The Wrong Solution: AI Productivity, Employment, & UBI

Authored by Lance Roberts via RealInvestmentAdvice.com,

It is expected that AI productivity increases will vastly transform the U.S. economy. Firms are utilizing AI productivity enhancements to automate repetitive tasks, and research and coding functions have already been implemented. The obvious problem is that when machines perform functions once done by humans, what are the humans supposed to do for income? This increase in AI productivity is measurable across various sectors, as supply chains operate more efficiently, data analysis accelerates, and customer service utilizes automated agents to streamline tasks. Manufacturing, once considered a stable sector of the economy, is increasingly using robotics to reduce labor costs. Professional services are also increasingly displacing workers in medical, legal, and other areas of the service economy to improve output (read: profits) per worker.

This is not a new thing. It has been accelerating since the invention of the fax machine and phone answering devices. The use of AI productivity-enhancing technology is becoming increasingly apparent. But as shown, the shift by corporations to focus on worker productivity is ongoing.

Recent corporate statements confirm this shift. At a 2025 financial conference, JPMorgan Chase reported that AI adoption doubled productivity gains in certain operations from 3% to 6%, with some roles seeing efficiency increases of 40% to 50%. Other banks said AI allows them to accomplish more work with the same headcount.

In theory, the promise of AI productivity increases is alluring. While firms can produce more with fewer inputs, humans will have more time to pursue education, leisure, and spend time with their families, increasing overall health and happiness. Again, that is theory, and the subject of today’s commentary.

Productivity Set To Surge

The strict definition of “productivity” is the output per unit of input. In other words, if output rises, it should correspond to an increase in employee compensation, as economic demand leads to the production of more products. Since 1947, a correlation has existed between economic output and the 3-month average of the annual rate of change in employee compensation.

Between 2004 and the pandemic, annual labor productivity growth averaged just 1.5% per year, significantly below the pace required for sustained real wage improvement. Recent gains measured in 2023 showed a temporary uptick; however, whether this marks a trend driven by AI rather than short-term business cycles remains unclear.

Furthermore, emerging research suggests that AI has the potential to deliver significant productivity improvements. A study of generative AI usage found that average workers using tools like ChatGPT completed tasks 40% faster with higher quality, implying substantial productivity enhancements when AI is integrated into work processes. The Federal Reserve Bank of St. Louis estimated that generative AI contributed a roughly 1.1% boost to aggregate productivity, with individual workers saving multiple hours per week on routine tasks. Lastly, a TIME-published analysis of Anthropic research suggests that AI has the potential to double U.S. labor productivity growth, increasing it by approximately 1.8% if widespread adoption occurs.

These projections also align with broader institutional forecasts. The IMF reports that AI could significantly impact nearly 40% of jobs worldwide, presenting both opportunities and risks for income growth and inequality. Yet, productivity gains alone do not automatically lead to wage increases or employment growth.

The Problem

The problem arises when productivity increases without a corresponding demand for labor. AI operates without downtime, 24/7, and does not require traditional wages, benefits, or breaks. If AI performs tasks that previously employed millions of workers, the question of how displaced workers earn income becomes central. Corporate leaders acknowledge this challenge. Federal Reserve Chair Jerome Powell has highlighted the unpredictability of AI’s impact, noting that productivity gains may come with labor market disruptions that current policy tools are ill-equipped to manage.

Historical examples show how technological shifts displace workers in the short term. For instance, during the “Industrial Revolution,” artisans lost jobs to mechanized production. Horse‑drawn carriage drivers disappeared with the advent of automobiles. Yes, workers eventually moved into new fields, but the transition involved hardship and community upheaval. Automation in prior eras often created new kinds of jobs, but the pace and breadth of AI disruption could set this wave apart. Instead of merely replacing manual labor, AI now substitutes for tasks across both blue-collar and white-collar jobs. Research by Oxford economists Carl Frey and Michael Osborne highlighted that many occupations have tasks that are susceptible to automation, and could disappear entirely.

Compounding the challenge, since the late 1970s, productivity gains started diverging from typical worker compensation. According to the Economic Policy Institute, productivity growth far outpaced wage growth for the median worker, signaling that gains from technology and economic expansion have accrued disproportionately to capital owners and high‑skill labor. This productivity-pay gap signals that, even before AI’s full impact arrives, workers were not sharing equitably in productivity-driven prosperity.

The pace of technological change means millions of Americans face an uncertain labor market. Young workers entering the workforce find fewer traditional hiring pathways and rising expectations around digital and AI‑related skills. Older workers frequently lack the time or resources to retrain in rapidly shifting skill environments. Across age groups, employers deploying AI experience reduced labor costs and increased productivity, which simultaneously puts pressure on wages and job security.

The reality is stark. The economy may grow, but how the gains are distributed will determine whether everyday Americans thrive or struggle. Without structural policy interventions, technological displacement risks widening income inequality and weakening labor market attachment. The promise of more leisure, education, and family time from productivity gains remains theoretical. If workers lack stable incomes, employment opportunities, or bridging support, the rest won’t matter.

But, this is where the “cries for UBI” become most vocal.

The Wrong Solution

Legendary investor Howard Marks has described AI’s impact on employment as “terrifying.” He emphasized that work provides purpose and identity beyond mere income. Notably, he stated that “…financial support alone will not replace the psychological and social benefits of employment.” That is a crucially important statement, which we now have the data to support. Universal Basic Income (UBI) is the default proposal to offset the impacts of increased AI productivity. The logic sounds simple enough: “If AI displaces workers, send checks to households to replace lost wages and economic stability returns.”

The problem is that the evidence does not support this conclusion.

Following the pandemic-driven shutdown of the economy, we sent checks to households, which was a form of Universal Basic Income. Many articles espoused the benefits of such an operation, but the results were far less appealing. Surging inflation eroded the benefits of the stimulus and left Americans far worse off than they would have been otherwise. However, other real-time tests have also yielded less than promising outcomes.

We previously discussed one of the UBI experiments, which found predictable results. Short-term relief did not translate into higher employment, improved skills, or long-term income growth. Cash transfers temporarily increased consumption but did not raise productivity, increase labor force participation, or improve economic mobility.

“Participants in the study generally did not use the extra time to seek new or better jobs—even though younger participants were slightly more likely to pursue additional education. There was no clear indication that the participants in the study were more likely to take the risk of starting a new business, although Vivalt points out that there was a significant uptick in “precursors” to entrepreneurialism. Instead, the largest increases were in categories that the researchers termed social and solo leisure activities.”

The Argument magazine also reviewed multiple studies on guaranteed income and reached a similar conclusion. While recipients reported lower stress and higher short-term satisfaction, these gains faded quickly. Employment outcomes showed little improvement, job search intensity declined in several cases, and participation in education and retraining did not rise significantly.

In other words, giving people money without purpose helped much less than promised.

The core flaw in UBI is structural, as it treats income as the problem. Employment is the real issue. Yes, work provides wages, but it also offers skill development, social structure, and a sense of purpose, along with long-term stability. A simple check replaces none of those, and unfortunately, as 2020 shows, when producers realize that checks are being sent, they raise prices to capitalize on it. In other words, an artificial increase in incomes will quickly be absorbed by higher prices (inflation), effectively rendering the UBI useless.

Here is the most critical point.

“An economy cannot function on transfers alone; production must precede consumption. UBI reverses this order.“

Cost also matters. A national UBI program large enough to offset AI-driven displacement would require trillions of dollars annually. Funding such a program would either require higher taxes, debt expansion, or both. While each option will reduce future growth, higher taxes reduce investment incentives, while increased debt raises interest costs and crowds out private capital. Neither path supports long-term prosperity.

UBI also weakens the labor signal. Wages communicate where labor is needed, and training follows opportunity. UBI dulls this signal by separating income from work, and, over time, workforce attachment erodes, skills decay, and reentry into employment becomes increasingly complex. This dynamic showed up repeatedly in pilot programs.

Most importantly, UBI avoids the hard work of reform. It sidesteps education reform, workforce retraining, mobility assistance, and pro-growth labor policy. It accepts displacement as inevitable and permanent. History shows this approach fails, and past technological shifts succeeded because workers moved into new roles. In other words, policy supported adaptation, not withdrawal.

AI productivity gains will demand active solutions, not government gifts. Skill development, apprenticeships, employer-based training, wage insurance, and mobility support. These tools address displacement directly, while UBI does not.

Defaulting to UBI is an admission of policy failure and signals surrender to the disruption rather than managing it. The United States grew prosperous by expanding opportunity, not replacing work with checks. That lesson remains relevant today as AI continues to reshape the economy.

Tyler Durden Fri, 01/16/2026 - 14:20

LIS Technologies Launches $1.4 Billion Laser Uranium Enrichment Project In Tennessee

LIS Technologies announced a $1.4 billion uranium enrichment project in Oakridge, Tennessee at the former iconic K-25 site, which until 1987 was a massive gaseous diffusion facility built for the Manhattan Project to enrich uranium-235 for atomic bombs. The company will set up shop on the 206-acre on Duct Island, which will be renamed to LIST Island.

Following the renaming of the 206-acre Duct Island to LIST Island and its redevelopment to house the Company's commercial laser-based uranium enrichment headquarters, Oak Ridge, TN is expected to become the site of the world's first US-origin commercial laser uranium enrichment facility, supporting U.S. utilities, next-generation reactor developers, and national defense requirements while helping to reestablish a resilient domestic nuclear fuel supply chain.

"Tennessee continues to lead the nation in advancing American energy independence, which is why innovative companies like LIS Technologies recognize our efforts through projects like this," said Tennessee Governor Bill Lee. "By creating the Nuclear Energy Fund, we have uniquely positioned our state at the forefront of cutting-edge R&D, and I look forward to the positive impact this project will have for Tennesseans across our state."

The company intends to break ground and begin site preparation and civil construction in 2026 subject to licensing, permitting, and final investment decisions.

LIST is targeting initial commercial operations before 2030, positioning its laser enrichment facility to meet accelerating demand for domestically sourced uranium enrichment.

LIST has partnered with Nano Nuclear to vertically integrate the nuclear fuel chain with reactor development and deployment. The companies are working together to commercialize the Kronos, Zeus, and Loki reactors and supply the necessary fuel for them to operate.

Nano Nuclear CEO Jay Yu, Tennessee Governor Bill Lee and Christo Liebenberg, co-foundder and president of LIS Technology

As the push for US nuclear development goes into high gear, the 3rd-generation laser enrichment technology from LIST could be used to produce low enriched uranium (LEU) and high-assay LEU (HALEU) for use in both traditional commercial reactors and advanced reactors throughout the US. The Department of Energy is pursuing the revitalization of the nuclear supply chain due to a current heavy reliance on foreign imports to fuel the nation's reactor fleet. LIST's major advantage over its peers in the laser enrichment field is that its process is the only US-origin technology in development. 

LIST states they will pursue site characterization and the initial phases of construction during this calendar year. It is then anticipated the company will begin discussions with the NRC to submit an application for the new nuclear fuel facility.

Nano Nuclear, a developer of small modular reactors, first invested in LIST in 2024, which included an enriched uranium supply agreement between the two companies and a potential for future collaboration on fuel fabrication facilities. Nano is still exploring the potential for entering the fabrication market, but has yet to make any announcements regarding land acquisition or regulatory engagement.

