DHUnplugged Podcast

Let’s Make a Deal!

News Dominated by … SpaceX

This week – Fed rate Decision

Need a new CTP (SPACEX?)

PLUS we are now on Spotify and Amazon Music/Podcasts!

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Warm-Up

- Let's Make a Deal!

- News Dominated by ... SpaceX

- This week - Fed rate Decision

- Need a new CTP (SPACEX?)

Markets

- Another V Formation - Nearing Highs again

- IPO Madness - Anthropic and OpenAi

- SpaceX IPO - could drain markets

- More AI valuations through the roof

DEDICATION: Stu Schifter - my good friend of 30 years passed away last night... battled Cancer for 2 years.

Market Valuations

- S&P 500 Forward P/E = 22.5

- 10-yr average =  19–20x

- Long-term average 18-19

- Not cheap, pricing in a lot of earnings growth.

- NASDAQ 100 forward P/E =  23-24

- 1-yr average   ~23x

- 20-yr average  ~20–21x

- Not screaming expensive on a forward basis

- - NOTE: Training P/E = 33-40

NEW Playbook

- But the Rumor and Buy the News

- used to be Buy the Rumor and Sell the News

- This is why there is an announcement about something and then a date to follow....

- Monday = Deal, Friday = signing

On that note

- What is the deal anyway?

- Seems that we  (USA) moving out our navy before the final

- Straights of Hormuz opening -??

- Has anyone seen the text?

- We are no better than we were before all this started...

Headline Nonsense

- Fox Business: Beware the ticking time bomb hiding in your 401(k)

- Required minimum distributions can trigger taxes on Social Security benefits and boost Medicare premiums

- This is not a ticking time bomb. This is just reality when you have a lot saved and need to start withdrawals

- HOWEVER - there are ways around this and we have helped clients with this.

- - Listeners - if you have a 401k and think that you will be paying too much later on - we can take a look at the options...

More Retirement Alerts

- Social Security running out again....

- Less that 10 year until the reserves are exhausted

- The Social Security Administration’s newly released 2026 Trustees Report confirms that the federal retirement safety net is less than seven years away from fiscal depletion, as the Old-Age and Survivors Insurance (OASI) trust fund will completely exhaust its accumulated reserves in the fourth quarter of 2032.

- Once the reserve dries up, ongoing tax revenues will cover only 78% of scheduled retirement benefits, according to the report.

- Some of the blame is being laid on the OBBBA with higher standard deductions and lower taxes on SS Benefits

- "The OBBBA also adds a temporary additional standard deduction for taxpayers over age 65," it says. "As a result, less income tax will be paid on Social Security benefits, and the OASI and DI Trust Funds will receive lower levels of revenue in the future from income taxation of Social Security benefits."

PSA

- The Food and Drug Administration (FDA) has classified a recall of more than 900 cases of Alfredo sauce at its highest risk level after a supplier recalled a dry milk powder ingredient used in the product due to potential salmonella contamination.

- The FDA designated the recall as a Class I event, its most serious classification, meaning there is a reasonable probability that use of or exposure to the product could cause serious adverse health consequences or death.

- The Coffee Connexion Co., Inc.

- According to the FDA, the product was distributed in Alabama, Arkansas, Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Maryland, Maine, Michigan, Minnesota, Missouri, Mississippi, Montana, North Carolina, Nebraska, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin and Wyoming.

Monday Markets

- 5:45PM Sunday night we see an announcement that there is a Deal!

- Why 5:45PM????????

- Futures rally, oil drops

- This is just days after the market already surged after a Truth Social post last Thursday that said that the US will "soon" sign a deal with IRAN

---- That pushed up markets quite a bit too

- Buy the rumor and buy the news...

Reality Check

- Thursday: Trump told reporters in the Oval Office that “we have a deal that Iran will never have a nuclear weapon.”

- Monday: 60-day period delay to continue discussions of nuclear issues

- Is there a sucker in all of this?

$ for IRAN

- Supposedly there i some deal...

- A $300 billion private fund designed ?to trigger investment into Iran is outlined in the U.S.-Iran framework agreement and more than half that sum has already been committed, a source with ?direct knowledge of the deal told Reuters.

- The fund is designed to give both sides an economic incentive to conclude a final deal, said the source, who spoke on condition of anonymity because the plan has not yet been announced as Washington and Tehran prepare to sign on Friday.

SpaceX

- IPO - Finally!

$135 per share - Rose to $160+/- on the debut day

- Rather smooth process and very orderly

- A total of $85B was raised - due to an add-on additional green-shoe that was allowed ($10B) for institutions.

