Daily Brief — May 13, 2026

Top of Mind

CPI printed hot at 3.8% YoY (core 2.8%), driven by energy and bleeding into services. This kills any near-term Fed cut hopes — swaps now price >40% chance of a hike by year-end. The market absorbed it without panic, but the real test is tomorrow: Kevin Warsh confirmed as Fed Governor, chair vote expected Wednesday. His first test will be managing inflation expectations that just hit multi-year highs in the 10yr breakeven (2.5%). Also: Trump heads to Beijing tonight with Jensen Huang now on board after a last-minute call. Nvidia's China sales are not coming back, but the optics matter for sentiment around chips ($SMH, $NVDA, $AMD).

Catalyst Radar

• Wednesday: Kevin Warsh Fed chair vote (Senate). 10yr note auction results. EIA crude inventories.
• Thursday: Trump-Xi summit in Beijing begins. Alibaba earnings. $GME shareholder meeting.
• Friday: EIA global oil inventory outlook. UK Q1 GDP revision.

Analyst / Opinion

WSJ Heard: Energy stocks are the cheapest they've been relative to S&P, despite crude at $100+. The sector trades at <14x forward earnings — a 36% discount to the index, wider than the 10yr average of 29%. Producers aren't adding supply; Diamondback only raised guidance by 10-20k bpd. Cash allocation is shifting to buybacks and debt paydown instead of variable dividends. This is a structural argument for $XLE, $OIH, even if Hormuz reopens.

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Markets

• US equities: S&P 500 -0.2%, Nasdaq -0.7% ($QQQ). SMH -3% — semis violently reversed after weeks of parabolic gains. Qualcomm -6.8%, Micron -3.6%, Intel -3.7%. Nvidia +3% in after-hours on Huang joining China trip.
• Fixed income: 10yr yield +5bp to 4.462% (highest since July 2024). UK 30yr gilt hit 5.81% — highest since 1998 — as Starmer leadership crisis compounds oil shock.
• Commodities: Brent +3.4% to $107.77, WTI +4.2% to $102.18. Gold -0.4% to $4,705 but exhibiting "asymmetric" behavior vs rates (central bank bid). India doubled gold tariffs to 15% to defend rupee.
• FX: DXY +0.3%. GBP -0.5% to $1.353. Rupee at fresh lows. Yen on watch with OECD calling for BOJ rate to 2% by end-2027.

Economy

• CPI: Headline 3.8% YoY (vs 3.7% est), core 2.8% (vs 2.7% est). Energy +18% YoY. Real wages fell for first time in 3 years. The "TAIL" risk from RSM's projection that war-driven inflation peaks at 4.5%+ this summer is now in play.
• Warsh confirmation: Confirmed 51-45 as Governor; chair vote tomorrow. He's publicly called for "regime change" at the Fed and believes rates can be lower — a dovish disposition that will clash with the CPI data.
• Shelter distortions: BLS housing data skewed by government shutdown; asking rents (Realpage) are actually rising after declining through 2025. This is a negative for the disinflation thesis on shelter.

Business/Finance

• eBay rejects GameStop: $55B bid called "neither credible nor attractive." $EBAY shares stable. $GME now faces choice: hostile bid or walk. Moody's called deal "credit-negative." Michael Burry sold his $GME stake.
• FDA commissioner resigns: Marty Makary out after clash over flavored vape approvals. Kyle Diamantas (food regulator, ex-Jones Day) named acting. Pharma lobbying power shift noted.
• UK private credit blowup: MFS ($3.5B lender) collapsed — $1.7B missing, administrators allege owner moved $550M into personal accounts. Barclays wrote off $310M, HSBC $400M. Blue Owl's retail credit fund inflows evaporated (only $26M in May vs $500M a year ago). This is the sector stress the bears have been waiting for — watch $OBDC, $ARCC, $BX.
• EQT bids £10.6B for Intertek: "Final" offer at £60/share, 62% premium. Shareholders (Palliser, Peltz son) pushing board to accept. $ITRK.

World/Geopolitics

• Trump-Xi summit: Trump arrives Beijing tonight. Three key tension points: (1) Rare earths — China tightened restrictions in April, samarium prices 100x higher abroad; the one-year pause on additional measures expires this year. (2) AI chip export controls — Huang's last-minute inclusion signals this is on the table, but don't expect a deal given NSC alarm over China's Anthropic outreach. (3) Hormuz — Trump says ceasefire on "massive life support"; NACHO trade (Not A Chance Hormuz Opens) gaining traction.
• Iran blockade: LPG tanker Tara Gas sailed past US Navy line carrying Iranian cargo. Oil inventories expected to drop 2.6M bpd (EIA). Construction projects stalling globally as PVC, asphalt, paint prices surge.
• UK political crisis: Starmer fighting to stay; 10yr gilt yield at 5.13% — highest since 2008. Market fears a shift left to Burnham (looser fiscal). Streeting seen as "continuity." Schroders and Sumitomo both avoiding gilts.
• Indonesia: MSCI removes 6 stocks (17% of index weight) for concentrated ownership — Barito, Dian Swastatika, Chandra Asri all dumped. Jakarta index -22% YTD. Rupiah at record low.

Technology/AI

• Nvidia's Huang on China trip: Trump called him after media noted his absence. He flew to Alaska to board Air Force One. This changes the market's perception of AI chip export control risk — but fundamental view unchanged: advanced chips still blocked. $NVDA.
• CME to launch GPU futures: Compute capacity as a new asset class. Silicon Data indices will underlie contracts. This matters for pricing visibility in a market where H100/B200 rental rates are opaque.
• Anthropic's Mythos: China think tank sought access in Singapore — denied. Model withheld from public release due to cybersecurity risk capability. Sets up AI as a key agenda item at summit; "deconfliction" channel being explored.
• Google Gemini Android push: Rebuilding Android as "intelligence system" with app automation. Apple's WWDC AI reboot (powered by Gemini) expected next month. This is competition for $AAPL, $GOOGL market share narratives.

Standouts

1. Market Financial Solutions blowup: Barclays/HSBC wrote off $710M combined on UK lender's collapse; $1.7B missing, allegedly flowed into Ferraris/Rolls-Royces. Watch for contagion in private credit bank exposure.
2. MUFG risk transfer: Largest Japanese bank seeking to offload $2B of credit lines to BDCs via risk transfer product. This is banks managing down private credit exposure before earnings questions.
3. Pettis on China: Carnegie fellow argues China's trade surplus ($1.18T) is unsustainable; growth model needs rebalancing away from exports. Relevant read for USD/CNH.
4. SCOTTISH MORTGAGE defends SpaceX: $1.25T valuation vs $1.75T IPO target. Trust has 41.5% in private assets (above 30% limit). SpaceX now 20% of portfolio. This is why IPO pricing matters for UK investment trust structures.
5. Ad ban for lab diamonds: UK regulator rules "diamond" cannot be used alone for synthetics. $BRK (via Helzberg), $SIG — natural diamond thesis gets tailwind.