Nano recently entered into an engineering agreement with Ameresco for eventual commercialization of their reactor designs, and most recently started the process for preparing the Loki design for use in space applications. Nano Nuclear acquired the Kronos and Loki designs from the now-defunct Ultra Safe Nuclear Corp during bankruptcy proceedings at the end of 2024.

Nano claims the Kronos design is in a high technical readiness state and is one of the leading high-temperature gas-cooled reactor designs in development. It is expected to enter commercial production by the end of the decade.

Tyler Durden Fri, 01/16/2026 - 14:00

Democrats Fight To Keep Insurrection Myth Alive In New J6 Committee

Authored by Jonathan Turley,

The new J6 Committee has started its hearings and, unlike the prior Committee, Republicans have allowed Democrats to select members to sit in opposition. That has led to sharp exchanges, but one of the more interesting occurred between Rep. Harriet Hageman (R., Wyo.) and Jamie Raskin (D., Md.). After Hageman got a witness to admit that no one was charged with incitement, Raskin made the clearly false statement that a few defendants charged with seditious conspiracy was the same thing as incitement. It is not.

Rep. Raskin triggered the confrontation by making a clearly false claim about one of those charged by the Biden Administration: “I would just commend to everybody the testimony of Pamela Hemphill, who was a convicted insurrectionist that was pardoned. She rejected her pardon.”

In reality, Hemphill was charged (like most of the rioters) with relatively minor misdemeanors. She pleaded guilty to one count of demonstrating, picketing, or parading in a Capitol building and received just 60 days in prison, 36 months of probation, and a $500 fine for restitution. She was never charged with insurrection or any felony.

Rep. Hageman pounced on the comment and asked former Justice Department prosecutor Michael Romano whether any January 6 protester had actually been convicted under the federal insurrection statute.

Romano tried to dodge the question but admitted that no one, not Trump nor any rioter, was ever charged with insurrection. Notably, after January 6th, there was a great amount of coverage on Trump and his aides being possibly charged with insurrection or incitement. Despite some of us noting that the speech was clearly protected under the First Amendment, the press portrayed such a charge as credible and heaped coverage on District of Columbia Attorney General Karl Racine, who announced that he was considering arresting Trump, Donald Trump Jr., Rudy Giuliani, and U.S. Rep. Mo Brooks and charging them with incitement. It never happened. The reason is obvious. It could not be legally maintained.

While the FBI launched a massive national investigation, it did not find evidence of an insurrection. While a few were charged with seditious conspiracy, no one was charged with insurrection.

The Supreme Court later reduced charges further by rejecting obstruction charges in some cases.

Yet that did not stop members and the media from repeating the false mantra that this was an insurrection, despite some of us immediately rejecting it as legally unsustainable. Indeed, Democrats used the false claim to seek to disqualify Trump and dozens of Republicans from ballots.

Now back to the hearing.

Hageman asked the witness, “Mr. Romano, did you prosecute anyone related to January 6th for engaging in an insurrection?” she asked. Romano responded, “No, congresswoman.”

That is when Raskin objected and tried to interrupt the confirmation that, in fact, there never was an insurrection or any such charges.

Hageman persisted, “So, Mr. Raskin’s statement that someone was a ‘convicted insurrectionist’ is actually inaccurate, isn’t that correct?”

When Romano again tried to pivot, she pressed further, “She wasn’t a convicted insurrectionist, was she?”

“For the crime of insurrection, no,” he admitted.

Raskin shouted, “Do you accept seditious conspiracy as insurrection?”

It was a telling statement.

For the record, I have long been a critic of sedition crimes. As I discuss in my book “The Indispensable Right: Free Speech in an Age of Rage,”sedition was a noxious import from Great Britain. British judges had balked at the effort to accuse citizens of treason for things like telling bawdy jokes about the queen in some pub.

However, putting that aside, the handful of charges for seditious conspiracy are not legally the same or even close to an insurrection charge. Rep. Raskin, a former law professor, must know that.

The provision in 18 U.S.C. 2384 has long been controversial because it is so sweeping and includes any effort “by force to prevent, hinder, or delay the execution of any law.” While the provision can also entail an intent to overthrow the country, the provision covers any interference with federal proceedings or laws.

Ironically, Raskin opposes the invocation of the Insurrection Act in cities like Minneapolis on the basis of the interference with federal officials in the enforcement of federal law. However, he seems to view this provision as endlessly malleable, so that anyone accused of hindering the execution of a federal law is an insurrectionist.

After January 6th, Justice Department official Michael Sherwin publicly declared that “our office wanted to ensure that there was shock and awe” in hitting people with a maximal level of charges. Yet, despite that “shock and awe” effort, not a single charge for insurrection was ever brought — an inconvenient truth for members like Raskin.

None of this excuses the outrageous riot that occurred on that terrible day. However, seeking to conform the criminal code to the political narrative serves neither the Congress nor the public.

Tyler Durden Fri, 01/16/2026 - 13:40

ACLU And Celebs Release Cringe Appeal To Allow Men In Women's Sports

Authored by Steve Watson via Modernity.news,

The American Civil Liberties Union has rolled out a new campaign pushing for biological males to compete in women’s sports, just as the Supreme Court takes up cases that could finally protect female athletes from unfair competition.

Featuring ‘stars’ including Megan Rapinoe and Naomi Watts, the ad frames this as a fight for “freedom,” when in reality it’s just another leftist assault on women’s rights and fair play.

The ACLU’s “More Than A Game” ad, launched during women’s basketball games on January 12, features celebrities and young people delivering lines like: “When you’re young, you believe that you can do anything. And then the world tries to set limits for you. Tell you what’s allowed, what is normal, who you’re supposed to be.”

It continues: “But on the field, the track, the court, here you get to be exactly who you want. Because at our core, we still are kids that just want to play. The go big game changers. The living, breathing fabric of this country.”

The ad closes with: “Supporting trans youth isn’t just about sports. It’s about freedom on and off the field. It’s more than a game.”

The campaign ties directly to Supreme Court cases challenging bans on transgender girls in school sports in West Virginia and Idaho.

WATCH: "This is an opportunity that the Supreme Court has to tell women that we matter." pic.twitter.com/1NUM988J8a

— Alliance Defending Freedom (@ADFLegal) January 15, 2026

Rapinoe has stated: “I am not going to be tricked into sacrificing hard fought civil rights protections because of anti-trans rhetoric. All women will be harmed if the Court rules against the young trans people at the center of these cases and I wanted to make unambiguously clear that I am on the side of equality and justice.”

Watts, whose child reportedly identifies as transgender, adds in the ad: “It’s about freedom.”

Of course, this completely ignores the real victims: female athletes robbed of opportunities, safety, and medals by males leveraging biological edges.

This push comes right after the Olympics finally acknowledged what everyone knows: men have inherent advantages over women in sports, leading to a ban on transgender athletes in women’s events. As we previously highlighted, the IOC’s policy shift was a win for science and fairness, highlighting decades of evidence that no amount of ideology can erase.

Former Olympic swimmer Sharron Davies, who spoke at a Supreme Court rally against male inclusion in women’s sports, slammed the ACLU’s arguments in one case, noting males’ inherent advantages like bone structure and reduced injury risk. “We cannot remove male physical advantage. NO male belongs in female sport. It’s cheating,” she posted. Davies emphasized: “The Supreme Court’s trans athlete ruling matters to women everywhere.”

The Supreme Court's trans athlete ruling matters to women everywhere https://t.co/VdsnAuToFJ

— Sharron Davies MBE (@sharrond62) January 15, 2026

Tennis legend Martina Navratilova blasted human rights groups like the ACLU for prioritizing trans demands over women’s rights: “Unreal how all these ‘human rights’ organizations are so willingly chucking women’s rights out the window…”

Unreal how all these “human rights” organizations are so willingly chucking women’s rights out the window. Money talks etc…. https://t.co/Jes1lNLk5g

— Martina Navratilova (@Martina) January 12, 2026

XX-XY Athletics, a brand championing women’s sports, fired back at the ACLU directly: “The only rights being violated when males compete in women’s sports are those of the women. You are fighting for the wrong side here.” They shared footage from rallies, underscoring the fight to keep sports fair.

Truth https://t.co/ZQhDUwWZNI

— XX-XY Athletics (@xx_xyathletics) January 15, 2026

My speech on the steps of the Supreme Court. With better sound this time. pic.twitter.com/eEGNA1O4Qk

— Jennifer Sey (@JenniferSey) January 15, 2026

The world does have limits, actually. One of them is when your “freedom” strips other people of their opportunities, rights and dignity.

Also, when did the Left become so bad at making ads? https://t.co/Z9A8jBTumu

— XX-XY Athletics (@xx_xyathletics) January 15, 2026

Leftist campaigns like this one expose the hypocrisy: claiming to empower women while stripping them of hard-won spaces. Real freedom means safeguarding biology-based categories, not bowing to ridiculous woke pressure that endangers girls’ dreams and safety.

As the Supreme Court deliberates, this could be a turning point—rejecting the erasure of women’s rights in favor of common-sense protections for female athletes.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Fri, 01/16/2026 - 13:00

EU Mulls Ditching Accession System Used Since Cold War To Fast-Track Ukraine

When in doubt, just change the rules - or so goes the thinking in Brussels as it seeks to get creative on ways to allow Ukraine's quick accession to the European Union, despite it being consistently ranked among the most corrupt governments on earth.

EU officials have described that a current plan being taken seriously is a 'limited' membership tier, part of a proposed European peace deal to end the Russia-Ukraine war, but which would withhold full membership rights for Kiev, which later must be "earned" according to a phrased transition.

Financial Times puts it this way: "Brussels is drafting proposals to tear up the EU accession system used since the cold war, replacing it with a contentious two-tier model that could fast-track Ukraine's entry in any peace deal to end Russia’s invasion."

File image via CEPA

These alternative plans have taken greater urgency after "Ukrainian EU membership in 2027" was added into the 20-point peace plan which has been subject of intense back-and-forth between the US, Ukraine, and EU.

As far as drastically changing the accession process for merely a single 'exception' - one EU official who is a proponent was quoted in NBC as saying, "We have to recognize that we are in a very different reality than when the (accession) rules were first drawn up."

And yet immense hurdles would remain, regardless, especially those states seen as 'Russia-friendly' and heavily reliant on Russian energy, Hungary and Slovakia. Joining the bloc requires formal approval of all 27 EU member nations. On top of this, as NBC points out:

But many E.U. governments believe that date, or any other fixed date, is completely unrealistic, because E.U. accession is currently a merit-based process, moving forward only when there is progress in adjusting a country's laws to E.U. standards.

Joining the bloc also requires sign-off from the national parliaments of the EU's 27 member states. Some kind of 'staged access' plan could then open the flood gates for others who are not ready, and whose economies would be a drag and drain and the rest of the EU.

A somewhat recent member like Poland was not even at war when it joined in the 2004 membership wave during the Bush era. Poland itself could stand in the way of fast-tracking Ukraine, with the two eastern European neighbors recently being engaged in several tense diplomatic disputes.

But one unnamed diplomat has argued:

"It is Europe’s interest to have Ukraine in the E.U., because of our own security," an E.U. diplomat said.