- Rose another $20% on Monday

- Retail got about 20% of the deal (down from 30%)

Oracle

- Oracle Corp. shares declined after the company reported quarterly capital expenses that were higher than estimates, raising investor concerns about the profitability of the AI infrastructure business.

- The company expects to spend about $70 billion on net capital expenditures in the current fiscal year, and plans to raise another $40 billion in equity and debt.

- Oracle's cloud infrastructure business gained 93% to $5.8 billion, and total cloud revenue is projected to jump about 61% in the quarter ending in August.

- The increase of $5B over the course of the year was disconcerting to investors.

- Shares dropped the most in over 6 months on the news

CPI and PPI

- May CPI was mixed but generally cooler on the core reading, with headline CPI up 0.5% month-over-month, matching consensus, while Core CPI rose 0.2%, below the 0.3% consensus and below Briefing's 0.4% estimate.

- The softer core CPI reading suggests some easing in underlying consumer inflation pressures, which is the more constructive part of the inflation picture.

- May PPI was firmer than expected on the headline reading, with PPI up 1.1% versus 0.7% consensus and 0.8% Briefing estimate, matching the prior month's revised 1.1% pace.

- Core PPI rose 0.4%, matching consensus and coming in below the prior month's revised 0.7%, indicating wholesale inflation remained elevated but did not accelerate further on the core measure.

- Taken together, the CPI and PPI reports point to a mixed inflation backdrop: consumer-level core inflation looked somewhat better, but producer-level price pressures remained sticky.

Cyberdyne

- Anthropic announced Claude Fable 5, a Mythos-class model that will be available to its enterprise customers and paid subscribers.

- The company unveiled Mythos in April and has limited the rollout because of its advanced cybersecurity capabilities.

- Anthropic said Claude Fable 5?s broad release is possible because of new safeguards that block responses in specific high-risk areas.

- WAIT! The US government PULLED the plug on Mythos and Fable for any foreign national

- From Anthropic - The US government, citing national security authorities, has issued an export control directive to suspend all access to Fable 5 and Mythos 5 by any foreign national, whether inside or outside the United States, including foreign national Anthropic employees. The net effect of this order is that we must abruptly disable Fable 5 and Mythos 5 for all our customers to ensure compliance. Access to all other Anthropic models will not be affected.

OpenAi

- Confidentially flies for IPO

- Sends financials and IPO materials to regulators - making sue all in good order.

- This allows the company to iron out accounting, compliance, and regulatory issues in private without triggering a "media circus" or alerting competitors to their financials

Last Friday.....

- Nonfarm payrolls jumped a seasonally adjusted 172,000 for the period, down slightly from the upwardly revised 179,000 in April and far above the Dow Jones consensus estimate for 80,000.

- The unemployment rate held steady at 4.3%, as expected.

- Average hourly earnings rose 0.3% for the month and were up 3.4% over the past year, both in line with the Wall Street consensus.

Screwworm

- The New World screwworm has been detected in a 3-week-old calf in Zavala County, Texas, the first known case of that fly in the United States since 2017.

- New World screwworm larvae “burrow into the flesh of living animals, causing serious damage to livestock and economic losses,” the U.S. Department of Agriculture said.

- The USDA and Texas officials are taking immediate action to contain and eradicate the pest.

- In December, the Food and Drug Administration granted conditional approval to the topical solution Exzolt Cattle-CA1, which is used to prevent and treat New World screwworm infestations and is produced by Merck & Co.

- What is going to happen to beef prices?

Real Estate

- Nationwide, 5.8% of all home listings were pulled off the market in April, according to Redfin.

- Delistings were up 3.8% compared with March.

- Atlanta saw the highest share of homes come off the market in April, with 1 in 10 delisted. San Jose, California, followed with roughly 9% pulled, then Los Angeles (7.8%), Dallas (7.8%) and Seattle (7.7%).

 In other news....

- The Japanese city of Utsunomiya has suspended all 94 of the primary and middle schools ?that it operates on Monday after its ?first-ever bear sighting, a municipal official said.

- The city of half-a-million residents about 100 km (60 miles) north of Tokyo said ?the bear was first seen in a residential ?area near a park on Saturday evening. It ?remains at large after the last sighting early ?Monday morning about half a kilometre from a ?middle school.

 

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The Winner for the THE CLOSEST TO THE PIN

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FED AND CRYPTO LIMERICKS

 

See this week’s stock picks HERE

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Another good month – investors are giddy.

Oil – CRITICALLY LOW inventory (Inside Baseball).

Fed governor admits inflation is hard to control.

A major name says they are reducing stocks – but are they really?

Announcing the Winner of the CTP for Salesforce (CRM).

PLUS we are now on Spotify and Amazon Music/Podcasts!

Click HERE for Show Notes and Links

DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.

