippines, Indonesia, Malaysia): Jet fuel & diesel shortages, flight cuts
- South Korea & Taiwan: Tight jet fuel and refined product stocks
- Europe (especially UK): Jet fuel critically low, risk of flight cancellations
- Africa (South Africa, Nigeria, parts of East Africa): Jet fuel and import shortages
- CUBA - OUT

Cooking Fuel (LPG) Shortages
- India: Severe shortages, long queues, rationing
- Pakistan: Critical LPG shortage, heavy rationing
- Bangladesh: Major shortages, price spikes
- Nepal & Sri Lanka: Supply cuts, half-filled cylinders common
- Southeast Asia (Indonesia, Philippines, Thailand, etc.): Tight supplies and high prices
- Africa: Sharp price increases, reduced affordability
- Europe/US: Mostly higher prices, no major physical shortages

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