"It is why we need to look for creative solutions - how to get Ukraine in the E.U. quickly. The reversed membership concept reflects this idea - to have Ukraine joining the E.U. politically and then getting full rights and full-fledged membership once all conditions are met," the diplomat said.

The European Union has meanwhile continued full steam ahead in efforts to ramp up support to Ukraine's defense sector, even as Washington has been seen as largely withdrawing. For example last November European Parliament voted to approve a 1.5 billion euros ($1.7bn) program which seeks to deepen integration between Ukraine and Europe on military-industrial relations.

Tyler Durden Fri, 01/16/2026 - 12:40

Shale Pioneer Harold Hamm Steps Back From Bakken After Decades

Harold Hamm says low oil prices are forcing a step he hasn’t taken in decades: shutting down drilling in North Dakota’s Bakken, according to Bloomberg.

“This will be the first time in over 30 years that Harold Hamm has not had an operation with drilling rigs in North Dakota,” he said. “That tells you a whole lot right there: There’s no need to drill it when margins are basically gone.”

The decision underscores how far conditions have shifted in the region that once defined the US shale boom. The Bakken was where Hamm showed that fracking could unlock oil long thought unreachable, helping transform the US into the world’s leading producer and reshaping global energy markets.

Bloomberg writes that the pullback reflects pressure across the industry. Even as Hamm backs President Donald Trump, producers are feeling the strain from policies aimed at pushing oil prices lower to fight inflation, at the expense of profitability.

Costs are rising just as prices fall. BloombergNEF estimates that a typical Bakken well now needs about $58 a barrel to break even, nearly 4% higher than a year ago. At the same time, US benchmark crude has slid about 25% over the past year to roughly $59, weighed down by fears of oversupply and expectations of more barrels entering the market, including from Venezuela.

Drilling activity has dropped nationwide, with US rig counts down 15% over the past year and the biggest reductions coming from the Permian Basin.

“A lot of people are assessing their activity in all the basins,” Hamm said.

He made clear the pause may not be permanent. “We’re price takers, as you’re aware — not price makers,” he said with a laugh. “See what we can get.”

Tyler Durden Fri, 01/16/2026 - 12:00

Isotopes 101

Submitted by TightSpreads 

Many smart investors are catching up to the nuclear story already, but there is another angle to it that is grossly uncovered: isotopes.

This educational primer provides a useful starting point for understanding isotope market opportunities and the nuclear equities or advanced materials companies to be featured soon.

Why is this timely?

• Because Oklo management has told the street that radioisotope revenues could begin as early as Q1-2026.
• Isotopes are about to drastically change the semiconductor, industrial, and medical industries.

What is an isotope?

Isotopes are atoms of the same element with identical chemical properties (same protons/electrons) but differing neutron counts, leading to variations in atomic mass and nuclear behavior. So if elements are families, isotopes are siblings. Being that sibings are similar, but not identical. They arise naturally as the result of ancient stellar explosions, cosmic ray interactions, and radioactive decay; or artificially via nuclear reactors/particle accelerators.

There are two types of isotopes: stable and unstable/radioactive. Stable isotopes have energetically balanced nucleus (protons/neutrons) and don’t decay. They are ideal for long-term uses like environmental tracking and are more ‘commoditized’ compared to radioactive isotopes. In contrast, radioactive isotopes have an imbalanced nucleus. This imbalance of energy, typically caused by an excess or deficiency of neutrons, forces the isotope to undergo spontaneous radioactive decay

Radioactive decay is a process exclusive to radioisotopes. It’s the transformation of an unstable atomic nucleus rebalancing into a more stable configuration. This process involves the release of energy through various decay modes, primarily alpha, beta, and gamma radiation. It is important to note that decay often occurs in sequences known as decay chains, where a parent isotope transforms into one or more daughter isotopes before reaching a final, stable state. The opportunity set of daughter isotopes have been increasingly researched and pursued in private markets, and more recently, public equity markets.

The rate of this transformation is measured by an isotope's half-life—the time required for half of a given sample to undergo decay. Half-lives vary significantly across the isotopic spectrum. This especially important for logistical considerations of isotope production and end-market delivery. Radioactive half-lives can be as short as septillionths of a second, but most commonly-used radioactive isotopes will have half-life spans of a few hours or days.

Major Applications

• Nuclear Energy & Fuel Cycle:

  • Enrichment Services: Focus on Enriched U-235 for the existing fleet and HALEU (High-Assay Low-Enriched Uranium) for next-generation SMRs (Small Modular Reactors). Exacerbated by the “Russia Exit” play to shift the U.S. from Russian enrichment reliance and assert our own nuclear and material dominance.

  • Specialty Lithium: Lithium-7 is critical for pH control in pressurized water reactors (PWRs) to prevent corrosion, while Lithium-6 is the primary precursor for Tritium in the burgeoning fusion energy sector.

  • Market Tailwinds: The Nuclear Energy Institute estimates the nuclear fuel enrichment opportunity will grow from ~18.0 MT/ year in 2024 to ~613.8 MT/ year in 2035, reflecting a ~37.8% CAGR.

• Medical (Primary Growth Engine):

  • Diagnostics: Technetium-99m (Tc-99m) remains the industry workhorse, utilized in approximately 80–85% of all nuclear diagnostic scans worldwide.

  • Theranostics (Targeted Therapies): The “Oncology Boom” is driven by Actinium-225 and Lutetium-177, which allow for “search and destroy” cancer treatments.

  • Market Tailwinds: According to Allied Market Research, the nuclear medical isotope market was estimated at ~$6.6B in 2025 and is projected to reach ~$14B by 2034 (8.8% CAGR). Growth is catalyzed by: the targeted oncology boom, a massive influx of biotech capital into radiopharmaceutical pipelines, aging global demographics, and the urgent need to diversify supply away from aging legacy reactors.

Supply Chain Fragility: The medical isotope market is notoriously fragile because it relies on a linear, "just-in-time" supply chain with almost no buffer for error. Much of the world’s supply currently relies on a handful of aging legacy reactors

• High-Value Industrial & Tech Niches:

  • Semiconductors and Quantum Computing: Isolating and enriching materials like Silicon-28 or Phosphorus-31, can unlock significant technological performance enhancements. McKinsey estimates the global semiconductor market will reach ~$1T by 2030, up from ~$527B in 2023 (~7.7% CAGR).

  • Industrial and Tech: Germanium isotope end use cases span electronics, infrared optics, solar cells, and fiber optics, among other applications.

  • Industrial/Research: Helium-3 for cryogenics and neutron detection; Carbon-13 for metabolic research and gas tracing.

  • Resource Management: Isotopes are essential for oil/gas reservoir tracing and high-precision environmental monitoring (e.g., tracking carbon sources or water table movement).

Isotope Production and Enrichment

As we recently mentionef, elements come as a mix of “heavy” and “light” versions of their atomic masses. Thus, elements may have a variety of isotopes found and to be made. Production methods work by bombarding target materials with high-energy particles—such as neutrons in nuclear reactors to create neutron-rich isotopes or protons in cyclotrons to create proton-rich isotopes. Enrichment takes a natural mixture (like raw Uranium) and use precision methods such as lasers to "sort" or separate the isotopes that are already there.

In a high-tech supply chain, you often need both enrichment and production to get to a final product.

Production Methods:

The Future, Nuclear Reactors

• The Process: Reactors act as “controlled furnaces” that generate a dense flux of neutrons. Target materials are inserted into the reactor core where they are “baked” or irradiated by these neutrons to create a radioactive isotope.

• The Reaction (Neutron Capture): Because neutrons have no electrical charge, they easily enter the nucleus of a target atom. The nucleus absorbs the neutron, becoming a heavier and often unstable isotope that then decays into the desired material.

Why it’s better:

• Massive Scale: Reactors are the only cost-competitive machines capable of “bulk” production, irradiating dozens of targets simultaneously. Making nuclear reactor isotope producers such as Oklo’s Versatile Isotope Production Reactors (VIPR) a strong contender for scaling U.S. domestic supply amid global shortages with uniform distribution.

• Unique Capabilities: Only reactors can produce the neutron-rich therapeutic isotopes and industrial dopants that represent the current largest growth drivers in healthcare and AI.

The Specialized Alternative, Cyclotrons

• The Process: Magnets and electricity fire a high-speed “proton beam” in an ever-widening spiral at a target.

• The Result: This “proton bombardment” creates proton-rich isotopes.

Status: Commercially scaled and widely distributed, often found directly in or near hospitals due to the short half-lives of the isotopes they produce.

 

The Precision Straight-Line, Linear Accelerators (Linacs)

• The Process: Propels charged particles in a straight line through a long vacuum tube using electric fields.

• The Result: Produces a wide range of isotopes with high precision and reduced beam loss compared to cyclotrons.

• Status: Commercially scaled for both isotope production and medical radiotherapy, though they often require significantly more physical space than cyclotrons.

The High-Energy Ring, Synchrotrons

• The Process: Guides particles in a circular path using variable magnetic fields to keep them in a fixed ring as they gain extreme energy.

• The Result: Capable of reaching GeV energy levels, far beyond what standard cyclotrons can achieve.

• Status: Not typically used for commercial isotope production; they are primarily “frontier” machines for high-energy physics research and specialized cancer treatments like carbon-ion therapy.

Enrichment Methods:

The Current Standard, Gas Centrifuge

• The Process: The material is turned into a gas and spun at incredibly high speeds in a cylinder.

• The Result: The “heavy” pieces are thrown to the outside walls, while the “lighter” ones stay in the center. By repeating this hundreds of times through a cascade of centrifuges, the desired isotope is concentrated.

The Retired Method, Gaseous Diffusion

• The Process: Pumping gas through miles of filters with tiny holes.

• Status: This was the original Cold War method. It is now obsolete because it uses massive amounts of electricity and is far too expensive compared to modern spinning.

The Future, Laser Enrichment

After 50 years of development, laser technology is the “next frontier.” Unlike the methods above, lasers are surgical and precise. The only downfall has been their ability to scale lasers for mass commercialization.

• How it works: Scientists “tune” a laser to a specific frequency that only hits the target isotope. It’s like using a specialized magnet to pull only the copper pennies out of a jar of mixed coins.

• Why it’s better: It is much more efficient and can handle materials that centrifuges can’t.

Key laser types:

• Atomic Vapor Laser Isotope Separation (AVLIS): Heat the element to gas atoms → lasers selectively charge (ionize) the target isotope → charged atoms stick to a collector plate (opposites attract). Was not scaled due to technical challenges.

• Molecular Laser Isotope Separation (MLIS): Convert to a gas molecule → lasers excite/break bonds in molecules with the target isotope → enriched part is collected via collector plate.

SILEX (most advanced version, from Australia’s Silex Systems): A smarter MLIS approach. Lasers excite target molecules → in a fast-moving gas jet, excited (lighter) ones resist clumping/condensing and separate differently.

Avlis technique:

* * * 

Read more at the TightSpreads substack.

Tyler Durden Fri, 01/16/2026 - 11:33

Another $3.5 Billion For Gas Power Generation

Talen Energy is following in the footsteps of utility peers Vistra and Constellation by spending billions of dollars acquiring gas generation assets to expand their capacity and grow market share in the growing power demand market.