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Warm-Up

- Another good month - investors are giddy

- Oil - CRITICALLY LOW inventory (Inside Baseball)

- Fed governor admits inflation is hard to control

- A major name says they are reducing stocks - but are they really?

- Announcing the Winner of the CTP for Salesforce

Markets

- Huge reversal in Software stocks

- A few names on the move - and moving BIG!

- SpaceX IPO - could drain markets

- More AI valuations through the roof

Pizza Mouth !

Reversal

- Software stocks bounced this week on strong results from Snowflake and Okta, which both recorded their best days on record.

- The results signal that investors may have been too quick to declare the end of software with the emergence of artificial intelligence.

- Even as AI displaces certain tools and job functions, many software companies continue to show growth, assisted by their own AI products.

- The iShares Expanded Tech-Software exchange-traded fund rose 8% this week and closed May up 21%, the best monthly performance for the ETF since October 2001.

- With this month’s rally, the iShares software ETF is only down 3.8% for the year, still badly trailing the Nasdaq, which has gained 18% in 2026.

Snowflake

- Amazon said Wednesday that its cloud division has landed a $6 billion spending commitment from Snowflake, which includes the use of the company’s custom silicon and chips for artificial intelligence.

- Snowflake’s purchase of services and technology from Amazon Web Services will occur over five years, according to a press release about the agreement.

- Snowflake intends to expand its use of Amazon’s Graviton general-purpose chips, as well as cloud-based graphics processing units for AI.

- Snowflake and Amazon are frenemies - they compete but also partner with each other.

- Stock up 36% on this news

DELL!!!!!!!!!!!!

- Dell Technologies Inc. shares surged due to an outlook for annual sales that far surpassed expectations on demand for servers that power artificial intelligence work.

- Revenue in the fiscal year ending in January 2027 will be about $167 billion, including $60 billion from the sale of AI servers, topping analysts’ average estimate of $142.1 billion.

- The company booked $24.4 billion in AI orders and generated $16.1 billion in AI server sales in the quarter ended May 1, with Chief Operating Officer Jeff Clarke saying “The AI opportunity shows no signs of slowing.”

- The shares surged 33% to $420.91 at the close Friday in New York, the biggest single-day increase in the more than seven years since the hardware maker returned to the public markets after a five-year hiatus as a private firm.

- Up 150% YTD

More Dell

- New XPS 13 at $699 targets price-sensitive market

- Aims to compete with MacBook Neo, lower-end Windows devices

- Launch amid global memory chip crunch to gain market share

- WINING OVER JCD:

-- 13.4-inch screen (very compact footprint)

Options: 2K / 2.5K LCD (120Hz)

OLED touchscreen (higher contrast)|

- Very thin bezels ? almost edge?to?edge screen

- Weighs 2.2 lbs - one of the lightes out there and a rival to Apple's Macbook Neo

Infighting

- OpenAI may release multi-chip AI software, challenging Nvidia's (NVDA) ecosystem advantage, according to The Information

- Oh, and NVDA is now releasing a CPU for PCs that is aggrevating Intel and AMD

Kaboom!

- Blue Origin’s New Glenn rocket exploded in a massive fireball while undergoing a test on a Florida launchpad, dealing a major setback to the company.

- The explosion is the latest blow to New Glenn's reputation as a reliable alternative to SpaceX’s Falcon 9, and Blue Origin’s launch schedule is certain to suffer significant delays.

- The incident will also affect Amazon’s ambitions to build out its Leo satellite network and may delay Blue Origin's role in NASA’s Artemis program, which aims to send humans back to the moon.

- As important as it will be for Blue Origin to diagnose the cause of the rocket explosion, it could take many months to repair its launchpad in Florida.

Taking Down - Really?

- BlackRock Inc. is trimming its bet on stocks across its model-portfolio business as US equities surge to record highs following a strong earnings season.

- The firm cut its overweight position in equities from 3% to 1%, triggering billions of dollars of flows between BlackRock’s exchange-traded funds.

- BlackRock remains confident in equities and will maintain positions that bet on growing corporate profits, artificial intelligence and government spending, but is rotating away from longer-dated US debt in favor of global fixed-income and liquid alternatives.

Slight

- SpaceX is targeting a valuation of at least $1.8 trillion in its initial public offering, according to people familiar with the matter.

- The company is seeking to raise as much as $75 billion, which would make it the biggest IPO of all time, and is expected to start formal marketing of its IPO as soon as June 4.

-SpaceX had $18.7 billion in revenue in 2025, and the company's pitch to investors shows its evolution into an AI services and infrastructure giant with a total addressable market of $28.5 trillion.

