This Week in Barrons: 05.24.2026

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• Happy Memorial Day ... My wife’s father and my dad both served in the Air Force and Navy respectively.  On this day, please salute, tip your cap, and/or remember the servicemen and women who've served and too often died for our freedoms.

• Per Steve Wozniak ... “Actual Intelligence includes the abilities that we’re born with and those we choose to develop.  It’s worth more now than ever before.  It includes: (a) The Difficulty of making choices.  (b) The Responsibility that comes with putting your name on it. (c) The Judgment to ask the right questions and skip the other ones. (e) Offering dignity.  (f) Knowing when to stop. (g) Taking initiative and doing your homework. (h) Having the patience to sit with the right problem rather than solving the wrong one. (i) Ignoring the noise. (j) Making something that matters. And (k) Caring.”

• SpaceX’s historic IPO filing ... SpaceX officially filed its S-1 prospectus to raise $80B at a $1.7T valuation, revealing $18.7B in 2025 revenue against a $4.9B net loss.  The filing underscores massive capital losses tied to xAI and plans for orbital data centers - and Elon Musk retains over 85% of total voting power.

• The Cash Savings Trap that yields Negative real returns ... A high-yield savings account earning 4.5% yields (after 3.8% inflation) – a real return of just 0.7% per year.  And, once taxes on interest are factored in – savers are actively losing money. At our current 3.8% annual inflation level, a $100,000 cash balance in a high-yield savings account looses ~4,000/yr. in purchasing power.

•  Market Euphoria & Crowded Trades ... May recorded the largest historical rush into equities and simultaneously triggered these 5 contrarian sell signals:

  o (a) equity allocations are at an all-time high (+50% overweight),

  o (b) cash reserves hit an all-time low (3.9%),

  o (c) the Bull & Bear Indicator flashed overly bullish,

  o (d) tech and commodity over-weights have spiked to multi-year highs,

  o And (e) Long positions in global semiconductors surged from 24% in April to 73% in May – making it the market's most crowded trade.

• Our new FED Chair & Bond Markets collide ... The new FED Chair Kevin Warsh was sworn in with plans of cutting borrowing costs; however, bond market resistance pushed the 10-year Treasury yield to a one-year high. Yields on 2-year and 30-year bonds also climbed above the 3.5 - 3.75% FED funds rate, further squeezing Warsh’s dovish position.

• Global Energy Competition ... Fuel demand from nations like India are driving our domestic costs up.  U.S. energy producers will not sell their diesel domestically for $8/gallon if international buyers are willing to pay $12/gallon – further exporting domestic inflation.

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• Global AI & Economic Headwinds

  o China’s AI Demand Weakens: China's massive AI infrastructure expansion faces low adoption as domestic demand softens.  April retail sales grew just 0.2%, property investments plunged 14%, and construction starts plummeted 22%.

  o Europe's Energy Disadvantage: Europe’s electricity prices are double U.S. levels and 50% above China’s.  This severely handicaps Europe in the power-hungry AI data center race.

  o Global Bond Market Rout: Multi-decade highs hit global sovereign debt yields simultaneously, with the US 30-year bond reaching 2007 levels, Japan's 10-year peaking at 1996 levels, and Germany's 30-year hitting a 15-year high. Odds of another US rate hike jumped from 1% to 54%.

• Commodity & Energy Scarcity

  o US Fuel Export Squeeze: Gulf Coast diesel supplies are down 19% from pre-war levels, risking critical local shortages if storage drops below 105m barrels by the end of May.

  o Gold Price Surge: Wall Street institutions updated their 12-month gold price outlooks, with UBS preserving its $5,600 target and J.P. Morgan pushing its base target to $5,500 with best-case upside of $6,300.

• Semiconductor Market Concentration

  o Nvidia Crushes Expectations: Nvidia reduced market bubble fears by marking its 12th consecutive quarter of record revenue.  The firm logged an 85% YoY surge in earnings per share on record revenue.

  o Crowded Trade Risk: Goldman reported that hedge funds have heavily concentrated (20%+) positions into semiconductor equities.

•  AI & Technology Movements

  o Karpathy Joins Anthropic: OpenAI co-founder and former Tesla AI head Andrej Karpathy has joined Anthropic's team to lead development on Claude's foundational capabilities.

  o Google's Gemini Overhaul: Google unveiled massive Gemini upgrades at I/O 2026, transitioning the model into a 24/7 personal agent ("Spark") that automates complex tasks across workspaces, with local computer control arriving this summer.

  o AI-Native Google Search: Google is retiring standard blue link search results in favor of an intelligent search interface powered by Gemini 3.5 Flash.  The system builds generative, real-time UI layouts based on multimodal text, image, and video queries.

  o Anthropic expands into Big Pharma: Bristol-Myers Squibb is integrating Claude across its 30,000+ employee network. The software will move past pilot trials to draft regulatory reports and manage core drug discovery pipelines.

• Governments & Quantum Computing ... The Trump administration announced a $2B funding award across nine quantum-computing firms in exchange for government equity stakes.  IBM received $1B to construct the nation's first dedicated quantum foundry.  $375m went to GlobalFoundries, and the remainder was split among firms including D-Wave, Rigetti, and PsiQuantum.