After spending about $3.5 billion to acquire gas generation capacity in Pennsylvania and Ohio back in July 2025, the company announced it spent another $3.5 billion to acquire two more gas facilities in Ohio. With the newly announced 2.6 GW added to last year’s 2.9 GW, Talen is getting just as aggressive as others with acquiring as much capacity as possible.

We previously discussed Vistra’s stock price popping after they purchased multiple gas plants for $4 billion, adding 5.5 GW to their portfolio across the US. The PJM market seems to be a focus of much of the capacity expansion efforts due to the extreme strain on the grid with data centers growing like weeds in places like northern Virginia. That acquisition is also in addition to their $2 billion Q4 purchase of seven gas plants for 2.6 GW.

Acquisitions by Talen and Vistra are still dwarfed by Constellation’s massive acquisition of Calpine announced one year ago. Acquiring 23 GW of mostly gas power, Constellation paid about $30 billion to further expand their generation capabilities. Constellation also currently holds ownership of the most commercial nuclear reactions in the US.

The frantic scramble to acquire as much capacity as possible, as quickly as possible, is due to the desperation for answering the demand from the US grid as it struggles to keep up with new demand growth not seen in decades due to electrification and AI data centers.

While it is far from being as dangerous as coal plants to the environment, gas generation is far from being considered as friendly as renewable and carbon-free sources like wind, solar, geothermal, and nuclear. This is one of the main reasons nuclear energy has come back into the conversation as more people than ever now approve of the use and construction of new nuclear power plants.

But, with data centers being built right now, the only way to meet their current demands is with gas and existing nuclear while the industry prepares to transfer to new and advanced nuclear in the future, most likely after 2030. There is a general concern that the nuclear bullishness of the Trump administration could be overridden by a left-wing government should parties switch after the next election, but due to nuclear being one of the most “purple” means a power production, those fears could be mostly over blown. 

Regardless, Energy Secretary Chris Wright is promoting and pushing nuclear developments harder than anyone since Admiral Rickover, with the near-term potential to bring at least three new reactor designs critical by July 4 of this year.

Tyler Durden Fri, 01/16/2026 - 11:25

Underwater Auto Trade-Ins Reach Record Highs: Edmunds

Authored by Rob Sabo via The Epoch Times,

A record number of automobile owners are carrying negative equity of $10,000 to more than $15,000 into trade-ins on new vehicles, according to online vehicle data analytics website Edmunds.

In the fourth quarter of 2025, a record high of 27 percent of vehicle trade-ins involved negative equity of at least $10,000, Edmunds reported on Jan. 15. Just more than 17 percent of trade-ins involved loans with $10,000 to $15,000 of negative equity, while 9.2 percent of trade-ins had loan balances exceeding $15,000.

Negative equity on auto loans is commonly referred to as being “upside down” or “underwater,” a situation where the vehicle is worth less than what’s currently owed on the loan. Nearly 30 percent of all vehicles traded in during the fourth quarter of last year carried some amount of negative equity, Edmunds said. It’s the highest amount of underwater loans on record since the first quarter of 2021, when nearly 32 percent of trade-ins carried negative equity.

The average negative equity of $7,214 that was rolled over into new auto loans in the fourth quarter was the highest amount ever recorded.

Ivan Drury, director of insights at Edmunds, said carrying negative equity into a new auto loan can be a difficult cycle to escape.

“Rolling debt forward may offer short-term relief, but it often leaves buyers with higher payments, and fewer options the next time they’re in the market,” Drury said in the report.

“Avoiding that cycle generally comes down to fundamentals: understanding how much a vehicle is worth relative to what’s owed, choosing purchases that hold their value and align with long-term needs, and recognizing that focusing only on monthly payments can obscure the true cost of a purchase.”

The all-time highs on upside down loans come at a time when more Americans are being approved for auto loans. According to Cox Automotive, the overall approval rates for auto loans in December 2025 jumped 90 basis points from a month earlier, to roughly 74 percent. Loans to riskier subprime borrowers—applicants with fair to poor credit scores—dipped slightly, to just more than 14 percent, Cox Automotive noted. However, subprime lending was still up by 230 basis points from year-ago figures.

Jonathan Gregory, senior manager for Cox Automotive’s economic and industry insights team, said borrowers should take a broad view of total ownership costs when evaluating loan offers.

“Ongoing improvement in credit access, especially in both the new and used markets, continues to offer financing opportunities,” Gregory said in a Jan. 12 analysis.

“While approval rates increased, the slight decline in down payments combined with longer loan terms may indicate stretched affordability.”

The amount of down payment borrowers brought to auto loans dipped slightly in December, to 13.3 percent, Cox Automotive noted.

Edmunds said the imbalance in auto loans largely stems from loans taken out during the COVID-19 pandemic, when chip shortages led to a dearth of new-vehicle inventory and pushed automobile prices higher. As those borrowers seek to upgrade their vehicles, more are finding themselves significantly underwater, Edmunds said.

“Loans that originated when prices were elevated are now aging into a market where values are no longer inflated, making the gap between what many buyers owe and what their vehicle is worth more apparent,” the report states.

“Combined with higher borrowing costs in today’s market, that dynamic has left more buyers facing steeper financial trade-offs when it comes time to replace a vehicle.”

Tyler Durden Fri, 01/16/2026 - 11:05

Canada's PM Carney Praises "New World Order"; Opens Door To Chinese EVs

The invasion of Chinese electric vehicles into North America is set to accelerate after Canadian Prime Minister Mark Carney agreed to roll back the triple-digit tariffs previously imposed on Chinese EVs. The move sharply diverges from President Trump's America First policy, which aims to revitalize the North American auto industry. While Chinese EVs remain effectively blocked from US import, there has been a noticeable increase in BYD Motor vehicles on highways in Mexico.

Canadian Prime Minister Mark Carney, who appears to have deep ties with Beijing, was the first prime minister to visit China since 2017 and is seeking a major thaw in relations after years of tense diplomatic and trade ties.

Carney's move abandons the 100% tariffs on Chinese EVs imposed by former Prime Minister Justin Trudeau in 2024, replacing them with a 6.1% rate capped at 49,000 Chinese EVs. In 2023, China exported 41,678 EVs to Canada. The shift in trade policy will certainly capture the Trump administration's attention.

"In order for Canada to build our own competitive EV sector, we need to learn from innovative partners, access their supply chains and increase local demand," Carney told reporters after talks with President Xi Jinping.

Carney may have given the wrong answer. Logically, if Canada wanted to build out an EV sector, it would turn to American expertise, such as Tesla, Rivian, Lucid, or even legacy Detroit automakers. Instead, that does not appear to be the case, raising questions about where Carney's allegiance truly lies, whether with the East or the West.

A recent report via The Bureau's Sam Cooper only suggests Carney's allegiance points towards Beijing...

• Brookfield's Deep Ties To Chinese Land, Loans & Green Deals

And there it is...

“The world has changed much since that last visit, I believe the progress that we have made in the partnership sets us up well for the new world order,” declared the Prime Minister of Canada.

His face really says it all!

Watch as Scott Moe reacts to Mark Carney’s New World Order remark. pic.twitter.com/DyKZB62Rnh

— Rebel News (@RebelNewsOnline) January 15, 2026

Also during his Beijing trip, Carney told Zhao Leji, the third-highest ranking member of the CCP, “We’re heartened by the leadership of President Xi Jinping and the speed with which our relationship has progressed,” Reuters reported.

He added that recent trade friction forced Beijing to slap 100% duties on Canadian canola oil - also known as rapeseed oil - as well as other ag products, with 25% on pork and seafood.

"China used to be the largest market for Canadian canola seed," Carney said. "We want to not just return to those levels, but to surpass them."

It appears Carney has not learned the lesson from Europe, where flooding the market with Chinese EVs helped decimate automakers across the continent.

Tyler Durden Fri, 01/16/2026 - 11:00

Trump Says Wants To Keep "Hassett Where He Is" Sending Warsh Fed Chair Odds Soaring; Gold Slides

In a strong hint ahead of Trump's decision later this month who the next Fed chair will be, the president appears to have hobbled the chances of one of the Kevins when he said that Kevin Hassett was "fantastic on TV today", and Trump wants to "keep him where he is" since "Fed officials don't talk much" while Hassett is "good at talking."

“I actually want to keep you where you are, if you want to know the truth,” Trump told Hassett during a White House event.

“If I move him, these Fed guys — certainly the one we have now — they don’t talk much. I would lose you. It’s a serious concern to me.”

The news promptly sent Kevin Warsh's Polymarket up to 54% from 34% previously making him the favorite, while Hassett tumbled from a 34% chance to be nominated to a 16% chance, below Chris Waller whose odds also jumped, from 9% to 18%.

And since Warsh is generally viewed more hawkish than Hassett, we have seen an instant jump in the Dollar index...

.. and a slide in gold.

...as rate-cut expectations plunge...

Tyler Durden Fri, 01/16/2026 - 10:51

Trump Stuns By Floating Tariffs On Countries That Stand In The Way On Greenland

Days ago as it became clear that Europe and the United States would be locked in a showdown over the future fate of Greenland and its sovereignty, the EU touted that it has some cards to play, as leaders stepped up in defense of Denmark's longtime hold on the resource-rich Arctic territory:

The European Parliament is considering putting on hold the European Union's implementation of the trade deal struck with the United States in protest over threats by U.S. President Donald Trump to seize Greenland.

The European Parliament has been debating legislative proposals to remove many of the EU's import duties on U.S. goods - the bulk of the trade deal with the U.S. - and to continue zero duties for U.S. lobsters, initially agreed with Trump in 2020. It was due to set its position in votes on January 26-27, which the MEPs said should now be postponed.

But the EU might soon regret this threat as diplomacy gives way to leverage, and the US under Trump has plenty of it.

President Trump on Friday went unexpectedly nuclear on the Greenland issue, openly floating tariffs as a pressure tactic against countries that refuse to "go along" with Washington’s ambitions over Greenland.

"I may put a tariff on countries if they don’t go along with Greenland, because we need Greenland for national security," President Trump said at a White House event Friday, according to Bloomberg.

via Reuters

"Trump was speaking about tariff threats serving as leverage to secure most-favored-nation drug pricing before he mentioned Greenland," the report indicates of the context.

While he stopped short of naming specific countries, the message is unmistakable - cooperation comes with benefits and those who stand in America's way will suffer the consequences.

Critics have said the move could fracture NATO and deepen rifts with Europe at a time of already heightened geopolitical tension, while some other sources have speculated of NATO's potential unraveling over this: maybe that's the point?

Tyler Durden Fri, 01/16/2026 - 10:50

"Connection Timed Out": X Goes Dark

At around 10:10 ET, X went down, displaying a "connection timed out" message, suggesting an issue on the Cloudflare side.

Here's the error message, indicating a host-side failure.

Website tracker Downdetector is currently showing a spike in reported X outages.

The disruption appears to be nationwide.

Developing…

Tyler Durden Fri, 01/16/2026 - 10:24

"Emergency Intervention": Trump To Cap Residential Electric Bills By Forcing Tech Giants To Pay For Soaring Power Costs

Back in August, when the American population was just waking up to the dire consequences the exponentially growing army of data centers spawned across the country was having on residential electricity bills, we said that the chart of US CPI would soon become the most popular (not in a good way) chart in the financial realm.