- 3-5% of the shares will be floated (TIGHT)

Strategy: keep supply constrained, which:

supports price discovery

maintains founder control

creates early scarcity dynamics

- - - SpaceX has reserved 5% of the shares ?in its planned initial public offering for certain employees and individuals selected by its executive officers, exempting them from post-IPO lock-up restrictions

AND.. Even more Valuations

- AI giant Anthropic is now worth more than OpenAI.

- Anthropic announced a $65 billion Series H financing at a $965 billion valuation, a round led by Altimeter Capital, Dragoneer, Greenoaks and Sequoia Capital.

- The financing puts its valuation above that of rival AI lab OpenAI.

- The valuation has TRIPLED since February

Let's GO!

- Shares of LG Electronics surged as much as 24% after the company announced a series of automotive innovations built with technology from Alphabet Inc.’s Google.

- The company said its new range of solutions is built on Android automotive operating systems. Its system can control multiple displays with different aspect ratios at the same time by using a single-on-chip, which is different from other conventional in-vehicle display systems, LG said.

- But 24% on this news?

- More reason that the KOSPI is moving higher

No One Care - But...

- Inflation has been above the 2% target for 5 years now

- Minneapolis Federal Reserve President Neel Kashkari said Thursday that bringing down inflation in the U.S. remains his top priority, warning that consumer prices are still “much too high.”|

- Speaking to CNBC’s Kaori Enjoji at the Bank of Japan-IMES Conference, Kashkari said that the U.S. central bank would continue taking a “balanced approach” to its dual mandate of price stability and full employment.

- 5 YEARS!

---- What that tells us is that the Fed is totally unable to do anything about inflation .... Are we the only ones that see that?

Inside Baseball

- From a colegie that will go un-named.

--- Let's just say he is someone who knows what they are talking about and runs BIG money

----- This is what he said to me.....

- Apparently, oil execs were opining with POTUS in meetings yesterday that oil inventories are at alarmingly low levels and oil prices could soon skyrocket (I might soften that language a bit but they know the oil biz better than me) if SoH does not open soon.

- I ran a few numbers on total oil inventories including and excluding the SPR.

- Total supplies are 10th percentile vs history (although that includes a period when the SPR ramped from 0 to 600mln barrels in the 1980’s).

- Today it is 4th percentile if you start from 1990 when the SPR was basically full.

- The 4 week net and % draw the last 3 weeks are the largest draws of all time.

- And not surprising the 1 week net and % draw of the SPR are also the 2 largest draws of all time the last 2 weeks.

Surprised - No....

--- This is another story similar to what we saw a few months ago

- Taiwan prosecutors suspect that three individuals smuggled at least one shipment of Nvidia Corp. AI chips to China after first exporting them to Japan.

- The trio was detained for allegedly falsifying documents related to exports of Super Micro Computer Inc. servers containing advanced Nvidia chips, which the US has barred from sale to China without a license.

- Taiwan authorities seized about 50 servers for which they accuse the trio of preparing fraudulent export documents, but at least one shipment had already gone through Taiwan customs and made it to Hong Kong.

Under/Over?

- Tesla will be somehow folder/merged or taken over by SpaceX in an all stock deal

- Tesla market cap is $1.6 Trillion so that will be a tough one to take on as SpaceX is about equal in size.

---- If this happens, when ?

Mini Retirement - Is this a THING?

- A mini retirement is when you take a planned break from working, usually for a few months to a couple of years, instead of waiting until age 65+ to fully retire.

- Tim Feerris popularized this... (4 day workweek dude)

Step 1: Work & save aggressively

2–10+ years

Build a specific “freedom fund”

Step 2: Take time off

3 months to 2 years

Travel, recharge, pursue interests, or experiment with new ideas

Step 3: Return to work

Same career… or pivot to something new

Then repeat if desired.

 

Love the Show? Then how about a Donation?

Announcing the THE CLOSEST TO THE PIN

for SALESFORCE (CRM)

 

Winners will be getting great stuff like the new "OFFICIAL" DHUnplugged Shirt!

 

 

FED AND CRYPTO LIMERICKS

 

See this week’s stock picks HERE

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter

Oil Drops – Still highest cost for Memorial Day in years

Consumer Sentiment Drops again

New Fertilizer coming – Kinda Soilent Green vibe

Everyone is talking about SpaceX

PLUS we are now on Spotify and Amazon Music/Podcasts!

Click HERE for Show Notes and Links

DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.

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Follow John C. Dvorak on Twitter

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Warm-Up

- Oil Drops - Still highest cost for Memorial Day in years

- Consumer Sentiment Drops again

- New Fertilizer coming - Kinda Soilent Green Concept

- Everyone is talking about SpaceX

Markets

- Nothing Really Matters - Anyone can see - New HIGHS

- Governments picking the winners again

- CHIPS !