• Robotics & Automation come to Humanoid House Cleaning ... Gatsby launched an app-based service that allows consumers to book a Unitree G1 humanoid robot to perform in-home cleaning and dishes for $150/visit.

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• Will Interest Rates be coming down anytime soon?  NO.  Our new FED Chair Kevin Warsh originally built a case for cutting rates based upon increased AI worker productivity delivering major disinflation.  However, our bond market prices reality - not future promises.  - The massive amount of AI infrastructure spending (an estimated $700B+ this year) is driving up capital and resource demand across our economy. Inflationary pressures are increasing as memory chip demand has caused prices to multiply, elevated software costs +14% YoY, and caused hardware price increases.  Finally, our FED’s current rate is below our economy’s ‘neutral rate’ – decreasing the odds of a rate cut.

• 1. Consumer Spending & Confidence (Tuesday / Thursday)

  o What to watch: Consumer Confidence drops on Tuesday, and Personal Spending drops Thursday. o If Tuesday matches the record-low University of Michigan reading, it will trigger the sharpest consumer warning since 2022.

• 2. Samsung Strike & China Health (Wednesday)

  o What to watch: Samsung's vote results before Wednesday's market open, plus China’s PDD earnings.  A Samsung ‘YES’ vote clears the tech IPO window.  A ‘NO’ vote threatens 3% of global memory chip supply right before the June 4 SpaceX roadshow.  PDD will gauge the health of the Chinese retail market after recent weak growth data.

• 3. PCE Data / Inflation (Thursday)

  o What to watch: The Fed's preferred inflation gauge lands alongside massive macro data (GDP, personal income, durable goods, home sales).  Prioritize PCE over all else.  A PCE print above 3% alters the June 16 Fed rate meeting, while a print below 2.8% favors the upcoming roadshow window.

• 4. The EIA Gasoline Report (Thursday)

  o What to watch: Crude and gasoline stock reports. Inventories hit an 11-year low entering Memorial Day.  Watch the 210-million-barrel threshold. Dropping below this level signals a severe, physical energy supply crisis.

• Key Takeaways

  o Wednesday: The Samsung vote will either open the roadshow window or trigger major supply chain risks.

  o Thursday: PCE and EIA gasoline data are paramount.  PCE will confirm or deny inflation cooling, while EIA will test critical consumer thresholds.

  o The Window: All of the data drops before the June 4 SpaceX roadshow begins and will directly dictate the market’s state-of-mind.

• Factually: (a) The equally weighted S&P500 has broken out to new highs. (b) Space stocks are soaring following the SpaceX IPO filing.  (c) SpaceX (SPCX) could end up with an index weighting of 3%.  (d) The mega-IPO wave is a sign of the times (late-cycle signal).  And (e) the swearing-in of a new FED Chair might be a bearish omen.  Overall, per Callum Thomas, the bull market got a bit more bullish this week with the breakout of the equal-weighted index.  However, the arrival of a new Fed Chair and IPO boom point to a more volatile horizon…

• Tips:

  o Honeywell (ticker: HON) I’m long the stock, but the options community is interested in these reasons:

  § The spin-off of Honeywell Aerospace will take place on June 29, 2026.

  § The IPO of Quantinuum will launch anytime.

  § HON is a major "peace" beneficiary and down 13% since the War.

  § HON July $240 Calls traded for $2.50 and they are OK as a "sprinkle" on top of a long position, since there is a "catalyst-rich" timeline into July expiration – and it covers the spin in June.

• HODLs: (Hold-On for Dear Life): 

  - Hold / Reduce:

  o (o) Ethereum (ETH = 2,072 / in at $310)

  o (o) Bitcoin (BTC = $75,915 / in at $4,310)

  o (o) ATXRF (copper & gold miner) == ($2.13 / in at $2.47)

  o (o) MTZ (MasTec = grid builder) == ($382 / in at $268)

  o (o) PWR (Quanta = grid innovator) == ($723 / in at $525)

   

  - Hold / Increase:

  o (+) Physical Commodities = Gold @ $4,510/oz. & Silver @ $75.9/oz.

  o (+) SLV (silver ETF) == ($68.3 / in at $27)

  o (+) GLD – Gold ETF ($413.8 / in at $212)

  o (+) HYPE (HyperLiquid) == ($55.0 / in at $32)

  o (+) WEAT (Agr. Wheat) == ($24.5 / in at $20.89)

  o (+) CORN (Agr. Corn) == ($18.3 / in at $17.19)

  o (+) CANE (Agr. Sugarcane) == ($9.9 / in at $9.14)

  o (+) QQQI (Divi. producer via Cov. Calls == pay mo.)

   

  - Recent Trades:

  o (+) OSCR (Oscar Healthcare) == ($22.6 / in at $11.92)

  o (+) DGXX (Digi Power) == ($7.9 / in at $4.92)

  o (+) NVDA (Nividia) == ($215 / in at $198.12)

  o (+) HYLN (Hyliion) == ($5.99 / in at $4.08)

  o (+) AAPL (Apple) == ($308 / in at $281)

  o (+) AMZN (Amazon) == ($265 / in at $265)

  o (+) NET (Cloudflare) == ($214.5 / in at $207)

  o (+) SMR (NuScale Power) == ($11.34 / in at $10.8)

  o (+) QTUM (Defiance Quantum ETF) == ($153 / in at $148)

   

  Please be safe out there!

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