In one year, this will be the most popular chart on this site pic.twitter.com/h93gWXMoNL

— zerohedge (@zerohedge) August 11, 2025

One month later we added that it was only a matter of time before Trump, realizing that soaring electricity costs would almost certainly cost Republicans the midterms, would enforce price caps.

100% wrong. Trump is about to put a cap on power price and will crush utilities. https://t.co/WjiZe8MEnM

— zerohedge (@zerohedge) September 29, 2025

Turns out we were right.

And while Trump obviously can not pull a communist rabbit out of his hat, and centrally plan the entire US power grid, what he can do is precisely what he is about to announce. 

According to Bloomberg, Trump and the governors of several US Northeastern states agreed to push for an emergency wholesale electricity auction that would compel technology companies to effectively fund new power plants, effectively putting a cap for residential power prices at the expense of hyperscalers and data centers. Which, come to think of it, we also proposed back in October.

The data centers and AI giants are making billions as they drain the power grid dry and get indirect consumer subsidies in the form of 100% bill increases. It's time they allocate some of trillions in circle jerk funds to lowering electricity costs for everyone else

— zerohedge (@zerohedge) October 15, 2025

The unprecedented plan, set to be announced Friday morning, seeks to address growing tensions over how the nation can supply electricity to power-hungry data centers, critical to help win the global AI race against China, without simultaneously hiking utility bills for homes and businesses.

The Trump administration and some US governors plan to direct grid operator PJM Interconnection LLC, the largest regional power grid in the US serving 67 million customers primarily in the Northeast, to hold an auction for tech companies to bid on 15-year contracts for new electricity generation capacity.

If the auction proceeds as envisaged, tech giants would pay for power over the duration of the contracts, whether they use the electricity or not, providing secure revenues for years in a market notorious for price volatility and generator bankruptcies.

The auction would deliver contracts supporting the construction of some $15 billion worth of new power plants, said a White House official granted anonymity to detail the approach. 

Naturally, since this plan is being introduced under duress, representatives of PJM won’t be in attendance when the plan is laid out Friday according to Bloomberg. 

“We don’t have a lot to say on this,” PJM spokesman Jeffrey Shields said by email. “We were not invited to the event they are apparently having tomorrow and we will not be there.”

The push by the administration and the governors — which will come in the form of a non-binding “statement of principles” signed by Trump’s National Energy Dominance Council and the governors of Pennsylvania, Ohio, Virginia and other states — responds to growing concern about power demand far outpacing supply in the region managed by PJM.

PJM is already home to the world’s biggest concentration of data centers, in northern Virginia. It expects peak demand across its system to jump 17% by 2030 from this year’s high. Furthermore, as we noted two months ago, PJM is one of the 8 (out of 13) regional power markets that are already below critical spare capacity levels.

"eight out of the 13 US regional power markets are already at or below critical spare capacity levels." - Goldman https://t.co/YYAGUukfwR pic.twitter.com/eU4XPFAMrp

— zerohedge (@zerohedge) November 23, 2025

Trump has repeatedly described power plants being built alongside data centers, and on Monday, he doubled down on the idea, insisting in a social media post that the big technology companies that construct data centers must “pay their own way.”

“I never want Americans to pay higher Electricity bills because of Data Centers,” Trump wrote in his post, and now he will try to make that a reality.

As we have warned repeatedly in the past year, cost-of-living concerns - especially when it comes to staples like electricity - are already weighing heavily on Republicans’ bid to maintain control of the House and Senate in this November’s congressional elections. While Trump has stressed the plummeting cost of oil and gasoline since he took office last January, electricity prices have climbed due to rising demand, and there’s a building backlash against data centers that are fueling the surge... which - you guessed it - we warned about too.

between exploding electricity bills and lack of jobs for grads, a new luddite revolution is coming - they will be burning down data centers within a year

— zerohedge (@zerohedge) August 25, 2025

The average US retail price for electricity gained 7.4% in September to a record 18.07 cents per kilowatt-hour, the biggest gain since December 2023. Residential prices have jumped even higher, rising by 10.5% between January and August 2025, marking one of the largest increases in more than a decade, according to the National Energy Assistance Directors Association.

Friday’s action is being cast as a one-time emergency intervention into the PJM market, necessary because of the rapid rise in electricity prices in the Mid-Atlantic region. The Trump administration and governors will urge the grid operator to return to market fundamentals after the acute problem is addressed, the White House official said.

The administration’s prescription for PJM is what’s known as a reliability backstop auction — something the grid operator already envisioned in the wake of repeated failed sales. But the administration and governors’ plan would mean holding the emergency auction right away after one clear failure – with unusual terms meant to foster a wave of rapid, new construction and the only bidders being data center owners and operators.

While PJM already holds auctions procuring electricity supplies, those are 12-month periods. In the auction encouraged by Trump and the governors for 15-year contracts, start-up times for the new power plants are likely to be staggered. The White House and governors are urging PJM to hold the special one-time auction by the end of September.

“It sounds like a significant improvement and a logical extension of bring-your-own new generation,” Joe Bowring, president of PJM’ s independent watchdog Monitoring Analytics LLC, said in a telephone interview. Almost as if the Trump admin read something else we wrote...

To prevent skyrocketing electric bills, every state has to follow the Texas example: each data center must have its own "behind the meter" onsite power generation.

“We believe data centers should pay for the full cost of their power,” Dominion Energy spokesperson Aaron Ruby… https://t.co/0u1owTeAs8 pic.twitter.com/8W421s3rzV

— zerohedge (@zerohedge) November 23, 2025

“While a ‘statement of principles’ doesn’t appear to include a legal mandate for PJM to act, pressure from the Trump administration and a bipartisan coalition of PJM states is very likely to motivate a considerable response” from the grid operator, said Timothy Fox, an analyst with the research firm ClearView Energy Partners.

This plan also could fast track the development of natural gas generation and potentially nuclear plants by guaranteeing revenues – and profits – specifically to support data campuses needed to deploy artificial intelligence. The approach could benefit larger tech companies at the expense of smaller firms, as well as companies involved in advanced energy development such as Small and Modular Nuclear Reactors. 

Amazon.com Inc., Alphabet Inc.’s Google and Microsoft Corp. are less exposed to electricity price fluctuations since they can pass those costs on to customers, said Gil Luria, analyst at DA Davidson & Co. However, dozens of smaller companies, including Nebius and CoreWeave that offer artificial intelligence infrastructure to cloud-computing companies on multi-year contracts, could be more exposed to big price swings since they are on the hook to absorb higher electricity costs, he said.

“If they have to pay more for electricity, their margins will get squeezed,” Luria said.

Trump's initiative will deliver another benefit: the effort has the potential to help PJM tackle a significant roadblock: improving the accuracy of its forecasts for demand growth. With tech giants paying for the power plants they need, the approach could weed out speculative projects that have skewed demand growth projections, something we discussed earlier.

As Bloomberg notes, the involvement of Democratic governors – including Pennsylvania’s Josh Shapiro and Maryland’s Wes Moore – is seen by the Trump administration as helping to anchor the effort, since state policies have driven recent changes in the power mix, including the retirement of coal and gas plants. The initiative is also seen aiding hyperscalers by ensuring reliable power supply, and it could be a model for other parts of the country, the White House official said.

Governors are committing to implement and assign these costs to the data centers, ensuring the price of these new power plants doesn’t land on the average household, the White House official said.

PJM’s auctions have emerged as a political flashpoint in the national debate about affordability after prices reached record levels in 2024. Although Pennsylvania’s Shapiro struck a deal with PJM to cap prices in future auctions, costs hit new highs in two subsequent sales. In fact, had it not been for an implicit cap in the latest auction, residential prices would have been 60% higher (see "Inside The PJM Auction Report, Something Crazy: Without Price Controls, Electricity Bills Would Explode".) 

The most recent auction, in December, also fell 6.6 gigawatts short of supplies, which PJM blamed on the frenzy to build massive data centers. PJM is now being asked to extend the price cap for auctions held through this year, the White House official said.

While the statement of principles being signed Friday isn’t a binding legal document, administration officials have discussed the plan with a host of stakeholders, from PJM executives and state officials, to utilities, power-plant developers, Wall Street and the hyperscalers building these data centers, the official said.

Tyler Durden Fri, 01/16/2026 - 09:25

US Industrial Production Surged To End 2025

While 'soft' survey data has been disappointing, hard macro data has been resilient and Industrial Production ended 2025 on a bright note with a 0.4% MoM surge in December (considerably better than the +0.1% MoM expected) complementing November's 0.4% MoM rise. This left industrial production up 2% YoY...

Source: Bloomberg

The index for utilities increased 2.6 percent in December, supported by a rise of 12.0 percent in the index for natural gas...

US Manufacturing output also rose more than expected, +0.2% MoM vs -0.1% MoM exp.

Source: Bloomberg

Capacity Utilization also rebounded in December, seemingly breaking the downtrend...

Source: Bloomberg

This 'positive' macro news seems at odds to the soft survey data that suggests the end of the world.

Finally, rate-cut expectations are lower still following this 'good' news.

Tyler Durden Fri, 01/16/2026 - 09:23

Trump Says 'Venezuela Leaker' Jailed As Polymarket Accounts Go Quiet

Authored by Helen Partz via CoinTelegraph.com,

US President Donald Trump said the “leaker on Venezuela” has been jailed, a remark that has renewed scrutiny of prediction markets following a series of well-timed bets earlier this month.

“The leaker on Venezuela has been found and is in jail right now,” Trump said in the Oval Office on Wednesday, according to a video posted by The Wall Street Journal.

Although Trump did not mention prediction markets, blockchain analysts such as Lookonchain have speculated that the leaker may be linked to a cluster of Polymarket accounts that placed concentrated bets on Venezuela outcomes just hours before the news became public.

“We noticed that two of the three wallets that previously profited from betting on Venezuelan President Maduro being out of office have been inactive for 11 days,” Lookonchain wrote in an X post on Thursday.

Some accounts are still active with bets on Iran

Addressing the inactive wallets, Lookonchain highlighted the 0xa72DB1 Polymarket account, which turned a $5,800 stake into $75,000 by betting on Maduro being out of office by Jan. 31, 2026.

Lookonchain also noted the 0x31a56e account, which placed a series of bets on Venezuelan events before disappearing from Polymarket around Jan. 8.

Source: WSJ

The remaining wallet, SBet365, placed another bet two days ago, predicting that Iran’s Supreme Leader Ayatollah Ali Khamenei would be ousted by Jan. 31, Lookonchain noted.

SBet365 was also among accounts that gained significant profits from betting on Venezuela on Polymarket, making abour $140,000 from wagers tied to Maduro’s ouster.

“There could be some others [leakers], and we will let you know about that,” Trump said, referring to the jailed Venezuelan leaker.

Source: Polymarket

The events come amid ongoing scrutiny of prediction markets, with US lawmakers pushing a bill to combat insider trading on political wagers.

Sean Patrick Maloney, president and CEO at Coalition for Prediction Markets, a national industry alliance formed in late 2025, said coalition members already ban insider trading by enforcing strict Know Your Customer policies.