- Concentration

NVDA

- Over the weekend, Jensen Huang said that his forecast of a $200 billion market for CPUs includes China, signalling Nvidia still sees significant long-term demand in the market amid ongoing U.S.-China technology tensions.

- During an earnings call on Wednesday, Huang said Nvidia's new "Vera" central processors give it access to a new $200 billion market.

- So, once again the PR machine is running overtime to make sure there is no reason for anyone to sell the stock - needed to make this clarification over the weekend

- Nvidia has received licenses from the U.S. government to sell its H200 chips but has not received approval from Chinese officials who are fostering China's own chip suppliers.

Consumers

- Consumer sentiment has tumbled to a fresh record low in May as fears of higher prices grow due to the U.S.-Iran war and elevated oil prices, the University of Michigan’s Surveys of Consumers said Friday.

- The index of consumer sentiment fell to 44.8 from a preliminary reading of 48.2. It’s also well below the 49.8 level seen at the end of April.

Consumers Upset

South Korea

- Record after record...

- This is an impressive chart

- Two companies -Samsung and SK Hynix

-----40% of the entire KOSPI index's total market capitalization.

Kospi Index

Who Believes this Crap?

- U.S. forces have conducted “self defense” strikes in southern Iran early Tuesday, with U.S. Central Command saying that this was to “protect our troops from threats posed by Iranian forces.“

- “U.S. Central Command continues to defend our forces while using restraint during the ongoing ceasefire,” Hawkins added.

- Meanwhile there was some talk over the weekend that

--- 1) We are very close to a deal and it will happen soon

----2) We are in no rush for a deal

----3) How many times is this same line going to be used to try to push the price of oil down (it did move towards $90 after the weekend resumption of futures trading)

- Neither side can agree on anything... Secretary of State Marco Rubio said on Friday that the United States has seen some progress towards a deal but that more work was required, while Iran's foreign ministry said the differences remained deep and significant.

- Tiresome

CEO of Ford

- Did you know -???

- The CEO of Ford (Jim Farley) is cousin to Chris Farley

Farley and Farley

Crops

- Farmers worldwide are under pressure due to the Iran war disrupting supplies of conventional nitrogen fertilizers, forcing them to improvise ahead of the fall planting season.

- Some farmers are turning to age-old solutions like manure, while others are experimenting with newer technologies, including waste-based inputs and microbial products.

-----Circular bio-economy

The crisis is giving fresh momentum to products that have long struggled to gain widespread adoption, with demand for biofertilizers and biostimulants rising and companies seeing rising interest and increased sales.

- Municipal wastewater and treated human urine, which contain high levels of nutrients that can be processed.

---- So, if your corn is a little extra yellow this summer - now you know...

Government's Hand

- Quantum computing shares popped last Thursday, as the U.S. government said it would award $2 billion in grants to nine firms operating in the space.

- IBM is the biggest beneficiary of the package, with the U.S. Commerce Department agreeing to give the firm $1 billion.

- Chipmaker GlobalFoundries is receiving $375 million, while other grant recipients D-Wave Quantum, Rigetti Computing and Infleqtion will be awarded $100 million.

- Shares of D-Wave added 33%, Rigetti soared 30% and Infleqtion skyrocketed about 31%.

- Funding will come from the 2022 Chips and Science Act.

More Money Throwing

- Nvidia Corp. bought $500 million worth of rights for shares in Corning Inc. as part of a partnership to expand artificial intelligence infrastructure.

- Corning pledged to increase US fiber production capacity by more than 50% to supply more optical fiber for AI data centers.

- The partnership includes Corning's plan to construct three new complexes in North Carolina and Texas, which is estimated to create more than 3,000 new US jobs.

DEBT

- Global debt hits new record, IIF (institute for International Finance) report shows

- Global debt rose for a fifth consecutive quarter in Q1 2026, increasing by more than $4.4 trillion to a record high of over $350 trillion, with the increase concentrated largely in the United States and China.

- Investors shows signs of shift away from Treasuries

- Global debt-to-GDP ratio stable around 305%

- NOTHING TO SEE HERE

Global Debt

More Charts

AI Reality?

- Starbucks retires AI tool nine months after North American deployment

- Tool was part of CEO Brian Niccol's campaign to fix product shortages

- AI tool miscounted items, leading to errors, Reuters has reported

Starbucks cites need for consistency, supply chain improvements in ending program

More AI

- Elon Musk's Grok is seeing minimal adoption in US government - even though it's cheap-

- Grok lags far behind OpenAI and other rivals that analysts call more capable

- Data shows uptake by corporations is also weak, suggesting Grok's problems stretch beyond government

- Is it possible that corps don't trust Musk after the way he heavy handled the DOGE process?