“It’s critical to draw a bright line between offshore, unregulated prediction platforms and federally regulated US ones,” Maloney told Cointelegraph, adding:

“Consistent with current law, offshore, unregistered platforms should not be able to operate in the US or serve US customers without the same safeguards and registrations, keeping this activity governed responsibly under US oversight.”

Tyler Durden Fri, 01/16/2026 - 08:45

Stocks Rise As Tech Meltup Accelerates

Futures are higher, and trading near record territory, led by tech as this year’s great rotation shows no sign of slowing, broadening the base of names driving Wall Street’s push back towards all time highs. As of 8:00am, S&P 500 futures were 0.3% higher with Nasdaq 100 contracts up 0.4% as the latest wave of enthusiasm for technology stocks carried into Friday. Overnight headlines were mostly muted. Pre-market, Mag 7 are mostly higher led by NVDA +1.1%; AI names (AMD +3.2%, AVGO +1.3%, MU +2%) continued their rally yesterday. Bond yields are unchanged. Commodities are mixed: oil added 1.2%, while silver fell -2.0%; ags are mostly higher. US session features industrial production data and three scheduled Fed speakers.

In premarket trading, Mag 7 stocks are mostly higher (Nvidia +0.8%, Tesla +0.6%, Meta +0.09%, Alphabet +0.5%, Microsoft +0.06%, Amazon +0.3%, Apple -0.2%

• JB Hunt Transport Services Inc. (JBHT) falls 4% after the trucking firm reported quarterly revenue that missed estimates, underscoring continued weakness in freight demand.
• Kraft Heinz (KHC) is down 1.1% after Morgan Stanley downgraded the maker of Jell-O and Oscar Mayer hot dogs to underweight.
• Mosaic (MOS) falls 6% after the producer of phosphate and potash crop nutrients said North American fertilizer demand declined well beyond normal seasonal softness in the fourth quarter.
• PNC Financial Services Group Inc. (PNC) rises 3% after reporting a 9% increase in fourth-quarter revenue, beating analysts’ estimates as financing and dealmaking by middle-market customers accelerated.
• Regions Financial (RF) falls 4% after the regional bank reported EPS and total loans for the fourth quarter that came in below the average analyst estimate. The bank also said it sees net interest income declining in the first quarter of 2026.

In corporate news, Trump continues to try to ease the squeeze on Main Street that’s hurting his popularity among voters. A plan is set to be announced on Friday to compel tech firms to effectively fund new plants to power the data centers essential to win the global AI race, without hiking utility bills for homes and businesses. A potential deal that would see China’s BYD supply Ford’s overseas factories with batteries for hybrid vehicles drew immediate political blowback from White House trade adviser Peter Navarro, who questioned its wisdom. OpenAI and Microsoft face a trial over Elon Musk’s claims that Sam Altman’s startup betrayed its founding mission as a public charity when it took billions in funding from the software giant and made plans to operate as a for-profit business.

Yet even after TSMC’s huge beat and capex forecast fueled optimism on Thursday that the AI boom has plenty of room to run, the Russell 2000 continued to outperform the S&P 500. It outpaced its bigger counterpart for a 10th straight session, leaving small caps’ relative performance more than 600 basis points better so far this year. 

Despite the bounce, the Nasdaq 100 closed Thursday still in the red for the week, as investors turned toward firms that are benefiting from improving economic growth prospects. The balance between tech leadership and broader market participation is likely to persist in the coming weeks.

“There is scope for some diversification away from concentrated positioning,” said Geoff Yu, senior macro strategist at BNY. “A rising tide can lift all boats as the US economy is still expanding and expectations for market returns remain favorable.”

The first full week of the latest earnings season is boding well for what’s to come, with 89% of the 28 companies that have reported so far beating expectations. With big banks dominating the early days, stock investors will get a clearer view of the broader economy next week when results from names such as Netflix Inc., Johnson & Johnson and 3M Co. are due. 

“The results so far show, at least for the banks, that the consumer is okay, deal activity and capital markets are healthy, earnings revisions are still very positive,” said Andrea Gabellone, head of global equities at KBC Global Services. “In the meantime, you have some big tailwinds, like the weak dollar.”

Investors continue to deploy funds into equities and trim cash holdings. According to Bank of America, citing EPFR Global data, US stock funds saw $36.5 billion of inflows in the week ended Jan. 14. 

Meanwhile, yield premiums on corporate debt have narrowed to the least since 2007, a Bloomberg index of bonds across currencies and ratings shows, prompting some of the world’s biggest money managers to warn against complacency. The extra yield investors demand to hold junk notes has also dropped to the lowest in nearly two decades. Companies issued roughly $435 billion of bonds in the first half of January, a record for the period, and more than a third above last year’s tally at this point, according to data compiled by Bloomberg. 

Five presidents of regional Fed banks, who in recent months found themselves on opposite sides of the policy debate, indicated on Thursday that the central bank is now well-positioned to sit tight and wait for further data before cutting rates again. No change is expected at the Fed’s Jan. 27-28 meeting, after cuts at each of its last three.

European stocks dip but remain on track for their fifth straight weekly advance, the longest streak of gains since May, as investors remain confident about earnings and artificial intelligence demand. The Stoxx 600 falls 0.1% as health care stocks outperform while miners lag, as news of a Chinese clampdown on high-frequency trading sinks metals. Here are some of the biggest movers on Friday: 

• Kloeckner & Co shares surge as much as 30%, to the highest level since June 2022, after Worthington Steel agreed to buy the metals processor for €11 per share in cash.
• Polar Capital shares rise as much as 8% to their highest level since April 2022, following the asset manager’s quarterly update and announcement of a share buyback program.
• Novo Nordisk shares advance as much as 6.7%, snapping two days of declines, as analysts at Berenberg and Bank of America lift their price targets on the stock, while Deutsche Bank calls the Danish drugmaker one of its top picks.
• Elekta shares gain as much as 9.1% after its Evo Linear Accelerator imaging system gained clearance from the US FDA.
• HBX shares rise as much as 8.6%, the most since May, after the Spanish travel technology firm announced a share buy-back program and plans to pay regular dividends.
• Genus shares surge as much as 15%, the most in more than four months, after the animal genetics firm said it now expects FY26 adjusted pretax profit to come in “moderately” above the top end of current views.
• Sunrise Communications shares slide as much as 4.7% after an offering of 4 million shares by holder Baupost Group priced at a 3.38% discount to Thursday’s close.
• Richemont shares fall as much as 3.8% as BofA downgrades to neutral from buy, in a second day of declines for the stock following the luxury goods group’s sales report.
• Boliden shares slip as much as 3.7%, leading miners lower as news of a Chinese clampdown on high-frequency trading cooled sentiment.

Earlier in the session, Asian stocks rose, with Taiwan’s key index jumping to a record, as results from TSMC helped confirm an upbeat outlook for artificial intelligence demand. The MSCI Asia Pacific Index advanced 0.4%, with TSMC the biggest contributor along with other tech firms including Samsung Electronics and Delta Electronics. Taiwan’s Taiex climbed nearly 2% and Korea’s Kospi gained 0.9% to a new high, while Japanese stocks slipped following a recent rally. The regional benchmark has gained about 2.8% this week, which would be its best since September 2025. While TSMC helped reinforce the AI rally, an agreement for the US to lower tariffs on Taiwan provided additional relief amid ongoing geopolitical concerns on multiple fronts. Chinese stocks fell amid fresh signs that authorities are attempting to cool the market rally, with record outflows seen in some of the exchange‑traded funds heavily owned by the so‑called national team. Next week’s highlights include monetary policy decisions in Japan, Malaysia and Indonesia. The World Economic Forum in Davos is among the key events that will be watched by global investors.

In FX,the yen strengthened, trimming its third weekly decline, as Japan’s Finance Minister Satsuki Katayama reiterated her warning that all options including direct currency intervention are available for dealing with the recent weakness. The US dollar slipped against most major currencies with Treasury yields trading in a tight range.  The kiwi is leading gains against the greenback, rising 0.4% while the Japanese yen and Norwegian krone are not far behind.

While equities are moving, yields are snoozing. The 10-year Treasury yield is headed for a fifth straight week of minimal change, rivaling its longest stretch of inertia in the past two decades. The bond market is waiting for a clearer steer on the economy and the outcome of the Trump administration’s pressure on Fed chair Jerome Powell to cut interest rates further. On Friday, treasuries edged lower in early US session after plying small ranges since Asia open with European bonds underperforming. Yields are less than 2bp cheaper on the day with curve spreads little changed; 10-year around 4.19% is 2bps higher, outperforming bunds and gilts slightly.The weekly IG volume stands in line with $60b projection after Thursday’s six-name $35b slate headed by Goldman Sachs’ $16b landmark transaction; issuers paid about 1bp in new issue concessions on deals that were 3.5 times covered.

In commodities, oil rebounded after its biggest drop since June, while gold and silver declined. WTI crude futures rise 1.3% to near $60 a barrel. Spot silver falls 4%.

US economic calendar includes January NY Fed services business activity (8:30am), December industrial production (9:15am) and January NAHB housing market index (10am). Scheduled Fed speakers include Collins (10:50am), Bowman (11am) and Jefferson (3:30pm)

Market Snapshot

• S&P 500 mini +0.3%
• Nasdaq 100 mini +0.5%
• Russell 2000 mini +0.4%
• Stoxx Europe 600 little changed
• DAX -0.1%
• CAC 40 -0.4%
• 10-year Treasury yield little changed at 4.17%
• VIX -0.3 points at 15.54
• Bloomberg Dollar Index little changed at 1210.82
• euro little changed at $1.1613
• WTI crude +1.1% at $59.82/barrel

Top Overnight News

• A plan to address power costs from data centers is set to be announced today. Donald Trump will direct the top US grid operator to hold an emergency power auction, forcing tech giants to fund new power plants, according to a White House official. BBG
• President Trump was advised that a large-scale strike against Iran was unlikely to make the government fall and could spark a wider conflict, U.S. officials said, and for now will monitor how Tehran handles protesters before deciding on the scope of a potential attack. Still, Trump is expected to order the Pentagon to send an aircraft carrier, the USS Abraham Lincoln, from the South China Sea to the Middle East. WSJ
• Bipartisan talks in the Senate about a healthcare deal to extend ACA subsidies are stalling, making an agreement less likely. Politico
• US senators are set to meet members of the Danish parliament in Copenhagen today as Denmark and Greenland step up lobbying in an effort to head off Trump’s push to take control of Greenland. BBG
• Canada and China reached a wide-ranging agreement to lower trade barriers including a reduction in tariffs for Canadian canola and Chinese EVs. Mark Carney hailed his strategic partnership with Xi Jinping, referencing a “new world order.” BBG
• Chinese companies have started discussions about renting computing power at data centers in Southeast Asia and the Middle East to get access to Rubin chips, according to people involved in the talks. That follows companies’ efforts last year to access chips in Nvidia’s Blackwell series. WSJ
• Some Bank of Japan policymakers see scope to raise interest rates sooner than markets expect with April a distinct possibility, as a sliding yen risks adding to already broadening inflationary pressure. RTRS
• The criminal investigation into Federal Reserve Chair Jerome Powell threatens to upend the contest over whom President Trump will choose to succeed him as it enters its final stretch. Trump has made clear he prizes loyalty in his pick, but the Justice Department probe—which Powell said was part of a pressure campaign to get the Fed to lower interest rates—threatens to make that quality a liability. WSJ
• Japanese Finance Minister Katayama said FX intervention is a potential option under the US-Japan agreement and expresses readiness to take decisive action while keeping all options on the table: BBG

Trade/ Tariffs

• Canadian PM Carney said the relationship with China is more predictable than the one Canada has with the US.
• Canadian PM Carney announces that they will allow as many as 49k Chinese EVs into the Canadian market, with a most-favoured-nation tariff of 6.1%. In return, Canada anticipates that by March 1st China will reduce tariffs on Canola seed to a c. 15% combined rate. In addition to a resolution to other trade obstacles.
• A White House Official said the chip announcement on Wednesday was 'phase one' action and there could be other announcements, pending ongoing negotiations with other countries and companies.