- Is this going to impact SpaceX growth story?

Employment and Ai

- The co-founder of AI company Anthropic said on Monday that the development of artificial intelligence cannot be left solely to technology companies, urging greater oversight from religious leaders, governments and civil society.

- Speaking at the presentation of Pope Leo's first encyclical, addressing the challenges posed by artificial intelligence, Chris Olah said there was "a real possibility" that AI will displace human labour "at very large scale".

Scared

- China is restricting overseas travel for top AI professionals in private firms, requiring them to get approval from relevant authorities before embarking on overseas travel.

- The government is targeting talent within the AI sphere, including startup founders, researchers, and executives, and adding individuals to the list based on assessments of their critical importance to the country.

- The restrictions risk undermining the ability of AI firms in China to recruit and retain talent, and may force engineers with global ambitions to choose between staying home or going abroad earlier in their careers.

CHIPS

- Micron topped a $1 trillion market value for the first time on Tuesday as shares popped 18%, driven by insatiable artificial intelligence demand for its memory chips.

- The stock surge came as UBS tripled its price target on the stock from $535 to $1,625 a share, citing long-term agreement opportunities with partially fixed pricing.

- “We believe the market will start to put a more ‘normal’ multiple on the stock and MU will continue to re-rate higher as more details emerge about the structural changes AI has driven to the entire memory complex,” the firm wrote.

SpaceX

- Lots of interest on this...

- Lots of clients calling on this and we are working on this for them

- Here is a bit of a reality check...

--- First - company still losing billions of dollars - some may look past that

- - Weird inclusion period for indices and that may take stock up due to required buying ahead of the inclusion (keeping a floor on prices in the beginning)

---- SpaceX plans to allow a large portion of its shares to become eligible for resale before the usual six-month restriction period post-IPO, under a staged system conditioned to the company's performance, a company filing shows.

- The approach, designed to avoid a large wave of shares hitting the market at once, would depart from the standard 180-day lock-up that has prevailed in the U.S. Most companies going public restrict early investors from selling shares to help stabilize the stock.

- Valuation somewhere between $1.5T and $2T (a year ago it was like $400 million)

- Valuation in December was $750 M

- Rationale for the big valuation: SpaceX is leveraging its satellite network to build massive, space-based AI data centers, which take advantage of limitless solar energy and off-planet cooling

Retail 

- Ross Stores Inc. raised its sales and profit guidance after first-quarter results surpassed consensus estimates, aided by strong customer traffic among younger shoppers.

- The company reported sales of $6.01 billion and earnings of $2.02 per share, with same-store sales growing 17% in the period, a record for Ross.

- Ross now expects full-year same-store sales to grow 6% to 7%, and earnings of $7.50 to $7.74 per share, with executives citing increased customer traffic as a key driver of profit.

Meanwhile

- Walmart issued a worse-than-expected financial outlook amid soaring gas prices.

- Finance chief John David Rainey said high tax returns may have muted some of the impact high gas prices had on shoppers in the first quarter, indicating consumer pressures could rise in the current quarter

- The big-box retailer issued fiscal first-quarter results that beat Wall Street’s expectations on the top line but were only in line on the bottom.

- The retailer said it’s expecting adjusted earnings per share to be between $2.75 and $2.85, lower than expectations of $2.91, according to LSEG.

- Walmart said it anticipates net sales will rise between 3.5% and 4.5% for the year.

Ferrari - Electric

- Ferrari (RACE) is trading lower today after the company unveiled its first fully electric vehicle, the Ferrari Luce, marking a major strategic shift away from its traditional combustion-engine supercar identity.

- The Luce is a four-door, five-seat ultra-luxury EV developed with former Apple (AAPL) design chief Jony Ive, featuring a quad-motor setup producing over 1,000 horsepower, a 0--60 mph time of roughly 2.5 seconds, and a price tag around $640,000.

- Despite these headline-grabbing performance specs, investors reacted negatively because the design is seen as a sharp break from RACE's iconic styling, with many critics arguing it looks closer to a mass-market EV than a traditional Ferrari.

Saying goodbye

- One of America’s once-dominant beer brands is being discontinued after more than 175 years.

- Schlitz Premium, a beer brand that traces its roots to Milwaukee in the 1840s and was once among the largest breweries in the country, is being put "on hiatus," parent company Pabst Brewing Co. confirmed Friday after Wisconsin Brewing Company announced it would brew the brand’s final batch later this month.

- "Unfortunately, we have seen continued increases in our costs to store and ship certain products and have had to make the tough choice to place Schlitz Premium on hiatus," Zac Nadile, Pabst head of brand strategy, said in a statement to Milwaukee Magazine.