Central Banks

• BoJ: abolish the "Amount of Cash Collateral for Lending of ETFs" today, given that the new lending of ETFs has been ceased and the outstanding balance of ETF lending has reached zero.
• BoJ is seen as likely to raise its FY26 economic and inflation forecasts, Reuters reported citing sources; the report adds that some BoJ policymakers see scope to raise interest rates as soon as April due to the inflationary effect of a weaker JPY.
• ECB's Lane said that there is no immediate debate on interest rates if current conditions persist and that that current rates set to establish baseline for years ahead.
• NBP Governor Kotecki, in a Bloomberg interview, said it is becoming increasingly clear that there is room for further rapid interest rate cuts. Assumes that in February, the MPC will resume its activities from last year. The inflation outlook is increasingly optimistic.

A more detailed look at global markets courtesy of Newqsuawk

 

Top Asian News

 

European equities (STOXX 600 -0.1%) are trading mostly softer, contrary to APAC which traded mostly in the green. Not much on a macro newsflow to explain broader weakened sentiment seen in European. European sectors are trading mostly in the red. At the bottom of the pile are Basic Resources (1.5%), Automobiles & Parts (-1.4%) and Consumer Product & Services (-1.3%). Sentiment around the Basic Resources sector has been pinned down by lower metal prices with copper especially pressured by China’s crack down on high-frequency trading. On the upside, Utilities (+0.3%), Health Care (+0.3%) and Energy (+0.2%) are the slight outperformers.

Top European News

• The ONS has drawn up contingency plans to delay the launch of its new labour market survey by 6 months, Bloomberg reported citing people familiar with the matter. Another scenario under consideration is to launch the survey in May 2027. ONS plans to decide in the summer whether to stick to the November roll-out date.

FX

• DXY is flat/incrementally lower this morning and currently within a narrow 99.26-99.40 range, which is towards the upper end of Thursday’s bands. Overnight, a White House Official suggested that the latest chip announcement was “phase one” and more could be put out following negotiations. That aside, not really much US specific newsflow, but focus will turn to a few Fed speakers and Industrial Production later.
• G10s are mixed, with the Kiwi and JPY topping the pile whilst the Loonie is mildly pressured. The JPY was boosted overnight after a Reuters report suggested that the BoJ could hike as soon as April, with some members fearing a weak currency could lead to a resurgence in inflation. In the midst of all this, Finance Minister Katayama has continued to provide some jawboning, which also helped the JPY. USD/JPY currently trades at the lower end of a 157.97-158.70 range vs Monday’s open of 158.07.
• Politics remains the main theme for Japan, as attention now turns to the 22nd of January, when PM Takaichi is expected to dissolve the Diet. UBS believes that the LDP will be able to secure a half majority, improving the party's position. Interestingly, Nippon TV ran the numbers following the CDP-Komeito tie-up and calculated that LDP "would retain only 60 of the 132 single‑member districts it won in 2024". Though this is only a mathematical calculation, and does not account for Takaichi's high approval rating of more than 70%.
• Japanese Finance Minister said the statement between Japan and the US can be viewed as saying intervention to counter FX moves out of line with fundamentals is permitted. Not sure when JPY-carry trades peak out as Japan-US interest rate differentials are set to narrow further.

Fixed Income

• A contained start for fixed income benchmarks, though the bias is increasingly bearish.
• Newsflow has been light. USTs in a very thin sub-five tick range just above the 112-00 mark into an afternoon once again dictated by, on paper at least, data and Fed speak.
• Bunds under increasing pressure into the morning, pressure that has emerged without a clear or overt fundamental driver. Down to a 128.26 base with downside of 17 ticks at most. No reaction to unrevised inflation from Germany and Italy, while the European docket ahead is light today before picking up next week with several key ECB speakers at the Davos WEF, including President Lagarde.
• OATs lag in Europe, down by 20 ticks at worst to a 121.01 base. Action that has lifted the OAT-Bund 10yr yield spread above 68bps, though the above Bund pressure is stemming the downside. Slight underperformance that is likely a function of the French Government electing to suspend the National Assembly budget debate last night, meaning that the deliberations of the budget and likely conclusion of it will not occur today. As such, the pencilled-in date of a Monday vote on the revenue draft is off the table.
• Gilts opened on the backfoot, with losses of six ticks and have since extended to a 92.27 low, -21 ticks at most. Pressure that is a function of catch-up to the bearish action that was seen in the latter part of Thursday's US session, the morning's bearish bias, and reports that the ONS might be delaying the new labour data by six months.

Commodities

• Crude benchmarks are firmer this morning, and while they are set to end the week in the green with upside of c. USD 0.80/bbl for WTI and USD 1.0/bbl for Brent, they are towards the lower-end of the week's c. USD 4.00/bbl parameters. Continuing with energy but away from crude, gas benchmarks remain alight and at highs. Drivers remain the same as discussed in recent sessions, including: Iran supply, European cold spell, Asian demand, and expectations for a cold spell in APAC next week. Dutch TTF briefly surmounted the EUR 35/MWh mark this morning
• Spot gold is under modest pressure. Hovering around the USD 4.6k/oz handle despite a contained USD, but hit as the risk tone stateside is constructive and geopolitics, as discussed, hasn't escalated. Further pressure is also potentially stemming from the firmer global yield environment.
• Base peers were softer overnight, hit by China cracking down on high-frequency trading via the removal of servers from some data centres. Action that pushed 3M LME Copper below the USD 13k/t handle early doors and since to a USD 12.77k/t trough, lower by over USD 300/t on the session.
• Heavy rainfall in northeast Australia has triggered floods that are hampering mine operations, with some coal miners declaring force majeure on portions of their shipments or potential delays to customers.

 

 

 

US Event Calendar

• 9:15 am: United States Dec Industrial Production MoM, est. 0.1%, prior 0.2%
• 9:15 am: United States Dec Capacity Utilization, est. 76%, prior 76%
• 10:50 am: United States Fed’s Collins Delivers Welcoming Remarks
• 11:00 am: United States Fed’s Bowman Speaks on Economy and Monetary Policy
• 3:30 pm: United States Fed’s Jefferson Soppeaks on Economy, Monetary Policy

DB's Jim Reid concludes the overnight wrap

Welcome to the end of another big market week. I had a knee scan yesterday and I made the mistake of uploading the images (which I don't understand) into AI last night. The scan was supposed to see how far the arthritis on the lateral side (outside) had spread and how far I might be towards partial knee replacement. Its swollen and I'm limping a fair bit at the moment. However AI said the scans showed the complete opposite. It says I have a medial (inside) meniscus tear and "massive" bone bruising. AI said my knee was at high risk of a stress fracture and I should see a consultant immediately and stop all activity! This was a bit of a fright. I'm seeing my consultant on Tuesday. Will AI be correct? There are few good outcomes here but I will be impressed if AI has accurately picked up a completely different issue to what my consultant and I thought before the scan. Update to follow next week!

Markets put in a stronger performance than my knee yesterday, as ebbing fears about a US military intervention in Iran saw the geopolitical risk premium taken out of various assets. For instance, Brent crude oil (-2.18%) saw its biggest decline since June, closing at $63.76/bbl. Meanwhile, gold (-0.23%) and silver (-0.80%) also retreated slightly from their record highs on Wednesday and continue to dip a little in Asia. Moreover, just as fears eased about the geopolitical situation, a strong batch of US data meant investors grew increasingly confident in the 2026 outlook, offering further support to risk assets. So the S&P 500 (+0.26%) and Europe’s STOXX 600 (+0.49%) moved higher, with the latter hitting a fresh record high. And as investors priced in fewer rate cuts, the 10yr Treasury yield (+3.8bps) also picked back up to 4.17%.

The latest headlines on Iran were the main drivers of market sentiment yesterday, as expectations rose that the US would not intervene for the time being. For instance, Trump posted a reference to a Fox News article that an Iranian protester wouldn’t be sentenced to death, saying “This is good news. Hopefully, it will continue!” So that helped oil prices to come down yesterday, with Brent crude and WTI both posting their first daily decline after a run of 5 consecutive increases. Some lingering uncertainty remains, with Fox News reporting that the US military was preparing a range of options towards Iran.

On top of the Iran developments, risk assets got a further boost from the latest US data, which added to the sense the expansion has further to run. Notably, the weekly initial jobless claims fell to just 198k in the week ending January 10 (vs. 215k expected), which meant that the 4-week moving average (205k) fell to its lowest in nearly 2 years. Even though there is likely to be a holiday season distortion partly impacting these numbers, it still added to optimism on the US economy. This was cemented by a couple of Fed surveys too, which painted an optimistic picture on both growth and inflation. First, there was the New York Fed’s Empire State manufacturing survey, which rose to 7.7 in January (vs. +1.0 expected), with the prices paid component at a 10-month low. And second, the Philadelphia Fed’s manufacturing business outlook survey rose to 12.6 (vs. -1.4 expected), with the prices paid component at a 7-month low.

This strong backdrop for growth meant that investors dialled back the prospect of Fed rate cuts in the months ahead. Indeed, the amount of cuts priced by the December meeting fell -6.3bps on the day to just 48bps, which is the fewest cuts priced so far this year. So that pushed Treasury yields up across the curve, particularly at the front end, with the 2yr yield (+5.4bps) rising to 3.57%, whilst the 10yr yield (+3.8bps) moved up to 4.17%. That also followed some hawkish-leaning comments from Fed officials, with Chicago Fed President Goolsbee saying that “The most important thing facing us is we’ve got to get inflation back to 2%”. Atlanta Fed President Bostic said “We need to make sure that we stay in a restrictive stance, because inflation is still too high”. Kansas City Fed President Schmid suggested that monetary policy should remain “modestly restrictive” and San Francisco Fed President Daly posted that “policy is in a good place”. Remember that today is the last chance we’ll get to hear from Fed officials before the next meeting, as their blackout periods start tomorrow.

With geopolitical risk subsiding and US data surprising on the upside, that meant it was another solid day for equities, though the S&P 500 (+0.26%) did decline late in the session, closing half a percent below its intra-day highs. Semiconductor stocks led the gains after TSMC’s strong earnings release, with the Philadelphia Semiconductor index up +1.76% and Nvidia rising +2.13%, though the broader Mag-7 (+0.18%) had a more neutral day. It was also a good day for bank stocks, with the KBW Bank index (+1.67%) recovering after four consecutive declines, aided by strong earnings from Morgan Stanley (+5.78%) and Goldman Sachs (+4.63%). And it was another strong day for small-cap stocks, with the Russell 2000 (+0.86%) up to a fresh record, meaning the index is already up +7.76% in 2026 so far. This marked the tenth consecutive session that the Russell 2000 outperformed the S&P 500, the longest such run since 1990.

Over in Europe, markets also put in a decent performance, with the STOXX 600 (+0.49%) and the FTSE 100 (+0.54%) reaching fresh record highs. Meanwhile, strong data also helped to push up sovereign bond yields, particularly for UK gilts after the November GDP print surprised on the upside. It showed that GDP grew by +0.3% in November (vs. +0.1% expected), which is the strongest monthly print since June. Separately in Germany, we also found out that the economy grew by +0.2% for the full year in 2025, in line with expectations, recovering after two consecutive contractions in 2023-24. So yields on 10yr UK gilts moved up +4.8bps, whilst those on 10yr bunds (+0.5bps) and OATs (+0.1bps) saw marginal increases.

Asian equity markets are a little mixed this morning. Tech is performing, still benefitting from   robust earnings from chipmaking leader TSMC the day before. However, this positive sentiment is being tempered by dips in other sectors. The KOSPI (+0.59%) and the S&P/ASX 200 (+0.48%) are increasing but with the Hang Seng (-0.27%) lower. The Nikkei (-0.11%) is pausing for breath after a great week and mainland China is flat. S&P 500 (+0.28%) and NASDAQ 100 (+0.38%) futures are regaining some of the late losses last night. 

In FX markets, the Japanese Yen (+0.25%) is appreciating, currently trading at 158.23 against the US Dollar. This strengthening follows remarks from Japanese Finance Minister Satsuki Katayama, who indicated a willingness to consider all available options, including coordinated intervention with the US, to address excessive foreign exchange volatility. Yields on 10-year Japanese Government Bonds have risen by +2.0bps, reaching 2.18% as we go to print.

The next main data point in Asia is China's fourth-quarter GDP data on Monday. This will tell us whether the Chinese economy met the government's annual growth target of 5%.

Looking at the day ahead, data releases include US industrial production and capacity utilization for December, along with the NAHB’s housing market index for January. Otherwise from central banks, we’ll hear from the Fed’s Jefferson, Bowman and Collins, along with the ECB’s Escriva.

Tyler Durden Fri, 01/16/2026 - 08:33

EU NatGas Spikes Most In Two Years As "Perfect Storm" Unfolds

Dutch TTF natural gas futures, Europe's benchmark gas contract, are up 25% on the week and on track for their largest weekly gain since October 2023. The abrupt reversal in sentiment reflects tightening storage levels, short covering, and a burst of unusually cold weather sweeping across the continent.

"Sentiment has completely turned ... you could almost call it a perfect storm," Global Risk Management analyst Arne Lohmann Rasmussen wrote in a note.

TTF futures are set for the largest weekly gain (25%) since the week of October 13, 2023.

TTF futures have rocketed higher this week from lows, now trading at nearly 36 euros per megawatt-hour.

Lohmann Rasmussen noted that sizable NatGas withdrawals have also brought stockpiling risks into focus ahead of next summer. According to Bloomberg data, inventories across the continent currently stand at around 52%, well below the 10-year average of 71% for this time of year.

Bloomberg noted, "The rally highlights a deeper structural shift. Europe has lost much of the flexibility it once relied on to absorb supply shocks, leaving storage as one of its few remaining buffers as it procures liquefied natural gas from across the globe."

The good news is that Europe has secured ample LNG supply this winter and Norwegian pipeline flows remain steady, but the lack of a meaningful buffer when temperatures plunge and heating demand surges highlights just how fragile Europe's energy system has become.

Tyler Durden Fri, 01/16/2026 - 08:20

Porsche Sales Plunge Most In 16 Years

Porsche AG shares in Germany are headed for their steepest weekly decline since trading began in late 2022, after the 911 maker reported that vehicle sales in the 2025 selling year fell to their lowest level in 16 years.

The 911 maker announced earlier that it delivered 279,449 vehicles to customers worldwide in 2025, down 10% from 310,718 in 2024. This marked the largest annual drop in deliveries since the 2009 financial crisis roiled global markets and crushed consumer sentiment.

"After several record years, our deliveries in 2025 were below the previous year's level. This development is in line with our expectations and is due to supply gaps for the 718 and Macan combustion-engined models, the continuing weaker demand for exclusive products in China, and our value-oriented supply management," Matthias Becker, Member of the Executive Board for Sales and Marketing at Porsche, wrote in a statement.

Porsche's troubles are not dissimilar to those of other European auto brands, where sliding sales, profit warnings, intensifying competition from Chinese brands, and weak electric-vehicle demand have created significant uncertainty that is likely to linger well into the second half of the year.

The stock is slightly lower in European trading. On the week, shares are down the most on record (-10%), with trading data going back to their 2022 initial public offering.

Compared with peers... 

Bloomberg cited a conversation earlier this week between Oddo BHF analyst Anthony Dick and Porsche CFO Jochen Breckner at the German Investment Seminar in New York. Breckner told the analyst he was "even more conservative" than before. In reducing his estimates, Dick said Porsche is in an ongoing "major restructuring," noting that profitability has been under pressure since its IPO. He added that this year and next are likely to be transition years for the company

According to Bloomberg data, analysts remain mostly pessimistic on Porsche, with just five buy ratings, 13 neutral ratings, and 11 sell ratings.

The broader EU auto industry is struggling.

Bernstein analysts, led by Stephen Reitman, called Porsche their "wild card," noting that a shift to a full-time CEO with experience at Ferrari and McLaren Automotive provides "room for optimism" and greater urgency in improving performance.

Overall, Porsche appears to be in prolonged transition over the next one to two years, while the broader EU auto industry remains stuck in a rut, weighed down by weak demand, margin pressure, and an uncertain path forward.

Tyler Durden Fri, 01/16/2026 - 07:45

UK Govt Threatens To Return Lucy Connolly To Jail For Sharing Joke Post On X

Authored by Steve Watson via Modernity.news,

Lucy Connolly, the 42-year-old UK woman previously sentenced to two years in prison for a post on X is back under the microscope of Britain’s speech enforcers, with the government threatening to put her back behind bars for merely reposting a satirical jab at Prime Minister Keir Starmer.

The latest drama stems from Connolly reposting a comment that read: “Could Trump could come and take Starmer like they did in Venezuela.”

Probation officials deemed it “not of good behaviour,” with Connolly noting: “Apparently… somebody called probation and said they were very offended by this post and it’s inciting violence.”

Lucy Connolly – who has already spent ten months locked up for a singular post on X – is facing a recall to prison because she retweeted a joke about Donald Trump arresting Keir Starmer.
Officials told her it was inciting violence.
THERE IS NO FREE SPEECH IN THE UK!@LucyTCWife pic.twitter.com/W3LtW5czA3

— Dan Wootton (@danwootton) January 14, 2026

The fact that some random person called in the thought crime to the authorities is arguably equally as disturbing as the resulting threat to send Connolly back to prison. It highlights how there are hordes of bootlicking citizens eager to act as the thought police and to tattle to the State.

Connolly has also been cautioned over remarks about British-Egyptian extremist Alaa Abd el-Fattah, who has a history of posting extremist threats against British people, yet was welcomed into the country recently by Kier Starmer after being released from prison by Egyptian authorities.

Connolly first hit the headlines after the horrific Southport attacks, where three young girls were murdered by a second-generation Rwandan migrant. In the heated aftermath, she tweeted: “Mass deportation now, set fire to all the f***ing hotels full of the bastards for all I care.”

Judge Melbourne Inman KC labeled it “grossly offensive” and handed her the maximum 31-month sentence under the Public Order Act, despite no prior offences or direct threats. She served 380 days before release on licence in August, under conditions typically reserved for serious offenders.

Her case drew fire from proponents of free speech, who blasted it as proof of Britain’s “two-tier justice system.” Before his tragic murder, Charlie Kirk noted such words “would not be any prison time in America,” underscoring how the UK has slid toward a “totalitarian country.”

Connolly insists she hasn’t posted anything offensive or inciting since her release, even suggesting authorities provide a list of “things she was allowed to say” to avoid these traps.

Connolly has also had to deal with her 13-year-old daughter, Edie, being barred from a new school after the headteacher rescinded a trial placement upon discovering her mother’s conviction. The educator claimed “racism doesn’t go down well” and that Edie’s presence would cause a “ruckus.”

Connolly called it “outrageous discrimination,” asking: “In what world is this ok?” and adding, “My daughter is being punished for my views. She’s innocent, and now she’s the one suffering.”

The Maduro quip that landed Connolly in hot water—suggesting Trump should swoop in and haul Starmer away like Venezuelan tyrant Nicolás Maduro—was no isolated gag. Thousands of frustrated Brits have cracked similar jokes across X and beyond, venting rage at a regime seen as trampling freedoms while bungling borders and the economy.

Posts like “Trump is gonna Maduro your ass next!” and “We really need Trump to repeat the Maduro operation with Starmer” rack up likes in the hundreds or thousands for mocking the PM’s fate. If resharing such satire warrants prison time, what’s next—a mass roundup of every citizen daring to poke fun at the powers that be?

This reeks of selective tyranny, cherry-picking targets to stifle dissent while ignoring the real threats fueling public fury.

Connolly’s ordeal is just one thread in Britain’s expanding speech gulag. Last year alone, police arrested nearly 10,000 people for “grossly offensive” social media posts under draconian laws like the Communications Act—averaging 30 busts a day.

Forces raid homes over sarcastic emails, old tweets, or WhatsApp chats, diverting resources from real crimes like burglaries and knife attacks. We’ve even seen early releases for violent offenders to make room for thought criminals.

Take the case of Luke Yarwood, jailed 18 months for two anti-immigration tweets viewed just 33 times. The judge called them “odious in the extreme,” despite no real-world impact or followers acting on them. Such minimal-reach rants get hammered harder than child abusers in some courts, exposing priorities skewed against ordinary Brits raging against open borders.

Starmer’s regime has recently gone as far as suggesting a complete ban on X, citing its Grok AI for generating fake images as a convenient excuse for what is clearly an effort to target the platform where unfiltered truth is allowed to reach the masses.

Now the government is turning its attention once again to Online Safety Act’s Section 121, empowering Ofcom to force platforms like WhatsApp to scan private messages via client-side tech—shattering end-to-end encryption.

Officially for child exploitation and terrorism, it flags everyday views on mass migration as radicalization risks: researching immigration stats, defending British rights, or protesting cultural shifts.

Schools are even using games labeling such concerns as paths to extremism.

The use of the “Maduro joke” shared by Connolly to crackdown on free speech echoes globally. In Spain, ex-senator Carles Mulet has denounced bullfighter Fran Rivera and right wing activist Vito Quiles for jokingly urging Trump to “continue” after Venezuela by intervening in Spain and eyeing Prime Minister Pedro Sánchez.

Ridiculously, the pair are now facing 5-10 years in prison, with authorities citing treason and provocation, among a litany of other offences.

This global assault on free expression demands fierce pushback. When mere reposts or quips land ordinary people in the crosshairs and families bear the brunt, it’s evident: the real danger isn’t online words, but regimes worldwide desperate to silence opposition to their rejected agendas.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Fri, 01/16/2026 - 07:20