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– Happy Memorial Day

– A WARM DHU welcome to Kevin Warsh – good luck fella, you are going to need it sir.

– The new transient inflation.

– Another BOARD? These guys like to make exclusive clubs…

PLUS we are now on Spotify and Amazon Music/Podcasts!

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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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A torn Meniscus – that is what they say… now what?

The beginning of UBI as a response from the AI boom?

Black in packaging – byproduct of war

Markets – – Up up and away!

– New inflation data is in…

– The Circular Economy – Great chart….

– Some inflation facts

PLUS we are now on Spotify and Amazon Music/Podcasts!

Click HERE for Show Notes and Links

DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.

Love the Show? Then how about a Donation?

Follow John C. Dvorak on Twitter

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Warm-Up

- Torn Meniscus - that is what they say... now what?

- The beginning of UBI as a response from the AI boom?

- Black in packaging - byproduct of war

- Insights into consumer confidence reports

Markets

- Up up and away!

- New inflation data is in...

- The Circular Economy - Great chart....

- Some inflation facts

- From the TACO trade to the NACHO trade

The new CTP for Salesforce is open for entries!

From TACO to NACHO

- Not A Chance Hormuz Opens

- - New phrase being used in the oil pits and trading floors

Life Support

- President Trump tells reporters that ceasefire with Iran is on "massive life support"; says Iran's peace proposal was a "piece of garbage"

Going to CHYNA

- President Donald Trump has invited executives from some of the biggest U.S. companies — including Tesla CEO Elon Musk, Apple CEO Tim Cook, BlackRock’s CEO Larry Fink and Boeing CEO Kelly Ortberg — to join his trip to China this week, according to a White House official.

- Also expected to join Trump’s delegation for meetings with Chinese President Xi Jinping are Blackstone’s Stephen Schwarzman, Cargill’s Brian Sikes, Citigroup’s Jane Fraser, Coherent’s Jim Anderson, GE Aerospace’s H. Lawrence Culp Jr., Goldman Sachs’s David Solomon, Illumina’s Jacob Thaysen, Mastercard’s Michael Miebach, Meta Platforms executive Dina Powell McCormick, Micron Technology’s Sanjay Mehrotra, Qualcomm’s Cristiano Amon and Visa’s Ryan McInerney, the official said, speaking on condition of anonymity because the list has not been announced.

- Jensen Huang supposedly not invited

Inflation Report Today

- Total CPI increased 0.6% month-over-month in April, as expected, following a 0.9% increase in March. That left total CPI up 3.8% year-over-year versus 3.3% in March.

- Core CPI, which excludes food and energy, jumped 0.4% month-over-month (Briefing.com consensus: 0.4%) following a 0.2% increase in March. That left core - CPI up 2.8% year-over-year versus 2.6% in March.

----Key Factors

- The food index was up 0.5% month-over-month and up 3.2% year-over-year.

- The energy index was up 3.8% month-over-month and up 17.9% year-over-year.

- The shelter index was up 0.6% month-over-month and up 3.3% year-over-year.

- The used cars and trucks index was flat month-over-month and down 2.7% year-over-year.

- The apparel index was up 0.6% month-over-month and up 4.2% year-over-year.

- The services index was up 0.6% month-over-month and up 3.4% year-over-year (services less rent of shelter was up 3.5% year-over-year).

- The all items index less food, shelter, and energy was up 0.2% month-over-month and up 2.3% year-over-year.

Consumer Confidence

- Surging gas prices due to the Iran war sent consumer sentiment to a new low in the early part of May, according to a University of Michigan survey Friday.

“Taken together, consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump,” the survey’s director, Joanne Hsu, said.

- The latest University of Michigan Consumer Sentiment preliminary reading for May came in at 48.2, below the 50.5 consensus estimate and below the prior 49.8 final reading for April.

---Note: Conference board's consumer confidence reading was actually better than last month so there is a discrepancy in reports.

- Conference Board measure as highly important because it is widely followed and often tied closely to labor-market perceptions, while the Michigan survey is also closely watched for inflation-sensitive consumer attitudes.

Thwarted!

- Google’s Threat Intelligence Group said hackers are using AI models such as OpenClaw to uncover and exploit zero-day software vulnerabilities.

- GTIG said it has “high confidence” that it recorded hackers using an AI model to find and exploit a zero-day vulnerability, or a software flaw unknown to developers, creating a way to bypass two-factor authentication.

-The group said in a report that it had uncovered and likely thwarted an AI-developed attack.

- Anthropic delayed its Mythos model rollout due to cybersecurity concerns, but current models are being used by hackers.

- How are we going to stop the hackers from using powerful AI models to hack?

Circular Economy

- Great Graphic

Circular

Always Money to be made...

- US derivatives exchange CME Group Inc. and index provider Silicon Data are teaming up to create a futures market for computing power.

- The futures will help traders, financial firms, AI builders and cloud providers manage volatility and price swings, according to a statement.

- CME CEO Terry Duffy said compute is "the new oil of the 21st century" and creating a futures market can help make the costs more transparent.

----- One more way to pump this as now there is ways to further inflate costs through a leveraged futures market

Private Credit Transparency?

- Faster mark-to-market plans

- Apollo Global Management Inc. has been stepping up efforts to provide liquidity and price transparency in the private-credit market, where assets don’t typically change hands.

- Last week, the firm said more than $830 billion of its credit assets will be priced daily by the end of September. "

- Others in the industry are not so happy about this.

- Most say that this is little more that lipstick on a pig

No Problem

- Congress is looking to suspend the federal gas tax for a few months

- Trump backing

- $0.18 per gallon tax in a effort to reduce gas prices that are now approx $4.40 average per gallon higher than before the war

- War not changed, Iran still stringing us along.

- Under/Over how long it will take until next Ceasefire bombings start?

- Will a sprinkle of warfare prior to China visit be in the cards as a show of strength?

AI Jobs

- Kevin Hassett says that AI isn't costing anybody their jobs rights now

- EVEN THOUGH TECH CONTINUES LAYOFFS

- Why bother even listening to these guys?

- Major deep discussion on this on TDI Podcast this week

-- WORTH THE LISTEN

Asian Markets

- Continuing to brush off any worries about oil prices, escalation or valuations that are in the stratosphere

- Korea - as we discussed this would be the case is up a staggering 78% last year and already up 81% this year

- Market cap has increased $2.7 trillion over the past year

- The massive wealth increase has been heavily concentrated. Tech giants Samsung Electronics and SK Hynix accounted for the vast majority of the gains, with individual rallies of up to 382% over the year.

Strange

- The retail trades added nearly 22,000 jobs in April, accounting for almost one-fifth of total job growth.

- In March, retailers posted their largest number of monthly job openings since 2023.

- Retailers are more confident after seeing consumers keep their wallets open in the face of an uncertain economy and higher gas prices.

- Nearly 15.5 million employees now hold retail industry jobs, the most since July 2024.

- What is strange is the UMich confidence hit another all-time low last Friday for the latest prelim reading for the month

ANALlysts

- The earnings upgrades for tech are not just incremental

- Examples:

-  Seagate Tech target raised to $1000 from $750 at Evercore ISI, cites HAMR-driven multi-year HDD growth, pricing power, and strong AI/data center demand backdrop

- AMD - Goldman Sachs upgraded to Buy and raised its price target dramatically (e.g., to $450 from $240). Other firms like Bernstein (to $525), Barclays, KeyBanc, TD Cowen, and Baird also hiked targets significantly (many by $200+)

- Several other names upgrades with big ranges of price increases

UBI Starting...?

- South Korea should consider institutional ways to redistribute potential excess tax revenue generated by the AI infrastructure boom to help ease inequalities that could deepen in an AI-driven era, a top presidential policy aide said.

- President Kim proposed the principle, tentatively named a “national dividend,” underlining that gains from AI infrastructure should be understood as the product of South Korea’s collectively built industrial foundation.

- In his Facebook post on Monday, Kim explained that "the central question of the AI era is not simply about growth rates, but about how to socially stabilize excess profits."

Black ink

- Calbee to switch its brightly colored packaging to black and white because war has disrupted supply of certain raw materials used in ink

- Calbee, whose potato chip brands in particular are known for brightly colored bag designs, said 14 of its products would switch to monochrome branding by the end of May.

- Printing ink requires naphtha, an oil derivative for which Japan relies on imports from the Middle East for about 40% of its consumption.

Black Ink Printing

HantaVirus

- Tristan da Cunha, home to only around 200 people, is halfway between South Africa and South America. It is the world's remotest inhabited island, more than 2,400 km and a six-day boat ride from St Helena, its nearest inhabited neighbor.

- It usually relies on a medical team of two people for its health needs, and is normally only accessible by boat as it has no airstrip.

- A British man was dropped from the death ship was there and has the symptoms - so "out of an abundance of caution...."

- "The arrival of paratroopers, medical personnel and medical supplies from the sky has hopefully reassured the people of Tristan da Cunha," said Brigadier Ed Cartwright, Officer Commanding 16 Air Assault Brigade.

- Does this give comfort that paratroopers dropping in with hazmat suits?

 

 

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